I remember in 2011 when ql did their rights issue, all the find managers was telling me ql is overvalued, not a good buy etc etc. Same thing with Nestle, forever overvalued.
But if knew 2018 results for QL, would you have bet the farm in 2011? It's undervalued then compared to now. But if course hind sight us everything.

Tah16600- downtrend is just a technical word when Mr market buys and sells shares. If you really want to know the meaning of the word downtrend, take a look at the quarterly revenue and sales of QL, is that a downtrend? Or did they just have the best quarter revenue ever in ql ?

Small advice for you warchest, I started investing in 1997, back then still using remiser with their 10% brokerage fees. After the crash I also first started buying those small/midcap with small success. But after Bursa stopped shortselling activities, I notice the market here become very weird and hard to analyze properly. Basically you cannot punish bad companies, you can only reward good companies. So after I changed my investing policy ( I lost money for 6 years), to only buying companies with growing or good moats and great management, I started to make money.

My summary is for bursa market since 2000 to make money, you need to be willing to pay fair or slightly overvalued prices for great companies. All the others small/midcap with good people/lowdebt etc, a lot of them are value trap that is being manipulated by cartel. They put out announcements and fudge figures to make you think it's a Warren buffet buy, then they push the price up and make you excited. Then when you think you can wait longer to gain more, they pull the carpet from your feet. In 20 years of investments I have seen these trends repeat over and over.

Only in Malaysia Bursa because it's a small cap stock exchange. The only time I make ten-baggers, is when I pay fair price ( what I believe to be) got great companies do u get rewarded properly long term. Like QL. Like TOPGLOV. Like public bank. Like YINSON. Those give you ten-baggers.

Funny thing is, the so called chia family just bought 4 million shares in QL from 21st ones when people lost faith in QL. Is that a sign that they are confident in QL business prospects? Or are they still selling according to choivo? I wish they were still selling so I can collect more, but 50k shares is my limit this quarter.

Slow and steady wins the race.

Problem is, choivo still thinks RCECAP is a good undervalued business because it has 30% profit margins, spews out 2 dividend payments per year, has good roe, good gearing.

He doesn't think of RCECAP in terms of a going business.

I won't teach you how to evaluate QL, but I will give you FREE hints on business fundamentals on RCECAP by asking you these few questions that you should think hard on.

1. RCECAP enjoys good profits, but how far can it increase revenue every year for the new 10-20 years? Where does the revenue come from?
2. To increase the client base, where does the challenge come from? What will the percentage of NPL look like with bigger loan base? What guaranteed returns are we looking at if we have to do write offs with no collateral base? How much of a hit can RCECAP absorb? Are payments of government officials guaranteed? Or is it like 2007 when housing prices were guaranteed to go up forever?
3. Is RCECAP the market leader? If not, is MBSB the market leader? What is the returns of comps? What is the NPL performance? What are their returns like? What is the possibility of RCECAP outperforming the market leader? Why?
4. Is RCECAP using their share options responsibly with shareholders in mind? Are they treating share options as free cash?
5. Is the management trustworthy? Why are the ambank kids running the show? Why is the asset Management not profitable?
6. Why is the pe perpetually so low? Is it because the market is undervaluing RCECAP? Why is every fund manager undervaluing RCECAP? What is the reasoning behind them not investing in RCECAP despite the performance? How high is the business risk that it would be valued so low? Are they blind? Are you blind?

Choivo. My advice to you. Before going into technicals and fundamentals, think of investment like buying a piece of a business. Understand the business risk, business model and future growth possibilities first.

First rule of investment: don't lose money.
Second rule of investment: don't lose money.
3rd rule of investment: don't be choivo capital.

Once you understand that, you will understand why I buy, bank and use only public bank. Quality of assets is everything. Savings and deposits is the closest thing to risk free business you can find.

Just because RCECAP is making money on risky assets( and if you think borrowing money to government officials is guaranteed returns then you are as stupid as stupid does) doesn't mean you won't be swimming naked when the tide goes out.

QL on the other hand is built on quality assets with guaranteed supply and demand. That's why it's pe50. And that's why your RCECAP is pe 5.

I rest my case on your business acumen.

He can't go far, his mentality and his investing skills is just looking at top layer to make decisions. So he keeps on buying stocks with low pe and low debt, not knowing that many of these stocks are small/mid cap and results easily engineered.

