the bursa journey that worked for me. 2000-2019

2019 Quarter 1st Report for the BORNEO BIKERS GANG, and that annoying Honda Goldwing guy.... PCHEM, QL, YINSON, TOPGLOV

Philip ( buy what you understand)
Publish date: Sat, 09 Mar 2019, 03:11 AM
How to invest for the long game.

Quarterly update for PCHEM, YINSON, QL, TOPGLOVE & STNE Feb 2019

This will be a simple quarterly report that I will be putting up for my family and friends. So I will have killed 2 birds with one stone, a simple letter to let everyone know what I am doing with our investments (using my alias as (S=QR) Philip), as well as sharing an investment journey that fellow retirees and new investors can learn from and understand without paying training fees and subscription payments. Admission is free.





My investment strategy is simple, and yet difficult.

I am to invest in a concentrated manner, holding a small number of stocks that I can monitor and understand clearly its long term prospects.

I buy stocks based not on the stock price, but on the viability of its business in growing and keeping its competitive advantage over a period of 5 years or more. In short, a wonderful, growing business. Hopefully, as I am still an amateur with only 20 years of investing experience, I hope to buy them at a fair price, failing which I hope to buy them cheaper than what my 10 year projections of the business will be. I will be wrong on many occasions.

I try to avoid buying penny stocks, startups, turnaround stocks, asset plays, politically connected stocks, and investment banker/shark promoted stocks. I will be wrong many times, but more because of not acting on those opportunities, and not because of making bad investments(hopefully). My investment strategy involves reading annual reports, market journals, news reports, press releases on many many stocks in the bursa market, with the mental model that all businesses in malaysia will be related in someway to each other (from developer to banker to contractor to business owner to workers to government bodies to import to export and so on). Out of these many businesses, using that framework of relatedness, I monitor a group of stocks which has shown a background of achievement, competence and business growth in a number of years. These form my circle of competence, which I follow closely.

When I spot a viable long term growth trigger for the business, and the share price is not too onerous, I buy the stock with as much financial might as I am able to muster.  I try to ride the stock like a bat out of hell, reinvesting all dividends and quarterly capital as I can reliably muster. At each quarterly report juncture, I read the quarterly report (usually starting from the back where all the juicy details are), and see if the stock has performed along my expected projections. If it has, and the investing public has not yet caught on, I buy more.


The results of my personal legacy investments are as follows:


My personal investments:

Shares owned                             Company                                 Cost*                                   Market value

    2,000,500                          QL Resources Berhad                RM1,265,892                         RM13,783,445

    2,013,800                          Topglove Corp Berhad                RM1,340,796                         RM9,263,480

    615,400                             Yinson Holdings Berhad             RM789,900                            RM2,769,300

* Cost includes all margin loan costs, interest payments, dividend reinvestments, monthly salary contributions, commissions from amway, year end bonuses, performance bonus, palm oil plantation returns, money drop from the sky, picked from rubbish bins, selling 4D private bookie activities(to company and subcontractor workers only - divested ) begging, mugging, borrowing, inheritence and so forth.



QL Resouces Berhad has been a gem of an investment for me. Last year there was earnings increase to RM206 million ringgit. out of which there was a dividend of 73 million given out. My share of that last year was 4.5 cent (around 80K). I have since built up to a larger position, reinvesting the returns and buying more stock, which my latest investment was 6.25@50K shares done in Dec of 2018. I believed that the entire bursa market was oversold, and it proved to be a good deal. Moving forward, I expect even more good things from QL management. We have hit the 1 billion quarterly revenue mark (or almost there give or take a few million), and a guaranteed huge growth driver in family mart which kicked off in 2016 and is now at 89 stores with a target for 200 upcoming. I expect many japanese familymart combi stores in Sabah and Sarawak soon, serving a healthy and tastier option to generic fast food options that you can get from 7-11 and mynews. Try the tomyam oden. Its good. Its QL.

In terms of growth, in 2009 quarter when I first invested in QL, we did 320 million in revenue, with 19.8 million in net profits. the book value was around 400 million. Today in 2019, the revenue is now 3 times more at 978 million,  with a net profit of 75 million, and a book value of 1.9 billion. Did I mention this is PER QUARTER?

The future of QL is as clear as its business units.  The food industry is a very huge market, and very treacherous to those who doesnt understand that only scale will survive. Different from many opinions, it is very very hard to get into this market and not make a loss.

The big companies that succeed are usually very highly intergrated, with vertical integration covering:

1) feedstocks production, manufacturing and trading(stocking and purchasing),

2) growing livestock, catching wild, processing, packing and freezing.

3) efficient logistics and delivery team to send and market the processed food to the masses.

