Is anyone thinking with the ROE in single digit for more than 5 years. The company is growing it's way to bankruptcy?

From my understanding, all fund managers role have been trying to predict EPS. That is the culture of Wall Street. Nothing against that, but i think trying to predict EPS is futile if you are a long term investor.

Rather learn about what are the competitive advantage of the business, is it sustainable, how's the management, reinvestment dynamics etc

self fulfilling prophecy

When you buy you need to understand 2 risks. Risk 1 - Every public information about how much money MYEG will make over the next few quarters have already been priced in, buying at current level will be classified as speculative with no margin of error, should MYEG failed to deliver promising results, permanent loss of capital is definite. Risk 2 - Fundamentals. The fact that their ability to generate profit is entirely reliant on government

put it simple - over overvalued

Someone hate ifca at 60 cents, now it is $1.30, does that makes you right, the rest are wrong? lol simple minded

you will only be played because you choose to play the game stupid

I am not sure how those professionals are, or how good they are, but im sure your syndicate wont be any better.

reversion to mean, reversion to mean, reversion to mean, reversion to mean.

When everyone is chasing Mazda, time to buy Tan Chong

But yes as a long term investor, management quality is a strong consideration (after industry attractiveness). If management cannot explain the rational behind the privatization price convincingly, even if the deal fall through, you won't want to do business with them anymore. You cant make deals with devil

Yes of course you not going to pay a price based on the yield that you pluck from skies, but just saying everyone that is going to pay will compare the yield % in relative to what they can get, had they use their money to invest in something else, i.e. FD, bonds, shares, each has different risk profile hence difference yield and returns.

Yea of course if you are staying in a property, even if it is low yield you will still keep it because you know that had you sold it, you can't get a similar value out there (Also need to figure out where to live). But if you have another place ready to stay and you can sell this property at an attractive price, and invest those profit into something that generate higher return, suddenly the perspective changed.

As a shareholder of Hunza, the return you receive (as a minority) from investing in this company is through the property development, rentals income from mall etc that the company conduct, you receive dividend + capital appreciation. How much you are willing to pay will depends how much free cash flow do you expect Hunza to generate, when it will be generated, discount at an appropriate discount rate back to present value, same goes for the mall (which is part of the business).

So say example Gurney mall, expect annual earning is $30mil, based on Kenanga research (2013). That's about $0.13 eps. If using 8% growth rate x 10 years, terminal growth rate 5%, discount rate 10%, it is about $2.02, the mall itself, but it is just a rough figure, but you get an estimation, just to be safe, you can say the mall is worth somewhere $1.80-2.30.

In the end, every investor has different measurement, if I have some better stocks to invest (higher return) than this, and knowing it will take a long time to get to RNAV, I will prefer to sell at a smaller profit and invest there, compare to someone that don't have other better investment option.

All Hunza shareholders, I do not own the shares but I want to share my analysis.

All of our goal is to make a good investment return right? The main question is not really about how the main shareholders are robbing minority shareholders, the more important question is -

1. if there is no privatization, what is the PROBABILITY that the share price will go to RM3.50 (NAV)? How long can you reasonably expect that (Timeframe)?

2. What is the PROBABILITY that the share price will go to RM7.50 (RNAV)? How long can you reasonably expect that (Timeframe)?

There are some property companies with huge landbank and those lansd have not been revalued for 10-20 years. They have really high RNAV compare to current share price, so you think it is undervalued, and figure that as long the land value increases every year, your 'wealth' is increasing too, regardless of the share price. The question is - if the management never 'unlock' the value of those value (sell or build something on it) for the next 20 years, are you gonna wait 20 years for your wealth to be realized?

So Hunza have some malls example Gurney. How much should it really worth? If you are a businessman, you would be looking at how much the mall can generate right (Rental, carpark revenue) and interpret it as a yield %. If say you calculate the yield is 2% and foresee future rental will be flat, then you will think I might as well put it in FD and generate 3% correct?

