this airline service has been getting worse day by day. My flight was rescheduled 4 times in 1 week!!! how the hell do you do business like this? We need more airlines come in to take away customer from airasia since apparently they can't handle the customers here. and Im getting MAVCOM to investigate these type of willfull business practices. Told that my flight is confirmed, then few days later say sorry reschedule again.

Thanks for the arbitrage from 1.7

Good to see this stock still can sustain after i collected at 0.77/share when BN lost election and sold @ 2.03 per share recently, though not the highest price i can sell but it's a satisfactory results. The business is good, but the price now doesn't justify it. Government stock or not, I buy only when the price present a very deep discount to my intrinsic value, which happened in mid 2018.

It's funny when i am buying @ 77 cents, everyone in this forum is all doom and gloom, and the argument of avoiding this BN stock comes from everyone. Who knows it went all the way from 77 cents to 2 ringgit..

I can see some old names here who didn't act in 2018 and sounds regretful.

Thanks for the excellent run from 88 cents. The Buffett method works immensely. See ya guys.

i think investing base on IB reports or somebody else's opinion is not wise at all. You will not know why you buy it and absolutely no idea when to sell. You got to think for yourself.

It's thinking rather than polling that determines your success in investing.
It's what Bertrand Russel said: "Most people would rather die than think, many do."

It's the objective of IB to make investing sounds easy, its like selling real physical products, sometimes you wonder their ads is selling a physical product or really an independant evaluation.


Because let's face it, most investors want other people to tell what to do, because making decision by oneself is not part of our evolutionary trait, and it consumes too much of our brain power to think independently. People likes the comfort of being in a group, that's why you have groups in Whatsapp, companies(group of people working together), house(people live together). I don't mean being in a group is bad, it has a lot of utility and is essential to human living, but "investing in a group" is an oxymoron.

"Consumers" of IB reports want a simple buy or no buy recommend, and they supply it. Once you get the "first impression" from the report, its very hard to detach from it, that's why people always say first impression is very important. It's human nature to weigh first impression heavily. If you really think IB reports are useful, you can dispense the effort to even read the report and just hand them the money. You get to relax and not think while they work the money for you.

And about the MRCB GKENT JV, yes it is equity accounting, no cashflow except dividend is coming in to GKENT. But does this accounting gimmickry paint the real picture? Let's say you own a business earning 100k a year, and reinvest every earnings @ 10% returns, back into it without paying you, the business owner, a single dollar, do you think your business is worthless?

As for PDP to turnkey contractor, people say risk is higher, but which risk higher? financing risk? execution risk?

As for construction project price, i'm not expert in the construction industry but having renovated my house recently(which at the end comes at 10% more than quoted price), i don't think the agreed price is fixed in eternity. I mean if a contractor can't even estimate exactly my house renovation price down to the hundreds, who can have 100% confidence the estimated price of a project as big as LRT 3 is fixed at the 11B price tag? I mean construction industry is the most complex work of any kind and any precise calculation is an illusion.

Even if the contract price is fixed, i remember our current transport minister once commented on TV about the ECRL project that, even though ECRL publicly announced cost is 44B, there is another contingent reserve set aside for excess cost which will be paid out when the need arise. This contingent cost reserve is not announced publicly. That is why I am not too worried about margin compression in the JV.

As i have said earlier, what the management IS doing is as important as what they are NOT doing. And I have not seen any detracting actions by GKENT management to derail itself from being successful.

I believe the development cost is the cost to develop new services such as COVID screening and nak beli app. Those development cost are capitalized instead of expensed as it is considered long lived assets.

Well I hope gkent is not doing something stupid like getting into the mask and ppe bandwagon. It’s a commodity business with no barrier to entry. Anyone can come in and setup business within a month, and you have no pricing power in these commodities product. I would rather they focus on their specialty products.

I still think Gkent is going smoothly business wise, there are a lot of things that they do and DID NOT do that contribute to how shareholder-minded they are. Much as Steve Jobs said, what you did not do is as important as what you do. Honestly, all the SBB is a tremendous action that few shareholder here appreciates. All i can see here is shareholder whining about how much is the dividend. SBB is a much more effective method that contributes to shareholder value rather than giving dividends. I really am exasperated at why some shareholders are so concerned about dividends. If you rely on dividends to sustain your lifestyle, i think you should not be in the stock market in the first place. And if you wonder why SBB is good for long term shareholder, well you got a long learning road ahead.

And if you rely on IB recommendation to tell you how good a stock is, you might as well buy a dice and roll, you get better odds. A company value depends on 2 scenarios. First you have companies that has no earnings and alot of liquid assets, but sell at substantial discount to this liquid asset value, typical net-net situation. But this situation requires a catalyst or corporate action to unlock the value, if not it will just stay dormant forever. Another scenarios is where a company has high rate of earnings, then the value of the company is the discounted cash earnings that it is expected to earn till kingdom comes. I think Gkent fits the latter scenario. So in view of the current interest rate environment, I think its great that Gkent put excess money into SBB because sometimes the best investment a company can make is in itself.

This stock is tinged with political perception that may or may not be true, but let's face it, construction companies all around the world rely on connections to get deals, because other than a sterling track record, there is no other differentiating factor significant enough. Furthermore, Gkent is not really a construction company, it is actually a service company, Why? it doesn't do the construction itself, but provide project management services, and this is where it can differentiate itself because constructions projects are unique and complex, you need connections upstream and downstream to manage projects, and not many companies has this aptitude. And once a company has the track record, ipso facto it excludes other companies from having the same track record, and this first mover advantage is just going to keep rolling.

A company is a good buy at one price and a mistake at another higher price. You've gotta figure out the price yourself, else you will not have the conviction to hold or the courage to sell when you see the price appreciates.

Well someone did not read properly that the disposal by Wong is to Asia internet holdings, which is just a cross trade with no effective ownership change. And after that he bought 2m more. Now I don’t have this so called automated app to tell me to buy at 1.3, but when I see 80 cents I bought and a pleasant surprise when I came back it goes up almost 100%. It’s such a no brainer that I don’t think I need an app to tell me its cheap to buy at the time. It’s what Charlie munger said: when you see something cheap, pound on it with vigor!

In the end, S5 used ALB to go public, so much for the hoo-haa by Connectcountry, haha. I believe this is only for paving the way for the NIIS project by the alliance. Should not have much fundamental effect on the company realistically as the shareholding in S5 is quite small. I would rather have the share price go up according to business performance than rumours.

I’m not here to put salt onto the wounds, but if you thought AA balance sheet is horrible, wait till you get to the “notes to the financial statements” where they tell you the “off-balance sheet obligations” that was owed to the lessor of those airplanes you see on the field, then you realise the company has almost negative net worth.

Well, negative net worth company could be an excellent one, like Home Depot of the US, where the entire business is financed by borrowing from banks. But they have extremely strong cash flow to support the borrowings.

But AA as I see, due to the pandemic, they would have tremendous pressure to pay the lease for the airplanes. I think it was unfortunate that Fernandes sold the airplanes and gave out all the proceeds as dividends. If they default on the lease payment, who knows what will happen. They might have to return the airplanes and cut opex, but their workforce is already a huge fixed cost, and retrenchment will only exacerbate the cash flow pressure as they will need to pay compensation for retrenched staff.

I think they overstretched themselves for too Long and this could be the undoing event. It would be interesting to see the development. Maybe some white knight could be the saviour, but there will apt to be a lot of pain.

I am very happy as their customer as AA provides an essential service. But I just can’t commit to buy the shares, especially after discovering those off-balance sheet obligations, those obligations is every bit real as bank borrowings.

The economics of airlines is just appalling even with monopoly, as geographically, Malaysia is not that big that u had to take a plane to travel unless you go east Malaysia. Forget about foreign operations, one competitor is enough to put it out of business.

This is the actual charges from Bursa:

Receiving gratification as Home Minister for accepting a RM250,000 cheque from Mastoro Kenny IT Consultant & Services to help the company get a MyEG project on Jul 15, 2016.

