20 sen, ex div 18 Oct, to pay on 3 Nov

Thank-you HAPSENG for making my portfolio a NEW HIGH again!

2.24 ... Nice! I have been overweighted this stock with an average entry price of 1.86.

No guaranteed profits from markets.
Happy I sold all at $1.51 1.5 month ago, and use the proceeds to buy other stocks when their price is compelling.

Downtrend intact. New low 9.19. No upside yet.

Will be interesting to see, on this next wave down, how low it can get ...

Let's see which IB will recommend a Buy ... hahaha ...

I think in next few months/years, ASTRO still have a lot of room to fall further - NTA is only 21 sen. Another 60% fall is possible in next 1-3 years.

In short, revenues drop 6% but PAT drop 79%!!!
Poor shareholders.

Oh, and look how much "Administrative Expenses" have gone up this year vs last year, even though revenues have come down. By right, both Cost of Sales and Administrative Expense should come down when revenues come down. Probably the accountants trying to soften the message by allocating some to cost of sales and some to administrative expense, basically trying to hide the higher expenses.

Either way, it's a terrible picture. Lower revenues accompanied by higher expenses.

How can any responsible Board of Directors and Senior Management justify this kind of spending?

Goodness, what a terrible result. YoY, revenue dropped 6%, but Gross Profit dropped 20% because Cost of Sales has gone up - they are so desperate to protect revenue, that Management throws good monies after bad ...

Typical of desperate Management who doesn't know what to do, except spend more monies to protect their own high paying jobs.

The right thing to do is to cut Board director fees by 20% and slash Senior Management salaries by 20% and hunker down ... basically try to pay off that massive loan quicker.

But of course, Board of Directors and senior management will never do that ...

Better to let shareholder lose, than they lose their earnings.

For many of you who are long BAT for a long time and sitting at a loss and wondering what to do, I've been in this situation many times before and the only advice I have is - be a good trader.

If you want to do a DCA, be a good trader.
Know when market signals a price bottom.
Then, buy anticipating selling at higher price, regardless of prior average holding.
This way, you might lower your average cost from gains from trading.

However, this is easier said than done, even for very good traders who trades against the trend.

Much easier to cut loss and move on to new trades. Start with a clean slate.

Another reason to exit BAT is that if I am not mistaken, it is part of Bursa Malaysia Top 100 companies.

However, if BAT keeps declining, it will fall out of the Top 100 eventually.

That's when institutions will further dump this stock.

Just be aware that DCA this stock is probably not a good idea.
If you can't bring yourself to sell a losing stock, at least, don't throw good monies after bad investment.

I know how hard it is to sell at a loss.

https://www.macrotrends.net/countries/MYS/malaysia/smoking-rate-statistics

The % of Malaysians who smokes (legal and illegal cigarettes) has declined. GEG (Generation End Game), global trends and vaping/alternatives are likely to cause this % to continue to fall in future years.

Benjamin Graham is one of my favorite authors.

"In The Intelligent Investor, Benjamin Graham famously writes that: “Investment is most intelligent when it is most businesslike.” Graham viewed any purchase of a stock or bond as an investment in a business, rather than the purchase of just a piece of paper."

What I find interesting is one of the commentators mentioned candlesticks. My experience with candlesticks is that it is random. E.g. last Friday, we have a bullish engulfing pattern, which is bullish. However, today's pattern negate that i.e. this is now a bullish reversal failure - indicating more lower prices to come. However, I think my view here is "random" i.e. 50/50 chance that this view will be wrong or right.

I've seen this randomness in candlesticks for many, many years (nearly 2 decades). I don't have an edge.

My edge comes in fundamental analysis (and combined with timing and technical patterns). Without fundamental analysis, my technical results is just 50/50. I'm willing to illustrate with BAT over time how random techical / candlestick trading really is.

To be honest, in a long term down trend like BAT, I am only about 33% confident of winning the trade on the long side. So, I really need to see strong technical signal that the bottom is really in, it has been basing, it has been testing lower lows and fails.

Without this technical signal, I will prefer to miss the opportunity to win from the long side.

