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2,301 comment(s). Last comment by Maxpowar at Nov 22, 2020 11:05 AM
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Philip ( buy what you understand)
4013 posts

Posted by Philip ( buy what you understand) > Jan 1, 2020 6:31 PM | Report Abuse

Do you know the sales is to pay for their yearly dues and upkeep for their foundation? They only sell that amount every year to pay for all the projects and upkeep for the foundation members, all week enjoy a bigger and bigger value for the share sold.

But how much disposed and how much kept? That is the big question to ask. How much shares does the chia family still hold?


Joon Chan
108 posts

Posted by Joon Chan > Jan 1, 2020 6:47 PM | Report Abuse

Philip you should have bought some of those "founder" shares sold.
For sentiments.


calvintaneng
39104 posts

Posted by calvintaneng > Jan 4, 2020 2:03 PM |

Post removed. Why?


Kendo Ken Hz
954 posts

Posted by Kendo Ken Hz > Jan 9, 2020 10:27 AM | Report Abuse

Tp10 soon


Kendo Ken Hz
954 posts

Posted by Kendo Ken Hz > Jan 9, 2020 4:01 PM | Report Abuse

Every month up by rm1, apa..ini


Kendo Ken Hz
954 posts

Posted by Kendo Ken Hz > Jan 12, 2020 5:09 PM | Report Abuse

Mkt cap exceed ammb topglove mairport...flying soon


calvintaneng
39104 posts

Posted by calvintaneng > Jan 13, 2020 11:11 AM | Report Abuse

SELL AND RUN AWAY FROM QUICLY LOCK-UP

SEE

LOOK AT THESE FACTS

1) AUGUST 2019

NETC DIECTORS USE ASIABIO TO BUY 103 MILLION NETX SHARES FROM OPEN MARKET

2) PP WHICH SHOULD BE POSTPONED TO JAN WERE URGENTLY BROUGHT FORWARD TO NOV 2019 & EAGERLY ALL TAKEN UP AT 1.89 SEN


3) IN DECEMBER 2019 EMPLOYEES OF NETX EAGERLY TOOK UP 50 MILLION NETX SHARES at 2 SEN

WHILE OUTSIDERS AND NAYSAYERS TALK AND TALK BAD ABOUT NETX INSIDERS/DIRECTORS OF NETX JUST BUY AND BUY


enigmatic [control your emotions, discipline your mind]
838 posts

Posted by enigmatic [control your emotions, discipline your mind] > Jan 31, 2020 5:11 PM | Report Abuse

WHILE OUTSIDERS AND NAYSAYERS TALK AND TALK BAD ABOUT QL, QL SHAREHOLDERS ARE CELEBRATING UP UP UP


Choivo Capital
3596 posts

Posted by Choivo Capital > Jan 31, 2020 5:22 PM | Report Abuse

Phillip,

Id like to see you do this intrinsic valuation for QL.

try and see.


====
So to simplify my intrinsic valuation of the business, I expect them to do:
2020-2024.

Revenue estimation:

Water meter: 40 million earnings a year
LRT3: 385 million earnings over 5 years (7% of 5.5 billion), 70 million a year
MRT2: 150 million earnings over 3 years (15% of 1 billion), 50 million a year.
Engineering:? If I told you they submitted a bid for NFCP package 1 with Ericsson would you be impressed? I can't confirm this, but if march comes round and this comes true I would be the first person to be happy, unlikely as it may sound. In any case, any company that goes from treatment plant contractor to sole water meter manufacturer in Malaysia to hospital contractor to wtp concession to rail contractor has to have a strong technical team. They will have a fighting chance unlike many contractors out there.
Discounting= 20%

Yearly earnings 128 million for the next 4 years, or 5 year outlook of 500 million in earnings from which I only need to pay 273 million today ( with 200 million in cash).


Philip ( buy what you understand)
4013 posts

Posted by Philip ( buy what you understand) > Feb 1, 2020 8:21 PM | Report Abuse

Choivo I find you a waste of time.

How about this? I am willing to bet that your petronm will not hit 200 million in earnings for this year. As I am sure that you don't know anything about your analysis on petronm, I am willing to give you a heads up.

If I am wrong I will write whatever you want me to write. I will give you my revised honest intrinsic valuation for ql.

If you are wrong and petronm does not hit 200m in earnings this year, you will write whatever I ask you to write.

Deal?


Icon8888
19022 posts

Posted by Icon8888 > Feb 1, 2020 8:56 PM | Report Abuse

As usual Philips knows best

That is why he bought pchem and Gkent so expensive


Philip ( buy what you understand)
4013 posts

Posted by Philip ( buy what you understand) > Feb 2, 2020 7:36 AM | Report Abuse

As usual icon8888 knows even better, that's why he bought lctitan at even higher price and with one hand at the wheel. But unhappy his lctitan doing so bad now need to justify his self ego by taking about others.


