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KLSE: RCECAP       RCE CAPITAL BHD
Last Price Avg Target Price   Upside/Downside Price Call
1.61 2.10     +0.49 (30.43%)
* Average Target Price, Price Call and Upside/Downside are derived from Price Targets in the past 6 months.
** Price Targets are adjusted for Bonus Issue, Shares Split & Shares Consolidation (where applicable).
Date Open Price Target Price Upside/Downside Price Call Source News
No Price Target available for this stock.





  7 people like this.
 
eleh talking on company sbb, i think the cost sbb per share as at today is around 1.06-1.07.
15/03/2019 9:09 AM
eleh i think company next move will be giving treasury shares out as ESOS.
15/03/2019 9:10 AM
Choivo Capital Phillip,

The only reason why cigar butt method is outdated, is because they are so few of these companies left, and not much money can be placed in them , especially in the US.

Buffet stopped, because his capital is too large and he did not enjoy the process. Schloss stopped because he couldn't find any anymore.

This is not the case in malaysia. You have fairly profitable property development companies, paying out 4-6% dividend yield, selling for 50-70% discount to liquidation value. its a no brainer to buy some in a diversified, for me at least.

Here are two funds in malaysia/singapore who are practicing it quite successfully with good returns. Yeoman Capital, and Aggregate Asset Management.

In the US, you may have heard of this person called Seth Klarman.

There is no such thing as outdated, when it comes to value investing, just whether it can still be executed.

And this is not a cigar butt for me.

That is one way to think about PE6, but at some point, VITROX, PADINI, INARI were below 10PE PE and yielding 7% dividends.

The goal in investing is to find where market is wrong or inefficient, make your purchase, and wait for the market to correct itself.

Wells fargo, BOA etc also have low-ish valuations compared to the market, despite capital structures being far better than in the previous years.

What is investing but the long term arbitrage between the price of the stock and the intrinsic value of the company?

I think the market is wrong.

On your questions on the company, i know enough to understand the 5-10 year competitiveness of the company and the industry, and at this price, i've got a good enough margin of safety. I don't engage in false precision, and chase after information that have low utility.

See the trees miss the woods and all.

This isn't a 50PE company, where i better be right on every single aspect. Still i do enjoy the process of getting to know the company better.
15/03/2019 9:54 AM
Choivo Capital By the way,

Its not 10, its 5 years. Moving forward, i don't expect such strong growth, and if such strong growth was obtained in this kind of industry, i would be selling.

I expect a growth somewhere below GDP, since the govt is slowing down hiring etc. If it was fair value, i would not be as keen. But i'm getting a very nice discount.
15/03/2019 9:57 AM
KNM Sailang Margin All In Sharebuyback for ESOS is no difference than taking shareholders money to give themselves. Or I would say robbery if i am not being nice.
15/03/2019 10:00 AM
Choivo Capital Their buyback policy is whenever its below book. At this price, i would rather they buy back even more than ESOS issued. They usually buy less.
15/03/2019 12:20 PM
(S=QR) Philip The last time they hit 70 million was 31st December 2010. Or am I wrong?
15/03/2019 1:12 PM
Choivo Capital Oh you mean quarterly revenue. I thought you mean profit for some odd reason.

Yeah in that case, you're right.

I'm in no rush though,slightly below GDP growth is more than enough at this price.
15/03/2019 5:21 PM
GLNT https://www.finews.asia/finance/28549-singapore-fintech-launches-platform-for-personal-loans
30/03/2019 8:46 AM
GLNT https://www.sinchew.com.my/pad/con/2019-03/30/content_2030352.html
30/03/2019 6:50 PM
Choivo Capital Thanks.
01/04/2019 11:02 AM
(S=QR) Philip Oh god. Fintech startups in Singapore like numoni? Bye bye rm120 million...
03/04/2019 7:07 PM
chshzhd fintech so bad meh:)
03/04/2019 11:37 PM
GLNT https://sbr.com.sg/financial-services/news/online-lending-startup-offers-personal-loans-50000
04/04/2019 7:20 AM
GLNT Philip just simply wanna whack the credit culture deal without without bothering to look at the terms of the deal. Everything RCE is rubbish. George Kent is the best. Got it. Thanks.
04/04/2019 7:30 AM
GLNT What happens when credit culture fails? What does the terms say? Will RCE lose the money? What’s the collateral? How does RCE benefit even when CC fails? Oh... everything is gone! Aahhh, who bothers? George Kent is the best investment for now. Yay
04/04/2019 7:34 AM
GLNT Is the 120 million investment an equity stake in the company? A bond? Read the sheet. Oh, who cares? GKent!
04/04/2019 7:44 AM
Outliar :'D
04/04/2019 5:25 PM
(S=QR) Philip You don't have to be a genius to know Bitcoin bubble was going to burst, Warren Buffett called it a long time ago.

