the bursa journey that worked for me. 2000-2019

(Philip) 3rd & 4th Quarterly Report for The Borneo Bikers Gang

Philip ( buy what you understand)
Publish date: Mon, 02 Mar 2020, 10:05 AM
How to invest for the long game.


Lets set the stage.

With that out of the way,


Hello everyone,

My name is Philip.

it has been a while since I wrote. Due to certain complaints by investor friends and family, I have been asked to stop doing quarterly announcements on the progress of stocks, as they believe a yearly update letter would be far more useful and better for investor mental health rather than a quarterly letter. I do agree: stocks should be treated like business. There is no point in asking the agent to value your house every week, you are not planning to sell the house unless there is a fire or flood or someone builds a graveyard right in front of it.

Having said that, I will still maintain my trackable stock portfolio: the stocks that I buy are usually in the upper mid caps or large cap stocks (with exception of gkent, my margin buy), and you can monitor there. I do not have to worry like berkshire of being frontloaded, or buying at a high price, as I believe I am more rational than most and will usually manage to buy stocks at a lower price than many in the long run. You also do not have to worry about me doing a pump and dump, as the stocks I buy usually are to big for such actions, and the management team is usually of the most reliable kind, they are usually the majority shareholders and frown upon such activities.

My total investment holdings as at 28th February (friday) 2020 (inclusive shared friends, family and margin):

Shares owned/price                  Company                        Cost                                      Market value

    1,360,500 /8.16                    QL                                 RM1,265,892                          RM11,101,680.00

    2,043,800 /5.64                    TOPGLOV                        RM1,340,796                         RM11,527,680.00

    1,575,400/7.15                     YINSON                          RM6,507,976‬                          RM11,264,110.00

    2,820,000/0.82                     GKENT                           RM2,815,714                           RM2,312,400.00

    3,413,200/5.4                       PCHEM                           RM25,489,714                         RM18,431,280.00

    500,000/2.2                          SERBADK                       RM1,173.651.50                       RM1,100,000.00

    200,000/39.89                      STONECO:NYSE              USD3,800,000.00                     USD7,980,000.00

As of today we have utilized around RM10 million of the subscribed RM22 million of total margin offered by retail investment banks. Our margin purchases were in GKENT(2.8) and PCHEM(7.2). The majority of dividend yields and other income was spent in purchasing more stocks of PCHEM at lower prices.

QL Resouces Berhad has been a revelation. When I first introduced it into the I3 forum, and using my concept of companies that keep beating revenues, earnings and growth estimates will always have an ever increasing share prices, I was met with almost universal ridicule. When I told everyone that my purchase was done in 2009, and added quarterly  as the business grew, I was told I was lucky. In January of 2019, the share price was RM6.7. Today it is RM8.16. a PE of 56 (based on latest 4Q earnings). A gain of 21.8% YoY. What happened to all the detractors? The simple fact was quantitative valuation versus qualitative valuation will always affect 2nd level thinking. AMEX salad crisis is a big example of it. Using past metrics, QL looks to have slowing growth, EPS and ROA. However, looking into the business, one knows that 200 branches of family mart does not pop up out of nowhere, doubling the egg production in vietnam and indonesia requires huge capital investment, and market demand takes time to build and match. 

Moving forward a few key assumptions need to be made. The virus effects and reduction in performance will last throughout the year. For a high PE company like QL, any drop in performance will have a quadratic curve effect on share price. With that in view, I have sold a few stocks (850K @ 8.6) and invested the same amount in SERBADK and YINSON , searching for companies that is going to be more immune to COVID-19 and have fixed contracts.

However, I still have heavy faith in the future of QL as it goes regional. Malaysians eat 20 million eggs daily. Vietnamese eat 15 million eggs daily. Indonesia eats.... well I'll just let you look at my qualitative process, understanding trade journals.

"Currently, the group produces 5.7 million eggs per day across its operations in Malaysia, Indonesia and Vietnam."

