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Overview
Financial Highlight
HeadlinesBusiness Background George Kent is an engineering company involved in manufacturing, trading, and investment, development of services development of water infrastructure projects and provision of construction services. Its core businesses are in the water and construction industries. The company exports its products to Singapore, Thailand, Vietnam, Myanmar, Cambodia, Indonesia, Philippines, Papua New Guinea, Australia, Hong Kong, Sri Lanka, Kenya, South Africa, South America and the United Kingdom.
  Philip ( what you can learn from RJ MITTE ) Trust in RHB, one of the worse run bank in Malaysia, the ones who said QL was over valued and gave a TP of 5.85. on the other hand I also remember sslee and Calvin was the one who loudly keep saying QL was overvalued at pe50 and will soon suffer a crash in stock price. Meanwhile during this crisis QL is still above January 2019(6.90) price, or did you forget? While INSAS drop price to 40 cents and Calvin entire portfolio is red ( netx drop 50%). The difference? Unlike those companies Calvin and sslee hold, gkent has bought back millions and millions of shares back. I have already increased my shareholding value by 5% doing nothing. More dividends for me when LRT 3 earnings are reflected. 2 things Calvin and sslee forget: 27-Mar-2020 Insider GEORGE KENT MALAYSIA BHD buyback 190,000 shares from 0.540 to 0.585 on 27-Mar-2020. (Did netx and INSAS do such a thing? Does Insas and netx have a 13 billion in orderbook by 2024? nO?) Calvin still thinks he can get NFCP contracts. Funny. As for rhb-osk, they hedge their bets, read the last sentence: Key upside risks include stability in macro economy, positive outcome for water reform – paving the way for higher sector development allocations, higher-than-expected earnings contribution from the LRT3 project and further wins in water-related infrastructure construction. Sell call? >>>>>>> Sslee Haha Q4 result not yet out, RHB-OSK already give a sell call with TP of 43 cents. 27/03/2020 9:19 PM 28/03/2020 5:20 AM  Sslee Dear Philip, Good morning, why so stressful and picks fight with IR analyst. If you are so sure of Gkent shouldn’t you be happy to collect more at cheaper price? This is what I am doing collecting INSAS at 35 cents and q buy at 33 cents until you came to INSAS forum and make unfound allegation of why no shares buyback, the bank deposit and account must be fake. This force me to take my stand, “ I stand to benefit more if I just keep my silent and let Philip spreading unfound or malicious lies disguise as his well concerned advice in INSAS forum to create fear so that some of you might just sell cheap for me to collect. But I refuse to be part of such unethical conducts” and went on to explain why no shares buy back and what I intend to write to CEO for his consideration before the next INSAS AGM My advices to all, at current uncertainty time do not chase high with margin finance (until you have the chance to examine the next financial report). Just collect batch by batch at lower price. This is what I am doing and my next buying of Gkent is Q at 45 cents. Thank you 28/03/2020 8:30 AM Philip ( what you can learn from RJ MITTE ) I don't find anything stressful, I am just pointing out a simple fact to protect investors from selling on fear. In any case "chase high" with margin finance is a silly term at this juncture when everything on the market is at 10 year lows. If not now to buy with margin financing then when? If you do not buy when blood is on the streets then when? Between the qr and upcoming qr there has been no news of cancellation and fundamental project problems. However: the price has dropped from 94 cents to 44.5 cents. Why? What does oil price war, covid-19, have anything to do with LRT3 resolution? N the government had already guaranteed that it will continue as part of stimulus package. So it is up to you to decide: whether it is a discount day? Or a failing business selling at 40 cents per share net CASH. 28/03/2020 8:53 AM Philip ( what you can learn from RJ MITTE ) How is it unfounded? If they have so much money, why not buy back tons of insas shares from the market? Gkent is doing that exact same thing. I believe at one point you also were defending xinquan tooth and nail versus all questioners as to how undervalued it is with its billion dollars in bank account but no signs of share buyback and dividends, but huge pp and