Philip ( buy what you understand)
4013 posts

Posted by Philip ( buy what you understand) > Feb 2, 2020 7:41 AM | Report Abuse

If I could predict the future then I would be the best investor in the world. All I can do is buy pchem below intrinsic value, so I bought at 8.15, I bought at 7, I bought at 6.64, I'm waiting until next quarter results to buy pchem at 5. Any other way and I would be lying or trying to do something that cannot be done.

But the last time pchem was below 6 was 5 years ago, and it definitely did not earn as much with the same assets or samur.

That is why I can keep buying pchem even lower and lower.

Can you say the same about your 50% drop into lctitan? How about your armada? Drop so bad while yinson and ql steady as she goes.

I sleep well at night. You obviously don't .


Sslee
4192 posts

Posted by Sslee > Feb 2, 2020 11:32 AM | Report Abuse

Hahahaha
Icon8888 already sold his Armada and Jaks for handsome profit. He now only hold his sure win ABMB, Ytlpower and Ewint.
As of QL future, no worry you can look into top 30 rich funds holding how many % of share capital. Demand and supply play important part in share value.
Only calvintaneng promote 2 cents Next with billions or unlimited supply.


Choivo Capital
3596 posts

Posted by Choivo Capital > Feb 6, 2020 8:00 PM | Report Abuse

Thinking about it.

If you think QL can grow earnings per share by around 22% per year for the next 15 years. And lets say you value a company (with similar capital structures) that can grow 10% per year for the next 15 years at say 10 PE.

QL would be worth 50 PE.

But if the EPS growth were to increase at a higher rate, or your confidence level is higher (ie say 20 years instead of 15). The value of QL will be way way higher and an investment at the current price would make perfect sense.

Having said that, to be able to say you understand something so well, that you can say with 100% certainty its going to grow at 22% for the next 15 years at minimum.

Its almost like saying, you're sure someone is going to be worth at minimum RM100m in 15 years from starting point of RM0. Not impossible, but my god, so bloody hard.

And to top it off, that person does not need to just execute his plan at an extremely high level, he needs to stay alive. Compounded possibility of death is 1.5% from age 25-40.


Philip ( buy what you understand)
4013 posts

Posted by Philip ( buy what you understand) > Feb 7, 2020 3:55 AM | Report Abuse

Spoken exactly like an accountant.

Do you really think that is how you value a business? By having a crystal ball and looking at a business and seeing it grow linearly? Obviously not.

I keep repeating my investment philosophy. You keep not listening. While ql goes up, topglove goes up, stoneco goes up, pphb goes up, yinson goes up.

First, don't look at the number first, use second level thinking and understand the business. Imagine business as a snowball rolling down the hill.

1. Market size. Some hills are flatter than others, just as some are steep and deep. First, you need to understand the addressable size of the market. Here you have to be brutally honest and understand the industry properly, because too many people make bad assumptions. For example rcecapital. You have the assumption that the market is huge in billions and rcecap has room to grow. But if you were brutally honest, you would understand that the lending market is smaller than you think, there is only a certain number of borrowers that are good for repayments. Cast the net too wide, and bad debts and bad customers follow. If the repayments are too good, the big boys try to find their way in. The valuation of the market size is an art in itself. Which is why I'm constantly surprised at those who have 20+ stocks in their portfolio. They don't bother to value the market and just concentrate on a financial report to " make" their money. That's why the richest people in the world are neverv accountants. They look at the wrong things.

2. Growth. A snowball gets bigger as it rolls downhill. Sometimes, it splits into 2.
Another problem with new investors is their inability to understand growth. If you think of it using engineering terms, Newton sees momentum, f=ma ( Google it up). Basically force is mass x acceleration. You extrapolate here to investing, a business that has a tendency to grow, will continue to do so given enough capital, assuming the same management is in place. The more capital they have, the bigger their growth. There is no other way, all you can do is follow up the growth quarterly, and invest accordingly. The problem you have is psychology, mr market. You assume it will act rationally and earnings and valuation follow in a similar fashion. It doesn't.


Philip ( buy what you understand)
4013 posts

Posted by Philip ( buy what you understand) > Feb 7, 2020 4:07 AM | Report Abuse

3. Safety of investment. You state this:

If you think QL can grow earnings per share by around 22% per year for the next 15 years. And lets say you value a company (with similar capital structures) that can grow 10% per year for the next 15 years at say 10 PE.

QL would be worth 50 PE.

This is a very simplified concept, which doesn't take into account human psychology. Firstly, one thing you have to understand is if a business can consistently grow by 10% per year for the next say 15 years, there is an element of safety in it. Then if you consider the industry type, where the likes of similar companies like lhi and herbert eggs sputter in growth, shrinking sales. A huge market, but competitive as hell. Then you notice a company that is consistently growing and building a monopoly in this market space, while using every cent to grow vertically and ORGANICALLY ( unlike say scientex, which produces plastic film... Then becomes a developer, where is the synergy?).