"QL expects to double egg production in their Vietnam poultry layer unit from 850k to 1.85m eggs per day within 3 years and are positive that egg consumption will increase in the economic boom."

I have faith. 

"Firm plans RM400m capex; FamilyMart has broken even"

The fastest expansion ever and well managed. The growth has been even more spectacular than Taiwan's growth of Family Mart. Initial expectations were for QL to hit 300 stores by FY22. Currently now it is at 200 stores in West Malaysia, and have already broken even despite breakneck expectations and is expected to hit their target of 300 stores by 2021 one year ahead of schedule.

And so I maintain the bulk of my investments in QL, and continue to monitor quarterly.

TOPGLOVE  - Demand for surgical and protective gloves is definitely expected to surge in 2020 due to fears of the COVID throughout the world. The virus has entered 56 countries as of date, every one of which Topglov supplies to. Being a flu virus, mass paranoia and justified risk, gloves and face masks are already in short demand throughout the world. Topglove already has 25% of the world market, with its only weakness being the nitrile glove market. I had put a hold on purchasing more stocks in topglov due to the aspion disaster, and was hoping to begin my purchases when the capacity upgrades were complete.

However, the Covid-19 has tipped my hand and pushed the share prices far too fast on speculation. It has since dropped slightly while waiting for performance results, and I look forward to buying more quarterly soon.

Topglov will increase their capacity to 88.3 billion gloves per year by 2020, when their 40+ new production lines go online.

As far as being a no brainer, they have very few competitors (other than hartalega). Rubber gloves will continue to be a single use product that by its nature is not partial to recyclability or reuse. My only issue was branding and selection, as if topglove was able to spend R&D money to create patents (think 3M) its share price would be far far more. If they were able to invent antiseptic rubber gloves, or antiviral indestructible gloves, it would truly be a juggernaut (hartalega got there first). I have hope that Topglove management will one day see the light, and move from just a mega sweatshop for glove making, and move towards making gloves the world over will specifically say they want.

I continue to hold for the long term.

YINSON - With my initial expectations proven, wins at VERY good prices in Ghana, Brazil (40 billion in orderbook, or USD 10 billion over a 25 year contract), any problems with Malaysian currency to USD will only prove to be a boon to Yinson. Looking at the condition of malaysia now, in 10 years from now we are looking at a USD1 to 5 MYR conversion (I remember 1990s when USD myr was 2.5), in 20 years from now we would be staring at a USD 1 to 6 MYR. Sad but true. Yinson also has a perpetual bond which was covered 2 hours after launch.

Yes the details are true. 999 years to pay back that 950 million ringgit loan, at 6.8% interest per year (while their contracts are paid in USD). Yes, you have that right. AS long as Yinson pays 16 million per quarter in interest income, they do not ever need to pay back the bilion dollar principal.

So, cash in hand to build ships is covered as a super long term loan (essentially free loan from your dad that you do not have to pay back, as long as you bring him to lunch every weekend), FPSO projects during a time when many O&G companies are overextended or holding bad long term contracts (see armada and sapura), rising oil prices, and having an international norwegian project team with very good experience in building, managing, constructing and running FPSO. 

I would say slow down yinson! But thinking about it, when the korean government created to chaebol concept, and gave free loans to companies that met and exceeded their KPI for production, profitability and market approach, you quickly had names like samsung and hyundai and LG. 

What could Yinson do with free money? Another Ghana contract coming up for PECAN ? (again they are the only viable company with the financial capability to meet, past project reference, and criteria meeting needed to proceed)

I am a net buyer and as the contracts are 25 fixed, relatively immune to Covid-19. I have added 1 million shares at 6.38 during the speculative fear of covid (before everyone realized the orderbook had no bearing on viruses), and will be buying more after the LOI turns into a LOA and the specific terms are met.

