THE INVESTMENT APPROACH OF CALVIN TAN

EKSONS CORP BHD (9016) The Cash Rich, Asset Rich with Catalyst in USA Lumber Boom as it exports Plywood to USA, Calvin Tan Research

calvintaneng
Publish date: Sat, 22 May 2021, 11:50 PM
calvintaneng
0 1,801
Hi Guys,

I have An Investment Approach I which I would like to all.

Dear Friends & Investors of i3 forum,

All commodities have gone up & followed in somewhat by their share prices. One outstanding commodity is Lumber. In USA Lumber has gone up 300% from USD300 to over USD1,500 due to Work from Office to Work from Home

One Stock stood out as very undervalue --- EKSONS

Why Eksons?

Answer: Eksons export plywood directly to the USA market

Plus there are many salient factors about Eksons which Mr. Market overlooked

See its last Results

SUMMARY OF KEY FINANCIAL INFORMATION
31 Dec 2020

 
INDIVIDUAL PERIOD
CUMULATIVE PERIOD
CURRENT YEAR QUARTER
PRECEDING YEAR
CORRESPONDING
QUARTER
CURRENT YEAR TO DATE
PRECEDING YEAR
CORRESPONDING
PERIOD
31 Dec 2020
31 Dec 2019
31 Dec 2020
31 Dec 2019
$$'000
$$'000
$$'000
$$'000
1 Revenue
20,258
9,608
30,623
14,776
2 Profit/(loss) before tax
9,432
1,141
10,778
4,818
3 Profit/(loss) for the period
9,371
885
10,493
3,632
4 Profit/(loss) attributable to ordinary equity holders of the parent
7,449
1,100
8,363
4,886
5 Basic earnings/(loss) per share (Subunit)
4.66
0.69
5.23
3.08
6 Proposed/Declared dividend per share (Subunit)
0.00
0.00
0.00
0.00
   
AS AT END OF CURRENT QUARTER
AS AT PRECEDING FINANCIAL YEAR END
7 Net assets per share attributable to ordinary equity holders of the parent ($$)
2.4900
2.4000
 

Eksons revenue is up by 100% from Rm9.6 Millions to Rm20 millions

Its latest EPS is 4.66

Forward P/E is 

4.66 x 4 = 18.64 sen

Price is 71.5 sen

So divides 71.5 by 18.64

= 3.83 PE

That means Eksons will double your money in only 3.83 years

 

2) In the Annual Report 

See Chairman statement (page 12)

Notwithstanding the above, I am glad to report that the balance sheet of the Group remains respectable with total cash
and liquid investments totalling RM197.8 million as at 31 March 2020 against borrowings of RM15.5 million as at the
end of the financial year.
 
Eksons has Cash & Cash equivalent of Rm197.8 million and borrowings of Rm15.5 million
 
Net Cash  Rm197.8 Million - Net debt Rm15.5 million
 
= Rm182.3 Millions Cash
 
How much per share
 
The formula is 
 
Rm182.3 Millions divide by Rm7.449 Mil multiply by 4.66
 
=Rm1.14
 
THAT IS A LOT OF CASH = RM1.14 compared to its share price of 71.5 sen
 
That means
 
Rm1.14 - 71.5 sen =  42.5 sen
 
That means if Eksons were to STOP Today & dissolve the company
 
Every Investor will get back his 71.5 sen cost price plus FREE 42.5 SEN PER SHARE
 
Where to Find leh?
 