You accountants look at PE as if it is all the same. A dollar is a dollar right? An engineer looks at materials, and understands quality. Stainless steel has many grades, 304 is food grade, 316 is industrial grade. Price is hugely different.

There is something to be said for the QUALITY of earnings.

You assume just because a company has similar capital structures then the earnings are the same? You should probably have a conversation with Ajit Jain or my wife one day, who is a trained actuarist. Then you will have a better understanding of what I am saying, and you might incorporate risk into your understanding of PE.


Philip ( buy what you understand)
4013 posts

Posted by Philip ( buy what you understand) > Feb 7, 2020 4:28 AM | Report Abuse

4. Cigar butt value investing. What makes you think I bought ql at pe50? Obviously, there is something to be said for buying well. But, there is also something to be said of buying simple. You may think of buying ql as hard, but I think you are even better than me, you buy timecom, rcecap, lctitan, petronm, hengyuan simply by deciding that the earnings and assets you are paying for the business today is cheaper than the price you are paying for it, and thus the future will be better. Is that how everyone thinks value investing should work?

Charlie munger scoffs at that simplistic concept. I do too. 90% of the time, the deal you thought on paper accounting is a wonderful deal, turns out to be cheap for a reason. Why? You rarely think beyond to the future, or why the previous guy sold the stock cheap to you in the first place.

For example hengyuan. You based on simple valuations and extrapolate out and say this is cheap based on metrics, without understanding the business past and future. If you did you would have asked a few questions instead.
1. Why did shell sell in the first place, how much they sold the company for, and how much you could brutally honest get from it's operations? Past.
2. What is hengyuans history of operations, and what can they do that shell couldn't. Present ( or armchair analysts best tactic of analysis).
3. What is the future of operations, any capital expenditures needed in the horizon, what is the reasonable long term earnings? Future.

The problem with cigar butt value investing is that it doesn't take into account the past ( management capability, business capability), and future earnings.

You are basically repeating the same mistakes Warren did in buying Berkshire Hathaway in the first place. Buying second rate businesses with limited growth opportunities and management capability ( rcecap, lctitan, hengyuan, petronm), and assuming just because you bought cheap it means you bought well.

Thank god for Charlie munger.


Philip ( buy what you understand)
4013 posts

Posted by Philip ( buy what you understand) > Feb 7, 2020 5:00 AM | Report Abuse

So with totality, look at ql with a different eye, and compare that with the rest of your stocks.

What is the last 15 years like for timecom versus ql? Just business valuation wise.

1. The past. Timecom made huge losses in the beginning, to pay for the growth that it has today. Anyone that doesn't look into the cost of capital expended to grow in light of the past is not valuing the business properly. Ql has been steadily growing and splitting it's business lines into multiple businesses successfully. Timecom has not shown the versatility or inclination to diversify successfully. It could have bought kronologi to complement it's business arm. It could have applied or bid for a 4g or 5g license band. It didn't.

2. The present - a very successful company. A wonderful company.

3. The future - ql products are simple, timeless and a commodity. Safe and easy to understand. Timecom products are so hard to understand as the future of communications become more and more varied and robust. Back in the day, I couldn't live without prepaid value cards, payphones and satellite feed ( in East Malaysia). This was 2004 (when voice and call was cheap). Timecom almost went bankrupt if not for the 5200 km fibre network they installed. Today, voip, WhatsApp has basically killed the payphone, internet router technology has killed the satellite home business, and if you told me if the fibre versus wireless communications (5G,6G and 8G research) who will end up the winner? I have no idea although I would like to believe the cheapest solutions will definitely turn up ( wireless). In 15 to 20 years I'm pretty sure family Mart, 7-11 and Lawson will still be around. A shift in technology could tender timecom going the way of it's first products the payphone and the prepaid cards.

After you understand all of this, then only does it makes sense to look into the financial reports.

I spent a month understanding pchem and gkent, trying to understand the long term prospects. Then after I was convinced it MIGHT be a good bet, then I looked into the 10 year financials to understand how the management works, and the quarterly reports to see how the money is allocated.

Simple, and yet far more complicated than you might think.

But nothing like this:

Having said that, to be able to say you understand something so well, that you can say with 100% certainty its going to grow at 22% for the next 15 years at minimum.

Its almost like saying, you're sure someone is going to be worth at minimum RM100m in 15 years from starting point of RM0. Not impossible, but my god, so bloody hard.

And to top it off, that person does not need to just execute his plan at an extremely high level, he needs to stay alive. Compounded possibility of death is 1.5% from age 25-40.

This is pure drivel.


Joon Chan
108 posts

Posted by Joon Chan > Feb 7, 2020 5:18 AM | Report Abuse

well written philip.
thank you for sharing.

"Compounded possibility of death is 1.5% from age 25-40."

Taking away road usage, this goes down alot?