Anyway he only started in 2017, already think he can advise people charging 50 cents for his word of advise. But if you look at his performance and his analysis of stocks, it's more than laughable. His so called "fund", which is only 2 years old and not even securities commissions approved, is already in the red, he has to take margin to buy stocks, which all have poor management capability, no moat, and looked growth prospects, always look like a good cigar butt deal.

If just judging from 2017-2018 period, my quarterly investment in QL already outperform all his other so called fundamental stocks. I'm sure he will use hengyuan as his example of a good purchase stock. But when he can't even evaluate what the true value of the stock is i.e sell high, buy lower, cringe as it went lower, he just sit and blame others as if he is qualified to teach people how to invest.

Maybe choivo should just keep quiet and come back in 5 years when he has a proper stock portfolio with a good track record to speak of?

If you don't have the conviction to purchase a stock for more than 5 years, it shows you don't have a clarity of purpose, valuation capability and a stable mind.

You don't need to teach uncle or be smart. You just need to be disciplined with your approach, and have a good grasp of the stock more than just numbers but as a business concern itself.

No need to teach uncle. Uncle already buy and hold QL for 10 years. I know how ql business works and how it will look 10 years from now.

That's why I'm still buying. Every quarter.

this jon choivo come back and talk crap again, 3.5% after 2 years still want to be a fund manager? I could make better money of the FD. lets see, you bought hengyuan and chased till negative even with no fundamental skill on business sense (not noticing they were closing down refineries for upgrade), you bought liihen when the malaysian workers salary had just increased tremendously (compared to other countries). And you think RCECAP is the best performing lending institution in malaysia (there is a reason why major banks dont lend personal loans to individuals without COLLATERAL, and why ahlongs always have tatoos and gangsters to chase money) <------ this is far more speculative than any other foolish thing i have ever heard. You buy simply based on PE, profit margins, and ROE without looking at the business model. You are like GOLDMAN swimming in the beach without any underwear. When the tide goes down, then we can see if you are naked.

For QL, i dont gamble like you do, with your sailang and your betting method. I look at the quarterly reports, and every quarter, i buy more in QL. Unlike your weak way of investing. I have been adding up my position in QL for almost 10 years now, with almost 2+ million shares. and those are accumulated personally slowly, and with short term leverage from trading houses. I have been "speculating" for 10 years now on the same stock, rain or shine, and will continue to do so as long as the business model doesn't change. And it hasnt, the business is more idiot proof than ever.

And yes, I bought 50K shares at 6.25 these past few days, after year end bonus and dividend came in. I do have that conviction. And I dont need to pull in my friends and family into bad business ideas.

In any case, you only spout those american stocks, with no idea of how they got where they are (if you did you would have bought them, which you didn't). I dont buy american stocks, I have no way of knowing how to value them, nor able to attend the agm to know the management well enough to make a business decision. I do know how to value QL stocks. I went to visit their factories. I have friends who are suppliers and contractors to QL( and are also shareholders because of the wonderful paymaster that QL is), and they give their very best service to QL because of it.

You know nothing about all those companies, nor who the CTO,CFO or CEO's are (because you dont know how to value management quality nor attend any AGM/ site visit) nor have any business sense to invest in any companies at all. Other than reading some books and think you know all there is to know about investing.

Do you know what a 10-bagger is? You obviously dont, because you dont have the acumen to invest in companies like that.

I have. I bought ql and topglov in 2009.

Now, why dont you go away from this QL forum (since you think it is so bad) and go goreng your RCECAP stock ( which i have taken a good hard look at, and know it is a non-growing business with finite potential, there is a reason why public bank and other major banks doesnt do big business in personal loans to individuals, guaranteed or not guaranteed by government) and what happens if they increase their loan basis (NPL is guaranteed to increase tremendously). but yeah, why dont you go 40-50% of your assets into RCECAP ( i did that with QL and TOPGLOV which i held big for 9+ years, so called speculatively).

And stop insulting other people on this forum. You dont have the right, you dont have the business sense. And you definitely dont have the results to show for it.

Be foolish elsewhere.

Oh good good, another amateur fund manager. And worse, a kyy follower to the bone. I do consider learning, but definitely not from you. And a fool and completely blind to boot!