Those that dont understand this part well and execute poorly on all fronts are doomed to languish in averageland. Companies like layhong, CCK, etc that only do one part well, they will not earn a meaningful growing profit. They will forever languish in penny stocks range because the volume will get bigger and bigger as the population increases, but the big companies will force the profit margins lower and lower, killing the small players and forcing consolidation. Business vertical efficiency tends to do that. No one ever asks KFC or Nandos if their chicken is antibiotic free or they only want to eat layhong chicken. Price per kg comes first.

There is only a handful of companies in Malaysia that does all 3 things well in this huge market pie. QL is excellent at the first 2 parts, and with their addition of family mart, I am even more confident that they have grasped the difficulty of item 3, and have decided to learn from the best, japan's 2nd largest combi family mart. The lessons that they will learn on how to handle marketing and delivery to the end user will definitely serve them well as they replicate their business regionally.

I look forward to the day 10 years from now when 1 quarter of QL will be 2 billion in revenue, and a net profit of 150 million per quarter. It has performed so far along the lines of my growth triggers, and unless they invent star trek food 3D process, I expect business to be resilient to interruption. I expect the next growth triggers to be from local regions like indonesia, vietnam, phillipines etc where over time efficient integrated business will rule over ineficient ones. QL has yet to have a negative quarter, and excellent diversification and expansion track record historically. This quarter is their all time record of quarter revenue and quarterly profits. I am satisfied to sit and wait and hold. I am expecting them to jump from 206 million net profit last year to 240 million net profit this year end.



Topglove Corp Berhad is a one of a kind business in Malaysia. It produces something simple, a plastic glove with such efficiency and volume that they control a big share of the world market (25%). They export to all 4 corners of the world (195 countries), and the advantage of having a vertically integrated business coupled with being on the equator ( where rubber trees are best grown) allows them to supply, market and sell with fantastic volume and size. They are the lowest cost producer of the world gloves market, they have size, and most of all they have reputation and quality. In a market like medical gloves and condoms, reputation can make or break you. Toglove has ample, and is cheap to boot.

Now in analyzing growth of topglove, we need to understand the market size. Mature markets like Japan, West Europe and USA are mature markets, with high sales and usage of nitrile and latex gloves.  There is another part of the with a huge growth (35% growth YoY) which is ... the rest of the world. People are starting to see the value in using gloves for medical operations, factory operations, hygiene,healthcare and industrial applications. The growth of the world glove market is expected to grow by 10% yearly, and the 177 million capex investment (150 new lines, 18 billion new glove capacity per year) shows Topglove conviction in meeting that need.

Someone once asked me why I did not invest in Hartalega back then when compared to Topglove. It was having fantastic margins, gives out big dividends every quarter, and is valued more than topglove. For me, I always believe that dividends should only be given out to shareholders if the management can no longer find an efficient use for it. If they give out dividends simply because shareholders asked for it, the taxation, double handling and stamping etc serves as an inneficient way for the company to make use of retained earnings. I believe the management of Topglove may have been a bit slow on the uptake and made a mistake with Aspion purchase (which we paid for), but I believe they have the right mindset and approach. In essence, harta lega would find it hard to assault the topglove fortress, but topglove is the barbarian at the gates of nitrile products. Time will tell what happens.

In any case, I still see a good growth trigger for Topglove. Hartalega is not challenging topglove latex glove dominance anytime soon, but Topglove purchase of Aspion for 1.37 billion for its nitrile glove market shows that it is willing to challenge that portion of the business with Harta. With a target to of 148 new lines with 14.8 billion new gloves (by 2020) specifically targeted at nitrile gloves market. with a current 60 billion gloves a year capacity,  a 24% increase in capacity ensures that it continues to fight harta for market share growth long term, while hartalega continues to  reward its short term shareholders at the cost of future market share. Aspion is a regrettable waste of my shareholding money, but the 200M usd bond raised to pay of its debts at 2% and 5% share dilution(if taken at 6.204 per share) is still acceptable. The savings of RM16 million per year over 5 years (i suspect less) is a sign of good governance. I await my 17 cents dividend with baited breath. I expect topglove to grow in tandem with the world market (10% a year increase), increase its market share and expand into different markets (nitrile gloves, condoms) efficiently. It will be busy for many years yet. Did I mention that this quarter they hit an all time revenue in a quarter? The growth story is not done yet.



Yinson is a wonderful company that I started investing heavily in 2013. It has a unique story, as a turnaround company that sold all of its trucking and logistics assets (a horrible business with no moat) and ventured into the FPSO market in the right way, by purchasing Fred. Olson, a norwegian company. Instead of competing in local malaysia market (which was full of race based controls), they decided to take on the international market instead. They currently have 5 FPSO's, huge vessels which do processing and production of hydrocarbons directly in the sea, instead of building unwieldy platforms to dig up oil. It is the most efficient (capital commitment and time wise) method of doing offshore oil extraction, and I see a future where oil reserves will be getting less and less and harder to get to. The floating production, storage and offloading will have a big future in moving from site to site quickly, deliver and relocate to a new site.

