ONE REASON TO OWN EKOVEST

First thing I came across to buy Ekovest is their concession assets (unfair competitive advantage) as below. “Unfair” because other companies don't enjoy that type of advantage.

From 2016 annual report:

“On 3 December 2012, Kesturi entered into a Supplemental Concession Agreement (“SCA”) with the Government in relation to the extension of the DUKE Project (“DUKE Phase-2”). The DUKE Phase-2 commences from Menjalara Interchange at Bandar Menjalara to Segambut Interchange and Jalan Tun Razak near Kuala Lumpur Hospital/Institut Jantung Negara to Jalan Gombak. The concession period for the entire DUKE Project and DUKE Phase-2 under the SCA is for a period of 54 years commencing from the effective date, 11 August 2005 and shall, subject to terms and conditions of the SCA, be extended for a further period of 10 years.”

I am not looking at their construction and property development business. The one that I interested is their infrastucture concession business. The reason I like Ekovest is their ecomomic moat which the company has competitive advantage over other companies. The wider and larger the moat the better (54 + 10 years).

At first, I am a bit skeptical I might overpaid for such company (because the stock price was all time high, during that period) But once EPF came into the picture with offer RM1.13B for 40% of Kesturi (the Kesturi itself already exceed the market value of Ekovest, so why wait???). IMO, I rather pay a fair price for a great company than pay a cheap price for a lousy company.

I always look for a company that even the fools will know how to do that business (collecting money from others, indeed 'CASH' in this company). In my opinion, Ekovest, Myeg and some concession companies are condisered as monopoly type of business. If a market structure characterized by a single seller, selling a unique product in the market. In a monopoly market, the seller faces no competiton, as he is the sole seller of goods with no close substitute.

No doubt, Ekovest still growing, I don't think he is cash cow now as Myeg, it might takes few years to blossom. I am lucky enough to come across this great company by reading i3 sifus articles and discussions. Keep it up all the sifus and many thanks.