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214 comment(s). Last comment by heaven123 at Apr 5, 2017 9:17 PM
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Blue Planet
52 posts

Posted by Blue Planet > Mar 23, 2017 11:14 AM | Report Abuse

Is the comment below talking bad on Ricky Yeo? Just read how Ricky Yeo commented above:

Stock Kingdom I am a layman type investor, I can't read too technical things, I don't really understand what are you talking, sorry to say that, if you can make it simple in your comments, guess everyone will appreciate that.
23/03/2017 09:23


Bizfuneng
686 posts

Posted by Bizfuneng > Mar 23, 2017 11:38 AM | Report Abuse

Previously I had requested Ricky Yeo to explain on certain matters on one of his articles, he was very obliging. So be fair on ur comments. He is sharing his best judgment basing on financial data available to him. That's is nothing wrong. What is wrong with Rick challenging u? It is ok to be disagreed. Let other evaluate for themselves which informed data sets shud they adopt to formulate their decision.

Some folks may not agree to what he wrote doesn't mean others hv the same opinion. If u disagreed use ur own data or facts to challenge Rick's thesis. Pls don't use sarcastic general statement. We all here wanted to see facts and data to guide us on decision making shud we invest on the counter or not.


IamGoogle
636 posts

Posted by IamGoogle > Mar 23, 2017 12:02 PM | Report Abuse

There are many methods of valuing a company, some prefer discounted cash flow, some like PE, some use sum-of-part, blah blah...

For service industry like audit/secretary/tax, yearly revenue of a firm will be used as important reference.

Ultimately, the deal can only be struck if both parties reach a point where one is willing to pay & the other is willing to accept.


IamGoogle
636 posts

Posted by IamGoogle > Mar 23, 2017 12:14 PM | Report Abuse

Ricky, these are not easy because we are outsiders & we do not have the details. Just like Ekovest selling Kesturi, no one know the details until they announced. Meanwhile, we can only guess.

Ricky Yeo
Today CAB strategy is to grow, thus their decision is to take over Farm Best and move into Indo. Thus our role as investors is to ask "Given these strategies, how much would they need to put into the business (capex), how much cash flow, and when will they be generated?" Discounting those 3-5 years cash flow back to present gives you a valuation. I will be BS-ing you if this is easy to do, it's not. But 3 simple things, how much they going to put in, how much will they take out, and when.
23/03/2017 04:45


IamGoogle
636 posts

Posted by IamGoogle > Mar 23, 2017 12:19 PM | Report Abuse

I will rather put into a simple way of calculation when come to assets acquisition:

revenue
profit
cost of finance (& investment)

If the profit can cover the cost of finance & give good return of more than 10% on investment, it will be good deal.


IamGoogle
636 posts

Posted by IamGoogle > Mar 23, 2017 12:34 PM | Report Abuse

Due to my personal preferences, I don't like to use discounted cashflow due to the variable factors used in the formula are very subjective, but I respect anyone that using it. It is still very useful & powerful.


Iamxuewen
374 posts

Posted by Iamxuewen > Mar 23, 2017 4:12 PM | Report Abuse

Iamgoogle,

I like this statement you made :"If the profit can cover the cost of finance & give good return of more than 10% on investment, it will be good deal"
mind to provide your calculation for CAB acquiring best farm?
it is very useful for us to make a quick decision whether CAB is a good buy at the current price .
thanks

(i did not any bad about anybody , please do not flag me , if not i got use aseng to post my next comment


Iamxuewen
374 posts

Posted by Iamxuewen > Mar 23, 2017 4:20 PM | Report Abuse

I do not find ricky yeo argument hard to understand,
in fact , he is just following a basic principle " buy good stock cheap"
now , what he see in the available figures , things are not cheap , so he is putting across his view , hoping some kind souls to help him see that it is indeed cheap, since the article started with the tile " CAB is currently under value with a fair value more than 3.00 ". I am also hoping you can convince me , it indeed worth this value so that I too can put some of my hard earned money into to share the excellent discovery of wealthwizard


Iamxuewen
374 posts

Posted by Iamxuewen > Mar 23, 2017 4:22 PM | Report Abuse

Don't flag me, you may disagree but I am sure there are people can the logic in my argument


csan
164 posts

Posted by csan > Mar 24, 2017 1:56 PM | Report Abuse

you see....management only guided RM 1.6 billion revenue in FY18. assuming margins remain like the most recent quarter, we are only looking at around RM40 million net profits. At a PE of 10-12x, CAB is only worth maximum RM2.01 in FY18. This RM3.04 target price is unrealistic.


csan
164 posts

Posted by csan > Mar 24, 2017 1:58 PM | Report Abuse

CAB will never deserve the valuations of QL (PE of 20-25x) because QL is much more efficient....their margins are around 7% compared to CAB's 2.5%.


WealthWizard
337 posts

Posted by WealthWizard > Mar 28, 2017 10:50 AM | Report Abuse

csan, if you refer to the table below, QL is good in marine product, not poultry.

https://klse.i3investor.com/files/my/blog/img/bl2751_cab_industry_comparison_last_4q_v2.jpg


heaven123
1900 posts

Posted by heaven123 > Apr 5, 2017 9:16 PM | Report Abuse

QL strong poultry in Sabah and klang valley mainly in eggs.


heaven123
1900 posts

Posted by heaven123 > Apr 5, 2017 9:17 PM | Report Abuse

Are you interested pen a few words about mudajaya.

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