You would not go and think Gurney got RNAV so I should pay at RNAV, make sense? Unless the businessman wants to destroy the mall and sell the land or build something on the land that he thinks will worth more (create more revenue) than having a mall there.

yea it is not an obligation, but i think it is part of corporate governance, consider that their peer Magni, every year annual report is the same old copy and paste 3 sentences.

Forex can temporary boost the earnings but I prefer to look at the long term competitive advantages of the company like if they can sustain current ROE, barrier of entry for example economic of scales can be one of it, but in Prolexus case, I dont think there is any EoS advantage or even if they do, it would make a huge difference.

From my opinion, apparel manufacturing is quite a 'commodity' business, pretty hard to create a competitive advantage especially having such a powerful client like Nike but it is possible to create operation efficiency ie being the lowest cost manufacturer.

No doubts Prolexus quantitative is relatively strong, but it is pretty hard to access their qualitative strength. They dont explain much in Annual report and it is hard to measure their competitive advantage. Such as how long is their contract with nike, how does nike select contractors, what is the barrier of entry etc.

I am amazed that you use Nike's earnings to gauge Prolexus earnings. Nike has 600+ factories making contract manufacturing for them, does that means all those companies will report increase in earnings as Nike?

Put it in another light. If K-Cup is successful, it will 'temporary' boost VS. When is becomes successful, many suppliers like VS will want to do business with them, aka price war that destroy margin, VS will have plenty of competitors to deal with.

When K-Cup is successful, as the company gets bigger and powerful, the relationship between supplier (VS) and Buyer (Keurig) will change. The buyer can exert more power on the supplier, thus squeezing margin, and nothing can be done by the supplier, if majority of the supplier's earnings are dependent on them.

Conclusion? It is an industry with no moat, in the long term ROE will be similar to cost of capital, no economic profit can be made.

1. MPI is in semiconductor, how much revenue of VS is even in semiconductor, their main is plastic
2. Using PE to value companies and make buying decision is the fastest way to die

Many ppl losing money lol

Summary of the story: luck.

Whether you sell before all the stories unfold or you hold until you make 396x. It is a random chance of luck

Stock market is a zero-sum game if you are a trader, not for a long term investor

bro im talking about portfolio management, risk management, you keep talking about compare here and there

im saying is a fact, no insult, i like cold eye too. Take venture capitalist that invest in tech startup, no one will invest in one company and wait, because in tech, only a few out of thousand will be winner, so they spread out their investment to hundreds of startups, they just need to find one facebook, or twitter or airbnb or uber then they get all their return back.

Put it this way, when KYY says he buy xxx, you have to think how many % of his capital is in there, if it is only 5-10% and u believe KYY and u go hantam 50% of your capital, who u gonna blame?

Just like cold eye, it is his style to hold 20-30 shares at a time, meaning each stock represent less than 10%, he spread out his risk across many shares which he believe he only need to find a few winners and cut loss on those that are bad then he can make decent return, but when someone go and pick 5 stocks from cold eye portfolio and make it 20% each, you will either make more money than cold eye or die really fast, simple as that.

I think nothing wrong having own opinion but i think murali has some twisted mind where he always view every ppl as someone that love pump and dump from jobstreet ceo to KYY

At the end of the day, if you wana buy then you gonna be ready to take the shit if something happens, just like everyone used to claim bones pump and dump etc. Might be true might be not ull never know, but in the end, what's real is how do u think about investing, period.

let's put this straight, if you think VS intrinsic value is higher than current price, KYY or Najib or anyone can super pump and dump, in the long run the stock price will still rise back and reflect the intrinsic value.

About VS, VS is in plastic molding business, you need to ask, is it the only company that can do that? Then you have to ask, what makes VS so special another company cant compete? If you cant come out with an answer, it is likely VS is pretty hard to sustain their current growth.