Receiving gratification as Home Minister for accepting 13 cheques worth RM8 million from Mastoro Kenny IT Consultant & Services to help the company get a MyEG project between Dec 7, 2016 and Jan 5, 2017.

Receiving gratification as Home Minister for accepting 10 cheques worth RM5 million from Mastoro Kenny IT Consultant & Services to help the company get a MyEG project on Feb 8, 2017.

So it seems all monies was paid by Mastoro to get project from Myeg?? How come the news said the other way around.

And if the BOD were investigated, then why MACC issued statement that said BOD were not investigated in 2018?

It seems there is major inconsistencies in the news. These news agencies need to hire better writer that knows what he is dealing with.

Sounding weird with all these news since previously MACC even issue official statement to clarify MYEG is not being investigated. Now these alleged court news came out, is MACC statement fake too?

Btw all the news that came out has a lot of inconsistencies with the facts previously stated, previously was mentioned mastoro IT services. Now become Lewis & Co. seems like the court has no idea which company is which.

Some one is being illogical. Drive down the price so the Ownself so called big fund can sell lower? What a funny operation hahah.

Was hoping emperorfund to help me average down my 77 cents holdings, but damn it went the other way...

Talking about secrecy, isn’t the whole stock market about secrecy? We don’t need tautology here. Every profession is a conspiracy against the laity, now someone here has clearly intimated that he is a laity with all the boasting.

Too much nonsense here with people judging the business base on share price and not financial statements. But well it makes the job easier for me to exploit them.. who’s here holding sub 80 cents and just looking at these clowns waiting for certain price? They thought they would have the conviction to catch the falling knives but when the knives does fall, their convictions all but evaporated. Funny behaviour indeed these Traders showed.

Management that knows the intrinsic value of the company and shareholder minded enough to buy back when price is below intrinsic value. I don't think this is common even in the US, let alone Malaysia.

No use getting worked up for ignorant investors who only look at price and THEN judge the company. Real investor look at company and take advantage of price.

SHquah, it doesn’t work that way. The company used cash to buy back shares, net effect is to reduce total assets of the company, not increase. You may wonder why reduce the assets of the company? Actually Gkent should be valued through earnings and not assets, the hard assets are not worth anything, its the earnings that matter in this particular case. If gkent maintain same earnings, but outstanding shares reduce, EPS increase, ROE increase, ROA increase. That’s why Buffett says the best company have very little net tangible assets, or even negative tangible assets. Go look at Home Depot in the US. They have negative net worth. But that is exactly why it is good.

Scholez the Long term people usually are silent about their holdings. Let the Traders run the show for us. Usually the invisible investor profit the most.

Hotwires; indeed! It’s lower than 15%. Wonder why they cook up the statement.

Anyway, those letting the price To tell them how to value the company is really amusing to look at.

Those who said foreign workers to cut to 15% know how much is the percentage currently?

http://www.theedgemarkets.com/article/govt-study-reintroduction-gst-if-people-want-it-—-dr-mahathir?type=malaysia

I foresee if the pilot test is successful, and once the policy is set for all water meters in malaysia to be updated with the new solution, it will be huge market, and LRT3 is not recognised yet, which is anticipated as management has alluded the project to start in 2H19.

My conservative estimate of the value of the expressway base on
1. traffic data 150k cars/day from the road transport ministry(KL-ipoh only, assuming 50% of the users will choose WCE, just google and you can find the data)
2. average revenue per km of highways in malaysia, also googled it.
3. 60% EBIT margin
4. 5.5% discount rate

The resulting PV of the EBIT is about 12B, after tax value will be about 9B,which is what i think the expressway is worth now. WCE berhad 80% portion will be 7.2B.

Now the tricky part is how will the capitalization of WCE berhad at the end of the construction period. They have loan facility of 4.74B, which if assume they will utilize 100%, will leave about 2.46B value for the equity.

The market cap of 510M now seems like a bargain, and correct me if I am wrong, they intend to raise about 500M by issuing almost 2.5B shares base on the recent fund raising circular. So total outstanding shares in the future will be 3.5B. Add in the 500M fund raised to the expressway value and we will get about 3B of value.

3B divide by 3.5B, and a fair value price will be 0.85 a share. Of course the property development portion is an icing on the cake, which I currently ignore. In my view, the proposed rights issue activity is very dilutive.

You guys need to stop letting the market tell you how the company is doing. Such a weird behaviour.

indeed, everyone says its old news and factored in, but how much of it is "factored in"? no one bothered to put a number on it, much less putting a valuation on it. And what's the use of order book if the company can't book any significant profit from it? Just look at Sapura, 17 Billion order book, still bleeding.

Funny market indeed.

Lol nothing in the news that said all gov agencies.. May I ask what is the total number of gov agencies in malaysia? And funny they don't even want to disclose their current user base, which signify some issue there.

And payment portal is an industry that has no barrier to entry and no captive customer. It is actually good for those company that don't enter this industry.

There's no right or wrong with INSAS, just people's preference. Sure 10 year CAGR 7.2% is commendable given FD 3%, but if you have alternative which you are very confident will beat this, why choose INSAS?

Why those who liked INSAS never act when GE-14 caused some of the great companies to tumble >70%? Here we have one great example, MYEG. Before and after GE-14, the business did not change much, but share price tumble >70%. Within a year, you can get >100% return.

Those who did act(boldly) in the GE-14 panic would not be talking about INSAS. It's a true blue Graham value stock, but you are relying on the management to realise the value for you(selling the liquid assets and distribute dividend), which is kind of a speculating/gambling.

Some might say:alright, after the 100% return, what's next? INSAS got 10 year record, 100% in 1 year then poof, no more target to shoot. But come to think of it, if i can get 100% in 1 year, why would i want 100% in 10 years? I think its a no brainer question.

Buffett used to practice deep value technique during his partnership, he succeeded. But few would pay attention what he did after buying these cigar butts. He bought his way into the chairman seat, and demanded the value be realised, such as Sanborn Map and Dempster. But we as minority shareholder who bought into these cigar butts can only wait for management to realise value for us.

And why are we comparing these subpar construction companies with INSAS? a look at the operating results of these companies and you know there is no moat.

Afterall, if you are satisfied with 7.2% long term return for 10 year, well, all i can say its good to have low expectation and deliberately be oblivious to other better opportunities.

I think the cancellation is because the underground portion of the project is revised so that there is no more underground portion, of which IJM is the contractor for that portion. If they want participation, they would have to bid for other portion.

Well personally I felt Gkent has lesser moat than MYEG. But the price differential is much favourable to Gkent.

Because they were engaging in sort of commodity business rather than a franchise. In construction, it is kind of hard to stand out because the workforce is quite mobile and because of standardization in engineering works(building codes, ISO, etc), the output is usually not differentiated, at least not from the customer view point.

Hence I am looking for the lowest cost player in a level playing field. Of course in Malaysia, there is no exactly leveled playing field, you need connections to get projects, and since this is the condition here, having connections is a sort of competitive advantage(aside from the negative impression associated with connections) in preliminary stage. But being the lowest cost producer has the advantage in an absolute scale because ultimately, even if you have connections, if you can't manage well and keep cost in check, you can't even finish one project within budget and on time. Being the lowest cost producer is not just one advantage, it is a myriad of policies and culture that makes them low cost, and they are very underrated.

Btw I don't believe this crony culture in construction is unique here. In the U.S its even more rampant i believe, even in the defence and food industry. I mean objectively speaking, we should not view cronyism with a tainted glass. It is a by product of capitalism and it should be considered as one of the factors in assessing companies, as it could be a short term influencer in the profitability of the company.

Sorry for my idiosyncracies and weird thinking..

Personally i think MYEG and GKENT do have their moats.

MYEG being a "distribution" company instead of a technology company(really, they are acting as a channel for various government and commercial services to reach their user/customer), the moat lies in the integrated government services to their customers coupled with some tag along commercial products. People who are dealing with government services don't want to go to so many sites to get things done, and they tend to remember only a few website names for them to transact with the government because these are mundane chores, people just want to go to one site to settle everything.

It is a needed service, with no close substitution(unless you want to drive down yourself), and with that fat margin, seems like price regulation is not readily enforced(MyCC please don't read this comment). Really its the whole package that makes it a moat, if you break it to the elements(website development, etc.), everyone can do it(TS Wong said it himself :what MYEG do, everyone can do), but knowing how to integrate and package the service and marketing to make customer associate the name with government service, that is what makes them special.

Then there is the question of the risk of not getting government contract. I believe when handing out these concession contracts, track records plays a very important role, and in this aspect first mover advantage is almost perpetual. If they done it right first time, no other competitor has better track record than them.

GKENT on the other hand, has a moat in the water meter manufacturing as they have the largest brass forging plant in SEA, so they might have a lowest cost operation in this region, and as they are implementing backward integration into precision components in the water meter, the moat may be widen further. And again branding do have some influence here, as shown by repeated buyers from water authority from SG & HK.

On the construction front, as they have previous track record of completing rail projects, and management has relationships with international rail players, this could be the moat that is guarding their margins. And the very fact that all their projects were completed on time(I know some of you might say the Ampang line delay is due to them, but construction projects involved a whole host of different players, so it can't be only the problem of a single player). Furthermore, if it was really their incompetence, why would they get LRT 3 again even after a change of government? And now as the project being a turnkey project, GKENT have more leeway in terms of managing cost to achieve more profits.

And also, just look at how the company utilize their incremental capital to augment their earnings over the past 10 years, it is almost unbelievable how efficient they are at utilizing new capital to increase earnings. It reflects management understands how much capital they need and how much they can give back to shareholders, not an act that you can easily find in BURSA companies.(Some companies just like to hoard profits and see their ROE rolling down a slope.)

After all, investing is not just about figuring moat, the price you paid is also a considerable factor. You can find a company with very good moat, but if you are paying 100 times more than intrinsic value, god knows how long you gonna wait to get the returns.

Well I do prefer the earning power route as oppose to the Low price to net current asset route that most cigar butt follower tend to adopt. And my 50 cents for the dollar analogy, where the dollar is derived from earning power as oppose to cold hard asset is different from the usual Graham follower. I must admit in the early months I was attracted to the Graham method but my thinking and temperament dictates earning power as a more sure fire way to evaluate true value of a company.

And indeed the 2018 GE panic did me a great help by making some excellent companies that are viewed as politically connected to get so low a price to the extent that the price reflected eternal decline in their business. Gkent is just such example. But from all the reports and the broader industry outlook over a longer time horizon, the reverse is true.

Anyway stockraider I have no intention of shaping my views on QL to your opinion. cigar butt investing is hardly going to work in the Malaysia market because even though the company has more net cash than market cap, u have to rely on the management goodwill to give that to you. It will work if you can buy your way to the board to decide your own payout, like Buffett did with Sanborn map in his partnership years. But as minority holder, you can dream about it.

And it’s a shame that I did not have a few million to sink in the stock market at year 2000(damn I was still at primary 6 studying math), when it was considered the nadir of the millennium stock market.

I do concur with your choice of GKENT(probably under the influence of confirmation bias) and the reasoning. I think it is one of the company with the highest return on incremental capital relative to price on BURSA.

Hi Philip, it was only today that I discovered there are indeed someone who are truly rational and intelligent in the local investing scene. I have been a user of this forum for the past 1 year and all I have seen are speculators.

I consider myself a greenhorn in the investing scene, starting only exactly 1 year ago, where i formed my own partnership with my family, so far the results have been average, about 14% return annually. I am admittedly in the Buffett-Munger camp in terms of investing philosophy, where I try to find the proverbial 50 cents(or less) for a dollar, the qualifying dollar being derived from earning power as oppose to hard assets.

Before I start putting my dollars into the market, I did some serious readings on the Buffett-Munger style of investment, some notable ones includes:

1. The legendary Securities Analysis 2nd edition(which I find the entertaining value to be on par with the philosophy value derived, B.G is such a good writer).
2. The intelligent investor(which the value lies in the margin of safety and Mr. Market concept)
3. Damn right! Behind the scenes with Charlie Munger
4. Poor Charlie's Almanack (his lollapalooza concept is absolutely wonderful, together with his mental model to understand the world)
5. Various partnership letters and later BRK letters from Buffett and Munger(which a heap of investing treasure trove are buried)
6. Michael Porter's treatise on competitive advantage(I find it good as a preliminary mental model, but not exactly practical)

and 30+ books on various industries and accounting(I'm trained as an engineer) which I find irreplaceable in understanding businesses. As well as business journals.

Wonder if you have any good reading materials to recommend to understand the various industries in the world?


Also, on your preference for QL Resources, I can definitely see the company quality in terms of management and the growing food industry, but I have trouble projecting such a high growth rate with such a long period into the future in my calculation of its intrinsic value to the extent I think the current valuation verge on a dangerous bet on a presumably bright future. The same could be said of Top Glove and Yinson, which I think the current valuation is just fair or slightly undervalued, but not exactly one to make a bundle. This is what I think of them as I also look at how these companies make use of their incremental capital(as oppose to old capital), which I deem a very important proxy for projecting future growth rates. Of course, I could be missing out in reading correctly their industry conditions but high growth rates for a prolonged period is an assumption that I can hardly make.

It reminds me of Buffett saying he could have made a small mistake by overpaying in the Kraft Heiz deal.

Anyway, please do not contrue the above as critisicm, I would love to learn your perspective on this as well.

We need more sell side research to downgrade this stock.

we need to stop posting good news here and make sure the price slide. Else we are just hurting ourselves for buying at high price.

the glorious 75 sen, i can only dream of it

I really do hope it will drop significantly tomorrow, been holding my buying orders for months.

@Patrick13 agreed on not chasing high. Let the market take its natural course. We shall observe and take advantage of the situation that arises. There are always people that have no clue on dissecting the statements and those who do will see what's behind the veil.

Of course, patience is key.

But why should we be concerned about this impairment? It is not indicative of the normal earning power of the company.

My thinking is that this will greatly reduce the financing cost for the company, but the structure of the JV with Qatar is somewhat complex for the average investor to comprehend, hence the lag in the price performance.

The chairman is writing from the standpoint of management of the company reporting to the shareholders, so it is absolutely correct he used "your company" in addressing GKENT, and it shows a more civilised and respective attitude, rather than some egocentric management writing "my company" in AR. Someone should be brushing up his/her language and comprehension skills.

Btw, this is a perfect example of inefficient market. And the funny thing is people let the price tell them how good the company is, instead of the other way round.

Some of your questions are pertinent, others are questions you should have known the answer before you buy, and some are related to accounting quirks that is obvious to any analyst worth his salt. Why should any management reveal their trade secrets in the public, truly I wonder. If everything has to be known completely, then a math professor is a better profession.

It is equally foolish to only look at PER and earnings and decide the stock is worth the price or not. PER doesn't tell you anything about the company. Earnings need to be manipulated base on the type of business to get a real owner earnings picture, and it has to be viewed from a history of earnings, not just a few years. Alot of investor just take earnings on face value without prodding what is the underlying picture.

Let the market make the mistakes, and us make the profits.

Such a young age, what is the cause? Hopefully the transition will be smooth.

It's been a long time since the 77 cents price and what a joy ride! Wonder who really still holding since sub 80 cents? Anyway, it is just appalling that everyone here is looking at the price and tell himself how good or bad the company is, as oppose to studying the company thoroughly. Perhaps it is just too demanding of their commitment.

It's good to ride among the manic depressives and take advantage of them without them knowing.

Can only say if you can't arrive at an intrinsic price yourself, you will have much more fun at Genting than the stock market.