warrant sales to get more cash instead. There can be multiple opinions, but only one economic result in sight. Perhaps sslee should also start a trackable portfolio so we can see if your opinions versus your market results have any relation? Better now than never. >>>>>>>> Sslee Dear Philip, Good morning, why so stressful and picks fight with IR analyst. If you are so sure of Gkent shouldn’t you be happy to collect more at cheaper price? This is what I am doing collecting INSAS at 35 cents and q buy at 33 cents until you came to INSAS forum and make unfound allegation of why no shares buyback, the bank deposit and account must be fake. 28/03/2020 9:05 AM Sslee Haha Philip, Don't just believe please do your homework and find me any of my comments defending Xingquan. Thank you. 28/03/2020 10:09 AM Philip ( what you can learn from RJ MITTE ) click on philip and open his portfolio. the real one should have a trackable proper portfolio of his buying and selling. 28/03/2020 2:15 PM  isupertrader I don't detect any extremities on Gkent. NTA is abt 0.90 plus and already in margin of safety. TA wise, I believe the buy back has helped with the stability. If the price goes down further, you are basically buying in Gkent's cash pile. 30/03/2020 9:35 AM Philip ( what you can learn from RJ MITTE ) Do you even live in Malaysia? Or you think accountancy is a critical service? Or what part of MCO do you not understand? When the report comes out it comes out la. Important thing is almost every day gkent is buying back shares and you have received a good dividend. Prime minister already said LRT3 and MRT2 will not be cancelled. So what you scared? >>>>>>>>>> K-Den till today no QR release, scare or not? 30/03/2020 5:46 PM 30/03/2020 7:54 PM K-Den must be big shakeholder this Philip, talk so loud, hope u are right. Else I go holland together with this LC lang sound bad to me 31/03/2020 5:19 PM  enigmatic ¯\_(ツ)_/¯ Means we'll only know GKENT's results on 30th April?! https://www.bursamalaysia.com/about_bursa/media_centre/bursa-malaysia-announces-additional-relief-measures-to-alleviate-the-impact-of-covid-19-on-capital-market-players 31/03/2020 6:21 PM enigmatic ¯\_(ツ)_/¯ Means we'll only know GKENT's results on 30th April? https://www.bursamalaysia.com/about_bursa/media_centre/bursa-malaysia-announces-additional-relief-measures-to-alleviate-the-impact-of-covid-19-on-capital-market-players 31/03/2020 6:22 PM SHQuah Dividend % based on today price is 12.28%. One of the highest dividend % in KLSE. Better than putting money in FD & EPF 01/04/2020 9:52 PM Rwkl That is a unreasonable assumption given the current situation. I expect and fully support a cut to preserve cash 01/04/2020 10:36 PM Victory99 Goodvalue stock to invest...no worry at all if you buy and dumb dumb hold for two years. Double or triple gain is for sure..... 02/04/2020 10:38 PM Philip ( what you can learn from RJ MITTE ) I have been a trader for many many years during the 90's. One thing that I realized was a tendency I had when trading stocks is to fear buying a stock when the price has dropped so low. Obviously when you get your hands burnt trading a falling knife there is a psychological trauma that makes you fear buying even as rationally a stocks short term risk drops the lower the stock price falls. On the other hand, the inverse happens when the stock goes up from lows. Maybe you have made a few trading profit from a small jump from 0.46 and sold at 0.55. wow! 20% profit. Brilliant! But then as the prices goes up you start to feel silly and pride takes over, thinking that I've already made my 20%, why not wait for the stock price to drop to 46 cents before I buy it again. Problem is: will it ever drop to such once in a blue moon lows ever again? Once I started investing rationally with a long term mindset, everything changed for me. Instead of buying and selling everything in sight, I chose very carefully what stocks to buy and hold on. In GKENT case: how did I arrive at buying my entire final position at 46 cents ?