Well whether IFC is overvalued or not is up to your own judgement, but just because something has gone from 40sen to 80sen doesnt mean naysayers are wrong right? Investors always get overly optimistic and over pessimistic. A stock can be overvalued and continue to do so for years, same as stocks that are undervalued. And after a few years, you will be fooled by it thinking it will continue to do up/down, just like dot com bubble thats when everyone jump in during the last leg of the bull run, so you have a quote call "What the wise do in the beginning, fools do in the end"

And about TA, lets say when you notice this XXX line indicate super bullish trend, it is very likely alot TA ppl would notice also, so if ure the 1st to go in, you say TA accurate, but if ure the 100th that got in, you say it doesnt work, so how

I am saying when you have TA & FA together, and when you see a situation where TA looks good, even if FA is crap, you almost always going to enter. And when you see TA looks good again, even if FA is great, you still going to exit, so basically it defeat the purpose of one another.

I understand some ppl going by the reasoning that if my TA fail and somehow got 'stuck' at least FA can save me, but i just find it weird.

When you buy a good business at cheap price, it is like shooting an elephant 1 meter in front of you. Cincai shoot, 99% you will still hit it.

When you buy a good business at overvalued price, it is like american sniper, you trying to shoot something 1km away, it's not an elephant but a mouse. A drop of sweat on your gun, you will miss the mouse by 100 meter.

When you buy a bad business (you think it is good) at overvalued price, it is like shooting the mouse 1km away when he is running. Machine gun also hard to hit him.

I did not say there is anything wrong, I just find it conflicting. It is like you want to spend money now but want to spend money 5 years from now.

I suppose every software company in China will let IFC have those 800 clients

Item 3 SAAS, you really pluck that from the skies dont you. Btw why do you want to do FA then TA? Does that reduce your risk compare to people just using FA or TA?

Seasons come and go, Tanchong used to be the favourite because of Nissan, now everyone found new love, and believe it will be forever love, but it too, shall pass

that move might create more shareholder value. However over the past 5 years, free cash flow has been running at -135 million, the companies further spend another 131 million on capex. Has all the long term investor benefit from that?

When Zhulian was flying sky high at the end of 2013, trading close to $5, Kenanga had a target price of $4.70, few months later in Feb 2014 because of bad results from Thailand, target price adjusted to $2.83, now TP is $2.00. It makes you wonder did they give TP based on extrapolating share price or intrinsic value.

Near the end of 2013, I was buying SKPRes at $0.355, 2 months later they issue results which isnt that good, analyst downgrade TP to $0.20, share price subsequently followed and dropped to $0.31, no one wanted it, the forgotten child. I was more than happy to buy all the way down with average price of $0.339. Now just barely one year later, share price is flying high at $0.70, everyone become excited like they found something 'dirt cheap', everyone suddenly wants a piece of it.

"the thing about share is, the moment you buy after the news out then is too late...i'm not referring this stock or hint anything but *as general*...Pudu Jail is not the only thing in their plan. Is just one out of many. "

- Put it this way, if you admit that you don't have insider news, everything that you read or hear has already been priced in, or else Ecoworld would not be at today's price. Same as other stocks like IFC, people sees that it has bright future, that's why it is trading at PE 50. Current earnings and future earnings have been priced in, that's why you can invest, but your return is unlikely to be high, at worst, permanent capital lost.

"I dont usually take price target from analyst but as a general guideline all given in range of $6-$7 or today's $3-$4. I dont see any analyst showed single concern over the high PE, pls share the link if there is one. Therefore i believe the sale number has not been captured that probably do not reflect the true number. "

- That's why they are still working for people and didn't become millionaire.

From your writing seems like you have read a lot of books, but how come you still ask me question like "Why EPF JV with Ecoworld if they are risky company with PE so high"

You didnt give me any solid fact so how to open up my mind? You havent write anything Ive been begging you for a long time. All you write is PE is unreliable, but when I ask you to write something solid because PE is shit, you keep quite, why?

I got a book to suggest you too, "What has worked in investing" by Tweedy Browne. But I guess you won't read.

I am using Geneva as an example to show why I am skeptical, thats why I ask for you and the other guy's write up.