Incredible. Please don't talk to me about margin, when you pulled your friends and family into those bad businesses like liihen, Latitude tree and rce capital in 2017( buying high and selling low). Oh yes I've read your so called memo, when you took your fund into Maybank margin to take advantage and buy even more Latitude tree, liihen and rce capital. Wonderful! Any margin call yet?

A bad business is a bad business no matter how cheap it is. You will learn that too late, because the market is never stupid. Invest in a company that gives free shares options to it's staff at cheap rates? That's a bad business that gives great profits, but hides dilution and poor management. The only thing they do is be ah long, but never making money on asset management, not having a monopoly or market leadership, all you have is an investment in a "value" trap that you probably don't even realize. If you had invested in QL instead of rce capital since 2017, you would have doubled your money for your investors ( even with this huge drop this month), and made good money for your family.

Liihen and Latitude? Please, don't make me laugh. You bought Latitude at it's height, when signs were very clear that their business impact had changed drastically ( workers salary had increased tremendously), but you still looked at cash and their "intrinsic value", until their revenue prospects changed and the market turned on you.

With your investing skills, I sincerely hope you don't use margin it drag your family members into your fund. It's horrible when you are the fool and completely blind to many things at the same time.

FYI, I only used margin once in 2011 after my shares had doubled in value, and only buy in every quarter after the quarterly financial results come out.

And actually, I do appreciate Ricky, he is definitely not stupid and humble. I was only angry with him for his attitude to the other investors on the ql page, and I do regret that.

You on the other hand, are neither humble, not smart, and definitely not perfect.

And calling me a fool and blind in one sentence? Talk to me again in 5 years after tripling your investment in Latitude, liihen, and rce. Do you have that conviction? I've been adding to my position in ql for the last 9 years. I may not know much, but I definitely know my stock.

Let's see which stock performs better in 5 years, the superb business with pe50?, Or the bad business with pe5.

Ricky, I thought you were talking about future return of capital? If they bought 1000 acres of land in tawau 20 years ago and have not restated the values to current valuations, wouldn't you have an abnormal capital gains when it is restated to the value of the other averages value of average owned by ioi and hap Seng, and sold 10 years later. That's how I do deep value asset analysis, and that is how I added shares of QL.

As for justification, I could give you exact figures, but I prefer for you to come to the same line of thought, instead of asking uncle Google to just give you things as if you deserve them.
My hypothesis of current value 10 billion+.
1. Plantation asset valued below market(I used valuation reports from trade journals I bought of Sabah and Indonesia po industry and compared to comps from other plantations.) Yes it's very undervalued. By a few hundred million. It will correct sooner or later.
2. FM ctos reports of maxincome sdn bhd( assets and capital costs spent show new stores construction below 180k per unit, and daily turnover hitting 9k average in Klang valley), p/l shows breakeven, showing future growth not requiring outside capital. On track for 300 stores target in 5 years and daily sales with inflation at 10.5k imho
3. Myr exchange rate on track for 4.2 in the near /mid future, making me sad. But good for export gains. You can check quarterly report on the forex gain alone.
4. Looking at projects, projections and market growth, we are looking at 300-500 million of revenue growth average increase every year conservatively. Meaning they will be projecting conservative revenue of at least 6 billion yearly in 5 years.
5. However the capital investments to grow the business is massive, around 338 million. They are currently now after completing all of this years construction at 68% capacity. Meaning sooner or later, the growth will slow and they no longer need to build that many new plants, only refurbish or repair existing upstream and downstream activities. So if I fudge and bring down their operating capex flows, to 50% that is still around 150 million per year. Or more demand could come meaning even better prospects. And yes I know everything about depreciation and amortisation, but to be honest those are just estimates given by accountants with no basis on how well the equipments assets are maintained and serviced. And I can tell you management for ql is bar none in this regard. However imagine if ql instead of employing capital to more growth declared it as operating income. That would be at least 400 million in net profit instead. But why pay all that tax? I have no qualms with them spending ferociously on growth.