But you could be right ... maybe I should stop monitoring BAT and move on. Why trade from the long side in a downtrend ... maybe because I'm looking for the same opportunity that existed in Nov 2022 where BAT has a fast and nice run up - the trader side of me is "hooked" to try to find the right technical setup. Hence, I linger here to stay in touch with the market. I doubt anyone's comments here will move markets, as i3 is just one site.

Looking at price action .. chart wise .. I think it's too early to try to catch the bottom. It is only starting its downtrend. My thesis is it needs to do what it did during Jul to Nov 2022 i.e. drop more, find a bottom, build a base, test the downtrend again and again ... and when it finally has built a base and couldn't go down anymore, then, that's the time to buy anticipating the next path is up. But that could take several months and meanwhile, I think we'll continue to see lower prices.

I'm willing to be wrong here and not lose, and being too early to catch a falling knife.

Someone once posted past 10 years of BAT EPS. My own tabulation showed me that past 8 years, its EPS has been declining. I don't think this is due to Management mistake, but cigarettes have a reputation for bad economics these recent years and I don't think this trend is going to do a U turn ... it's one of those macro trends that is likely to persist.

Warren Buffett is famous for saying this - "“When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.”"

In BAT's case, its business reputation (declining cigarette revenues) is likely to remain intact, no matter how good BAT management is. That's my thesis.

It is human nature - Board and senior management nature - that when revenues decline, they will eventually sack the CEO. And replace the CEO with someone more aggressive. Then the CEO takes big bets, spend a lot, and basically run the company to the ground. Like new ASTRO CEO. Took on big debts to be aggressive and then, realize that it can no longer afford to pay high dividends because Finance costs that comes from big loans is unable to generate enough cash and so, they had to cut dividends drastically.

So far, based on what I've seen on BAT management, I haven't see they cut Directors fees by 20% yet. Like to see that before I go back in. For now, I have a feeling Director fees and CEO salaries will rise rather than cut 20%.

My experience with senior management and Board members is that they typically don't like to do nothing when market share is declining. They always want to do something. Especially when they are paid handsome fees - see the Annual Reports.

Because of this human nature, more likely than not, they will make mistakes and run the company to the ground. Because of this realization, I sold and exited.

https://www.globaldata.com/store/report/malaysia-cigarettes-market-analysis/ - a good report. BAT is the market leader in cigarettes. Dunhill is the more recognized brand by BAT. The best thing is for BAT to protect its cigarette segment as it is a cash cow. The question is - is BAT Board and Management willing to hunker down, or will they follow ASTRO to be aggressive and die faster?

So, these are my thesis. In cigarettes, BAT commands 52.4% of a declining market. In vape, BAT's a nobody, based on my research. I'm willing to monitor for a year to see if my thesis is right or not. Looking for people to provide counter examples to improve my learnings.

Google "what is BAT share of cigarrette market in Malaysia" - you will realize BAT owns 52.4% of Malaysia cigarrette market and this market is declining.

You will also see BAT management keen to convert its cigarette smokers into Vape, not realizing that whilst the same customers are sticky on cigarettes, once they convert to Vape, they will have hundreds of other choices in Vape.

The Vape market is very, very different than cigarettes market.

Google "size of cigarette market in Malaysia"

See Global data site:

"The Malaysia cigarettes market size was MYR4.89 billion ($1,182.4 million) in 2021 and is expected to decrease at a CAGR of more than 1% during 2021-2026. The tobacco business in Malaysia does not appear to have promising futures as total volumes are predicted to drop from 2021 to 2026. The industry is expected to post value growth which can be attributed to price increases majorly driven by increases in taxes on tobacco products."

Google "size of vape market in Malaysia".

From Code Blue:

"KUALA LUMPUR, August 21 – The retail value for Malaysia’s vape market grew by 53 per cent from RM2.27 billion in 2019 to RM3.48 billion in 2023, according to an industry report.

The Malaysian Vape Industry Study 2023 by the Malaysian Vape Chamber of Commerce (MVCC) also revealed that the number of adult vape or e-cigarette users in Malaysia increased by 27 per cent from 1.1 million in 2019 to 1.4 million in 2022."

@Kevin, I cut loss at 9.65, losing 2 sen - my average cost is 9.67. Normally, when I lose monies in a stock, I like to keep track of the stock for another year to see if my fundamental thesis is correct. I like to read fundamental comments here to see where the blindspots are. This is part of becoming a better investor. I don't mind being proven wrong by market. When I sell, I have a thesis and here, I feel it is a strong one.