Oil price 20USD a barrel Yinson makes money, oil price 80USD a barrel Yinson makes money. What do I mean by this remark? Yinson makes a very predictable earnings case because its contract is a fixed charter basis, with a fixed early termination penalty (the cost of FPSO conversion) built into the contracts, Yinson does not lose money on oil price difference, only on their ability to convert and deploy the converted ships to their chartered location on time and on schedule. I can tell you a thing or two about Mr Lim on schedule and ability, from the old days. He is one of the few owners who can fix his own 10 ton lorry, repair axles, change a blown lorry tire and get things going on time. He prides himself on being efficient and hands on. I can see the same managerial talent in his son.

Why is Yinson different from Sapura and Bumi Armada? A few major reasons. Firstly, the contracts they sign are very different. Sapura and bumi signed contracts where the payments are a JV share and based on the prevailing price of oil per barrel. That is a stupid way of signing a contract, and hinged on hoping the oil price will always stay up. Therefore in good times you roll, and in bad times you fold. Not only that, a lot of the contracts are based on infrastructure first, get the jobs in later. Therefore a gross underutilization of assets occur, and a lot of labour, machinery and vessels are put aside, waiting for the next contract. However, the debt and the management inefficiency (although in all honesty, driving a sportscar is far easier than maneuvering a 30 ton crane lorry) leads to higher tender prices and less ability to compete with little small norwegian company yinson. I put that in the "too hard" pile (as shown by the armada kraken fiasco). Yinson on the other hand, structures their contracts so that they build only when they win a charter contract. Add that to their skill in hiring Chinese companies to do their conversion (ahead of time and cheaper than their expectation), and you have a recipe for success.

What to expect from Yinson in the future? Predicting Yinson is very straightforward. Contracts are fixed, with 8-10 years contract length and extendable period.They can do bareboat charter (ship only), or full O&M management.  It is the cheapest FPSO charter by far, and building a huge goodwill from efficient on time deployment. It has recently sign a JV with sumitomo (Yinson technical works, sumitomo financing). It will send its maiden FPSO project into Malaysian waters (first local malaysian project by a malaysian internation company, funny.) ahead of schedule and cheaper conversion cost than expected (which THHE couldn't even do despite winning contract for years), building a big name locally should it be successful. On the international front, Yinson is so famous now to the point that FEP will bankroll Yinson a deposit fee, paying it an upfront cost of USD110 million to finance their conversion. Funnier still, this new FPSO Anyala will be converted from its Gabon based FPSO Allan, which was contract was canceled (and penalties written off down to 70 million usd). Yes, FEP will be giving free money to Yinson to convert a ship already converted FPSO Allan (which CNR gave an early termination notice on the 9th year of a 10 year contract, with an early termination fee penalty), which is pretty much amazing for a niche FPSO market with more tender bids in the last year than the last 3 years combined. I am continually amazed at these turn of events. If you were to look the dictionary for the phrase "money drop from sky", I am sure you will find the bald head of Mr Lim smiling ear to ear at you on the page description. I expect a few more contract wins these next few years, as the Yinson supercar is driving circles around the likes of Sapura and bumi Armada and others. I have a feeling my 10 cents per share dividend is going to increase sometime soon. Possibly even as early as this year. I am content to build my position.

Where to deploy capital for this quarter? After looking at the multiple opportunities and the opportunity costs entailed, I still find myself going back to these 3 companies. It is within my circle of competence, and I feel comfortable in investing in it for the long term. Noting that part of topglove bond deal is to allow 2% of the major shareholders to allow their shares to be put on loan (short sales) has brought the price down to a very comfortable level. I am comfortable in putting double down on topglove and yinson, putting in an extra 20,000 shares in topglove at 4.68, and 20,000 shares in Yinson at 4.25. The big bet should come next quarter, when the dividends come rolling in. On QL, sadly the investing public has caught on, realizing the strength of its business. I had previously bought 50,000 shares in QL on 6.25 december, and hopefully more people will bash the stock and bring the price down, so I can collect more.


As for my investment with my wife and respected father in law, the rules of engagement are very different. The goal is to choose a far more low risk and safe investment, and to select the stock with the greatest possibility of growth and minimum risk. The stock must have a worthy dividend policy, and there must not be any margin or any outside form of capital deployed. Only dividends may be reinvested. The split will be a 30/30/40% of shareholdings, with me holding the biggest shareholding (as it should, we sink or swim together, any risk I take must be bigger than others).

The investment chosen is as follows:

Shares owned                             Company                                            Cost*                                   Market value

    1,495,200                        Petronas Chemicals Berhad                 RM12,264,640                         RM13,905,630

*reivested full earnings from PBB divestment (from 2012 to 2019 January) minus some angpau money, a nice dinner, and some renovation at the old house.