RainT
7498 posts

Posted by RainT > Feb 7, 2020 11:10 AM | Report Abuse

spend a month just to understand GKENT & PCHEM....

need so long time meh ?

1 week also more than enough already


Rwkl
148 posts

Posted by Rwkl > Feb 7, 2020 1:40 PM | Report Abuse

If 1lot can buy in a heart beat.
A few million lots...... 1 month sounds about right


Philip ( buy what you understand)
4013 posts

Posted by Philip ( buy what you understand) > Feb 13, 2020 8:59 AM | Report Abuse

Really? I try to find answers to questions that seem easy but are actually hard to find.

RainT, think in business sense. Answer these simple questions, since you think a short term study is enough.

1. What products does the company sell. ( For example, list out what pchem sells, take pictures, ask friends/family/ acquaintances what they think of the product. Scuttlebutt).
2. Who do they sell them to? What is the average selling price, how are their distribution channels, stockists and inventory levels ( I personally have the kota kinabalu branch manager contact and supplier channel. I even brought him out to eat seafood to find out, my ex petronas friend helped me make a meeting.)
3. Who are their competitors? What prices do they sell at? Who stocks them, the fertilizer, plasticizer, etc ( I learnt here then that many are imported in from China, which sells at a very low price to compete with pchem, which is comfortable with their margin and unnecessary to drive competitors out of business, which they can do but why?)
4. What are their growth plans? ( I personally went to pangerang to take a look at the 2 billion USD pchem integrated plant. Armchair analysts I am not.) That is why I know their profit cycle is in 2021-2022.
5. What are the competitors growth plans? Are they cutting down production, or increasing? ( Yes, here I paid money for journals and business reviews reports, which stated that majors are cutting down production or shelving upgrade plans due to over supply and low prices. If everybody is doing the opposite of what pchem is doing, ( and since building a new refinery complex takes 3+ years), when supply slows down ( especially since demand has been going vertical for the last few years now). What is the long term consequence of reducing manufacturing, whole more uses for petrochemicals are being found?

6. What is the industry Outlook? You should read these journals and reports to understand the industry. Example:
https://www.iea.org/reports/the-future-of-petrochemicals

I use others which are paid for reports because pchem does not release Item by item prices and spot contracts.

I buy stocks based on that view, that I may see losses and lower profit ( due to start up costs, as no project I have ever done ever had a perfect start with no hiccups. More so a mega project. But I buy it because I have the funds to wait, and not worry over the short term. Those who buy it thinking it will appreciate in the next 6 months or 1 year, is looking for trouble.

If you can get all of those information in just a week, kudos to you as I am not as good at searching the internet for information or reading as fast.


>>>>>>>>

RainT spend a month just to understand GKENT & PCHEM....

need so long time meh ?

1 week also more than enough already
07/02/2020 11:10 AM


Kendo Ken Hz
954 posts

Posted by Kendo Ken Hz > Feb 13, 2020 8:55 PM | Report Abuse

Now, seem TP will be ten, then bonus share, then up again


stingray_ea
1977 posts

Posted by stingray_ea > Feb 14, 2020 9:49 AM | Report Abuse

Buy or sell


Philip ( buy what you understand)
4013 posts

Posted by Philip ( buy what you understand) > Feb 16, 2020 7:34 AM | Report Abuse

When I first bought ql and topglove, the valuation was only 1 billion+. When I first bought yinson, it has just changed business model and was close to winning its first FPSO contract.

Today QL is a 13 billion dollar company ( 13 bagger), topglov (15 bagger), yinson (7 bagger). The point that always eludes investors is simply this:

No one has a crystal ball. No one can predict the future. What you can only do is buy slowly into a company. Look at it's earnings and profitability. Study and understand it's position in the grand scheme of things. Then buy it slowly with a view of what will happen years from now, instead of next week.

The Corona virus and trade war is the best example of this. This will never affect the wonderful companies in the long term. But because of fear and worry, the price of the stock has been beaten down to wonderful levels, while the assets, management team, business model and future prospects remain the same.

Enjoy the discount days, they are the boon of the patient investor. Time is the best compounder.


WE IN
10 posts

Posted by WE IN > Feb 17, 2020 10:27 AM | Report Abuse

h


Sslee
4192 posts

Posted by Sslee > Feb 17, 2020 10:52 AM | Report Abuse

Haha 3iii,
You can still buy Pchem at discount days sales


Philip ( buy what you understand)
4013 posts

Posted by Philip ( buy what you understand) > Feb 17, 2020 12:38 PM | Report Abuse

fake 3iii ran out of things to say... he was about to comment on QL, then realized QL owns family mart and price went up to 8.63. Looks like I'm going to win the CharlesT Stockraider Bak Kut Teh bet for INSAS versus QL 2 year bet soon.

Fake 3iii now realizes 3000 per tonne palm oil, all the surumi booked ahead of japan olympics 2020, and family mart exponential growth and nothing to say.