But that is not all there is
 
Eksons' NTA is Rm2.49
 
So less Cash of Rm1.14
 
2.49 - 1.14 = Rm1.35 (NET NET ASSETS)
 
Yahoo Rm1.35 Extra in Assets
 
What are these Assets
 
Eksons invested in Shophouses called the Atmosphere, Inifiti High end housing project in Serdang & Plywwod factories in Sibu Sarawak & in Sabah
 
All these are Assets of Value. Especially those Shophouses in The Atmosphere generating Rental Income
 
 
3) MRT STATION 
 
Mrt Station near the Atmosphere (only less than 5 minutes walk) will unlock even more value when completed
Both Sale and Rental will improve by enhanced connectivity
 
4) BUT THE BEST OF ALL IS THE RISE OF PLYWOOD PRICES ESPECIALLY IN THE USA
 
We quote from Eksons website
 

The Eksons Group specialises in the manufacturing of tropical thin plywood of less than 3.0 millimeter in thickness, particularly in the 2.5 and 2.7 millimeter categories. The plywood is sold under the “Panda” brand name, which is an internationally established name known for its high quality. The thin plywood is used mainly for internal furnishing and decorative purposes. Eksons also produces veneer and sawn timber, targeted largely at the export market.

One of Eksons’ competitive advantages is our ability to convert various grades of logs into high and consistent quality plywood in accordance with international standards. We have the ability to convert even low grades of logs into high quality plywood which means we are not hampered by lack of options in our suppliers.

We have 2 factories with a combined installed capacity of 285,000 m3 per annum, located in Sibu, in the state Sarawak and Tawau in the state of Sabah. Over 90% of our production are exported, mainly to the US, Middle East, North Africa, Taiwan & Korea.

 

Unlike many that export to Japan & India -- Eksons main export is to USA, Middle East, Norh Africa, Taiwan & Korea

Over 90% of our production are exported, mainly to the US, Middle East, North Africa, Taiwan & Korea.

Read again

Over 90% of our production are exported, mainly to the USA, Middle East, North Africa, Taiwan & Korea.

DID YOU ALL NOTICE USA STANDS OUT AS 1ST??

AND THAT IS WHERE THE HOTTEST SUPERBOOM IS NOW ON

COULD THIS BE THE CATALYST FOR EKSONS?

Yes or no we shall SEE in Eksons future Exports Results

Eksons now 71.5 sen

Target price is Rm1.74

How did we arrive at the target price of Rm1.74

Quite simple

Using the 30% Discount to NTA as a Margin of safety by Great Benjamin Graham

We just take 30% discount from NTA of Rm2.49

is Rm1.74

 

Best regards

Calvin Tan Research

Please buy or sell after doing your own due diligence. In doubt please consult your Remisier, Accountant or Fund Manager

 

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2 people like this. Showing 12 of 12 comments

calvintaneng

EKSONS is Among World Top 10 Plywood companies

Read this carefully

https://www.imarcgroup.com/top-plywood-companies

2021-05-22 23:54

ctvelu

I was admirer of calvin.lately i realise he shoot out a stock over the weekend for monday morning..last one WTK today eksons..so be careful to buy anything when market opens in the morning especially monday morning

2021-05-23 15:39

Citadel9999

Calvin trapped inside palm oil ma, need promote more so he can earn from u lor!!!

2021-05-23 15:40

greedy44

Sell palm oil stocks and buy lumber stocks ? So confusing !

2021-05-23 16:28

ahbah

Ok lah, I oredi heard U loud n clear !

2021-05-23 16:29

ahbah

Sapu lumber stocks ? ok, I oredi got know that.

2021-05-23 16:31

Sansing

Alah! Hevea better mah! , making money where else Eksons lost money

2021-05-23 16:42

ahbah

Hevea lastest qtr financial results got make moni ?

2021-05-23 16:51

calvintaneng

Good evening all

Please hold on to all your precious palm oil shares as the best is yet to come

Only buy lumber if you got extra spare money ok

Palm oil bull run has structural dynamics like

1. World weather havoc depleting food supply

2. USA pivoting to clean green energy for biodisel thrust

3. Increasing world population and decreasing plantable lands

As for lumber see how long work from office to work from home(office) will last

2021-05-23 17:56

calvintaneng

JESUS - Son of God. God the very God. Became man the very man. To die for sins of all mankind

Jesus is more than a prophet. Jesus is also God the very God. And the KING OF KINGS AND THE LORD OF LORDS

And He shall return to reign for ever and ever

https://www.youtube.com/watch?v=LajyjD0nzF4

2021-05-24 01:34

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