It is not easy investing your family future. More so if the investment belongs to your wife and father in law. If one day you should find yourself in a position to be trusted, be fearful, be wary, and be careful. If you get a second chance after failing the first time, be even more wary. With such a  mindset, if you believe that you can only invest on 20 stocks in your entire life, you will choose with utmost care. After much deliberation (and much holding onto public bank stock since 2012), the family has agreed and we have reinvested our capital gains (thank god malaysia still does not have stock sales tax) from PBB and moved it into PCHEM. And not a moment too soon.

PCHEM has enjoyed a record quarter. All time high in revenue this quarter (5 billion ) and an all time high dividend (18 cents) Very much deservedly so. Petronas chemicals has all the trappings of a wonderful moat company. A huge yearly revenue of almost 19.5 billion, and incredible earnings of 25% net profit, or 5 billion after tax. Amazingly, even after giving out 50% of its earnings as dividends, it still has the ability to grow at an incredible clip. Even if it had no amazing growth triggers, just the synergy and vertical integration alone would be worth the investment.

The key to the entire puzzle that solves my investment into PCHEM is of course, the final testing and commissioning phase of PIC, the petronas integrated complex. This single complex alone would boost production from 10.7 MTPA to 13.8 MTPA, basically increasing total production of PCHEM by 30%. But the story is not so simple. It also has multiple new petrochemical processes that currently cannot be found locally (like isononanol processing), which will spur growth in the next generation of local industries and businesses in Malaysia (especially johor), and present a huge leg up into the future. And did I mention that feedstocks will be coming in from the same building next door, with crude oil refining supplied by Petronas AND Saudi Aramco, ensuring consistent, efficiently costed feedstock sources for decades to come. 

I expect about 269K in dividends ( another record high, but less after fractional taxes and expenses), which will be fully reinvested into PCHEM as soon as possible. Hopefully the price will stay low enough, while I continue to collect as much as possible, reinvesting return every 6 months. I still dont have a clue what the terminal value (the age when revenues and earnings start to stagnate) for a business like PCHEM, but if you asked me? at 25% net profits, by the time PCHEM hits Dowdupont growth level and hits its terminal growth rate of  5% net profits, it would be doing 50 billion USD in revenue and 2.5 billion USD in net earnings. I remain cautiously optimistic (especially since the major population growth in the future will be in south east asia, china and india, while USA will be a slowing market) which is annual report lingo for \(^__^)\  /(^__^)/

buy more when dividend income comes in.


And now for the coup de grace.

The last investment is for the sandakan smallholders and plantation farmers group, which I have been a part of and been friends with for the last 30 years. As they have been asking me for stock advice for many years (I had the same investment advice for the last 9 years. Buy QL.) some have taken my advice, others have not. But all have realized that the most consistent way of making money long term is by holding tight to your investment for a long period. Upon further discussion among friends, it was proposed that I should managed the funds that were put away in money markets in singapore. I said yes, with the condition that I will put up 50% of the close end fund, the holding period would be 10 years (no cancellations, hard to atm when your money is put in Singapore), and I would be allowed to use margin if needed, and hold cash if I deem fit. The "close ended fund" was oversubsribed, and I ended up with a 40/60 split (60 belonging to the retirees and other old dirty men who made money during palm oil spike and had nothing to buy with it in Sabah (trust me, the shopping malls in kunak and lahad datu are far from ideal) 

Shares owned                             Company                       Cost*                                   Market value

   200,000                                  Stoneco Ltd                 USD3.800,000                        USD6,400.000

*includes all margin, interests and fractional costs

For those who wondering, how did we own 200,000 shares when our total investment was supposed to be USD2,888,888 as previously agreed? Yes, I had decided to act on my capability as fund manager and invested extra on margin for stoneco. hubris and confidence combined. 

STNE is and remains our fastest growing stock (so far) in the shortest time yet. The IPO was in end of 2018. It started at 24, went up to 32, then dropped down to 19. At 19 I believed it was a no brainer for such an amazing business, and so I pulled the trigger. the share price has now gone back to its original high water mark of 32. From here on out the growth will depend on the business performance, profit earning and growth prospects.

And what a performance it had. 

STNE is now the 4th largest payments acquirer in Brazil. Their IPO recently has been backed by alibaba and Berkshire Hathway. I must admit I am going out of my circle of competence, so a helping hand by the financial arm of alibaba and BRK I decided to check out Stoneco. What I found astounded me.

In a business where the big banks are too rigid and slow to move and are very happy and satisfied with their current arrangement with VISA, AMEX and MASTERCARD, Stoneco has realized that the future of payments comes in many forms, digital, credit card ,  points, gift cards, cryptocurrency and many others. The company that is able to integrate everything together into one single device that can process legacy card systems, as well as link to your smartphone cloud account to digitize payments online will do very well in the future. The company that goes a step further, uses easily available smartphone apps and integrates in data 4.0 to allow you to do ALL the processes ( credit card payment gateway + POS point of sale system + Invoicing and accounting system) in one simple platform device targeted speciffically at the SMALL BUSINESS like hairdressers, one man contractors, fruit sellers at the market, the one man programmer and designer to allow them to be an efficient business (for only RM150 a month all included) is going to be a rockstar.