6.They are spewing almost 300 million of cash flows every year, in 2014 their plant activities was around 180m and revenue was around 2.6b. in 2017 their plant activities was around 338m and revenue was around 3.6b. their debt gearing ratio is outstanding for such a fast growing operation( which is another value why we justify 10b valuation) because it is a snowball rolling with its own strength now. Show me another business with similar metrics growing with debt that low in bursa. And please don't quote me aeon credit, because the main retail is complete trash. If the retail went bankrupt aeon credit would disappear tomorrow.

These are hints. You should look for the details yourself Ricky.

Hi avangelice, it has only dropped by about 10% from last peak I think. I usually don't do impulse buy. My method of investing is usually every quarter, once the quarterly report comes out, if the business model doesn't change drastically (it hasn't), I continue buying. Sometimes I pay more, sometimes I pay less. But I've been buying every quarter for the last 8 years as far as I can remember.

Godhand: it's not a simple question, that's the point. Your say it's a superb company, that I agree with. You say it's expensive, I say it's fair. And by that metric you can argue until the cows come home because everybody has a view on the intrinsic value.

And it's only after Ricky has started deriding and trolling the other investors in this page that I started commenting and trolling him back. You can look at his past comments on his profile page. He is a troll through and through. He doesn't want to listen to your answers, he just wants to argue.

Ricky,

Why don't you do some self study instead.
You said you bought scientex at 2.47 in September of 2012 and held it until today. Good for you. Did you buy more?
You said in April 2014 that it was fairly valued( with that growth and retirement pattern?) Did you have the conviction to buy more?
In 2015 you said it was overvalued, but you wished it went down so you can buy more. I would assume you didn't, because if you were you would be helping the scientex forum teach investors instead of trolling this one.
So I'm pretty sure you didn't buy any in 2016,2017 nor in 2018

Why don't you do your DCF, and look back at your track record of your roc, fcf, etc and tell me what you thought back in 2014 on the possibility of scientex hitting 4billion market cap. You definitely didn't think it was good enough for you to invest in it.

Let me tell you a bit about ratios. Roc, or my understanding of it is return of investment capital is based on your operating profit divided by your total assets minutes current liabilities. All of which can be restated or fudged. Land values can go up, operating profit has to take into account opex ( which you should be asking if it is abnormal), and in a comnodities traditional mode of business, it takes time for manufacturing to pick up.

Future cash flows based on DCF is also just as hard, because which discounts will you apply? I can use any number of figures to basically come up with anything I want? If based on dividends, definitely ql is a crap company. If I use weighted average cost of capital? Slightly better. Cost of debt? Growth rate? Discount rate? All of these are just ratios, garbage in garbage out. It's like reading horoscopes, you can get multiple results based on which bias you are working on.

Let me show you a better way. Yes you can mix those figures in to give you an idea of how a company can perform, but you need to temper it with business foundations. Here's what I did, when I went to the AGM 4 or 5 years ago, I asked the brother chia song kun, during the big bird flu scare, how many chickens did they need to cull, and how much of a percentage it was compared to the market average. His answer in the AGM regarding the culling and their care to biological health really impressed me( founder has a PhD) and I've been buying ever since.

You should read Peter Lynch sometime. His scuttlebutt method works so well with me for why I chose public bank ( all the major Chinese companies bank with them ), yinson( very well managed fpso business and dying bumi o&g competitors, and if course top glove (even nhs buy from them)

Have fun playing sandcastles and never needing to make big decisions in life.

But seriously. Take a risk. Attend AGM. Fork out the same money to buy trade reports, journals and read the financial statements.

I wish you all the best in the future Ricky. Talk less sand listen more.

Anyway, I'm sure none if you kids went to agm last year, which had pretty good food. If you did you will be far more interested in the details of their business more than anything. Here are some details that you probably won't learn unless you went to the agm directly and heard what they have to say:

