I think you guys have to stop looking at the price if it makes your pulse beat a little faster. Just looking at the price is anything but investing.

It’s funny that you let others tell you how much you are worth according to the price. You need to have a price of your own.

Why worry about the price? If you are a net buyer of this stock, you should hope that the price go way down while the business goes up. If the price goes up and you want to buy, won’t you have to fork out more to buy the same number of shares?

https://www.theedgemarkets.com/article/myeg-overseas-ops-are-expected-be-profitable-year

Let's not speculate on the intention of this transaction. It only affects the short term price movement. Does it affect the underlying business of MYEG? I don't think selling and buying shares between shareholders affect the business in any way.

It's better to think about the business rather than waste your time speculating about who is selling to who.

About the statement from MP that they are studying the impact of monopoly of MYEG, what can the gov do if after studying it they concluded MYEG really monopolyzed the industry? and how do they even define "the industry"? If you define the industry very narrowly, every single company is a monopoly. It is very subjective.

As TS Wong said it during AGM, what MYEG does, almost every capable group can replicate, after all, the NAV of MYEG is so little compared to its market cap, so by this thought, one need to invest only very little capital to reap so high a market cap, but why no one has done that for over 10+ years? some may say he got contracts from gov through unscrupulous means, by having connections to the government officials. If that is true as well, why other competitors can't curry the same favor and get the contracts? Furthermore he is Chinese rather than bumiputera.

I could be wrong.. Afterall, I bought when the shares tanked to 77cents and everyone is telling me I'm wrong...

Well, they were overly optimistic before election and overly pessimistic after election. In any case, both prices incorporated some unrealistic expectations of the business.

The management still carried on business as usual, nothing much really changed in the underlying business, only the sentiment of the manic depressive investors.

I doubt it will reach as high before election, because I would have to make some very optimistic assumptions to justify that kind of price, but the current valuation really just threw away some segments of the business for free.

It's so good to have extreme volatility.

https://www.freemalaysiatoday.com/category/nation/2019/04/03/apology-to-mrcb-george-kent-sdn-bhd-2/

Interesting article

Let the naysayers do the work. We would like to buy cheap as oppose to expensive. Those who did their extensive homework know how the capital is employed in the company.

Well the price actually went up over the recent 2 weeks only and people are whining? That's just deluded thinking. I mean your salary don't go up everyday, isn't it?

Look at the business not the price.

Well valuation has to come from demonstrated results and prospects comes from track records in construction companies.

If one is to wait till all projects are clinched and signed, then it is the time to sell not buy because the price will have already reflected the prospects.

Indeed unbiased thinking is one of the essentials in thinking through the decision, but one must also know what is the business worth(it doesn't have to be exact).

Everyone is saying GKENT is left with water meter business only(highly unlikely), and the company will languish down to 10 - 20 cents. But what is the true business valuation of the meter business? nobody attempts to find out, they just pluck some convenient numbers and paste it in their head.

It is common practice among project based companies to have good rapport with the customers, it is just one of the ways to market yourself, and people start to politicized the relationship.

Incidentally, this forum is exactly the wrong place to be learning investing. Too much noise and too little wisdom.

SHQuah there always will have naysayers. Let's not sound the bell for it will make our returns less because we will have to buy at a higher price.

lilu, finally a kindred spirit! It is a lonely world(intellectually), finding discrepancies between value and price. Most people here are just price hawk, they are not bothered with the company performance.

Have you tried to compute the incremental return on capital of this company over say 8 years? Of the few hundreds companies I surveyed, this company can be ranked as the select few in the high double digit group.

Seems like my advantage is getting smaller with ever rising price. Assumptions are bearing out

Personally I don’t think they will sell back the shares, and basically my thinking is SBB is an indirect form of paying share dividend for the staying shareholder because our percentage ownership increased without us paying anything.

Sorry I am not obliged to disclose my positions. You need to think for yourself and not rely on others on decision making.

Just a word of advice, if you judge how good a company base on the share price, essentially you are telling yourself the market know more about the company than you, in which case you should not be in the market because how can you win against someone more knowledgeable than you? I hope the investors here do not forget this simple rule.

Amzar I’m afraid I can’t tell you too much. You will have to interpret your own. Go read up on business valuation then you will know what I mean. Time will tell if the company is heavy weight or just effervescence.

I think the license always has the option to extend beyond expiry, and in terms of capability, MYEG track record is one their competitive strength, coupled with economies of scale. If one argues that this is a low barrier industry, where the threat of entry is high, then why has MYEG took the lead for more than 15 years, I can only say part of the reason is the lackdaisical attitude of other competitors and part of it is the whole package of MYEG.

I mean the success of a company depends on the whole business process, how it integrates their resources with the needs of the customers, its not that easily copied. You can copy one step, two step of their process, but you can never replicate the whole package. Take for example the MyCC case, if it is so easy to implement what MYEG has done that got itself into this dispute, why hasn't other done it?

If MYeg can offer the government the best service it can get at the lowest cost, there is no reason why the government will not want to renew the license.

and to answer derrtan on the 20% business from government related, MYeg has alot of other business such as auto financing, auto insurance renewal, FW insurance, card payment device, etc. You should read up closely the report what subsidiaries the company has.

As for fellysia, have you ever heard of non-profitable growth? Where company keep on growing their earnings, but consume 2 dollar of capital to increase earnings by 50 cents only. Yes the company earning grows, but their shareholder become poorer. Sounds paradoxical but its true for some company.

To me, assuming MYEG maintain their current earnings(taking into account inflation) till kingdom come, it is still way below the appropriate level.

Seems like the litigation has been overthrown according to the report

Fixed price or not, it will go under the track records of GKENT, and this will add towards the competitive strength of the company going forward. You can't believe the efficiency of the management in using the company's capital if you really go in and investigate their financials for the past 8 years. The people here look at the price like a hawk but never at the company itself, funny.

Well you all know this is exactly the wrong place to get advice on stock buying or selling, so why pay attention to anything said here? Do your own homework and think for yourself.

I think most trader will only buy this counter when the mall open or someone participate in the mall stake, because the news would be all over the place, but till then the price most probably reflected the potential.

Admittedly the impact is short term. If they can replicate their business model abroad, it will be a big plus.

The big bath accounting that the company took this FY is gonna have a big impact in the future. Coupled with the SBB, those who knows what this means will act accordingly.

It doesn’t matter the government need to care about us or not, in any way we have to figure out ourselves how to profit. All these are circumstances to be overcame, because everybody is facing the same issue, not only us. All these politics issues are just like a good story, A good entertaining read.

We always complain on the current ministers but what’s the alternative? No ministers at all? Put back former ministers? I sure hope the investors here are not so backward minded.

The important point is to prepare ourselves so as to be able to face all these turmoils with equanimity, else we shall all succumb to the manic stock market sentiment and lose our clear headedness.

And seriously is this a forum where people come here to know whether to buy or sell? It’s just absurd.

Actually, if one really wants to know the whole story, we should start by knowing to whom does the government owe its debt. All these talk about Malaysian debt is not accurate, it should state "Government debt". Last I check, about 70% of debt is owed to the rakyat. In other words, it is highly unlikely that the rakyat will so enforce their claims as to make the government defunct. It was simply right pocket owed left pocket money, although we have to contend the distribution of the debt is not equal within the country, as only institution have the power to purchase large amount of debt.

And the Tabung Harapan is a funny concept to be had, because it is akin to debtor asking creditor to strike off some of the debt in the name of patriotism. Try persuade your bank whom you owe money whether you can setup a tabung for them to put their money in for you to repay your debt to them.

The wealth is still within malaysian and not being channeled out, albeit the majority of debt is held by people of power. Actually, it would be beneficial for the government to take on debt to finance the country growth because that is what the government is supposed to do right now as Malaysia capital markets are not that developed to facilitate large amounts of private financing.

US actually resorted to trade deficit to fund their rail network construction in the mid 1900s, while we complain about budget deficit. Trade deficit makes a country poorer because they have to produce more to pay interest to OTHER COUNTRIES. While with budget deficit, all the wealth are contained within the country, but the holder of debt is its citizens, so there was no flow wealth outside Malaysia.

It seems to me most Malaysian in the stock market are news trader. They invest base on perceived news, but never see the company as it is. Everyone looks at the price like a hawk, but never at the company, what a funny way to invest. I think Malton has a special moat in that it has prime location, past experience, share of mind(Pavilion), and good leadership. Real estate companies are not like manufacturing companies where the asset values are basically a tiny bit of the reported figures. These assets are indeed very real and holds its value well. The property market may be undergoing a glut, but that is a temporary macro view. If a product is well built and liked by majority of buyers, it will have its fair share of customers. I have seen examples of good property developer doing intensive development during industry downturn so that when the industry reverts, their products are ready for customer at the right time because property development have a long lead time. There is a saying:

What the fool does in the end, the wise man does in the beginning

It can't better describe the property industry.

9mil is comparatively insignificant for MYEG, even with the daily penalty. But the case does illuminate that MYEG, even with only 20% revenue coming from the government, it is a dominant player in the field . I would prefer this situation than with a struggling company who MyCC is not interested to meddle with.

The same is true as everyday looking at the price and this forum. As investor I think we should not look so closely at the price. If your judgement is sound, just relax and feel happy that everyday the company is adding value for us, and not fret over the vagaries of the price.

Clearly the government is playing coy with CCCC by releasing some fake news to make CCCC make more concession. Hope the government can get more concession to have more local content in the project. Anyway, the company has 4-5B order book, and judging from the historical margins, the profits is more or less the same as the market cap. That means we are getting all the properties and management and cash for free. It's a really no brainer here. Just sit tight and ride it out. Vietnam is also starting their rail project, we could see some development there.

But this goes to show MYEG has such a dominant position. You don't see many other companies fined for having such strong position.

Munger once said his investing strategy is akin to "sit on your ass" investing. Indeed one had to do the legworks and have the right temperatement for this strategy to work, else they won't be able to sit alone in a room and think and left the room rather hurriedly when they hear some bad news.

I’m quite sure Gkent is able to contribute to Ecrl as all rail needs system specialist and gkent is the only local proxy for that, while boasting partnership with renown European companies such as Siemens and Alstom.

Conventional view is that competitors are always bad. But we need to assess whether the competitor is credible as a threat or not. And there are also good competitors that actually help other firms to strengthen their position by occupying market share and raising entry barrier so other bad competitors don’t come in. I can see MYEG and other competitors occupy different segments of the industry and don’t necessarily compete head to head. And MYEG has been constantly investing abroad as a market leader and not competing for more market share locally, I think this is a good development for us because it will be relatively stable and profitable industry.

Jaya thanks for clarifying. Sounds like it’s a good scheme for the market for gkent. But personally I would rather have full control of my shares. 4% is nothing compared to the potential gains.

Overall i dont think lending stock is a good situation for us because they are likely to be shorting the stocks they borrow. If they are going for long position, they would just buy on the open market.
We will have to scrutinise the agreement to consider if this is good. Note a very dangerous condition when lending your stocks: When a security is loaned, the title and the ownership are also transferred to the borrower.

https://asia.nikkei.com/Economy/Vietnam-revives-58bn-high-speed-rail-project-despite-cost-hurdle

Vietnam is reopening their rail project, perhaps gkent can contribute in terms of rail system integration as it is a specialist in this field

I digress, Intelligent Investor is still the best book in my opinion, margin of safety is the cornerstone of my investing method. Of course you can get more out of it if you also read Security Analysis. Instructive yet entertaining. Graham had a very artful way of conveying an idea to you. I hope all will get to be better investor. BURSA is too inefficient at the current state!

And personally I think investor's focus on reported earnings could potentially affect adversely on their decision making. Owner earnings is a better concept and should be adopted widely. Of course one needs to know the meanings of the figures he uses to calcuate owner earnings, lest he come out with an even more erroneous earnings picture.

I have not critically evaluated QL but judging roughly from the 10 years financials it seems to be an average company, although it could have a slight chance of growing faster than previously. Assuming that the company can grow in real terms faster than inflation + long term gov yield, I have trouble assuming such a long growth period in my calculations. Yes, the company is good, it sells things that consumer will always need and recurrent(something Buffett would like), but the risk as Buffett said: the final risk is the risk of inadequate return over time, euphemism for you paid too much. Some might argue: have a longer time horizon, let the company compound. Even Munger has said eventually, over a very long period, ROE is the return investors ultimately get. But the caveat is you must be sure this is the best return you are going to get over that period, if not your opportunity cost would outweight your gain. And this is the point, where I believe the divergence of ideas begins in this forum. Each person opportunity cost is different, that is why QL could be good to some but inferior to others. For an investor who did not encounter better opportunities than QL, ipso facto QL is the best; while others will pursue better opportunities. The only way to get better returns is to widen your universe, as Buffett once comment on how to start finding good companies: start from A and work to Z.

Why is this kf911 copying my post?

We can see from this flurry of events that Malaysia as a developing country cannot escape having more construction projects in the future. The government debt of 1 trillion should not be confused with national debt. Most of the debt( about 70% I think though I’m not entirely sure)are owed to the rakyat of Malaysia, so it will be just a change of hands. If the money is repaid to the rakyat, we could see a shift in the construction industry where infrastructure are privately financed, then we can anticipate some real impetus in construction spending.

Well people always judge stocks by the sectors. Construction sector recently took a beating because of delays, not cancellations. People tend to substitute words in forming perception. And also, money earned by construction is the same as money earned from other sectors, it is just how fast and sustainable of the earnings. Sooner or later the market will recognize that.

We should applaud the media who exaggerate those delayed projects, for we can take advantage of those who look only on the surface.

Sometimes people associate future of industry with the company, which could be a fallacy. This company would need to achieve some heroic results to justify current price.

Interesting that the company moved closer to MRT Corp..

The business is treading along pretty well. Next year results will probably be better due to more water meter orders from Singapore and lrt 3 resumption, so currently the results from associate company is probably due from MRT 2 project, which Gkent holds a 49% equity interest. And the good thing about this contract is the company can gain recurring income as it also covers maintenance works. So we can see the development of the stock market deviated so much from the business itself.

Don’t let the market dominate your thinking.

Actually I have a hypothesis that the company is delaying the QR just so it can scoop up the shares cheap. And the way the company buyback shares is considered shrewd because it doesn’t disturb the share price. If the company really buyback in few millions shares at a time, it may push up prices and made it more expensive to buyback. Buyback shares is good for the staying shareholders because it increase our ownership without us forking out our money.