I buy fintech companies with a specifc purpose that fulfills a certain market need. I don't buy it just because it says fintech. I also don't think the management of RCECAP has the same level of financial acumen.

Maybe you can read more on my fintech investment here ( and the share price today)
https://klse.i3investor.com/blogs/philip2/191042.jsp

>>>>>>>

GLNT Philip just simply wanna whack the credit culture deal without without bothering to look at the terms of the deal. Everything RCE is rubbish. George Kent is the best. Got it. Thanks.
04/04/2019 7:30 AM
12/04/2019 11:14 AM
(S=QR) Philip Obviously when I say say oh god I back it up with facts.

Here is fact number 1. RCECAP is selling bonds at 10% to credit culture. Sounds good? Wait.

Here is fact number 2. Stop looking at profits, think on the risks ( as someone who borrowed and borrow money to others repayment is more important than profits). In this case there is no collateral or capital guarantee. The bond repayment is based on the loan portfolio receivables. Meaning upon collapse, rcecap will have to do the loan chasing themselves in Singapore. And these will be those b40 people, very hard up already. Got funds? Bankruptcy lo.

Here is fact number 3. What is the basis of lending? Basically it is based on their proprietary internally processed credit scoring system, which we are not privy to. As this is an online, quick lending system, I suspect credit culture will not have the capability to chase after major defaults, and their marketing tool in getting clients is based on lowered borrowing costs, faster approval, no collateral. That is the worst combination I will ever hear in the lending business ever. The best performing banks in Malaysia is public bank and Hong leong, they are successful because they are the most conservative and stringent lenders in town. How safe do you think credit culture will be?

Fact number 4? Look at the founders and the management team. They won after a pilot award from the government of Singapore. Young people and money management had never been a good mix. Ever. Just because it is a cool sounding proposition doesn't mean it will succeed. Especially since it has no track record and a good business fundamentals historically.

Fact number 5? Here is the killer. If you go to the website, the charges are as follows, rates are 0.8% monthly, with 1% setup fees. That means of you borrowed 10,000. You will pay back after 1 year 9.6% + 1% = 10.6% ON YOUR TOTAL LOAN. Let me put it mildly, if we round up and say you are paying 11%, basically credit culture is making 1% profit a year on its loan portfolio. Rce 10% right?

This is obviously ok if you are lending to the super rich or VIP to buy another house, buy that new Mercedes. Especially if it is covered with a huge current/savings/fixed deposit account at the bank. It's perfectly safe.

If you are making 1%, and lending to kids who can barely make ends meet, and need that "personal loan" to pay for things which they can't normally pay for? It's just stupid.

Especially when the chickens come home to roost.

Even rce isn't that stupid.
12/04/2019 11:47 AM
stockraider Soochai Philip...where got people borrow 10% pa lend 11% pa maybe your grandfather loh...!!

Stop playing with this fake news loh....!!

If true, RCE will be borrowing at 3 to 4% pa and lend out at 11% pa mah....!!

Pls don 't fool us lah....!!

Posted by ( BNF trader losses ) Philip > Apr 12, 2019 11:47 AM | Report Abuse

Obviously when I say say oh god I back it up with facts.

Here is fact number 1. RCECAP is selling bonds at 10% to credit culture. Sounds good? Wait.

Here is fact number 2. Stop looking at profits, think on the risks ( as someone who borrowed and borrow money to others repayment is more important than profits). In this case there is no collateral or capital guarantee. The bond repayment is based on the loan portfolio receivables. Meaning upon collapse, rcecap will have to do the loan chasing themselves in Singapore. And these will be those b40 people, very hard up already. Got funds? Bankruptcy lo.

Here is fact number 3. What is the basis of lending? Basically it is based on their proprietary internally processed credit scoring system, which we are not privy to. As this is an online, quick lending system, I suspect credit culture will not have the capability to chase after major defaults, and their marketing tool in getting clients is based on lowered borrowing costs, faster approval, no collateral. That is the worst combination I will ever hear in the lending business ever. The best performing banks in Malaysia is public bank and Hong leong, they are successful because they are the most conservative and stringent lenders in town. How safe do you think credit culture will be?