Wonderful companies do Wonderful things.


i3lurker
5203 posts

Posted by i3lurker > Feb 17, 2020 1:12 PM | Report Abuse

so QL is only worth 1.17?

the figures are so funny from valuation reports


i3lurker
5203 posts

Posted by i3lurker > Feb 17, 2020 1:18 PM | Report Abuse

QL is not worth 7 or 6 or 5 ?

but only RM1.17 per share?

the Emperor has no clothes indeed !!!


Sslee
4192 posts

Posted by Sslee > Feb 17, 2020 2:32 PM | Report Abuse

Dear Philip,
https://klse.i3investor.com/blogs/tradevsa_smart_robie/2020-02-17-story-h1483848130-Robie_computes_and_agrees_the_call_of_this_analyst_on_QL_Resources_to_b.jsp

Robie computes and agrees the call of this analyst on QL Resources to be pricey and rate N/A.

Time to take some profit too.

Fundamental for QL[s] (7084).
http://www.ql.com.my/

FA Ratings : N/A
PE = 58.94
ROE = 11.75 %
DIY = 0.53 %
Mkt Cap: 13,709.6M (RM) in Large Cap, Consumer Products & Services, Main Market.
(3-Yrs CAGR: +34.5% p.a.)
Note: [s] = Syariah, ** = Good.
@ Trading at Overpriced (relative).

*Intrinsic Valuation Desk*
Intrinsic Value @ 10% disc rate = RM 1.68, IV @ 3.6% = RM 13.00, IV @ 7.5% = RM 3.00, IV @ 12% = RM 1.17,

Share is *OverValued *, Safety Margin @ 10% disc rate = -80 % (Sell !).

Thank you


i3lurker
5203 posts

Posted by i3lurker > Feb 17, 2020 3:00 PM | Report Abuse

People love naked Emperors who show kuku ciow


Philip ( buy what you understand)
4013 posts

Posted by Philip ( buy what you understand) > Feb 17, 2020 5:14 PM | Report Abuse

Sslee you have been saying QL overvalued from 2019 till 2020. Share is overpriced? Using what metrics? What are you comparing it to? Meanwhile instead of yoyo up and down like insas, all I have done is constantly add more and more and more each year.

Just a simple question though, who is QL competitor that has 160 family mart units, 30,000 acres of Palm oil, multiple refineries, biggest surumi and seafood frozen export division, and egg seller.

Until today I have yet to find one company with the same level of expertise.

Every year you say overvalued, every year the revenue, earnings and share price go up and price you wrong.

Thank you


Philip ( buy what you understand)
4013 posts

Posted by Philip ( buy what you understand) > Feb 17, 2020 5:34 PM | Report Abuse

In any case,

What is this?

*Intrinsic Valuation Desk*
Intrinsic Value @ 10% disc rate = RM 1.68, IV @ 3.6% = RM 13.00, IV @ 7.5% = RM 3.00, IV @ 12% = RM 1.17,

This is backward looking data. Incomplete picture.

Investment is laying down money today, to get a piece of the future earnings.

Now if smartrobie was REALLY SMART,

He will give the intrinsic value of QL 10 years from now, and give me the calculation of future valuation and how much I should be willing to pay for QL today.

All of the data smartrobie has given is quantitative and based on ratios of safety. Change one perimeter and the entire valuation changes.

What if the price of frozen seafood goes up? Valuation of earnings changes.
What if Malaysia and Indonesia starts using biodiesel as a government policy? Valuation of earnings changes.
What if chicken disease and lhi goes bankrupt and egg shortages occur? Valuation changes.
What if family mart expansion to East Malaysia, franchise to family Philippines bought from itochu?
What if QL expands into f&b franchise and buys over in & out burger chain? Valuation changes.

So you see, you and smartrobie can only see what is in front of you, nothing more nothing less. You could not have anticipated Palm oil prices increasing to 3000+. In fact, neither could I. I also cannot see the future, except for milestones that have been preset ( fixed sales of surumi bulk orders for Olympics Japan 2020), ( family mart store count of 300 by 2022).

Not knowing the future, we look to the past and present and future goals, compared to the management capability to perform.

QL is overvalued because it has performed. As long as it continues to perform, it will continue to be overvalued. More importantly, it has the financial and management capability to continue to perform, because it stays within its circle of competence.

As should you.

Thank you


Sslee
4192 posts

Posted by Sslee > Feb 17, 2020 6:09 PM | Report Abuse

Dear Philip,
No offend. I just posted the link from Smart Robie in referring to what i3lurker comment about.

I3lurker claimed he had used Monte Carlo Simulation for project evaluation and further claimed that all IB will base on Monte Carlo simulation to make their IB report and recommendation.

Had you use this Monte Carlo simulation programmed analysis before in your work for project study?