High PE has nothing to do with JV with EPF. High PE means you are running a risk of losing your investment, that is your 'risk' an an investor, not the risk of a company. You losing money will not affect Ecoworld.

Example Public Bank -

PE 5 - Great company, great valuation, low risk, great investment
PE 10 - Great company, good valuation, low risk, good investment
PE 20 - Great company, fairly valued, average risk, average investment return
PE 30 - Great company, full to overvalued, middle risk, low investment return
PE 40 - Great company, overvalued, high risk. bad investment

Just an example, whether PE is 1 or 1000, Public bank is still a great company, but the PE price that you pay to buy public bank tells you how much you are paying for the company. Which mean the higher the price = less upside = less return = more downside= high risk. Even a great company, there is a limit how much you should pay, there is no unlimited price.

I never recommend anything, I just write out the facts why it isnt a good investment, anyone who can read can judge for himself whether what I write contain solid points or bullshit. And make decision from there.

Same for you, you have the right to ignore what I write, but if you say that Im making noise, which means I am talking shit, I would love to hear what solid points you can write, Im waiting for your write up as well as the other guy.

Dont write vague replies like:

1. They dont know how the company works
2. Never trust anyone but yourself
3. There are no right and wrong in investing, buy at your own risk

You can write those if you want to write memorable quotes. People in forum will think how come someone that invest in Ecoworld cant even come up with some solid facts, compare to someone that did not invest in Ecoworld. Isn't people that invest in it should know more?

Voonyoke & cheeseburger, you are both right, PE is a very 'crude' number, can be misleading, for example, a bad business with low PE. Just like we shouldn't judge someone base on appearance, but that doesn't mean we should ignore what the appearance is telling us correct? I hope you can differentiate what I am saying.

Normally before I invest I would look at things like ROE, Cash flow, EV, Ratios, Debt, Management etc. PE and ROE are the the first thing I filter, and Ecoworld fail both, doesn't mean it is a bad company, just that I think current price is bad investment.

My apology of being skeptical so I hope you can explain more about how Ecoworld works, it will benefit everyone in this forum and allow us to understand more about the company and business. I am being a bit too skeptical sometimes because:

1. I wrote 500 words of facts and reasoning, you wrote 7 words - They just don't know how Eco World works.

2. Those 7 words are very vague and doesnt explain anything about why Ecoworld is a good investment. It is like when at interview, they ask "Why should I hire you?", I answered "Im good la, believe me", "Trust me, dont regret later", "I can make a lot money for your company".


-------------- Break time ------------

Back in 2012, I visited Geneva branch at Kuchai Lama, the gold trading company. I wanted to find out what is it about and planning to invest in it. I sat down in a room with another gentleman, in his 40s from another company nearby. He asked for my name card, I was in sales. A young lady executive came into the room and explain to us about the investment. That was close to Father's day around May, they are having promotion, 2% per month (24% per annum) return. We asked all those general questions, price of gold, investment period etc. Then I asked how does Geneva invest our money to generate a return of 24% per year? She said she wasn't sure.

After that we left the branch and back to office, the gentleman gave me a call to hear my thoughts. I told him i don't feel good about it and it's too good to be true return. Mind you, back then Geneva is already in operation for over 2 years and everyone is able to get their money back from the investment. He told me he might just try investing for a 3 months period, the minimum period, and cash out after that, if my memory is right about $10 or $20k. The last thing I told him is, be careful. BNM shut down Geneva and freeze all its assets that August, the rest is history.

--------------- ----------------------------

I am sharing this not because I think you are lying or anything. I just want to share that if i dont have a skeptic mind back then, I would be holding Geneva gold bar today.

Back to investment, normally when you say that 7 words, that only means 2 things, that is either:

1. The person is very knowledgeable that he think it is a waste of time for him to explain such a simple and common sense thing to normal people, like me and other ppl here that don't understand.