1. QL spent 25 million in the cold storage factory in tuaran, KK last year to basically freeze and process tiger prawns for sale to China and Australia. And if you know anything about construction ,25 million just to build a huge freezer is very impressive. I won't tell you the metric ton per month they sold last year, you can find that out from Google yourself. And yes some of it is also being sold to premium FM at much higher profit margins than normal.
2. They are now 3% of Vietnam poultry and egg market. And growing exponentially.
3. They are now 10% of Indonesia poultry and egg market. Definitely growing exponentially.
4. They also are now one of the cheapest and fast growing feed mill manufacturer in both countries. Vertical integration. And when Ricky says QL business is only in Malaysia I shake my head and laugh.
5. Their surimi business is biggest in asean. FYI this is pure monopoly, as they are providing interest free loans to fishermen to buy or lease boats and equipment with the only requirement being that all catches to be sold QL first. Guess how many fishermen in asean owns their own boats versus loans from QL?
6. It's looking more and more likely that QL will own the entire egg industry in Malaysia. And as there is no control over monopoly in Malaysia, guess who wins?
7. Guess how many new acres of land in Indonesia is QL investing in for their palm oil activities?
8. Guess who family Mart has to buy all their fresh foods and materials from daily? Who else has that funky seafood dip food contraption? When family Mart wins, ql wins bigger.
9. I forgot. It's pretty important, but this uncle getting sleepy now, jet lag and attending my daughter's graduation in San Fransisco.

Have fun digesting.

Hi pewuf,

My other 3 investments since 2009 buy and hold till now was in yinson, public bank and top glove. All lucky picks taken from Google, affin, and whatever the other one Ricky said. :)

Funny thing is, when I bought shares of each stock back then, the same financial asset managers said these counters were risky, they were too high, pe not good, growth prospects max out.

Luckily I listened to myself instead. To be honest, I'm not really good at reading all those details and ratios and technical analysis mumbo jumbo.

All I know is in bursa you can buy shares but you can't short them. Therefore our market becomes very unique because you can't punish bad stocks, only can don't buy them. And because of that the market will value good companies far higher than normal.

So my job becomes easy. I don't know about all those methods, but I do know business. And in business companies with monopolistic characteristics will be far more resilient and reliable in the long term than normal malaysia counters.

In Malaysia most companies are basically small cap. That's why there are many cartels that know small fish like you who just learned about Warren buffet 1-2 years and think they can invest like him based on PE and time of thumb etc. And most of the time, they will work to push those small caps to present value traps which looks nice to newbie 1-2 year investors like Ricky yeo with their smarts into "investing" in those companies which they then goreng and let the bottom fall out. I pity people like Ricky because I see them all the time. They never make money in the long run.

All I am saying is if you want to invest in bursa, always look to the business first and foremost. Understand the business. Then look at the numbers. After you look at the numbers and the business, then you ask yourself am I buying a wonderful business at a fair price?

I'm proud to say I've never sold a single share of these companies since 2009, and I've been DRIP personally and with my excess cash ever since.

Before Ricky goes into another troll rant, just ask yourself this. What shares in bursa market have you bought and held for at least 5 years, and made a profit? And if you had to hold a share for the next 10 years what would you buy and hold? Because it's been proven, long term investors like me win over short term daytraders like Ricky yeo over any metric.

Whatever Ricky says about ql not being with 10 billion and overvalued etc, I know that sooner or later ql is going to be worth northwards of 20 billion value. I don't know when, but I do know that ql is paying me a growing dividend every year to find out and splitting my shares. And since my risk is basically near zero, I don't mind waiting.

Now Ricky, do share with us your latest grand profits from your forex currency trade? Don't bother denying, I know amateur fund managers like you always think zero sum games are winnable.

The star news is your source of facts? Ok you have the upper hand. Anything other people say you will just have guesstimates, worthless talking to kids like you who don't ever read financial reports from sdn bhd or even annual reports, and simply rely on Google for everything.

Why should I show you numbers from reports that I paid money to buy?

Good luck in your investing future, lazy to even explain to you investing principles.

FYI Ricky, how is comparing Nestle Malaysia and QL resources stretching the definition of comparison. Who else do you compare QL to in bursa?

Both are into commodities, one basically imports raw materials from overseas/local and processes it for local Malaysia consumption.

The other processes locally manufactured goods( seafood, eggs, chickens, palm oil) into finished goods for local consumption.

Both have retail operations ( one uses shelf space from hypermarkets and distributors like Harrisons /wholesalers etc) while the other uses FM/ hypermarkets/ and sells to wholesalers.

One is 30b market cap with slowing growth, pe50 and 10+% margins for commodities with brand recognition. 5 billion sales.

The other is 10b market cap with high growth for commodities market, pe50 with 7% margins with brand recognition (family Mart). And growing 3.6 billion sales.

I mean, who else is in this market?