Thank you


Philip ( buy what you understand)
4013 posts

Posted by Philip ( buy what you understand) > Feb 17, 2020 8:38 PM | Report Abuse

I3lurker uses computers to think for him. That is why his results are always subpar. If I have d listen to Monte Carlo simulation, I would not have held QL from 2009 until today 2020 and still going up from 6.7 to 8.6.

Interestingly enough, ulam and von Neumann ( from the Manhattan project that created the atom bomb) created this simulation while playing solitaire, which is by itself a fixed game with low variables.

In essence, Monte Carlo simulation only works if you assume efficient markets. Which I believe do not exist.

Anyway, I don't use it for project study anyway either. I am a firm believer if the if something can go wrong, it can and will go wrong sooner or later.

If you have ever commissioned a palm oil refinery before you know exactly what I mean. The problems that usually come out, come from left field. Something totally out of expectation.

Thank you


Philip ( buy what you understand)
4013 posts

Posted by Philip ( buy what you understand) > Feb 18, 2020 3:27 PM | Report Abuse

Its funny how analysts are either very optimistic or very negative based on past info, but make funny assumptions into the future. Well, the thing is, these are all very achievable and simple goals to reach, low hanging fruit which have a low chance of failure, as the initial push and risk outlay has been done years ago. Now it is just a case of expanding on all cylinders and moving forward.

I believe QL will get 2 billion in revenue every quarter from organic expansion, with a 5% net earnings or 100 million a quarter in earnings in a few years.

When that happens, the next thing on the list is to start or buy over a growing franchise (i hope it is in& out burger), and expand in south east asia to become the next big thing here and dethrone cp.food.

>>>>>>>>>>>>

QL Resources - Consumer juggernaut deserves a premium PE
Author: HLInvest | Publish date: Tue, 4 Feb 2020, 5:29 PM

We met with QL management and came away feeling positive on the group’s prospects going forward. Forecasts remain unchanged. We raise our TP from RM6.56 to RM8.20 based on a higher PE multiple of 50x (+1SD above its 5 year average PE) from 40x previously. While we understand 50x PE may appear to be a rich valuation, given the size of QL, growth prospects and lack of alternative investment options of this magnitude in the consumer sector, we feel this is justified.

We met with QL management and came away feeling positive on the group’s prospects going forward.

Integrated Livestock Farming (ILF). QL intends to increase egg production capacities in Indonesia (to 1.4m from 0.85m) and Vietnam (to 1.8m from 0.85m) over the next four years. We expect egg consumptions in Indonesia and Vietnam continue to increase as both countries become increasingly wealthy (egg consumption in Indonesia increased from 60 eggs per person p.a. in 2011 to 90 currently). Note that in Malaysia, egg consumption tops 300 per person p.a. currently. We are positive on these growth ventures as we are confident there is still room for growth in consumption for Indonesia and Vietnam. As QL is already a large poultry player, we see little execution risk in these ventures. Note that currently, QL already produce approximately 5.7m eggs per day (4m of these in Malaysia).

Marine Processing Manufacturing (MPM). QL’s fish ball and surimi processing remain dependent on weather conditions, which effect volume of fish catches. In order to mitigate this risk, QL have ventured into aquaculture production (which involves farming of fish, prawns etc. under controlled conditions). QL intends to increase production capacity from 2,000MT currently to 6,000MT p.a. in the next four years. We understand aquaculture products are sold to Australia, China and Japan markets.

Palm Oil Activities (POA). Surging CPO price bodes well for QL’s plantation division. CPO price surged 45% since mid-2019 to ~RM2,850/mt currently. HLIB expects CPO to average RM2,550/mt in FY20 (+13.5% YoY). QL’s plantation division is well positioned to take advantage of the high price, as 85% of their planted trees are in their prime fruiting age.

Family Mart venture. QL currently has ~170 operational outlets, with plans to open a further 80 stores in FY20. We expect new outlets in Klang Valley and sub-urban areas in addition to further locations in Johor Bahru, Melaka and Negeri Sembilan. They intend to have 300 operational outlets by FY22. We are very positive on the group’s venture into the convenience store business as the profitability of stores has far exceeded our expectations due to (i) higher average ticket amount; (ii) higher average customer count; and (iii) skewed sales mix toward fresh food. QL shared that the capex requirement for each store averages RM400k. We are very positive on the group’s Family Mart venture as our internal calculations indicate Family Mart has already turned profitable in under 3 years, which was previously expected to take 7 years.

Forecast. Unchanged.

Upgrade to HOLD. We like QL for its diversified revenue streams, seasoned management team and decent growth prospects. We raise our TP from RM6.56 to

RM8.20 based on a higher PE multiple of 50x (+1SD above its 5 year average PE) from 40x previously. While we understand 50x PE may appear to be a rich valuation, given the size of QL, growth prospects highlighted above and lack of alternative investment options of this magnitude in the consumer sector, we feel this is justified.

Source: Hong Leong Investment Bank Research - 4 Feb 2020


Philip ( buy what you understand)
4013 posts

Posted by Philip ( buy what you understand) > Feb 18, 2020 3:28 PM | Report Abuse

I couldn't have said better myself.