OR

2. That person is clueless. When you ask pasar aunti what stock to buy today, she will say "xxx stock good, gone up so much, I made so much vegie money already, quick you are missing out leh". When you ask more probing questions like adding more Whys she will scold you "Tell you good is good la, ask so much, dont ask me next time.."


I sincerely hope you are example 1 not 2. If I write 500 words of bullshit or blow water here you can ignore me any day, but I wrote everything down in calculation, facts and reasoning, I don't pluck numbers from the sky. And I expect you more than 7 words, if you felt that my calculations, facts, reasoning are misleading, please feel free to correct me and state your facts. We are here to learn about investing after all. No one can learn anything from 7 words.

Nothing to do with Tan Sri, it is simply as: There's is nothing in this world that can be called a good investment regardless of the price you pay, just like there is no bad investment when the price is too low/cheap, it all comes down to how much you pay for it.

Take Tambun, a reputable Penang small developer, selling at PE 8, that means you are willing to spend $8 to buy $1 of earnings. For Ecoworld, you are spending $180 to buy $1 of earnings. What can explain the big gap? Why everyone wants to pay extra $172 to Ecoworld? Because Tan Sri, Tan Sri is worth that extra $172?

How about all other good developers in Malaysia? IJM, Sunway, MahSing? Everyone is only paying them $8-10 for every $1 profit. You are saying all these talents in these companies are not smart enough compare to Tan Sri & his management? Mahsing might not be long in the property field, but IJM, Sunway all have been developing properties for more than 20 years, their know-how is very much as good as Tan Sri, although I might be wrong.

So what explains the $172? Property industry has low entry to barrier, anyone with enough money to buy a piece of land and get a loan from bank to finance the construction or just using the downpayment from buyers can become a developer, thats why there are 20-30 companies that develop properties, even if their core business isn't in property.

Wingtai has always been in retail, now shift into property, property contribute biggest profit percentage. Hapseng a conglomerate always involve in auto sales (Mercedes ), plantation, fertilizer, now property arm contribute more profit than the rest.

Why everyone is pilling into property? Because it is good and easy money. Most developers have 20% profit margin. Who wants to go and tanam palm tree and wait 4-5 years for the tree to mature and make money, and rely on CPO price. Property, take downpayment in advance, landed or high rise, complete in 2 or 3 years. Good, fast, easy money, as long there are buyers.

So what is the advantage Tan Sri have? Yes he has the expertise, good with township development, for example Setia alam, The reputation, buyer is probably willing to pay more for houses developed by Ecoworld compare to other developer, if in the same location. How much more, I don't know, 10-20%?

But no matter how you slice it, I just dont see how his company can command a $172 gap with other developer, unless he has some secret recipe like coca cola that makes people addict to it's product. Even coca cola dont have such a gap with Pepsi cola.

With Tan Sri capability paying $15-20 (PE 15-20) for every $1 profit is a very good investment. And it also make sense because I am very confident Ecoworld can grow at 15-20% a year for next 3-5 years, their target is 67% a year for next 2 yrs. That is a premium of $5-10 compare to other developers. But $172? This is building castle in the sky.

One last thing, if lets say you are building a software like Microsoft, the advantage is scalability. Means after you develop the software, high upfront cost to invest in research & development, but after that you just need to produce the next copy at very low cost and you can produce alot of it very fast, that is call scalability, you can sell your software to anyone in the world really fast. The cost of producing the next copy is close to nothing.

Consider Ecoworld, you pay 180 pe because you expect Ecoworld to grow superfast right, like Alibaba, maybe around 100% a year, if they only can grow 20% a year might as well buy Huayang or Tambun correct? Since Tambun Huayang are selling at pe 8-10. So to grow at 100% you need scalability, the ability to expand your operation and do sales very fast, like software. But can a developer do that?

Developer need to: Search for land, studies, buy land, development planning, marketing and advertising, open sales gallery, advertise and attract buyers, launching, begin construction, hand over keys, after sales service etc. So a huge township like Setia Alam took 8-10 years just to fully develop the whole piece of land. Everytime you need to build a house the process is the same, so do you think developers has scalability? If not how the hell can they grow at 100% a year?

