In my last article when I share the amazing returns of those stocks in my portfolio which had carried out those corporate exercises such as bonus issues, free warrants and share split in the link below,

http://klse.i3investor.com/blogs/kcchongnz/106650.jsp

I shared that corporate exercise does do good for good companies in the short as well as long term, and if you know how to read the balance sheet, you may be able to judge if a company is able to give out bonus issues. Furthermore, if you have read enough and know about event studies and understand the anomalies of over and under reaction of investors in stock market, you may capitalize those corporate exercises and make good money. More important, focus on what the important things in investing, i.e. find good companies selling at cheap price, good investing outcome will come naturally, despite whether is any corporate exercise or not.

Here came this type of comment from this person who have been following me blindly for years.

[donfollowblindly Agree. Bought at RM 4.24, today only 3.94 losing 30 sen in less than 1 month. That's why I said he never highlighted those he lose money.
http://klse.i3investor.com/blogs/kcchongnz/104956.jsp
Posted by yktay1 > Oct 18, 2016 08:43 PM | Report Abuse
your thong guan dying]

Mr. donfollwblindly (DFB), despite of his name, always follows me blindly. He always lost money from my sharing of my stock analysis, because of his follow blindly mentality, he always buys the 10% of those stocks I shared which have negative returns now. He also always talks blindly about them in i3investor, without mentioning any those 90% stocks which made money, and half of them made big money.

Don’t get me wrong, I love constructive criticisms as I always say. They help me to curb my over-confidence in investing. That was the main reason why I liked to share my analysis in i3investor before. You can see I have written many articles on stock analysis here. I do not like to “ka ki kong, ka ki song”, although being human, I enjoy good comments too, but feel annoyed when the personal attack got overboard.

Let’s look at DFB’s comment above. Why “your thong guan dying”? It would be excellent if you could share your view with some facts, instead a sweeping statement like that, wouldn’t it?

Why I didn’t highlight Thong Guan, which “loses money”? Am I hiding facts?

My recent article on Thong Guan was my opinions to my course participants who have invested in them, whether they should sell what they already have after the publication of their recent interim quarterly report. I took the liberty to share with you too if you have those shares. I also shared with you KESM and Hevea just recently too in i3investor. KESM and Hevea have gone up by more than 20% and 10% respectively in about a month ago. But I also didn’t highlight them too, but you can check them out.

Here were my conclusions about Thong Guan.

[Conclusions

Thong Guan has returned a great set of quarterly results ended 30^th June 2016 with a net profit growth of 100% compared to the corresponding period last year. Its return of capitals has improved to a high of 17.3%, much higher than its costs of capital, and with great cash flows from operations of RM61m, and free cash flows of RM40m for the first two quarters 2016. Management has guided that the company is in for a growth trajectory in the near future.

Using the DCFA from the basic principle with internally generated growth, and adjusted for full dilution of loan stocks and warrants, THONG GUAN appears to be undervalued by 19% at the present price of RM4.24 apiece at the close on 22^nd September 2016.

As the share price of Thong guan has risen substantially recently, the margin of safety may not be that good now to consider investing in it. It may be okay to invest in it too considering its good prospects in the near future, as you know, it is hard to find a good company selling at cheap price to invest any more.

For the existing shareholders of Thong Guan, it is not a stupid move too to take some profit from the table now if you have invested it for some time and have made substantial profit. However, in my opinion, it may still be good to hold it and let your profit runs, as you know, it is not easy to find a great company to invest for long term. This is despite of what icap has written about it.]

Did I recommend you to follow blindly and buy Thong Guan at RM4.24 from the above?

When did I say I bought it at RM4.24? How much did we pay for it? For this I append an analysis done, not by me, but by a course participant of my online course (I hope the writer doesn’t mind I share this) about a year ago on Thong Guan. This analysis was published in all my online investment courses then.

Some of the things which you may be able to learn are:

1. How to do a good business analysis in investing?
2. What are the important things to look out for?
3. Why did we invest in it?
4. When should we invest in it?
5. How to use behavioral finance for investing
6. etc.

This was just one of analysis of stock in my courses. There were many others. They were also many done by my course participants.

My message to you Mr. DFB is, open up your mind, focus on the relevant subject matter, try learning a thing or two if you are able to, be skeptical, but yes, don’t follow blindly. You may then benefit.

Above all, don’t focus on personal attacks, telling lies, damn lies, and deceptions.  You may make a fool of yourself.

Best of luck to you.

K C Chong at ckc14training@gmail.com

Tguan did very poorly in 2H14.   3Q14 saw  net  profit fell from RM11m to RM5m  y-o-

y. According to CIMB, Tguan took a hit from their Japanese customers due to the increase in consumption tax from 5% to 8% in April. I don't know why it affects the third quarter instead of the second quarter, but demand should normalize as stock bought prior to the tax hike are exhausted and the drop in product price spurs consumption, if the reason for the drop in profit is indeed as per CIMB's report. Japan is one of their main export markets with nearly 30% of its revenue derived there.

4Q14 is worse with a RM4m loss. Company booked a RM5.5m provision on doubtful debt, as well as another RM2.4m and RM1.7m on unrealized and realized forex losses. Excluding these, Tguan actually  made  RM5.1m  in  PBT;  not  great,  but  better  than  4Q13's RM4.4m. According to RHB, the doubtful debt is caused by the strengthening USD causing  a client to delay payment. The unrealized forex loss is most likely due to their USD denominated loan. And the realized forex loss is most likely because the company has hedged their forex rate. The latter should not come as a surprise as management has already indicated in an article "Cheap oil and weak ringgit a boon for plastic firms" on 9/2/15 that the company will not enjoy the positive effects of the weaker ringgit until 2Q15 due to carried over hedging position against USD.  In addition, since MYR/USD fell again from 3.5 at the end of 4Q14 to

3.7 now, we can expect another round of hefty forex losses in 1Q15.

Another disappointment is the inability of Tguan to capitalize on the decline in crude oil price, which should translate to lower raw material cost and better profit. As shown in the second figure, LDPE price declined in 4Q and nosedived even more steeply in 2015.  Unfortunately, I can't find data beyond Jan 2015.  In my opinion, there may be two explanation: