Icon8888 Gossips About Stocks
(Icon) Sweet Talks By Public Listed Companies
1. Minho (M) Berhad
This afternoon, Minho announced net profit of RM1.62 mil, an 85% decline from previous quarter's net profit of closed to RM11 mil. As a result, share price took a beating and declined by 26 sen (18.6%) in the afternoon trading session.
To be fair, what happened to Minho is not unique. Sometime, PLCs' results do come in below expectation. That is the nature of doing business. Sometime you make more, sometime less.
What made this case so special and created a lot of discontent was Minho's commentaries in its March 2015 quarterly report.
In the "Prospects For Current Financial Year" section in its March 2015 quarterly report, it said the following things :-
The key word was "slightly lower".
The impact of that statement should not be underestimated. It implied that the coming June quarterly result would be closed to the RM11 mil reported in the March 2015 quarter.
Probably as a result of the expectation created, Minho share price rallied during the month of July and August.
Of course, as we all found out this afternoon, RM1.62 mil is definitely NOT "slightly lower" than RM11 mil.
I think Minho owes many investors an explanation.
2. Denko Industrial Corporation Bhd
On 16 July 2015, I wrote an article about Denko.
The reason I paid attention to that company was because it delivered a strong set of result in March 2015 quarter.
Not only that.
In that quarterly report, the company made the following comments about its prospects :-
I am not trying to blame the company. But the red highlighted statement above played a major role in motivating me to buy into Denko.
On 24 August 2015, the company announced its June quarterly results. Net profit came in at RM0.4 mil, 83% lower than previous quarter's net profit of RM2.83 mil.
Of course, it was a big disappointment for me.
I flipped to its commentary section, and this is the company's explanation :-
Please note the statement "The turnaround result expected to be shown in the following quarters".
Basically, the company was trying to comfort investors that things will be better going forward.
Guess what was my reaction ? I told myself "You go and fly kite lah. Fool me once, shame on you. Fool me twice, shame on me."
Too many excuses.
When come to investing, shareholders need concrete results, not promises.
The next morning, the first thing I did when market opened was to dispose of all my Denko shares, at a loss.
I deleted the stock from my watchlist and vowed that I will never look back.
3. Concluding Remarks
I have never owned any share in Minho. I simply didn't find their business operation appealing.
As for Denko, maybe I was a bit drastic in my reaction.
To be fair, Denko's case is a bit different from Minho. Maybe the company meant what it said. Maybe in the coming quarters, their results will indeed improve. Maybe I was too early to give up on them. Maybe I am a bit too harsh on them.
Or maybe not.
There is no way I can find out. We will have to wait for next quarter result.
Still, the lesson is the same - Public Listed Companies sometime give out some positive signals. Some of them are genuine, some of them will later turn out to be not achievable. Some are downright misleading.
Most of the time, the release of such statements or information do not breach any guidelines or break any laws.
It is also difficult to establish that they are unethical or bear ill intention.
The only thing I can say is that we need to take those information with a pinch of salt.
But don't be too cynical also. Not all are meant to fool us.
We need to be vigilant. But we also need to continue to keep our mind open, or else we miss out real opportunities.
This is all part and parcel of investing.
Welcome to the stock market.
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Discussions
5 people like this. Showing 33 of 33 comments
most of the comment in quarter report just nonsense, they just writing for the sack of writing and audit requirement. the comment piss me off the most is " the Revenue lower due to the lower sales"... thats why i pay my respect to the company who serious explain the situation to their investor.
2015-08-29 04:13
My loss is only 3%, considered negligible, since my entry price is low, so I'm not particularly upset. I am angry though. Of course, anyone who kena cheated will feed angry. I'm filing a complaint because I want to play my part to make Bursa a better, and safer place for investors. After all, it just requires a bit of time to fill up a form. If you do nothing, then same shit may happen again because directors think they can get away with it. If you file a complaint and nothing happens, hey at least you played your part in trying to improve corporate governance in Malaysia.