( https://klse.i3investor.com/servlets/pfs/120720.jsp#tabs_group2 ) At 538 million nosh, paying 46 cents I would be buying the entire company for 50 million, minus it's cash of 200 million give or take. That is a brilliant once in a lifetime deal. The factory alone is worth 50 million, what more its Singapore and hong Kong water meter contracts and inventories. That is how I finally made money. Not by trading small amounts and playing the stock market. But by participating in the growth of a company. >>>>>>>>>> dlau8899 From 1.38 to 0.52 , more than 50 percent discount, if buy above 1.00 , why not buy now. 26/03/2020 12:12 AM 04/04/2020 6:37 AM Philip ( what you can learn from RJ MITTE ) That is not altogether unreasonable. I believe if you buy the shares today and also at my buying price of 46 cents, the dividends will be safe once the expected 20 million of earnings per quarter from lrt3 progress claim and the 5 million per quarter from mrt2 progress claim comes online. Here are facts: 1. lrt3 and mrt2 and the 2 hospitals are still running, meaning contracts and their orderbook are firm. Prime minister has already guaranteed payment as these 2 mega projects are feeding thousands of contractors and workers. Hospital handover and final claim + 2 year retention (5% of 500 million project is around 25 million of balance profit) incoming. 2. Lrt3 progress billing was delayed, not cancelled. It will achieve 45% completion by 2020, a huge progress. https://www.theedgemarkets.com/article/mrcbgeorge-kent-aims-complete-o... 3. Gkent main water business is still running on all cylinders with demand more than supply. 4. Gkent is buying back shares aggressively, gkent current outstanding shares dropped from 563 million to 538 million outstanding. I expect gkent to end share buyback around the 500 million nosh mark. 5. Gkent has huge cash load with a history of paying dividends. It paid sustainable dividends, paying out 40 million of 80 million. I believe until 2024 this will be sustainable. As a reasonable assumption, I receive around 60k in dividends per year from QL. I spent 200k in 2009 buying ql shares, and in total with real cash, dividend reinvestment etc I have put in around 850k into QL. So if I told you that on a cost basis my QL investment gives me 7% dividend every year, would you believe me or consider it an unreasonable assumption. Always look to the future, not the 6 months and 1 year future. But at minimum 3 years and beyond. Then you can consider yourself really investing, rather than just playing with stocks. >>>>>>>> Rwkl That is a unreasonable assumption given the current situation. I expect and fully support a cut to preserve cash 01/04/2020 10:36 PM 04/04/2020 6:39 AM Rwkl Definitely I am in it for the long haul and am expecting a equally big haul At around current prices a payout of 4 sen would be fine with me. In testing times, management should bunker down, invest wisely eg adding capacity for water business and emerge much stronger when recovery takes shape. A 4 sen payout I believe offers a good yield of 7pct. Of course those who bought at higher prices won’t be too happy..... but it’s for long term. As for QL, if I had bought in 2009, given the capital gains, dividend is a mere afterthought. Let’s hope Gkent can replicate it 04/04/2020 9:22 AM Philip ( what you can learn from RJ MITTE ) I first night into gkent at rm1. I thought it was a good deal then, since it dropped from it's highs of rm4. At today's prices it is a wonderful deal. I'm buying more right after the QR results come out, which I expect credible news. 04/04/2020 10:53 AM K-Den Listen to Philip's analysis, wouldn't wrong, I support him. I bought few batch 1.29/1.02/0.85/0.64/0.51, still big losses, dont worry, will value back 04/04/2020 6:35 PM untong Yea, i think should be one of the few companies least affected by COVID, government payor for LRT3 projects. First batch bought at 0.835, after that added more at 0.47, 0.535; Average about 0.60. Expect minimum 3c payout, giving at least 5% yield :) Cant appreciate more on dividends at this trying times. 04/04/2020 8:24 PM rururunnn Hi Phillip, "the expected 20 million of earnings per quarter from lrt3 progress claim and the 5 million per quarter from mrt2 progress claim comes online." Could you highlight on how did you get these numbers? If these are EARNINGS per quarter, effectively per annum you're expecting: 80m earnings from LRT 3 progress *50% JV (just to be conservative, I take the 50% that belongs to MRCB out) = 40m and MRT3 = 20m That's a forecast of 60m without considering the construction and water division. and if they can achieve 60m for FY21, they will have a P/E of 5.5x and lower if you take into account the other revenue... I'm still learning.. if you could share some thoughts that'll be great. >>>>>>>>>>> Philip ( what you can learn from RJ MITTE ) That is not altogether unreasonable. I believe if you buy the shares today and also at my buying price of 46 cents, the dividends will be safe once the expected 20 million of earnings per quarter from lrt3 progress claim and the 5 million per quarter from mrt2 progress claim comes online. Here are facts: 1. lrt3 and mrt2 and the 2 hospitals are still running, meaning contracts and their orderbook are firm. Prime minister has already guaranteed payment as these 2 mega projects are feeding thousands of contractors and workers. Hospital handover and final claim + 2 year retention (5% of 500 million project is around 25 million of balance profit) incoming. 