Do you even know what QL resources does?? It's really not a stretch to say once layhong lays over, and fm has 300-500 stores around Malaysia, once palm oil plantations recover, seafood demand increase and supply constricts, that margins go up to 9%, sales go up to 5 billion revenue. When that happens, would it be fair for QL resources to hit at least 20 billion market cap?

Obviously I don't know when that will happen. But it will happen sooner or later. I guarantee it in a commodities market ( unlike construction, or tech) because of human needs, volume, vertical integration.

If 3-5 years from now the market cap doubles, if you buy now you would make almost 20% annually. It's the kind of business even idiots can run once the system is in place.

Monopoly.

The words let's ignore ql and focus solely on fm shows you are totally in your own world, ignoring facts and just plucking figures out of the air to fit your thesis. When you say paying pe50 for ql ( which obviously includes all the net fixed assets, where again I repeat ql did 338 million in new fixed capex overall from the annual financial report last year) but try to fit only fm into the pictures, where exactly do you get the "numbers" other than ql saying their fm operations broke even this year ( after spending 100m in 2016 to start the fm business). Anyway, how does a single fm store costs you 300k to build with 100k refurbishment every 5 years? I'm really curious where you got these figures.

Here are REAL figures because you really should get instead of plucking figures out from the air.

The master franchisee in Malaysia of family Mart is maxincome resources sdn bhd, which is a full subsidiary of QL. As far as I know QL doesn't report the breakdown performance of family Mart. Correct me if I'm wrong on that.

So if you really want to look at exact performance, you should go and invest and buy the ctos/ccris reports of maxincome sdn bhd so you can have an exact idea of how they are doing.

Key questions you should be asking, after they pumped 100m into starting the franchisee, how much more did they have to pump to keep the company afloat. They also said they are breaking even in 2019, 3 years after starting fm, what does that mean? And their p/l breakdown? Their assets? Their company stability? All of these are available when you buy the reports, same as a bank when they do analysis on whether to give a loan to you.

They don't pluck figures out of the air. Anyway, I first bought 100k shares when it was really cheap almost 10 years ago and held on to it until now, with stock split and price increase until today.

And in all that time the only reason why I never sold those shares and even added with my dividends was for one simple reason, monopoly.

As long as that doesn't change, my buying habits into ql will simply not change 20 years from now. Hopefully.

Warren buffet says that you should invest as if you only have 3 stocks that you can buy in your entire life. When you realize what he means you will quickly find out that there are only a few guaranteed stocks you can buy, stocks with monopoly/duopoly structures that are economy resistant.

I'm now happy to say that I have more than 400k shares in QL collected over the years which are almost ten-baggers in capital gains now.

It may be small compared to the profits you have gained from your trading/fundamental pe/ etc, but I have the conviction to go big and go long on this stock almost 10 years now. I only have 4 stocks in my portfolio.

How well have you done with all your research, Ricky boy?

Shpg22 fyi, if you want to fudge numbers I can just as easily change the earnings part by omitting their opex growth to get a feel of how the business is doing.

If we take out their future expansion of 338 million, and use that plus the 65 million declared profit we'd get roughly P/E 3+ if they stopped investing in growing their business.

What do you say to that?

Also your book value is also not accurate, because a lot of their land assets for palm oil and factory grounds and lands have not been restated for a long time. So if you just want to invest based on wsj or morningstar estimate of book value you better spend a bit more time on reading financial reports. Otherwise you'd just be another Warren buffet wannabe.

Sorry a bit more of a rant Ricky, cos you don't seem to want to digest what other people are saying.
Last year annual report,

Nestle Malaysia spent a part of their 5 billion revenue 138 million in new equipment, plant and machinery.

Now look at QL resources, they spent 338 million of their 3.6 billion revenue on new factories, plants and machinery. That's how much cash they are churning out, that's how much growth they are expecting.

Now for those who didn't buy Amazon back in the day ( I learned this lesson far too late) because pe was like 300+ or something, digest this.

In fact, I won't give you the answer, find out and reply back here.

Did Amazon lose money every year for all those years? Or did they just make a minimal break even every year because they were pumping every single cent back into growing the business?

And now Amazon is a trillion dollar company.