GKENT - Gkent is of a more structurally risky nature, I doubt that not. With the change of government recently and the problems surrounding, I do worry about project cancellation and delays. However, I believe this will not be the case, as GKENT has been able to work with both the BN government and PH government in doing the massive 11 billion LRT3 project (43% completion and submission for claim expected in 2020). But looking at the scenarios available, and as this is my main margin play for the year of 2019, this is a work in progress that I am monitoring quarterly. There are cancellation penalties (if 43% completion as per progress, this must be paid out for works done and billed. hopefully quickly) I do not doubt GKENT will make a profit this year and many years after that, and I do not underestimate their revised partnership and technology transfer with Honeywell. However, this is a margin play, medium risk for high return play, and caution is to be advised. This is a very small part of my portfolio, but it is also one that I have bigger and bigger confidence in as quarterly results come up.

I am a net buyer. I have bought (on margin) an additional position of 1 million shares at 0.88 cents and continue to pile my dividends into buying back shares of GKENT. Interestingly enough, GKENT management also has the same opinion as I do. So far, they have spent RM25 million in buying back more than 6% of outstanding shares, given out 6% in dividends, and in every action they are doing they are telling me to KEEP CALM AND HOLD ON. The CEO of the company Mr Tan Kay Hock has also not sold a single share, and has actually increased his position, which gives me hope that the business will do well in the long term.

The best form of security is sometimes from the management and controlling shareholders. IF the CEO tells you that his entire networth is in the company, and if we win or lose toghether, ride the ups and downs together. 

That is good enough for me. At these prices, I am willing to wait

PCHEM - So far my biggest loser, I am on record and will to state that me and my family are still net holders and buyers and have not sold a single share or cut losses in PCHEM.  It was cheap when I bought it at 8.15. It was good value at 9. I am the first to say I bought 950K shares at 6.3 which I thought was a wonderful deal. It continues to be even cheaper this morning at 5.4 due to selling by individuals who owned PCHEM during IPO prices (BN nationals I supposed to fund the new efforts), and it has hit all time pre IPO prices. 

I am a net buyer. My mistake was probably buying before the QR announcement (my mistake I know, as I usually buy after the QR, not before. But everyone makes mistakes of greed and ego once in a while). I could have saved almost 90 cents per share on my RM6 million purchase, or an additional 900k saved.

However, the fact remains. PCHEM is undervalued. Severely. Current earnings notwithstanding, the revenues are still the same as last year. The demand is still there, just the pricing and supply. They have 12 billion in cash to ride out years of oversupply. They have a new production facility in pangerang that will produce 3.3 mpta of olefins and other derivatives at a huge reduction in capacity costs ( saudi aramco the world lowest cost producer of oil has a joint refinery right next door), they own half of the joint business with pchem. What this means is that when PIC goes full production by 2021, many of the loss making petrochemicals would have reduced supply (lctitan has recently sold its holdings in louisana state for 33 million usd) the region, PCHEM will be right there to catch the load. It will be able to sell at the cheapest cost in the market, make the most profit (they have shown they can sell lower than its compeitors production costs and still make money).

This was my thesis when I bought the stock in 2019 at 8.15. And it continues to be the reason why I am holding the stock for the long term. There is no structural competitive disadvantage for PCHEM (revenue is holding steady). It is still profitable (albeight more than half reduction in earnings). It still declared a 7 cent dividend this year. I have already received 36 cents in dividends so far, and I remain confident that PCHEM will recover its earnings strength (as guided by management).

SERBADK  - As this is a new holding for me and I am monitoring quarter by quarter, all I can do is my initial rough analysia on the long term prospects that I find for the company. 

My qualitative view on adding Serba dinamik, their main business model is operations and maintenance, all items that require very little in purchasing big ticket items or storing warehouses of equipment. Mostly needed is just simple manpower and high level of expertise in servicing and maintaining equipment ( high engineering skill). They have 21 years of experience in this, their CEO karim is a technical man who knows a thing or two about engineering ( IR in mechanical engineering, same as me in requiring to get a certain level of points every year to keep the IR status and learning more everyday).