Stoneco has grown from 126 million in revenue  in 2016 (33 million loss), 240 million revenue in 2017 (33 million loss) to the sept quarter of 2018 where it had a revenue of 104.8 million (in one quarter) and a net profit of 22 million. Its concept of skipping the big ugly bank building and instead using its MLM style "angels" system to go to ground and help business owners directly is a revolutionary move (for banking industry) Using their operational metrics (how they measure their growth), in 2017 they had 131 thousand clients. This year they had 268 thousand clients. As their charges are based on a monthly fee and a fractional cost of each transaction, they also use TPV (total payment volume) as a metric for how well their business is doing.

They did  RS15.3 billion in 4Q 2017 and RS26.6 billion in 4Q 2018, for a growth of 73.8%.

This growth is simply amazing. Imagine an ecosystem where you make a small fee of every banking transaction, a few cents, invisible if you stand alone. But mind boggling in its profitability when you start to have 1 million companies using it and doing daily transactions every day. In their IPO prospectus, Stoneco aims to target the 8.8 million SME's, one man operators etc in signing them up to use their services. If everyone starts using their payment system in Brazil, and it is replicated regionally, well... did I just describe another VISA in the making for you? In either case, Stoneco has raised a warchest of USD1.5 billion from its IPO, and is an immediately profitable company that has gained a suitable scale (big enough to be efficient, small enough that the investing price is still low)

I wait with baited breath on what it will do in the future. Based on its upcoming results come March 18, more equity may be deployed.


Learn something new everyday,


10 people like this. Showing 50 of 82 comments

(S = Qr) Philip

Thanks for the pertinent information SSLEE.

Do you know what the information is trying to tell you?

2019-03-09 20:22


sted by (S = Qr) Philip > Mar 9, 2019 02:51 PM | Report Abuse

Which is why I kind of respect kyy, he puts large sums to back his investments, with margin to boot.

S = Qr

Last year, I don't know how to write it properly.....I write about sailang margin and everybody censures me, deletes my posts.........

2019-03-09 20:48


Dear Philip,
I quote your explanation on 50PE, “Imagine if you have a condo in klcc that you bought for 1 million. Currently you are renting it out for 3,000 a month. Your earnings per year is 36,000 a year. If you were to offer 50pe, you would saying that you want to buy that condo for rm1.8 million. Would you sell your condo in klcc for 1.8 million knowing that a few years down the road you would be renting it out for rm 5,000 a month? If you think about it very carefully, 10-20 years down the road do you think condos in klcc will ever be sold at 1.8 million?”

I totally disagree with your above explanation hence I just want to highlight if QL EPS is 12.71 cents financial year end 31/3/2018. Apply the growth rate of 10% and discount rate 3.5% then how many years you need to get a DCF of RM 6.79 (Closing market price on 8/3/2019)

Note: Unlike the condos in KL many of QL assets “Farm building, Boat, Plant, Machinery, Vehicle, Fitting, Work in progress, Biological assets, leases hold land, Plantation development expenditure and etc” will have zero value at end of life. Moreover QL still need to repay their increasing borrowing.

Thank you

2019-03-09 22:18

(S = Qr) Philip

So you are trying to tell me pt murni plantation lands will have zero value when you evaluate its business value(lease hold lands cannot be renewed?). Or the 2 refineries that it has once you fully amortise it's cost after 7 years it suddenly is worth nothing( fully depreciated in financial report suddenly cannot still be productive)? Or the specialist workers and management that is working to make PT murni a success is not an intangible asset when you buy the business. The wonderful organisation you helped set up, the highly trained workers and bylaws and business practise you have brought down are amortized to zero with no further value in making of murni a well run company?

Simple question for you, sslee. Malaysia depreciation for plant and equipment can be expenses out by 14% each year for tax purposes. But in reality, do you scrap and replace new palm oil refineries every 7 years? Do you just scrap your 10 ton lorries after 7 years? It do you replaced parts, upgrade machinery and keep it chugging along far beyond its assumed end of life cycle?

I think you would need to convince me further on your concept of useful life of an intangible asset (like sslee PT muni organization costs)and tangible assets (like your refinery)

In the end you need to explain to me the concept of fair value, willing buyer and willing seller. If you tell me that when I buy PT murni I need throw away refineries after 7 years ( fully depreciated) and scrap lorries after 5 years for me it doesn't really make sense.

Most refineries and plantations I know have equipment running and maintained far beyond that.

Or am I making the wrong assumptions all this while? Appreciate if you can elucidate on real life valuations versus tax accounting.

2019-03-09 23:16

(S = Qr) Philip

Zero accounting value at end of life does not mean I cannot have a gain on disposal of asset, especially if it is a well run, well maintained asset in a difficult location and is still productive, no?