PE is just a ratio. I can turn it into any figure I want. If you want to understand a business, read the financial notes. Then read the cash flow statements. Then read the assets and debts. Then look at the business and see who else above them. That's how you do comps.

Ricky how about these for hard facts, let's use comps.

There are 80 fm stores in Klang valley area, daily turnover around 6k with mostly fresh food and seafood kombi direct from ql, higher margins than seven eleven which doesn't carry their own products ( low margin). No differentiation between 7-11 and mynews etc. QL spent 100m in 2016 to in operating budget open up these stores, and they have a much deeper capital to reinvest. FYI the profit returns from fm is enough to generate new store openings, unlike 7-11.

There are 2240 7-11 stores in Malaysia, with low margin items and high debt ( from which you can do comparison), the returns from 7-11 are only enough to pay dividends and small growth. They are taking on more debt to grow the 7-11 stores, which are becoming more saturated and can't be grown organically.

Now, which do you think has the bigger future and growth opportunity, the vertically built company with production, manufacturing and now retail? Or the other company which frankly is built to only drive out and bully the mom and pop kedai runcit and doesn't even make a good profit. Do you think 7-11 can double the number of stores in the next 5 years? Is that even possible?

And if you do the math, right now fm is worth more than 2 billion to ql simply because 80 stores generate 150m in sales per year, ql has the opex cashlow to add even more stores if needed, and if you think 5 years or 10 years ahead (pe10), you are looking at 200-300 stores in Malaysia which would add 300-400m in sales, at 5% profit margin internally is around 20m. However when you look at ql bottom line which is linked to surumi, poultry, eggs and palm oil products then you will understand what is meant by vertical integration.

Now look even deeper into things. What happens when fm hits 800-1000 stores? QL would be able to start producing and selling even more specialized products under their brand umbrellas mushroom, suria, ika, ql Omega and Sakura at higher prices because right now people look at fm and think quality, same way people look at Nestle and think quality.

If you really want to do comps, don't just look at pe or profit, compare growth speed and market valuations.

Nestle Malaysia is a 30 billion company with 5 billion sales at 12% margins, pe 50

QL resources is a 10 billion company with 3.6 billion sales at 7% margins, pe 50

But now look deeper and look at how the much cashflow is being used to grow the business, affecting current profit now for future growth. Look at the factories, refineries and plants being built right now that can handle future orders.

Now ask yourself what a monopoly means, how growth works, and what people are investing in. There are hundreds of companies which have pe of 2 and 3 etc but never make you money because it doesn't grow, but only a few companies in Malaysia similar to Google or Facebook or Amazon which can consistently grow over a 20 year period.

In the end a business is only worth holding if it grows, and pe doesn't mean a thing if no one buys the shares.

FYI I also continuously bought my shares at 3.90 more than 7 years ago, then it split, and then it went up to 7, so whatever drop you are looking at now doesn't change how a great business works.

Shpg22, in all time you were saying fcf is negative, the business kept growing revenue and earnings. And I'm all that time I kept and reinvested my shares, I had share splits, dividend increases, share price up, I basically made 10x my original investment. For all your book smarts and outlying factors, how do you explain why people still invested in ql throughout the entire time, and were rewarded?

In terms of fcf, you really need to check out what the capex is and what they are doing with the capex.if you ever come down to Sabah id be glad to bring you visit the megafactories they are building now to get so that seafood processed and exported out.

If you remember when Warren buffet drove to visit Geico to see what the business is about, my advise is to come visit QL to see what the business is about. Then you'd probably stop reading too much into technical charts and start understanding businesses...

Hmm, if your logic is 10b cap must have 100m profit per qtr, then why do people buy Amazon, Tesla and so many other companies? Why did Alibaba buy lazada? Why are they so special? I think the answer is revenue growth possibilities, market moat and monopolies.

I don't know if you mean Dr Chia, but I do live near one of the other Chia brothers, problem is do you know they own 600 million shares, and they are only selling around 500k-1m shares once in a while to fund their lifestyle, they still own majority share, and one of the purchases they did was to buy a property in Australia. He is 68 years old with 4 billion net worth, why do you think he still needs to buy to prove something? If he sell when business is bad will kena insider trading, so when else to sell?