In terms of business prospects, Qatar is their biggest revenue and profit center. They are a unique country, very rich but supporting both Iran and USA ( terrorism and also the biggest US airbase this side of the world).

The interesting part has been that ever since the blockade and embargo ( but Saudi still says they will send aid to Qatar if needed), of Egypt, Bahrain, Saudi etc a lot of contractors and suppliers have dropped ( forced) to leave the country since 2014. Leaving the o&m space pretty much open to Serba dinamik to step in at high margins and huge demand. Going in at cheap prices, using technology transfers from cse global and India subsidiary (, they are building up a localized price with cheap costs to take jobs from international companies.

O&M is an interesting beast, due to its nature you will find that manpower expenses are the biggest cost ( variable costs) which is easily managed compared to inventory. Therefore you will see 1.2 billion in receivables ( below 30 days payment no impairment due to if not payment entire plant stops production not an option to delay, as we know production and profits to owner). On the other hand payables are very low due to only stocking small spare parts and ordering big items only when overhaul needed ( which if maintenance is done right not often).

Serba is also interesting in that it is similar to yinson, where it started out internationally, getting international team together first, then expanding back to Malaysia and SEA.

Is it a good bet? So far it seems good as the results have shown increasing revenues and profits, and a good line of credit from sukuk to fund projects.

We shall monitor and see from the latest qr report coming up to decide what to do.

Here is my initial feel for it, and I have sold a portion of my QL holdings to invest in the company to do so at a good rate.

We shall monitor more going forward.

STONECO - I will just leave it to the CEO to explain further (as their reporting and earnings statements are far more advanced and monitored than in malaysia. Do download the QR report, the transcript of the earnings call and their presentation slide to understand more).

to understand how management think and how they respond.


Operating and Financial Highlights
Total Revenue and Income
+62.1% Total Revenue and Income was R$671.1  million, an increase of 62.1% year over year    
Net Addition of Active Clients 68.7 K
Total Active Clients were 428.9 thousand, an increase of 82.8% year over year, with a record net 
addition of 68.7 thousand clients in 3Q19
Adjusted Net Income
R$ 201.9 MM an increase of 126.0% year over year    
Adjusted Net Margin 30.1% an increase of 8.5 percentage points year over year
Net Income
R$ 191.3 MM an increase of 111.6% year over year    
Net Margin 28.5% an increase of 6.7 percentage points year over year
Total Payment Volume (TPV)
R$ 32.6 BN up 49.8% or R$10.9 billion year over year    
Take Rate1

1.88% comparable to previous quarters, with client lifetime upward revision taking actual take rate to 1.91%


All I can say is: WOW.

Being an investor in Stoneco is fast proving more profitable than I expected. It is beating and taking market share from the incumbent banking system, it has received approval to be a bank themselves, and their concentration on online bridge of works instead of brick and mortar banking stations is proving to be a huge boon.

They are increasing clients, revenues, earnings AND margins all at once.

How many companies in Bursa can claim such a thing?

I sincerely hope you learned something new from my postings. Not in a ego or proud way. But in a way that you have received new information that is useful to you in making rational relevant decisions.


The key to making money in the stock market is not intelligence or IQ or charts or notifications etc. You dont need to be able to play 3 dimensional chess to be able to make money in the stock market. The key to making money in the stock market is to make rational decisions. Buying profitable companies with long term market competitive advantages, not getting caught in speculative assumptions (like Sapura being worth rm3 in 3 years without any profits or quarter to quarter growths to prove the speculation), or NETX (assuming you will make 8 cents for a 10 year loss making company just because the government announced NFCP, without a contract to tie your belief or a yearly profitable earnings doing NFCP things ).

In essence, Koon yew yin was half right. A company that has increasing revenues and earnings will always go up in share price. 

That is true in almost every case. But the other half is also true, a company with decreasing revenues and earnings will always go down in share price.

The trick is to predict not 2 quarters or 3 quarters, but to predict multiple years of earnings and revenue growth.