Ecoworld sales as of 2014 is $3bil, and they have a sales target of $7bil in 2 years, 133% growth or 67% a year, if they can grow at 67% a year, do you think 9 years later they can push growth to 100% a year? Growth slow down the bigger you get.

cheeseburger - thats for sure with the high expectation everyone is pushing the share price up, that's why it is at 180 pe. I have no idea where the share price will go in short term, it can easily go RM5, but im very confident 99.9% you will lose money if you hold it above 3 years.

if that's what you choose to believe. Anyway good news for shareholders, bad news for speculators

if they love pump and dump they will announce 1 to 5 not 5 to 1

so for those that still believe that management loves pump and dump or theyre in for a quick profit. I entirely support the decision by Jobstreet to shrink outstanding shares and they have my great respect.

Interesting you are trying to compare 1 company, largest and leader in it's industry, population of over 1 billion, over 100 billion market potential, largely untapped market, with another company, in a population of 20+ million, over 20+ competitors, and a very saturated market.

Lets do some fun calculation, current earning yield at PE 180 is 0.56%. Means you 'think' buying Ecoworld is actually 'safer' than FD, because FD is giving you 3-5%, but you say nope, im willing to accept 0.56%. I didn't know there is anything safer safer than FD.

Another calculation, comparing to all other developers, most are trading at PE10, even heavy weights like IJM, I will factor in Tan Sri goddess brilliant that can turn land into diamonds and gold, I give him a PE20 (A deep deep respect consider Public Bank only has a PE 16, although they are in different industry). To bring PE 180 down to 20, EPS needs to grow 893%, and that is if the market price remain the same as of today, means you are not making any money on your investment yet.

So how long will you think it takes to grow 893%? If you say 100% a year, thats very aggressive, still you need 9 years to hit the target before you start making money. This is the super best case scenario, not the average or worse case scenario. This is not the question of landbank, Tan Sri can own the whole Malaysia yet he won't be able to grow that fast because to grow that fast you need money, be it equity or debts, and you simply don't have the human resources to handle a growth of 100% a year for 9 years.

Lastly, you will say you will make money because the PE of 180 will either maintain or go up. But you see this is chicken and egg, people like you expect Ecoworld should be growing like the caliber of Alibaba since you are comparing them. Yahoo investment grow 40x (1mil to 40mil) in 9 years, or 440% a year, your expectation that Ecoworld should grow at least 100% a year i guess is the minimum requirement, anything less is unacceptable, or else why/how would future investor justify paying PE of 180 if the company can only grow 10-20% a year? You pay such a high PE precisely because of the growth potential, correct? So now the question goes back to the top, can Eco grow at 100% non stop for 5 years or above? Tan Sri or no Tan Sri, I have never seen a property stock can grow at that rate in long term. Time will tell.

I wonder why is everyone willing to pay a price at a PE of 180? Because of Tan Sri?

how on earth can CBIP be below NAV

if you can explain how can you time (aim) something when the target is moving, ill believe you lol

Put it the right way, buyback is stupid not the person. If a company is worth $1, share price suddenly go from $2 to $1.50, and suddenly management says buyback to stop the drop, everyone is happy. But what actually happens, management is using Your money to buyback shares for $1.50 when actual value is only $1.

That's why you have to learn the right way of investing. When price gone up during 2014, im very sure many investor plow money into Hapseng, I bought at $1.97 and exit last June at $3.40+. Now when a sudden drop everyone lose confidence and start dumping, this is called buy high sell low. When market crash everyone panic and sell, when that is normally the perfect time to buy.

If you have a yardstick about how much is the correct price for Hapseng, why worry? I bought Aeon Credit at $15.30 and it falls all the way to $10.80, I was surprised but im happy to average down.

Before you buy something, imagine if it drops 30-50% will you panic? if you think you will, never buy. In contrast, if you feel excited, then you are allowed to buy.