I see from your past comments that you are advocating DCA for this stock. Why do you think this stock is under-valued and worth to average down? Are you aware that Vape market in Malaysia is now generating RM3.5 billion revenue? And cigarette market revenue is only RM4.9 billlion? And BAT share of Vape is hardly anything? Don't you think BAT is too late?

@Ong, in i3, click on user name and you can see all of their past comments. There is enough clues if you study one’s comments to know which counter they are interested in.

@William, good to watch the price movements past 4 days but also watch price movement past 4 years and longer too so that you employ the right trading strategy. Many BAT retailers have been holding for longer than 4 months hoping for price to rise back and getting trapped. The longer they hold, the higher the odds of losing

Casino de bursa. Or is it Bursa de Casino 😂

@Simon, majority odds 2024 Budget will be neutral for BAT. Only very small minority odds that government will do a complete U turn on GEG. If you are betting on a U turn on GEG, that’s like buying TOTO. 😂

Dangerous to short too early. This stock can keep climbing the wall of worry for quite a long time.

Personally, I wouldn't chase this stock. I am not expecting price to run up fast. If one is patient and willing to wait 3 months, it is possible with very good odds to own at 2.51. This stock is unlikely to run up very fast, hence, just wait, key in a GTC buy order at 2.51 and don't watch the market.

For past 4 years, there is a soft sideways trading range between say 2 to 3.5. So, if price goes lower below 2.5 like 2.25, that's another accumulation zone for me. If it goes down to around 2, that's another acccumulation zone for me. If it goes down to around 1.75, it should still be another accumulation zone for me. Maybe by this stage, I get to 5% portfolio and then, I will forget about this stock.

otherwise, look forward to get paid in dividends long term.

Price gain is a bonus, but not necessary.

According to Ringgit Plus, today 12 months Term Deposit rates for the major banks like Maybank, Public Bank, CIMB bank, etc. is around 2.8% excluding special promotions. So, why put 100% monies in FD when some could be spread around like GENM to earn more than double in Dividend yield? It's backed by a decent underlying business.

Diversify and put a little bit of your FD into GENM. GENM is now 2.7% of my portfolio - I added more at 2.51 earlier this week. It feels about right.

Patience. GENM dividend yield is nice. I am still expecting next dividend to be 9 sen ex div Mar paid Apr 2024. If true, then, total DPS 15 sen is decent. On current price 2.56, that's 5.9% dividend yield, which have good odds to beat EPF.

Which means I don't need the price to run up so soon. It can stay flat for years and I am okay with that as the DPS alone is already likely to beat EPF. Any price gain is a bonus. I can live with 5.9% DY for ever.

Today is Bullish Engulfing candlestick, where today's close (9.5) is higher than yesterday's high (9.45).
Bulls should feel a sigh of relief.
However, if (low odds) Monday shows a Bearish Engulfing candlestick (e.g. if Monday's close is below 9.22), I think you will be glad to have your Stop Loss at 9.2 gets hit.
If Monday do a Bearish Engulfing, we could be looking at a serious downtrend continuation.

Nevertheless, I think less than 20% chance Monday will show a Bearish Engulfing. Next week majority odds will rise / flat.

https://punkjuicevapestore.co/collections/top-malaysian-brands

Where is Vuse?

For this week, for those who are long, I strongly advise to put a Stop Loss at below 9.2. Today is a bullish engulfing pattern signaling a potential trend reversal. So, by right, price should rise next week, if today's bullish engulfing follows through. So, next week, we don't expect 9.2 if follow technical analysis. However, If next week touches 9.2, this stock is completely dead. Hence, by right, next week, should be low odds of seeing 9.2 and when there's a low odd event happening, you should have a stop loss there because it should be low odds to see the stop loss gets executed. Trade dynamically, because market is not static by dynamic. The stop loss after next week will be different and gets updated later.