You would do far better if you spent time trying to understand how to predict that instead of just turning the blinders on and buying based on dividend yield, PE, cash flow, debt, ROE and alone.

Warren had a 54 year secret.


4 people like this. Showing 23 of 23 comments


Thank you for sharing.

2020-03-02 10:16

Philip ( Icarus)

You are very welcome. But please note that the market currently is very choppy, and if you need a dividend yield it unable to withstand long periods of market down, you would be best served to wait it out.

I am able to keep holding on and to purchase more during this bloodbath because I have access to margin and additional dividend and cash resources to average down.

I can't tell you how to predict when a market downturn is coming, but I can sure navigate one. Bursa now is under the strain of fear from covid+ trade war+ political uncertainty, a very very rare combination.

Today you can buy public bank at pe12, PCHEM at ipo prices etc.

If you ever need a signal to buy wonderful companies at drop dead prices, this is it.

Ignore the noise and understand the business.

2020-03-02 11:45


Thanks again. Yes looks like a perfect storm for Malaysia in particular and the world in general.

Any lead to new company(s) that you maybe assessing now? Appreciate it very much.

I am looking at DBS (PE10) and comparing to PBB appears to have much better potential going forward.

Happy investing.

2020-03-02 13:56

Philip ( Icarus)

For me in terms of banks I prefer safety of investment in terms of loans.

DBS has a lower PE than PBB true. However why is that so?

PBB has a much lower gross impairments loan ratio of 0.49% versus DBS 1.5%. This is because PBB borrows for hire purchase loans (which pretty much does not exist in Singapore haha). Comparatively, it is almost a guaranteed loan, as the loan principal is paid off early, and profits are paid of in the back end of the car/house loan. Which if any impairment occurs PBB can auction of the car or resell it cheap as the principal has already been paid, and any further loans is just gravy on top.

DBS has such a high gross loan impairment because it borrows a lot to SMES, developers and manufacturing companies, which is going to be looking at huge losses and payment misses in the months to come. The disposal of assets of which will be hard to factor in due to bankruptcy.

PBB on the other hand is mostly borrowing to households and car owners that already have a committed monthly loan payment schedule. So i believe the payment schemes are there.

In terms of free loans (individual deposits and fixed deposits), the lifeblood that banks use to generate income and cover loans, you can measure yourself the deposit/loan percentage of DBS versus PBB. You will quickly find out how much the chinese communities save money and squirrel away in malaysia versus singapore.

One sad fact is singapore seems to be a very wealthy country, but in truth its individuals do not have much money to save and spend almost all of it away.

Malaysia on the other hand has a very healthy savings community (the chinese community at least), and this is shown with how much cheap loans are being kept as fixed deposits and regular savings accounts in Public bank.

Either that or Singaporeans are far brighter in chasing after alpha, keeping most of their wealth in bonds, stocks and mutual funds, versus in plain old boring fixed deposits.

2020-03-02 15:58


You would do far better if you spent time trying to understand how to predict that instead of just turning the blinders on and buying based on dividend yield, PE, cash flow, debt, ROE and alone.

I like that...that is the professional approach...........

don't lah be like subscription services talk warren Bufett.........than go and recommend all kinds of cyclical rubbish stocks, small caps , companies with unpredictable long term future.......

2020-03-02 18:30


Post removed.Why?

2020-03-02 18:39


Thanks for sharing.
Is the size of each positions relative to your relative confidence on their business competitive advantage or expected return%.?