2015-08-29 08:04
My view is that this Minho case is no accident
I think that statement was slotted into the March quarterly report intentionally, with full awareness of its implication and consequence
There are also indications that syndicate were later brought in to stage a play, which ultimately lead to certain people achieving financial gain at the expense of others
I fully support a complain to bursa
2015-08-29 08:15
So, anyone who got a bit of spare time can just download the form from http://www.bursamalaysia.com/contact/other-complaints and submit. If you get enough people to complain, maybe Bursa will query the company, keep them on their toes.
2015-08-29 08:21
They might think that they are lucky. We have to tell them:" No. No way." You might only be lucky to escape from the 'gallows' but 'the gas chamber' awaits you. Always remember this : " A postman always rings twice."
2015-08-29 08:22
haha, Soo should be cool and steady.
Denko i dunno the story but Minho doesnt hv concession right, it is all depends on state gov to let them extract logs. And recently clampping on illegal logging is quite vigorous, even co with big forest right like Taann and WTK oso nid to reduce their logging activities.
2015-08-29 08:29
Kakashit It is not like that mah when 1st Q come out already 2 months in 2nd Q liao Patut know liao lo....
2015-08-29 08:39
Pasangkia !!! Long time no see !!! I thought we are supposed to bakuteh with Duit at Pasang ? : )
2015-08-29 08:42
Minho co in Pasang Klang la in Hokkien. Popular liao the directors all old old liao no energy for business liao.. Collect gaji buta pun ok liao
Their kiln are normally very very quiet like not doing business liao
2015-08-29 08:43
Duit pays for us lah. He (or she ? Bloody hell until now I am still confused whether is a female or malatlou ?) works for KWSP, iron rice bowl, and a lot of insider tips
2015-08-29 08:47
May be Minho boss Ang Mo bor hor like me la write ka kilikalat no know meaning "slightly" lo HaHa wu ko ling bor??
2015-08-29 08:49
Oh.. si ah Duit name KWSP really work in KWSP ah... mah cui tip lo.. duit pa pa lo
2015-08-29 08:52
Ha ha u got a point
Maybe he meant "coming quarter likely lower" instead of "coming quarter slightly lower"
LOL
2015-08-29 08:52
Boss all old old liao la Kong Hokkien eh normally Ask write long sentence si liao lo likely pian slightly HaHa
2015-08-29 08:57
Ka si spelling no good la.. lu buy liao Minho ma mo tin tin fatt tat liao
2015-08-29 08:59
Icon8888, agree with you. Lots of recycled mumbo jumbo statements by PLCs but no substantiative reality in terms of shareholders benefit. For example, WCT has been parroting "monetizing their property assets into REITs," from one quarter report to another. NTPM has been recycling the same old melody of "because of forex rates and high tariff rates" when announcing dividends!
2015-08-29 15:53
I have file a complaint with Bursa Malaysia using the text below. Whether Bursa will take action or shake leg is out of my control, but I did my part.
"In Minho's quarterly report for the period ending 31/3/2015, which was released on 29/5/2015, already 2/3 into the next quarter, the management states that "the group performance for the second quarter of year 2015 is projected to be SLIGHTLY LOWER than the first quarter of year 2015." In the subsequent quarter, profit dropped from RM12.6 million to RM2.7 million. I contend that the management of the company intentionally defraud investors by providing false and misleading forecast, thereby facilitating the sharp increase in share price."
2015-08-31 09:52
Icon, its precisely due to the often 'misleading' statements that Bursa requires all companies report/file Quarterly reports within 2 months.
In the earlier years, it was half yearly or annually reporting, by then investors would have been screwed well and good.
I have never trusted the company reports with regards to prospects, prefer to look at challenges and risk management to alleviate the hurdles, besides its bottom line of course. The more serious the challenges, the further we should stay away from the counter.
2015-08-31 10:50
did u check bursamarketplace, cffo so poor, no track record is like that one, turnaround seldom turnaround with cash flow
2015-09-15 15:20
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