@Bradon, 9.22 is clearly the low today. Next week, 60/40 bias towards higher prices. The question mark is how long can bull sustain (a few days? 1 week? 2 weeks? 4 weeks to end Oct on next QR?) and how high can it get to (RM9.9?). I expect a lot of sellers near RM10. So, next week, next 2 weeks, next 4 weeks is critical. If prices starts to rise in the 4 weeks leading to QR release, majority chance the QR will disappoint. Punters are betting QR is good, hoping for a good Vuse results, but odds are not good here to bet on the long side.

I suspect, this next 1, 2, 4 weeks may provide opportunities for longs to exit on short term strength. I suspect 70/30 odds that RM10 resistance will hold, because many longs who averaged down below RM10 will try to exit near there to try to make a small profit. Those who are not greedy have 50/50 chance of making a tiny profit. Those who are greedy and tries to sell above RM10 like RM11 is banking on low odds of winning.

FWIW, without BAT, today, my portfolio made all time high again. It has made all time highs 3 times this week. One does not need BAT to win this game. There are so many other sound fundamental stocks with good technicals. Or buy good quality REITS at lower prices if one doesn't know technical analysis. REITS returns should match or beat EPF over 5-10 year time-frames.

@MOBA, the key thing about technical analysis is to first figure out what is the TREND, before thinking about other details like resistance, support, etc. In BAT's case, the TREND is very obvious and the downward trend is supported by terrible and ugly fundamentals. Sure, price will go down, move up, etc. but the clear downtrend is unmistakeable if you look at charts longer than say 4 years. Since 2020, it has been trading on a sideways range, typical of long term consolidation, but today's price action to make a new all time low of 9.22 is not convincing. Nevertheless bulls have been defending strongly and so, it won't be so easy to break below 9.22 yet as the momentum next week is an attempt by bulls to push prices back up again to support.

If BAT makes a new low lower than 9.22 in the coming weeks, then, bulls will have lost and we will see even lower prices.

IMHO, next week or two may be the final chance for those who are long to exit their longs.

The longer longs hold on to their position, the greater the odds of them losing. Hold for 2 years and don't be surprised to see RM7.

BAT made a new all time low today at 9.22 and rebounded. It "looks" like a "bear trap", but I am not convinced. As of today, bulls tries to regain control and the real test is Monday. I think next week is a good chance for those who are trapped on the long side to sell on strength.

The 38.2% Fibonacci retracement around 4.68 or so, is a magnet, so, price may ding dong there for a while. But the trend is bullish over past weeks, so, the bias after that is more likely a continuation of prior trend. The stock has risen 50%+, so, it's normal to build a new base first.

SPTOTO keeps buying back stocks every day.

BAT in the coming QR will be trying all accounting tricks to show high Vuse margins. It won’t work because market is always smarter than any one accountant.

Analysts will be watching BAT’s expenses in the coming QR like a hawk. Particularly the real cost of selling Vuse vs Vuse real revenues and total expenses. After subtracting long term expenses and allocating excess expenses to Vuse, if analyst discover that Vuse real margin is lower, this stock will crash.

The only risk to my prediction of RM7 in less than 2 years is:
1. BAT Management and Board slash expenses by 20%.
2. BAT increases marketing budget to protect their declining cigarette customer segment.
3. BAT accepts slow death because it cannot be market leader in Vuse to compete with hundreds of China producers. There is no real premium segment in Vaping. Google “ best vape in Malaysia” and Vuse doesn’t even feature. BAT is simply too late in the vaping space and it will never have the same monopoly or leadership like it has in the cigarette market.

Today 9.23. Classic bear drop like falling knife. I tried to warn all you longs on weekend. I then sold on Monday my longs at 9.65. I explained very patiently for those willing to listen. This is still a falling knife.

Who is selling? For this volume, it is clearly institutional.

Why are they selling? Looks to me more and more institutions are realizing that this is a sad long term bear case.

As Engineering puts it - this is probably one of the strongest long term bear case in casino de bursa.

What is it worth long term? Assuming very successful Vuse and zero cigarettes then it is not worth even 70 Sen.

That’s how strong the bear case is.

There is simply nothing to induce institutionals now, after they de-risk to come back in.

Longs have made a mistake. Still not too late to cash out at 9.2.

Give 2 years or less and you will see RM7.

Next target RM5-5.20. Entered GTC to sell another small portion on strength there. Queue and forget.