Fact number 4? Look at the founders and the management team. They won after a pilot award from the government of Singapore. Young people and money management had never been a good mix. Ever. Just because it is a cool sounding proposition doesn't mean it will succeed. Especially since it has no track record and a good business fundamentals historically.

Fact number 5? Here is the killer. If you go to the website, the charges are as follows, rates are 0.8% monthly, with 1% setup fees. That means of you borrowed 10,000. You will pay back after 1 year 9.6% + 1% = 10.6% ON YOUR TOTAL LOAN. Let me put it mildly, if we round up and say you are paying 11%, basically credit culture is making 1% profit a year on its loan portfolio. Rce 10% right?

This is obviously ok if you are lending to the super rich or VIP to buy another house, buy that new Mercedes. Especially if it is covered with a huge current/savings/fixed deposit account at the bank. It's perfectly safe.

If you are making 1%, and lending to kids who can barely make ends meet, and need that "personal loan" to pay for things which they can't normally pay for? It's just stupid.

Especially when the chickens come home to roost.

Even rce isn't that stupid.
12/04/2019 11:54 AM
(S=QR) Philip You quarrel but based on stupidity I can't say anything... Let you say whatever you want. I lazy argue with office boys.

Injection Via Bonds

The S$40 million investment from RCE Capital comes via the purchase of five-year bonds issued by Credit Culture. The debt securities are in turn secured against loan receivables from Credit Culture.

The coupon rate on the first S$20 million is 10 per cent per annum, while the rate for the balance S$20 million has not been set, RCE Capital said. The bonds can be redeemed ahead of their maturity at the discretion of Credit Culture.

The Singapore fintech has also granted call options to RCE Capital, which give the latter the right to take a stake of up to 30 per cent in Credit Culture, on the fully enlarged shareholding basis.
12/04/2019 12:04 PM
stockraider Put it in a nutshell RCE is investing into the fintech co (credit culture} bonds at the rate 10% pa upto SGD 40m loh....!!

The securities for RCE will be the loan receivable credit created by credit culture by lending to fintech customers loh...!!

Ok mah....RCE is just a lender to the fintech co loh...!!

Posted by ( BNF trader losses ) Philip > Apr 12, 2019 12:04 PM | Report Abuse

You quarrel but based on stupidity I can't say anything... Let you say whatever you want. I lazy argue with office boys.

Injection Via Bonds

The S$40 million investment from RCE Capital comes via the purchase of five-year bonds issued by Credit Culture. The debt securities are in turn secured against loan receivables from Credit Culture.

The coupon rate on the first S$20 million is 10 per cent per annum, while the rate for the balance S$20 million has not been set, RCE Capital said. The bonds can be redeemed ahead of their maturity at the discretion of Credit Culture.

The Singapore fintech has also granted call options to RCE Capital, which give the latter the right to take a stake of up to 30 per cent in Credit Culture, on the fully enlarged shareholding basis.
12/04/2019 12:17 PM
(S=QR) Philip Ok stockraider you win! You go and borrow rm10 to the beggar in the street tomorrow and tell him pay you back rm11 next year, see he Choi you or not ok? He take your money, say thank you and declare bankruptcy for you big big smile. Nothing to lose if poor.

Enough storytime with despatch kids who don't know how to handle money.
12/04/2019 12:21 PM
stockraider Raider just put ur miscommunication to proper perspective nothing about who win who lose lah....!!

Use your brain think lah....!!

Posted by ( BNF trader losses ) Philip > Apr 12, 2019 12:21 PM | Report Abuse

Ok stockraider you win! You go and borrow rm10 to the beggar in the street tomorrow and tell him pay you back rm11 next year, see he Choi you or not ok? He take your money, say thank you and declare bankruptcy for you big big smile. Nothing to lose if poor.

Enough storytime with despatch kids who don't know how to handle money.
12/04/2019 12:23 PM
qqq3 I like the participation of Philips and the young One....


and everyone knows whose side I am on.....
12/04/2019 12:26 PM
stockraider U don understand loh 11% pa...list in the website by credit culture fintec co is just a mkt gimmick or teaser loh...u try borrow ...see u can get that rate or not ??