2. Lrt3 progress billing was delayed, not cancelled. It will achieve 45% completion by 2020, a huge progress. https://www.theedgemarkets.com/article/mrcbgeorge-kent-aims-complete-o... 3. Gkent main water business is still running on all cylinders with demand more than supply. 4. Gkent is buying back shares aggressively, gkent current outstanding shares dropped from 563 million to 538 million outstanding. I expect gkent to end share buyback around the 500 million nosh mark. 5. Gkent has huge cash load with a history of paying dividends. It paid sustainable dividends, paying out 40 million of 80 million. I believe until 2024 this will be sustainable. As a reasonable assumption, I receive around 60k in dividends per year from QL. I spent 200k in 2009 buying ql shares, and in total with real cash, dividend reinvestment etc I have put in around 850k into QL. So if I told you that on a cost basis my QL investment gives me 7% dividend every year, would you believe me or consider it an unreasonable assumption. Always look to the future, not the 6 months and 1 year future. But at minimum 3 years and beyond. Then you can consider yourself really investing, rather than just playing with stocks. 06/04/2020 9:46 AM Philip ( what you can learn from RJ MITTE ) If you look at 2017, you already the figures that were coming into Gkent from lrt3 progress claims. After it was stopped in 2018 and revised to change them into main contractor instead of PDP partner. You can see the EARNINGS drop. Meaning the difference should be coming in from LRT3 progress claims. Now those claims were not cancelled, only delayed as per revised redesign of systems. Now that all those progress claims for work done have been submitted and received to begin in 2020(48% completion), you will begin to see more revenue and earnings resolution from lrt3. In any case, as a PDP partner their profit was capped at 6% of the project size previously, https://www.thestar.com.my/business/business-news/2018/08/08/mrcb-and-gkent-shares-rise-on-confirmation-as-pdp-for-lrt3 As seen here, profit margins for GKENT will be higher, but the total sum will be lower for the redesign, redesign details here: https://themalaysianreserve.com/2018/07/17/lrt3-rationalisation-sufficient-to-meet-demand/ But gkent/mrcb is required to accept bigger risk as a fixed contract supplier instead of PDP partner. So they are allowed to use better subcons( no longer BN crony company sub like IJM), but hire specialist companies ( like the one I used to work for before retiring) who can give better price and do directly instead of sub sub like a standard bumiputera company. I believe their profit margins will be in the range of 1.2 billion or 10% of the contract, similar to standard main contractor margins. Meaning Gkent earnings will be around 50% of the JV, 600 million divided by 5 years, with a safer number similar to pre-najib lrt3 fees of 60-80 million a year. Of course with PDP structure Kent took zero risk, as their fees were based on contract value. With new structure more risk, direct control as main con, better profit margins. And if you believe that gkent used to be valued at rm4 reflecting the results? Knowing that lrt3 is still continuing and full payment guaranteed by federal government? I thought I was having a deal buying GKENT at rm1. Buying GKENT at 0.46, with 200 million cash at 30 million share buyback? It's a steal. >>>>>>>>> rururunnn Hi Phillip, "the expected 20 million of earnings per quarter from lrt3 progress claim and the 5 million per quarter from mrt2 progress claim comes online." Could you highlight on how did you get these numbers? If these are EARNINGS per quarter, effectively per annum you're expecting: 80m earnings from LRT 3 progress *50% JV (just to be conservative, I take the 50% that belongs to MRCB out) = 40m and MRT3 = 20m That's a forecast of 60m without considering the construction and water division. and if they can achieve 60m for FY21, they will have a P/E of 5.5x and lower if you take into account the other revenue... I'm still learning.. if you could share some thoughts that'll be great. 