THE INVESTMENT APPROACH OF CALVIN TAN

Why you should not chase WCE Holding for its Toll Road hype till More Real Earnings come in, Calvin Tan

calvintaneng
Publish date: Tue, 16 Jan 2024, 03:07 PM
calvintaneng
0 1,788
Hi Guys,

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

Dear friends of i3 Forum,

They say, "If you don't study history you will repeat the same mistakes again"

So this brings us to share about WCE highway Toll hype

Why WCE?

Answer:

Without Real Collections of Real Profits from Toll (only projected profits) many have gone GaGa over the Toll Hype Story and chased up WCEHld from 29.5 sen low to the recent high of Rm1.19


Now let us study deeper

First take a look at its latest Qtr results


SUMMARY OF KEY FINANCIAL INFORMATION

30 Sep 2023

INDIVIDUAL PERIOD
CUMULATIVE PERIOD
CURRENT YEAR QUARTER
PRECEDING YEAR

CORRESPONDING

QUARTER

CURRENT YEAR TO DATE
PRECEDING YEAR

CORRESPONDING

PERIOD

30 Sep 2023
30 Sep 2022
30 Sep 2023
30 Sep 2022
$$'000
$$'000
$$'000
$$'000
1
Revenue
230,507
120,656
346,549
225,870
2
Profit/(loss) before tax
-29,943
-48,648
-62,169
-69,607
3
Profit/(loss) for the period
-30,413
-48,892
-62,882
-70,096
4
Profit/(loss) attributable to ordinary equity holders of the parent
-24,172
-41,285
-50,583
-55,417
5
Basic earnings/(loss) per share (Subunit)
-0.81
-1.38
-1.69
-1.85
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 ($$)
0.3542
0.3711


Above tells us WCE a Qtr Revenue of Rm230.5 Millons

And a loss of -0.81 sen

Now go look at its balance sheet


It has Rm6.5 Billion Infrar dev expense (its assets)

It has Rm4.25 Billions in loans & borrowings to finance the Toll Road


Although it has Rm230.5 Revenue it cannot show a profit as yet due to

1) High Maintenance cost gone up (Minimum wage was Rm1K and now Rm1.K to Rm1.8K)

2) Material cost up. Cement alone is Rm24 per 50kg bag (Was Rm13 per bag)

3) Interest on Bank loan one Qtr is Rm90 Millons

So after deducting all the operating cost plus high bank int WCE Hold is still in the red


Then why Do People Chased Up WCE shares by a jump of over 300%?

All this is premised on "Future Toll Collections"

So at this time of euphoria they are willing to pay and chase at any price?

What will the Future Earnings be if all the "profits" are fully priced in?

And what if earnings lag and still disappoint like SILK & LATAR Highways?


SILK?

Yes, we made 200% from buying SILK below 40 sen & sold it at peak euphoria at  Rm1.18 on 1st, August 2014

All because of the Kajang - Selangor Toll Road Hype

After Toll Receipts proved mediocre SILK price crashed back to now at 

0.21 with a changed name to Marine & General


So those who chased SILK at Rm1.18 has seen a lost of over 80%

After all the Kajang-Selangor Toll Hype fever subsided.


Then there was Bina Puri which built the LATAR HighWay

At the hype Bpuri also chased to the peak price of Rm1.27 on January 7, 2011

How come Calvin remembered these dates and prices so well?

Of course I was bullish on both since that time and made money from them

It was a "greater fool" profit on hindsight

Do I want to play "Greater Fool" Stocks in future

Of Course Not!

There were other Greater Fools stock like Fountain View that got delisted


So is WCE is greater fool stock?

No one knows for now. As future is still ahead of us

Only one Big Caution

WATCH CAREFULLY THE EARNINGS BOTH CURRENT & FUTURE OF THE WEST COASTAL HIGHWAY

Only then will Know


Regards

Calvin


Note: I am no savior. And please buy or sell after doing your own due diligence

Be safe. Not sorry


For now Calvin is 95% invested in Oil Palm shares

Dull but very safe and highly profitable


Why?

Answer:

FCPO now 


CRUDE PALM OIL FUTURES

Market open
Continuous contract
FCPO1!
Bursa Malaysia
3857MYRD
+39+1.02%

COST OF CPO PRODUCTION FOR MOST RM2000

So gross profit is 92.8%


Most businesses only generate a gross profit of 5% to 15%

Rare ones get 20% to 30% gross

Exceptional ones get more than 50% gross profit 

To get as high as 92.8% gross profit is just amazing indeed!


Calvin are into 10 Palm oil

Top 4 are

TSH RESOURCES

THPLANT

JAYA TIASA

BPLANT (Buy bplant was 57 sen

After 24 sen dividend cost 33 sen)

From 33 sen to Rm1.55 )LTAT offers is up 369%


Not telling you to buy or sell as Bplant took us 2 years

More articles on THE INVESTMENT APPROACH OF CALVIN TAN
Discussions
Be the first to like this. Showing 8 of 8 comments

vespa

Calvin and his crap

2 months ago

calvintaneng

CALVIN WARNED ABOUT RAPID SYNERGY

IT WENT 3 TIMES LIMIT DOWN

2 months ago

speakup

wow! always thought highways were good biz. didn't know Silk & Latar slaughter alot investors
good sharing calvin!

2 months ago

speakup

calvin, is WCE got risk limit down or not? scared kena limit down like many other companys

2 months ago

calvintaneng

Speakup

Hopefully no
Many friends will be in trouble

Please stay safe in 🌴 🌴

Here we have visible real earnings

Safety of capital

Dividends

2 months ago

purplered

one of the best public road to test speed limit

2 months ago

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