2019-03-09 23:28

(S = Qr) Philip

And without knowing the future SSLee and using your current assumptions,
If you applied DCF for ql in 2009 you would have been wrong. If you applied it to TOPGLOV in 2010 based on your past data you would still be wrong. Heck, you can try to calculate your INSAS DCF in 2014, and you would have been horribly wrong. the problem with DCF is that your projections are all based on past historical data as your assumptions for the future. Investing is about making a risky bet on the future. DCF tells you nothing about risk or growth triggers.

I wonder what your DCF calculation told you about xingquan?

Don't forget when you apply DCF calculation you need to put in a terminal growth factor ( when growth stagnates), otherwise you will hit infinity and your DCF model falls apart. Not a very smart way to invest in a stock. Ql has grown for the last 20 years, how many more years of 10% growth do you foresee in your crystal ball?

2019-03-09 23:52


i do feel pity for those who insisted insas rather than yinson or pchem. cigarbutt investing doesn't win in long term, period.

2019-03-10 00:23


Dear Philip,
Let examine:
1. Palm oil mill: How many equipment after a certain useful years of operation you need to replace with the new one because the old one keep breaking down (production interruption) and high maintenance cost. (Boiler, Steam turbine, fruit cage, sterilizer, stripper, digester, screw press, separator, cyclone, nut cracker, vacuum dryer and etc?
2. Plantation: How many years your biological assets of palm tree remain productive before you do replanting? How long your vehicles use in plantation can last? After lease hold plantation land expired how much you need to pay to renew the lease?
3. Fishing: Fishing net/gear/motor how often you replace them? Fishing boat how many years can it last before it is no more sea worthy? Refrigerator units what is the life span before it break down too often?
4. Layer poultry farming: What you do with the biological assets of egg producing chickens when they are old and unable to lay egg anymore?
5. General transportation vehicle, how many years before it become no more road worthy or incur high breakdown and maintenance cost?
6. How often the supplier of control system will tell you they no more produce/keep obsolete spare parts or maintain their old system and you have no choice but to upgrade the whole system?
7. How often your high wear and tear moving part/equipment or vessel subjected to high corrosion, erosion and pressure swing needed to be replaced during MTA?

So instead of getting mad at me and keep harping on INSAS or Xingquan, why not you tell us what is your projection of EPS growth rate and from where to justify Present Value or DCF of RM 6.79 in 10 year time.

By the way your article is top class no argument about that. (Million time better than quack quack quack’s article)I do learn something new from your article.

Thank you
P/S: This is what we do when we present project flexibility study to our boss with discount rate of 7% (interest rate is high in Indonesia) the capital payback period should not be more than 10 year otherwise it is not worth investing. (And of cause you do not stop production after 10 year and the plant shall still be productive for another 20 years)

2019-03-10 07:45

(S = Qr) Philip

If I were to pick up figures from the sky ( which is what DCF is all about), and use past historical figures only, my DCF calculated value for ql currently ( if no further growth triggers apply), I would be giving ql a dcf intrinsic value of rm18.65. if ql gets over the bump into the second growth challenge ( which I am confident they will do), I have an intrinsic value of rm26.47. if they perform beyond my wildest expectations and become the next Nestlé, my DCF is rm53.6. your guess is as good as mine.

I would need to earn at least 6% above( more than EPF rate), otherwise it would be unwise to invest in the future.

But SSLee you are buying a business. Not an asset. If you buy a lousy business with 1 refineries, it would not grow beyond that. But if you are buying pt murni which is one of the biggest privately owned plantations, your business will definitely grow beyond your original calculations 10 or 15 years ago.

Imagine rabbits breeding. When you first only paid for 2 pairs of rabbits, in 10 years you would have many many many pairs of rabbits, far beyond your wildest projections.

The challenge is to buy a male and female pair. After that you wait.

2019-03-10 10:18

(S = Qr) Philip

In either case, DCF also does not take into account many things.

Limitations of DCF Model

A DCF model is powerful but there are limitations when applied too broadly or with bad assumptions. For example, the risk-free rate changes over time and may change over the course of a project. Changing cost of capital or expected salvage values at the end of a project can also invalidate the analysis once a project or investment has already started.

Applying DCF models to complicated projects or investments that the investor cannot control is also difficult or nearly impossible. For example, imagine an investor who wants to purchase shares in Apple Inc. (AAPL) in late 2018 and decides to use DCF to decide whether the current share price is a fair value.

This investor must make several assumptions to complete this analysis. If she uses Free Cash Flow (FCF) for the model, should she add an expected growth rate? What is the right discount rate? Are there alternatives available or should she just rely on the estimated market risk premium? How long will she hold AAPL’s stock and what will its value be at the end of that period? Unfortunately, there's a lack of consistent answers to these questions, and since she cannot access AAPL’s cash flow as a minority shareholder, the model is not helpful.