Think about it, ql just announced 920 million in revenue in one quarter, do you think it all comes from just eggs and chickens? If you think carefully, why will LH report loss, while ql report big profit and revenue growth? It all comes from being integrated. They have their own production, their own feed mill, their own plantation, the biggest surimi in Asia, they even have their own retail ( family Mart), they are a full fledged juggernaut. If you are looking for a moat in a bursa company there is nothing bigger. I've held and collected every year this stock since 2009, and every year there is someone who looks only at pe but not the business.

When you hold 1 million shares ( after buying for 10 years, share split, steadily up year after year), then you realize kids like 4444 know nothing about business.

So my question is, do you think our country which had 7 years of bad economy will be balanced out by 7 years of good economy in the future? ( Past results doesn't guaranteed future performance)

And if you think Malaysia will catch a break sooner or later, do you think a company that averages 36% net profit during the bad times will outperform during the good times?

Basically it's like buying that semi-d in puchong for 300k, you don't know what the value will be like, but the location will almost guarantee value sooner or later.

Hope this gives you more clarity. Until then, buy and hold!

Hi Singh1, I may be wrong on this, but I think your conclusion on price alone as a factor of investing in stocks is pretty flawed. Example, the house I bought in puchong was pretty low for a good 10 years before suddenly the price jump to catch the value of the location in recent years. So price and value is unconnected from my opinion,

In 2009( best year in Malaysia), rce did around 200m revenue, the net assets per share is 40 cents, earnings is 9 cents.
In 2018( after the worst set of years in Malaysia), rce did around 245m revenue, net assets per share is 151 cents, earnings is 26 cents.

If you assume that IMDb d didn't exist, and market factors from our spending (usd3.0 to usd4.5 exc) has no effect on business, then yes fd would have been a much better investment. But imagine if you had bought 10k every quarter from 2009-2018( knowing that you had a solid business and just keep on buying consistently), the dollar cost averaging itself u would realize that your average buying cost + dividend would be around rm1.20.

I noticed that a lot of investors seem to just look at pe as the all around deciding point of whether to buy a stock. The thing is though not all businesses are the equal. Construction businesses have naturally low pe because their sales are always cyclical and people have a choice not to buy. Banks can afford to have a higher pe because of monopoly and everyone has to use their services. But imagine Titans like Nestle and ql, do you think people will stop using their products? Where else are you going to get surumi and daily consumables from? When you realize companies like this can have neutral days and profitable days but never down days, then you know how safe your money really is when investing in these companies. What is the chance of bankruptcy? Pretty much zero. What is the chance of some profit? Pretty much guaranteed.

a company that pays 15% of its profits as a dividend means it can pay a lot more without any stress. revenue growth of 6% YoY and 15.2% QoQ definitely means its growing it business. dividend increase from 6.3 cents a year to 12 cents a year? 200 million war chest to help it compete against china competitors? definite moat business. And you think its a value trap? Please elaborate.

I like their annual report best: with respect to investor relations, 10 analysts came to visit us. share movements should be left to market forces, it has no correlation with our business.

Hi superpanda, just read the past 5 years report of mmsv, I like the company, here's my 2 cents,

Both company worth 200m market cap, so if I got 200m to buy just 1 company, which will I choose?

Hmm,
If I buy iq, based on last 5 year results, if the company stagnate - 10 years earnings I can earn back
If I buy mmsv, based on 5 years, 30 years to earn back if the company no change on profits

Both company no debt... But
Iq got 60m in cash
Mmsv got 8m in cash

Iq does oem to US, Europe, Germany. But they also transitioning to do own design product ( which explain last quarter lower profits due to new launching) and got ang moh director.
Mmsv does oem to.... Dunno who. Can't find list of their customers. You would probably know better since you research their company before buying their stock? Can update? Id like to know more.

Iq did 200 million in sales last year, and increase around 5% every year with more r&d soon the way. Their profit was 35 million.
Mmsv does... 35 million in sales. Profit was 8 million I think? But of course this year looking to hit at least 15m, but caveat from last 10 year progression tells me 8m was the average profit so it seems like an abberation so will need to look at the next 2 quarters to see how, but seems good for now.

In either case investing in the end it's still a bet, just now calculated and risk controllable compared to casino. But for now IQGROUP is still the safer bet for the long term. Of course, mmsv just doubled it's revenue this year, but is the premium worth it?