>>>>>>>>>>>
While we understand 50x PE may appear to be a rich valuation, given the size of QL, growth prospects highlighted above and lack of alternative investment options of this magnitude in the consumer sector, we feel this is justified.


PaulNewman
75 posts

Posted by PaulNewman > Feb 18, 2020 8:48 PM | Report Abuse

Thanks Philip. Learnt a lot today. Hope to see more sharing from you.


stockraider
19618 posts

Posted by stockraider > Feb 21, 2020 12:06 AM | Report Abuse

Raider's Senior sifu advice carefully consider this mah:

U NEED TO UNDERSTAND LOH...!!
WHEN RAIDER SAYS INSAS IS WORTH AT LEAST RM 3.50, IT IS A FACT LOH, ITS NTA PLUS INARI EXCESS MARK TO MKT PREMIUM EASILY EXCEED RM 3.50 LOH, THIS IS THE TRUTH NOTHING BUT THE TRUTH LOH...!!

HAVING SEEN THIS SITUATION,HOW CAN U PARTICIPATE IN THIS OPPORTUNITY LEH ??
1. U CAN INVEST INSAS AT RM 0.83 & HOLD LONG TERM.
2. U CAN PUNT INSAS-W AT RM 0.005 FOR A 2 MONTHS WINDOW MAH..!!

IF U CHOSE TO SPECULATE & LOSE MONIES LIKE MIKE BELOW NOW CRY BABY, BUYING INSAS-W 0.5 SEN, RAIDER PITY HIM, BCOS THE SPECULATION HAS FAILED EVEN WITH BEST EFFORT, IT IS A CALCULATED RISK WITH HUGE PAYOUT, IF SUCCESSFUL LOH...!! BUT DO NOT CRY BABY LIKE MIKE IF U FAILED LOH, BCOS U R SPECULATING WITH HUGE REWARD VALUE RATIO MAH...!!

ON THE HAND, IF U CHOSE TO INVEST IN INSAS AT RM 0.83, U R DOING JUST FINE, INSAS IS NOW ABOUT RM 0.86 AFTER 2 MTHS, WITH LONGEVITY OF INVESTMENT, IT CAN ATTAIN THE TARGET OF RM 3.50 A RESULT U CAN BE PROUD & CAN TELL YOUR CHILDREN OR YOUR GRAND CHILDREN YOUR SUCCESSFUL FORAY INTO AN UNDERVALUE MARGIN OF SAFETY INVESTMENT LOH....!!

Posted by stockraider > Dec 4, 2019 7:24 PM | Report Abuse X

Today substantial 21.366m of insas warrant B at rm 0.005 was traded in the market, that means potential large corporate raider, may want to ambush insas shares given that the thong family only hold 33% loh...!!

This is bcos insas inclusive of inari associate is worth at least Rm 3.50, that means it is worthwhile for corporate raider to attack insas at price even at above rm 1.00 loh...!!

The corporate raider have 2 to 3 mths to carry out their raiding campaign loh....!!

U have too choice to play insas loh....u either buy the mother insas at Rm 0.83 or u buy warrant B at Rm 0.005 loh....!!

For your info raider bought 1m insas warrant B at Rm 0.005 costing raider rm 5k loh...!!

Next raider will accumulate the mother share loh...!!

Posted by stockraider > Dec 4, 2019 7:49 PM | Report Abuse X

It is a small change to punt insas wb at 0.5 sen loh....!!

The key success factor is still insas mother which has intrinsic value of Rm 3.50 mah..


stockraider
19618 posts

Posted by stockraider > Feb 21, 2020 12:06 AM | Report Abuse

U pakai otak..covid 19 virus, trade war and msia political crisis of course, we must kasi some allowance & adjustment sikit mah...!!

Macam Philip pun kata Pchem can go Rm 10.00 tapi sekarang baru Rm 6.56, raider pun understand mah....no need go to pchem complain everytime mah......!! Only complain 1 or 2 time only loh...!!

But most importantly...insas recommend 83 sen beli recently, sudah naik to 86 sen....all investor make monies within a period of 2 mths mah...!!

Posted by Philip (Can I advise you?) > Feb 19, 2020 3:22 PM | Report Abuse

In August 19 stoneraider said insas go to 90 cent.
In January 20 stoneraider said insas go to rm1.
Now in April 2020, stoneraider say insas can go to 3.50????

Who is giving false information here?


stockraider
19618 posts

Posted by stockraider > Feb 21, 2020 12:08 AM | Report Abuse

This Philip is dead wrong & out mah...read carefully mah....raider rely both NTA and earnings of insas mah....!!

"Thats why raider say insas 83sen is great bcos it got both has good earnings and NTA, thats why its margin of safety is great & safe loh"...!!

On the issue on "assets of no income" and assets with "high ROE" make this fallacies loh...!!