2019-03-10 10:29

(S = Qr) Philip

Don't get me started on dividends, if you do a dcf analysis based on dividends, almost all the stocks you look at are a bad investment.

2019-03-10 10:30

Heavenly PUNTER

Uncle S=QR, I got some extra pocket money, and I read every single annual report of QL Resources, Chairman is Chia Song Kun, can buy already lah. CEO is Mr Chia also, very confident. I will punt in QL only from now onwards, God Bless My Soul and my pocket money. Amen!

2019-03-10 10:31

Heavenly PUNTER

Maybe I can meet you in the AGM one day, you are my idol

2019-03-10 10:31

Heavenly PUNTER

I will buy Family Mart ice cream every week at least once, and eat QL eggs from today onwards, hopefully can contribute a bit more to my investment / punting (whatever you call it).

2019-03-10 10:33

(S = Qr) Philip

Personally, I think PCHEM would be a better buy for retirees and elders, if they are looking for a safe long term investment. It has the lowest risk Vs reward ratio in my stock portfolio.

2019-03-10 10:57


now epf started buying back pchem..cant figure out why they sell n buy back

2019-03-10 11:00


Knowledge and information will not bring riches, for if that's true, professors or PhD holders would be the richest people on the planet..

So, what determines success and to a larger extent, riches? It is the IMAGINATION - in being able to combine knowledge, information and experience into something of value

Everyone has access to the same information, annual reports, books by authors, economic reports... You can see the by-the-book forummers expounding list after list of theoretical jargons, more to confuse than convince, while the successful outlier sees an imaginative perspective not immediately apparent to the norm

And that is the hallmark of a great entrepreneur - skill, guts, instincts and creativity in making use of chaotic mess of information into structure of substance

Seeing beyond his cockiness, Phillip has this pedigree and he's earned it... Thanks for the wonderful read of your thought processes

2019-03-10 11:05


[转贴] 尝试以不同角度看HARTA - 蛤蜊先生







HARTA 2019财年的每股盈利预计是15仙,也就是说,我以5000令吉收购价,买入了一个每年能够创造150令吉净利的资产,回酬每年约3%。(5000x0.15=150)作为老板,我不一定要把赚到的都拿出来,我可以把盈利存起来或投资扩充工厂。











所以就会像这样慢慢增加, 2019年 每股盈利 15仙,2020年17.25仙,2021年19.83仙,以此类推。





2019-03-10 11:26


谢谢 Ahuat50
的 梯增值 文章。

2019-03-10 11:31

(S = Qr) Philip

Which is why I pointed out the fact that topglove is adding more production lines, more expansion, more r&d, more cost reduction activities, more improvement.

Hartalega is giving up 240 million every year from 400 million in earnings and giving it out as dividends.

TOPGLOV is giving out 190 million out of 400 million earnings, and using the retained earnings to grow bigger and extend its moat and improve its business.

TOPGLOV is cheaper to buy, and has better mix than HARTA.

I'm content to bet on this horse for the long term.

2019-03-10 11:58


Please understand this things loh....!!

Posted by (S = Qr) Philip > Mar 10, 2019 11:58 AM | Report Abuse

Which is why I pointed out the fact that topglove is adding more production lines, more expansion, more r&d, more cost reduction activities, more improvement.

Hartalega is giving up 240 million every year from 400 million in earnings and giving it out as dividends.
TOPGLOV is giving out 190 million out of 400 million earnings, and using the retained earnings to grow bigger and extend its moat and improve its business.
NO BIG DEAL MAH..counter like hartalega and topglove pays div about rm 400m a yr bcos their mkt cap already exceeded rm 11 billion mah, this translate to a modest div yield of 3.7% pa loh...!!

TOPGLOV is cheaper to buy, and has better mix than HARTA. Not true their valuation of Harta almost the same as topglove but 1 thing is for sure harta is more efficient as its ROE is much higher loh..!!

I'm content to bet on this horse for the long term.


2019-03-10 12:08


哈哈, Harta being innovative with their new products has a additional mark.
Both are good.

2019-03-10 12:09


Next 5 or 10 year harta will produce 100% amg glove..topglove.supermax and kossan will take market share for nitrile glove that left by harta...i think next move for top glove to buy UG healtcare to compete with harta in amg glove ..harta already in new level for amg glove that not many competitor....

2019-03-10 12:12



2019-03-10 12:21

(S = Qr) Philip

Please open annual report for all the producers and check trade journals. Rubber glove market is a disposable product which needs to be replaced every time you use it. The entire world market is growing by more than 10% yearly for the past 10 years. Mature markets( USA, Japan) are growing slower, but the other markets are growing by 30+%.
Please open page 27 of the annual report la SOHAI.

Stop posting your nonsensical remarks ( in ALL CAPS nonetheless) and stay away from my blog. I wrote it. You are not welcome. Go away stockraider. And stop asking me to buy shit like INSAS.