For PCHEM,what do you think of their growth trajectory after RAPID project? Da Vinci management guided will contribute about only 5% to the earnings when fully consolidated.
Latest analyst Q&A they mentioned about why they need to conserve so many cash instead of increase the dividend payout after Pengerang project, it is for some plant upgrade in Pengerang,may need as much as 2-3bil USD in 2-3 years,related to specialty chemicals, e.g intermediaries for gloves manufacturing etc. I am curious what is the prospect like for them to spend so much

2020-03-02 19:41


Dear Philip,
Refer SERBA financial end 2019 report: On SERBA major contributor O&M business segment:
O&M-Operation and maintenance which include maintenance, repair and overhaul of rotating equipment (“MRO”), inspection, repair and maintenance of static equipment and structure (“IRM”), maintenance of process control and instrumentation and other related services.
Revenue: RM 3,895,228,000
Operating Profit: RM 710,923,000

Cash flow from investing activities:
Acquisition of property, plant and equipment: RM 868,207,000 (2019): RM 551,917,000 (2018)

Capital commitments of the Group in respect of property, plant and equipment as 31st December 2019 are as follows: -
Land and Building
Approved and contracted for RM 436,440,000

“My qualitative view on adding Serba dinamik, their main business model is operations and maintenance, all items that require very little in purchasing big ticket items or storing warehouses of equipment. Mostly needed is just simple manpower and high level of expertise in servicing and maintaining equipment”

Q1: If O&M is as what you said then why the need of huge CAPEX for Acquisition of property, plant and equipment?
Q2: Do you know CAPEX RM 868,207,000 (2019) is for what?
Q3: Most of original equipment supplier (Especially expensive rotating equipment) will come with warranty with condition services by the original supplier or their qualified maintenance service provider. (Surely you do not want your BMW car to be serviced by any workshop)
Q4: Do you know how many original suppliers qualified Serba as their qualified maintenance service provider.
Q5: Who is Serba nearly competitor?
Thank you

2020-03-02 20:32

Philip ( Icarus)

Q1: operation & maintenance still needs warehouses, testing and rewinding facility, specialized machinery to break apart turbine for servicing which cannot be done in client area. Indeed this capex is a normal expenses which is assistant if you look at previously Schlumberger and baker Hughes financial reports.

You will receive more detail in the latest annual report coming up, but for your kind attention in last year annual report.

Long-term Short-term Assets leasehold leasehold under land land Furniture, ______construction______ (Unexpired (Unexpired Plant fittings Tools Land Freehold lease term lease term and Motor and office and Office use Other land > 50 years) < 50 years) Buildings machinery vehicles equipment equipment renovation rights asset Total RM’000
==================================================================================================================== ======== At 31 December 2018 5,896 2,984 20,831 67,640 315,326 7,337 4,080 528,927 3,236 196,544 120,289 1,273,090 ====================================================================================================================

The main expenses here are for Plant and machinery at 315 million and Tools and equipment at 528 million.

Now this amount looks big until you realize that Serbadk is doing international business with an exposure in the following countries:

Segmental Revenue by countries
Individual quarter Cumulative quarter
31/12/19 31/12/18 31/12/19 31/12/18
RM’000 RM’000 RM’000 RM’000
Malaysia 395,454 278,660 1,305,559 920,250
Indonesia 12,480 20,780 155,443 70,399
Laos 1,358 - 12,326 -
South East Asia 409,292 299,440 1,473,328 990,649
Turkmenistan 95,767 98,416 175,325 239,514
Kazakhstan - 1,789 - 1,789
India 16 - 16,555 -
Uzbekistan 7,888 - 24,320 -
Central & South Asia 103,671 100,205 216,200 241,303
Bahrain 122,045 101,790 382,011 327,204
UAE 232,270 161,699 889,945 674,919
Qatar 427,063 235,320 1,243,263 681,244
Oman - 552 - 46,764
Kingdom of Saudi
Arabia 25,027 55,669 188,287 274,998
Kuwait 51 152 26,879 12,848
Middle East 806,456 555,182 2,730,385 2,017,977
Tanzania 38,508 22,539 104,015 29,821
United Kingdom 2,622 632 4,693 3,424
Total 1,360,549 977,998 4,528,621 3,283,174

868 million looks big until you realize it is merely 200 million USD, chump change in opening an o&m facility in each country.

Johor pangerang Serba dinamik maintenance facility alone is costing them 270 million.

