Stock Pick Challenge 2013 2H

Stock Pick Challenge - [HAPSENG-WA] by OTB

Tan KW
Publish date: Thu, 22 Aug 2013, 07:33 PM
Tan KW
0 458,614
Stock pick challenge based on the discussion @ http://klse.i3investor.com/blogs/kianweiaritcles/33790.jsp
Following Message

Dear valued members, 

You should be realistic about your goals. 

"In this business if you're good, you're right six times out of ten. You're never going to be right nine times out of ten." Peter Lynch 

Disclaimer: Please be informed that the following mentioned stocks / symbols are solely for the purpose of education only; it is neither a trading advice nor an invitation to trade. For trading advice, please speak to your dealer representative or remisier or financial adviser. Please buy at your own risk. Final decision is yours. 

The 10th stock I wish to select for second half of 2013 is HAPSENG-WA. 

My trading plan 
This stock is an up trending stock (daily, weekly and monthly). 
The stock price was hitting all time high at 0.54 on 20/8/2013. The price retraced and closed at 0.51 on 21/8/2013. 
Major resistance is 0.54. 
Major support is 0.42. 
Target price = 1.86. 
Margin of safety = 74% 
Potential profit gain = 288% 
Cut loss at 0.40 = 16.6% 
Risk reward ratio at 0.40 cut loss = 1 : 17.25. 
Recommendation from CIMB : Target price for Hap Seng (mother)is 2.89, Hap Seng-WA is 1.49. 

Note: 
The target price at 1.86 is based on Technical Analysis calculation. 

Technical Chart. 
A very nice up trending chart formed. There will be a good chance to hit our target price of 1.86 if the major resistance at 0.54 is crossed convincingly. The chart is very bullish and the sky is the limit (my slogan only) if 0.54 is crossed convincingly. I like this chart because the price is at a new high. 

Conclusion 
I was very happy that the market sentiment was bad on 22/8/2013 so that I can buy at a bargain price of 0.48. Recommend to buy at 0.48 on22/8/2013.

 

Hap Seng IV Calculation          
        Fundamental Rating  
Total Net Profit Years   10/10   62.50%
Total Positive Operating Cash flow Years   4/10      
Total Dividend Payout Years   9/10   Current Price   
Total Positive free Cash flow Year   2/10   2.11
    25/40      
        Growth%  
10 Years Average Turn Over     2354133    
Latest 4 quarters     3765098 59.94%  
           
10 Years Average Net Profit     281004    
Latest 4 quarters     537927 91.43%  
           
  2011 2012 2013 Growth%  
EPS (Cent) 18.85 19.58 25.44 29.93%  
PER 11.19 10.78 8.29 23.03%  
NTA 1.51 1.61 1.63 1.24%  
Net Profit 375602 422632 537927 27.28%  
Equity  3293417 3398641 3715118 9.31%  
ROE 11.41% 12.44% 14.48% 16.39%  
Dividend 8.6 10.5      
Free cash flow -492580 510708      
           
Price CAGR % (Buy and Hold)          
Average Return History   8.59%      
3 yrs Return   35.99%      
           
Method 1          
EPS   0.25      
g   15.00      
Y   7.0      
IV= (EPS*(8.5+1.5g)*4.4)/Y   4.96      
Current price   2.11      
Margin of Safety   57.44%      
Potential gain   134.94%      
           
Method 2          
Discounted Cash Flows Calculator          
Discount rate    12.00%      
EPS   0.25      
Earning expected to grow (annually)   15.0      
for the next (? Years)   3.0      
before leveling off to an annual growth    3.00      
Calculate Stock Value per share   3.89      
Current price   2.11      
Margin of Safety   45.76%      
Potential gain   84.36%      
           
           
Method 3          
ROE   14.48%      
Rr   8.00%      
NTA   1.63      
IV= ROE/ Rr*NTA   2.95      
Current Price   2.11      
Margin of Safety   28.48%      
Potential gain   39.82%      
           
Method 4          
(22.5*EPS*Book value per share)^0.5          
EPS   0.25      
Total equity   3715118      
Number of shares   2186537      
(22.5*EPS*Total Equity/share)^0.5   3.12      
Current price   2.11      
Margin of Safety   32.34%      
Potential gain   47.80%      
           
Warrant          
           
           
HapSeng-WA          
Expiration date    8/9/2016      
Exercise price    1.65      
Price of Mother share   2.11      
Intrinsic value of WA     0.46    
Actual price of WA   0.51      
Premium or Discount     2.37    
Gearing     4.1    
           
Conclusion          
If the price of Hap Seng is 3.20, the price of Hap Seng-WA should be (3.20 - 1.65) = 1.55. 
If it is trading at 20% premium, the price of Hap Seng-WA should be (1.55*1.2) = 1.86.   
Potential gain = (1.86 - 0.48)/0.48*100 = 288%.        
           
Special note:          
I bought HapSeng-WA at 0.48 on 22/8/2013.        
           
           

 


 

 

HAPSENG (3034)
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Discussions
4 people like this. Showing 10 of 12 comments

jalenheng

The target price by climb is on hsplant,not hapseng

2013-08-22 21:02

Ooi Teik Bee

Please read the below link. Thank you.
http://klse.i3investor.com/servlets/ptg/3034.jsp

2013-08-22 21:51

Ooi Teik Bee

Dear Mr Tan KW,
My reference price for Hapseng-WA should be 0.48. Thank you.

2013-08-22 22:44

inwest88

OTB, if you may understand, KW always use the previous day closing price as the reference price, not the price which you purchased. This is to ensure a level playing filed for transparency and standardization purposes.

2013-08-23 07:13

inwest88

KW Tan, I think you are not consistent with your reference price as you are the one who mentioned that it is based on the previous day closing or prevailing day's opening.

2013-08-23 10:03

inwest88

For the purpose of fairness, consistency and transparency the reference price should also be based on a certain benchmark or criteria and in this case should be on the previous day closing as the prices can fluctuate within a wide range during the trading day. It does not matter if the price purchased is lower or higher than the previous day close. Thus is this case the previous close was 51 sen and even in the event that otb bought at 53 sen, the reference price should be 51 sen. And this is basically what happened as in Pintaras as selected by kcchongnz.

2013-08-23 10:15

inwest88

As I said it would be preferable to let i3 set the reference price to ensure fairness to both kcchong and otb. At least there is a standard basis.

2013-08-23 10:37

Ooi Teik Bee

Post removed.Why?

2013-08-23 12:53

davors

Chill... reference watchlist only... even it reach that price doesn't mean one can buy at that price as volume varies... only a buy sell portfolio is more accurate when judging performance... 2cents...

Let's continue to share and prosper...

2013-08-23 15:15

haikeyila

excellent analysis

2013-10-31 08:54

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