1. If u have piece of empty in kota kinabalu, but have no income or u may even make losses bcos u have to pay for outgoing of the land...can u tell me your piece of empty has no value meh ??
Of course not loh..!!
Thus the same applies to share with high NTA share, but have low return or no return, of course they always be some good value on your nta loh..!!
Warren Buffet also says NTA is an approximate value of a fair value .

2. Imagine u have Nestle, the ROE of 70%, does that means u give more capital to nestle...it still can generate 70% return on the extra capital leh ??
The answer is NO mah....!! This is bcos extra capital will have little use, it will even bring down the high ROE mah..!!
Thus NESTLE have no choice but to distribute high dividend loh..!!

3 Say Nestle ROE 70% & nta is Rm 3.00 thus it return is rm 2.10 pa.
Or your prefer Aa PALM OIL company that have NTA of Rm 30.00 but generate a roe of 7% pa thus give u a same return of rm 2.10 PA loh...!!

ANYBODY WHO IS NOT A FOOL WILL CHOSE Aa PALM OIL COMPANY instead OF NESTLE MAH...BCOS WHEN NESTLE COMPANY EARNINGS FALTERED, IT WILL WORTH RM 3.00 MAH, WHEREAS in case of Aa COMPANY U STILL CAN LOOK UP FOR THE RM 30.00 NTA when its earning falter MAH..!!

THUS THIS HOW INVESTMENT IN INSAS IS FORMULATED AS A VIABLE INVESTMENT WITH BIG MARGIN OF SAFETY LOH.....!!

Posted by Philip (Can I advise you?) > Feb 19, 2020 10:31 PM | Report Abuse

Raider raider.... After so many years you still don't understand what is meant by assets? If you ever learn anything, learn that there are many different types of assets, otherwise you will keep falling into the same trap forever.

If you only use level one thinking then you should buy all the property stocks, TALAMT, ASIAPAC, bjland, etc those companies. Asiapac is a good deal right? Selling for 13 send today with nta more than 1 ringgit?

But the answer is simple: there are many different types of assets, just as the earnings return on assets and equities employed play a huge difference in valuation.

It is pointless to shout insas is worth rm3.50, sapura is worth 0.86 per share, ASIAPAC is worth rm1 if you do it without context of the quality of the asset.

Why do people spend so much money to chase dlady? A company that has a net asset of RM 2.3 is about to produce rm1.65 in net earnings. Imagine how efficient that is. In comparison, a company like sape with 13 billion in "assets", last year has a asset value of 0.86 per share, but made you a loss of 2 ringgit.

Why is context important? It gives you a story of impairments. What is the real value of the assets, and how much in actuality you can monetize it. It answers the question why TALAMT, ASIAPAC, insas, sapura seem to be stuck for such a long time, while other stocks keep going up and up.

In the end all that matters is earnings per share, how much debt is being raised to fetch those earnings, how efficient the assets are in growing earnings, and how much you the shareholder is getting from your ownership of shares ( buybacks, dividends, etc)

If you want to keep on using NTA as your investment metric, at least do it properly and put it in the context of earnings return on assets employed, ROE, and assets to earnings growth.

In either case, if you need to chase, chase future earnings growth, instead of buying NTA accounting companies.

Else, just dump all your money into those developer companies. They have all the cheap assets you can ever want ( empty unsold condo which you have to pay loan and interest every year).


Joon Chan
108 posts

Posted by Joon Chan > Feb 21, 2020 12:12 AM | Report Abuse

i've got to stay stockraider is very creative in justifying stuff.


qqq33333333
2834 posts

Posted by qqq33333333 > Feb 22, 2020 7:34 PM | Report Abuse

ql is a good example..................all the amateur value investors are wrong.................the pros are correct.......................


qqq33333333
2834 posts

Posted by qqq33333333 > Feb 22, 2020 7:52 PM | Report Abuse

at the end of the day, it is all about attitude...and the pros got better attitude............


SilvaMS
41 posts

Posted by SilvaMS > Feb 23, 2020 4:48 PM | Report Abuse

Come on livestock shares.....fly ...no need to worry...people will continue to feed their bellys with chicken n eggs...


qqq33333333
2834 posts

Posted by qqq33333333 > Feb 23, 2020 4:52 PM | Report Abuse

but only QL......


no rewards for shareholders of Layhong, Leong Hup and others.......


SilvaMS
41 posts

Posted by SilvaMS > Feb 23, 2020 5:05 PM | Report Abuse

Qqq33333..ive made a general statement..no nees to get emotionally involve..answer me this...at supermarket went normal people buy eggs ..did they pick only ql brand only?..people couldnt care ql...or LHi or tpc or etc..they pick eggs only..dont be typical guys just like an eggs ..hehe..


Kendo Ken Hz
954 posts

Posted by Kendo Ken Hz > Feb 23, 2020 10:37 PM | Report Abuse

Family mart toward 100 mil profit in three years times

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