2019-03-10 12:36


Post removed.Why?

2019-03-10 12:42

(S = Qr) Philip

Revenue is all time high la stupid SOHAI. Disposable product how to become cyclical bodoh? You think petronm with scheduled shutdown? Do you even know what is cyclical business? You stupid or something? Annually every year HARTA and TOPGLOV did better than the previous year for upteen years. Stick to your sapura and INSAS, you brainless office boy.

I repeat, don't pollute my blog. Or I will have to shut down replies again.

My blog is for people who seek knowledge, not those who shut their brain and repeat useless information.


2019-03-10 13:18


Post removed.Why?

2019-03-10 13:21


long num.. ur pchem recommendation look good , i think i'll buy it soon

2019-03-10 13:25

(S = Qr) Philip

Really brainless SOHAI

Topglove net profit

2014 183million
2015 281 million
2016 362 million
2017 330 million
2018 437 million

What part of net profit is collapsing you sohai idiot.


I won't be reading or replying further.

2019-03-10 13:38


Post removed.Why?

2019-03-10 13:45


U should consider switching to this no brainer counter loh...!!

Posted by stockraider > Mar 10, 2019 01:19 PM | Report Abuse X


OpenSys has four business revenue models, namely
(i) outright sales, NEUTRAL GROWTH PROSPECT
(ii) software services, GOOD PROSPECT STILL GROWING
(iii) outsourcing services CHEQUE PROCESSING FALLING VOLUME
(iv) maintenance services. GOOD PROSPECT DUE TO HUGE CRM MACHINE





But overall...Raider see it is a worthwhile investment in opensys the core software and maintenance should give a large core base income loh......!!

2019-03-10 13:47


Post removed.Why?

2019-03-10 13:48


very informative... opens my eyes to many perspectives of long term company growth and investment...

2019-03-11 09:56


once again thanks for the learning...

2019-03-11 09:57


Thanks Philip for yr info. However me being a 75 year old retiree find some parts a bit difficult to follow. However no worries. I have picked up a few lots of P.CHEM Yinson & Top Glove for my children and hope to see them grow and flower in the years to come. Will be adding on to them when finances permit at regular intervals. Again thanks and a good night

2019-03-13 21:59


Thanks for sharing your knowledge and information !

2019-03-14 15:53


Philip, thanks for sharing. Hope you can share more in i3 to benefit more people.

2019-03-18 17:37


What a great article! This is what I want to see more in i3. Thank you so much Philip for sharing. My newbie mind is learning a lot from your postings.

"My blog is for people who seek knowledge" - Philip
- Great words. Please continue as your postings has benefited many people including me.

2019-03-22 15:21


But this biker fellow...dia bike sudah hilang loh....!!

Posted by Jester > Mar 22, 2019 3:21 PM | Report Abuse

What a great article! This is what I want to see more in i3. Thank you so much Philip for sharing. My newbie mind is learning a lot from your postings.

"My blog is for people who seek knowledge" - Philip
- Great words. Please continue as your postings has benefited many people including me.

2019-03-22 15:23


philip...thanks for sharing.

2019-03-24 18:13

Heavenly PUNTER

stupid raider

2019-03-24 18:17

(Clark GKent) Philip

Picked up additional 29,500 shares of PCHEM @9.05 on march 26th t+3 based on dividends yield of 18 cents for my shares of 1,495,200 shares. The balance dividend seafood dinner in Penang!

2019-03-31 07:41


Top Glove, QL, Yinson...they had explosive organic growth the last 10 years.

Gkent? Gkent is facing 2-3 quarters of disappointing results and a real test for its survival in new challenging environment , its probably feast or famine and whatever is currently in balance sheet is probably irrelevant in comparison.

2019-03-31 08:56


Gkent has tremendous possibilities and execution risks...Its one of those critical junctions.

2019-03-31 09:10


A good article with plenty of good investment stuff will always attract many comments, whether good or bad comments. But obviously the sharing of the author has been attracting many good comments, which the author deserves it.

Well done Philip. Take it as a joy to share.

2019-03-31 11:10


Philip U are very good stock analyst. Never come across an analyst like U in I3 so far. Thank for sharing and hope U continue write more in I3.

2019-03-31 12:15

(Clark GKent) Philip

Hi jackfruit, I'm not a stock analyst, I'm merely a amateur stock picker who reads a lot, am rational in my investments in not being much affected by highs and lows of the market, and treat investing as being part of a business, instead of prices on a stock ticker tape that goes up and down every day.

2019-03-31 12:55


thank you for the sharing, very insightful .... regret to sold off my yinson earlier now to switch to other...

2019-06-21 11:28

(US/CHN trade war doesn't matter) Philip

The real money in stock investment is in the waiting. Not in the buying. I will be preparing my latest quarterly report, just as soon as gkent and yinson announce results, should be end of this month.

2019-06-25 07:26

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