So first answer is the capex is not huge, it is actually very small. secondly is a one off setup and non recurring. Now is expansion phase however as many of the foreign American and European specialists have left the market, leaving a huge void filled by Serba.

So ask yourself if 200 million USD in capex is huge or small to cover so many countries at once.

Thank you

2020-03-02 22:30

Philip ( Icarus)

Q3: very interesting question here as in Sabah we do not have a mercedes service facility. So what am I to do? My only choice is to use either hap SENG star or use my 30 year old friend whose workshop tokai engineering is a specialist in servicing Mercedes with the same equipment and trained mechanics sent to China facility. I choose the cheaper option of course: and hap seng does not service or warranty any car not bought by them.

Sometimes we just do not have a choice.

In this case, in Malaysia there is bumiputera requirement which gives Serbadk a huge advantage especially if they can perform well.

And in Qatar, the political embargo has forced suppliers to choose between supporting Saudi or Qatar. Most have been pressured away. Serbadk is filling that need from Qatar.

FYI Serbadk is a qualified service provider. They have been doing as an agent for many brands for the last 20 years. They are the cheaper option with all the needed certification. I checked. It is one of my qualitative requirements and easy to find out what certificates Serba has.

In fact, not only are they qualified to do. They are also qualified to teach, as they have multiple accreditation to train new specialists from city & guild.

They have the capacity to train new specialist and give them jobs as well, feeding a new business model where you don't need to go to UK to learn how to be a plant engineer.

2020-03-02 22:54

Philip ( Icarus)

Q4: judging from these wins: I would prefer to assume they have all the capability needed to complete o&m jobs.

Its unit, Serba Dinamik International Ltd secured three operations and maintenance (O&M) contracts from Energeniq FZE for work in United Arab Emirates, Pavillion Multi Holding LLC in Uzbekistan, and Process Dynamics Company in Qatar.

Another unit, Serba Dinamik Sdn Bhd, secured three O&M contracts from Pengerang Refining Company Sdn Bhd, Pengerang Petrochemical Company Sdn Bhd, and Petronas Dagangan Bhd.

It also secured one engineering, procurement, construction and commissioning (EPCC) contract from Malaysia LNG Sdn Bhd, and two O&M and EPCC contracts from Petronas Carigali Sdn Bhd.

2020-03-02 23:06

Philip ( Icarus)

Q5: maybe you can tell me? Share and share alike. I have a list, local and international which I monitor. But I still like Serbadk so far along those lines.

2020-03-02 23:08


Dear Philip,
Capex is good provided it can generate earning above it cost of fund.
I just feel for the last 4 years their Capex is above their earning. Will Serba becoming another KNM? Very happy to be proven wrong though

Cash flow from investing activities:
Acquisition of property, plant and equipment:
RM 868,207,000 (2019): Acquisition of associates RM 58,257,000: Advance to an associate RM 26,264,000: Increase in other investments RM 32,009,000
RM 551,917,000 (2018); Acquisition of associates RM 267,306,000: Increase in other investments RM 74,888,000
RM 237,942,000 (2017) Purchase of share in associates RM 34,000,000
RM 109,527,000 (2016)
Depreciation of property, plant and equipment
RM 141,636,000 (2019)
RM 89,781,000 (2018)
RM 68,198,000 (2017)
RM 32,952,000 (2016)

Consolidated Profit or loss and Comprehensive Income
Finance costs: RM 204,295,000 (2019)
Finance costs; RM 62,122,000 (2018)
Share of results of equity accounted associates
RM 35,306,000 (2019)
RM 13,880,000 (2018)

Thank you

2020-03-03 09:13

Philip ( 2.3% fatality rate)

I believe knm and serbadk is a totally different animal.

One has been growing revenues and earnings at a fantastic rate, the other had not been growing revenues at all, and has losing quarters.

You have a point though, and every capex for each company is different.

The capex for serba consists of training centers and maintenance centers and support warehouses and specialized equipments.

One thing I monitor more is not to compare capex against earnings, but to compare capex against free cash flow. As there operating cash flow is still positive and growing (86 million last year after finances and taxes).