06/04/2020 2:41 PM Philip ( what you can learn from RJ MITTE ) Here is one of the reasons why I don't practise trading, and why traders are rarely successful long term. At first you seem very smart, buying a small batch at below 50 cents and quickly selling it when it went higher. But two problems happen: 1. You learn nothing about the company or its long term prospects. 2. If you lose money trading ( as you invariably will), the will be a fear that happens in trading downwards, freezing you from buying something at huge discounts. 3. If you cutwin ( as you usually will), you will start to feel silly when the price jumps far higher than your sold price, causing your pride to stop you from buying more because you feel that if the stock dropped to such lows that it will continue to do so, not realising that this is not a new normal, but an abnormal opportunity that rarely knocks twice. >>>>>>>>> Sslee Haha, No hurry will collect slowly but right now better to buy Gkent below 50 cents and sell back to Gkent above 50 cents, learn from hng33. 26/03/2020 4:02 PM 06/04/2020 3:05 PM super_newbie Finally today breakeven + small % unrealised profit after 2 weeks of dropping since earlier March. huh? 06/04/2020 4:55 PM Sslee Haha, Wait for Gkent Financial result to confirm whether Philip is right or wrong. Bur for immediate future with MCO all Gkent activities on hold. Hari Raya is coming, all Indo will go back and later 14 days qurantine to reenter Malaysia again. How many more months with no productivity for Gkent? 06/04/2020 6:27 PM Philip ( what you can learn from RJ MITTE ) Oh gosh, you are so funny, which financial result? The current one or by end of 2020? Still short term thinker. Obviously the next financial report will not have much in contribution, the mrcb quarterly report last month for December had already come out, with the gkent/mrcb lrt3 jv claim earnings only at 700k earnings. Do you think a full redesign of system takes a few weeks to carry out? When management has already guided towards 48% claim by end of 2020, you still look towards end of 2019 FY for your confirmation? So you are still assuming buy today for 100% earnings tomorrow? Those who know what to look for look not only at gkent financial earnings: the look at prasarana reports, they visit the lrt3 sites, they look at mrcb reports, they buy the mrcb/gkent jv SDN BHD report, they visit the lrt3 architects, civil and m&e consultant firms to interview on payment claims progress and revised work schedules. They check with the gkent project team to find out the problems and hiccups they are facing. So much work to buy just 1 stock. But that is why the more work you do to study a company, the more conviction you get. This is the essence of scuttlebutt and keeping within your area of competence. If you think reading quarterly report and financial report is enough to know a company, your portfolio results will reflect your opinions. 07/04/2020 5:25 AM Sslee Haha Philip, To confirm whether Gkent can be efficient as a fixed contract supplier by using better subcon (hire specialist companies who can give better price and do directly instead of sub sub like a standard bumiputera company) so that their profit margins will be in the range of 1.2 billion or 10% of the contract, similar to standard main contractor margins (pre-najib lrt3 fees of 60-80 million a year and 5 million per quarter from mrt2 progress) and Gkent main water business is still running on all cylinders with demand more than supply Thank you PS: Wonder whether with PN government Gkent hire specialist companies is not force to sub sub contract to sub sub like a standard bumiputera company or BN crony company sub like IJM? 07/04/2020 8:04 AM dlau8899 Continue going up above 0.70 as soon. Company aggressive share buy back... 07/04/2020 1:53 PM Victory99 Hopefully don't privatise the company because at this moment the price is too low.... Company almost everyday buy back shares from open market... 08/04/2020 3:00 PM LA777 Added more this morning. This is an uptrend share, must keep for long term. 09/04/2020 10:50 AM super_newbie how far can this goes for rebound, this counter posted consecutive positive profits for atleast 10 years and every single qr. 09/04/2020 1:11 PM  |
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