Soochai Philip...don know how business operate meh ??


Posted by ( BNF trader losses ) Philip > Apr 12, 2019 12:21 PM | Report Abuse

Ok stockraider you win! You go and borrow rm10 to the beggar in the street tomorrow and tell him pay you back rm11 next year, see he Choi you or not ok? He take your money, say thank you and declare bankruptcy for you big big smile. Nothing to lose if poor.

Enough storytime with despatch kids who don't know how to handle money.
12/04/2019 12:29 PM
qqq3 In stock market, A lot of people are like Choi

But I consider Philips the 1%..........the better approach.


I also think the difference is because Philips do it using his own money while Choi depends on client money. Much easier to get client money using Choi approach.
12/04/2019 12:30 PM
qqq3 and of course raider spamming, as usual.
12/04/2019 12:31 PM
stockraider qqq u add no value on your comment loh...!!

Posted by qqq3 > Apr 12, 2019 12:30 PM | Report Abuse

In stock market, A lot of people are like Choi

But I consider Philips the 1%..........the better approach.


I also think the difference is because Philips do it using his own money while Choi depends on client money. Much easier to get client money using Choi approach.


qqq3
9420 posts
Posted by qqq3 > Apr 12, 2019 12:31 PM | Report Abuse

and of course raider spamming, as usual.
12/04/2019 12:32 PM
qqq3 stockraider > Apr 12, 2019 12:32 PM | Report Abuse

qqq u add no value on your comment loh...!!
======

I think its very insightful of me......I got good insights.
12/04/2019 12:34 PM
Choivo Capital Every sen in the fund is mine, or guaranteed by me.

Where its not guaranteed, i earn zero. At least until i have a good enough track record, where i think i can charge as i can get above average returns.

I suggest you consider thinking a little before talking.
=====
I also think the difference is because Philips do it using his own money while Choi depends on client money. Much easier to get client money using Choi approach.
12/04/2019 12:47 PM
stockraider Chivo,

U r totally wrongloh....!!

If something happen to credit culture certainly will impact RCE mah...!!

But i not seeing cc lending at 11% pa...that is a gimmick or mkt teaser to get people interested loh....!!


Posted by Choivo Capital > Apr 12, 2019 12:45 PM | Report Abuse

Phillip,

You are right on the rates by credit culture and the margins for credit culture.

What i see is RCECAP covering their backside properly as a bondholder.

They are getting a 10% SGD bond, secured against the loan portfolio, in a market where FD is 1.5 to 2%, secured term loans 2.9-3%, unsecured about 6-7% and SG SME Loan rates of 10.88%. Personal loan in sg is about 7-9%.

If with impairments in, they can get around 6%, which is what RCE is getting from their loans now, except in SGD, which is way better.

Im pretty ok. I don't really care about what happens to CC, just what happens to the bonds.

Now on chasing money, i can tell you now, every credit co in msia and sg, use a third party to chase, unless the amount is damn big, in the event any chasing is needed.

As for whether CC will turn out to be good, we'll see. At some point, personal loans etc will be alot easier to get.

Having said that, i'm talking with management on CC, we'll see.
12/04/2019 12:50 PM
qqq3 Choivo Capital > Apr 12, 2019 12:47 PM | Report Abuse

Every sen in the fund is mine, or guaranteed by me.
=======

do whatever u want....before the authorities catch up with u.

still, I consider Philips writing very educational.
12/04/2019 12:53 PM
Choivo Capital Phillip,

You are right on the rates by credit culture and the margins for credit culture.

What i see is RCECAP covering their backside properly as a bondholder.

They are getting a 10% SGD bond, secured against the loan portfolio, in a market where FD is 1.5 to 2%, secured term loans 2.9-3%, unsecured about 6-7% and SG SME Loan rates of 10.88%. Personal loan in sg is about 7-9%.

If with impairments in, they can get around 6%, which is what RCE is getting from their loans now, except in SGD, which is way better.

I'm pretty ok. I don't really care about what happens to CC, just what happens to the bonds.

And if CC does well, they get to convert it to equity.

A pretty decent convertible bond to me.



As for whether CC will turn out to be good, lets see.

1) Can only borrow up to 6X salary, capped at 50k SGD.
2) Upload singpass and Credit Bureau Singapore Report(which determines your rate and loan amount),
3) Meet loan office for final verification.

Sounds similar to how every bank give out personal loans, except less overhead as most things are done online.