I will definitely monitor continuously if this will be a case similar to London biscuit ( which I find unlikely having checked with my friends on the o&m contract by pchem, dagangan and carigali to serba), but so far I am ok with it.

Spending 400 million USD in capex to collect 1 billion USD in revenue and 100 million USD in earnings every year for the next 10 years ( with the first 2 years showing promised) sounds like a deal I am ok with.

Don't forget, KNM never grew it's revenue and earnings, so did London biscuit. So what was the capex for?


Capex is good provided it can generate earning above it cost of fund.
I just feel for the last 4 years their Capex is above their earning. Will Serba becoming another KNM? Very happy to be proven wrong though

2020-03-03 10:27

Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥


In essence, Koon yew yin was half right. A company that has increasing revenues and earnings will always go up in share price.

That is true in almost every case. But the other half is also true, a company with decreasing revenues and earnings will always go down in share price.

The trick is to predict not 2 quarters or 3 quarters, but to predict multiple years of earnings and revenue growth.

You would do far better if you spent time trying to understand how to predict that instead of just turning the blinders on and buying based on dividend yield, PE, cash flow, debt, ROE and alone.

Warren had a 54 year secret.



Thanks for sharing.

Yes, buy WONDERFUL COMPANIES at fair price. Can also pay a little bit more too to own them. Long term focus. Let these WONDERFUL COMPANIES grow their intrinsic values over time, rewarding you the returns through compounding.

2020-03-03 10:38


Post removed.Why?

2020-03-03 10:48

Philip ( 2.3% fatality rate)

Which one is worse, I remember another sohai recommending tp rm3 for his sape, and put 30% o oh his money in the stock competition. So how? Who is worse? Dlady already start moving up from 38 to 42 and gaining 10% return and dividend. The sohai I mention his sape drop from 33 to 17, and still not giving any dividend.

And now he don't dare to take bet to prove his recommendation of sape TP3 in 3 years.

You should change your name to lousyraider lo.


stockraider Yes but sohai 3iii recommend dlady at Rm 66 & padini Rm 6 the share price crash loh...bcos overpay mah....!!

2020-03-03 11:38

Philip ( 2.3% fatality rate)

A few more months left your Insas 0.755 versus ql 8.25 the gap going bigger and bigger lo.

2020-03-03 11:39

Philip ( 2.3% fatality rate, 80% recovery rate age 10-40)

Q4 results is out for stoneco, and it has gone up to usd45 per share on EXTREMELY good results. If anything, this is my most profitable investment ( and first one outside of Malaysia) of all time, beating my 1 year record with QL and TOPGLOVE

Mar. 2, 2020 4:16 PMStoneCo Ltd. (STNE)By: Liz Kiesche, SA News Editor
StoneCo (NASDAQ:STNE) Q4 adjusted net income of R$275.0M (US$61.5M), up 76% Y/Y and adjusted net margin of 35.1%jumped 570 basis points Y/Y.

Q4 net addition of active clients was 66.2K; total active clients were 495.1K, up 84% Y/Y.

Q4 total revenue and income of R$782.9M, up 48% Y/Y.

Q4 total payment volume of R$40.2B rose 51% Y/Y.

Q4 adjusted free cash flow of R$185.9M increased from R$144.7M a year earlier.

2020-03-04 06:14


Thanks for this good article information sharing

2020-03-04 13:04

Learning machine

Hi Philip, really admire your track record for QL and Topglov. I noticed that you have a huge position in StoneCo. They have 3G imprint all over. I am a bit worry that it will end up like two 3G investment like KHC and BUD because they push their business variables too far. May I know how you have a huge conviction on Stone Co? Any qualitative factor that you see? Thanks

2020-04-02 14:17

Learning machine (BRK investor since 08)

Just curious, are you still adding Stone Co at lower price now? Stone Co is the most interesting ideas that I come across on i3 as I am a new member.

2020-04-04 00:17

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