At some point, loans, personal etc will be a lot easier to get.

The current model of borrowing money, that requires me to go to the bank etc etc, does not make sense, as you can submit everything online, and meet officer afterwards to settle.

Now on chasing money, i can tell you now, every credit co in msia and sg, use a third party to chase, unless the amount is damn big, in the event any chasing is needed.

Having said that, i'm talking with management on CC, we'll see.
12/04/2019 12:54 PM
Choivo Capital raider, maximum CC charge is 1% per month>

So they need to keep the quality up to that of your typical bank, and save on overhead.
12/04/2019 12:58 PM
qqq3 The first instinct of young accountants is arbitraging.....maybe, one day RCE can go crazy and u make money on RCE.....from fairly valued to over speculated.

As for me, I consider RCE as a play thing of Tan Sri. Its not some thing for u and me to invest.
12/04/2019 1:02 PM
chshzhd rce so bad:)
12/04/2019 6:45 PM
KNM Sailang Margin All In wahhh so much drama here ahhh today
12/04/2019 10:18 PM
antoniomc27 Questions: since when has RCE been doing the strategy of buying back a very small number of shares almost every day? I only started following the counter 3 months ago. Is it to inspire confidence and support the price?

What do you think they will end up doing with the shares, since it does not seem total volume will ever be big enough to do a bonus issue: will this just be kept as treasure shares? Or even worse, will this just be given away via ESOS?

Thanks.
19/04/2019 7:43 AM
leekh5555 if look at the high profit margin,very tempted to buy BUT why only traded at PER 6.27(current price RM1.65)? are there any hidden risks that we omitted?
19/04/2019 1:39 PM
chshzhd OTHERS RCE CAPITAL BERHAD ("RCE") - PROPOSED INVESTMENT IN PRIVATE DEBT SECURITIES OF CREDIT CULTURE PTE. LTD. BY RCE CREDIT PTE. LTD. ("RCE CREDIT"), A WHOLLY-OWNED SUBSIDIARY OF RCE
We refer to our announcements made on 22 January 2019 and 29 March 2019 (“Earlier Announcements”). Unless otherwise stated, the definitions used throughout this announcement shall have the same meaning as defined in the Earlier Announcements.



Further to the Earlier Announcements, the Board of Directors of RCE wishes to announce that RCE Credit, a wholly-owned subsidiary of RCE, has terminated the Subscription Agreement due to non-fulfilment of the conditions precedent provided therein.



Accordingly, the Call Option Agreements shall cease to be in force.



The termination of the Subscription Agreement and Call Option Agreements are not expected to have any material effect on the earnings per share and net assets per share of RCE for the financial year ending 31 March 2020.



This announcement is dated 25 April 2019.
25/04/2019 7:52 PM
Outliar https://www.theedgemarkets.com/article/frankly-speaking-why-rce-still-buying-back-its-shares
13/05/2019 3:29 PM
Choivo Capital Malaysia is abit different, in other countries, giving out dividend is less tax efficient, compared to buying back shares, so, for us, its interchangeable with no real cost. but dividend is naturally preferred for most.

I think RCE shares is worth about 2.3-2.7 per share. So i'm perfectly fine with them buying back shares. Nothing wrong with dividends though.

If the share was 2.2 and they are buying it back, well, id much prefer dividends then.

====
Outliar https://www.theedgemarkets.com/article/frankly-speaking-why-rce-still-...
13/05/2019 3:29 PM
13/05/2019 6:31 PM
Choivo Capital chshzhd,

Not surprised. 10% convertible bond, is just unbelievably amazing deal. You must be stupid or unbelievably desperate to take it. Its basically giving them the company for free if you don't do incredibly well.

I'm quite happy that they wanted such a rich concession from the other party though, considering the risks. Shows me they got brain.
13/05/2019 6:34 PM
Wadafuq NPL 4.2%? o.o
28/05/2019 7:51 PM
GLNT If NAV keeps increasing at 7cents per quarter, a year will be 28cents or 17percent of current price.
29/05/2019 9:38 PM
Duncan Invest My review about RCECAP> http://evassmat.com/21735737/duncaninvest
01/06/2019 2:15 AM
DaitoRyu ^The above link leads to Adware and potential Malware installation.
07/06/2019 11:02 AM
hng33 Today, bought RCE at 1.60
15/07/2019 5:03 PM


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