Good dividend yield for shareholders with low entry price...total 7.1 sen for 2016

It's kind of fun reading some of the comments here at times...it may trigger some thought you may not have considered. As a minority shareholder, I am equally concern whenever there is RPT... In this case the vendor is a subsidiary director, not at Heveaboard Bhd. We have been reading about the 2 families at Hevea not in harmony and even lots of smear tactics to tarnish the image of some board members. Question..have they resolve their misunderstanding and now come to conclusion to "makan" bersama? If that is not the case, I would see there is always a check and balance being in place. How could then a obvious case of unfairness to the other shareholders including minority can happen as claimed by someone in i3 ? Just to offer another side of argument whether this is a funny transaction.

Thanks Ricky.

Could not believe its from Kenanga Research..how can a wholly owned subsidiary of Amcorp get listed? Isn't wholly owned mean 100% owned?

The company is now in such a strong financial position compared to many years ago. Obviously the early investors has reaped good profit as the share price has multiplied many folds.
Of course we are investing for the future, so will it grow stronger or now is already the peak of furniture industry and it will start to make U turn? Its a million dollar question!

Even when there is slowdown/challenges in the industry, are we assuming that management is not aware of it and do nothing about it? Nothing is static and company evolves when industry cycle changes. The track record shown by the management so far provides more confidence than fear to me.
I agree with the writer that Hevea is a gem, but could not agree on the part it is “broken” as there is nothing to indicate that. Hopefully, we shall review in 2 years from now.

Sometimes it takes lots of courage and patience to be contrarian. But then both sides strongly believe they are the one with second level thinking, hence, their decision and judgment are correct. Therefore, they make the buy or sell decision. It is time when there are extreme contradictory views that created the deep undervalue or overvalue situation. It is not this month or next month that will prove who has the right judgment. I personally think we should at least give 1 -2 years to review whether which view is right for the decision made today.

I will subscribe too.

Good sharing cpng.

Thanks for sharing. I felt so happy as a shareholder who could not attend the AGM but still get some update.

No worries Yistock. In fact, I enjoyed reading your blog and sharing. Keep up the good work!

Hi Yistock

Hope the below example helps

I have USD 1000 three months ago..exchange rate 4.39 . It was RM4390
Today exchange rate 4.00. it is at RM4000. I lost 1000 X RM0.39= RM390

Or using %..exchange fluctuation = 0.39/ 4.39 = 8.88%

My loss = RM4390 X 8.88% = RM390

Hi Yistock

I would say both method you compared should be the same...just that you have use rm17.999 mil.i believe it shud be translate to usd first using original exchange rare...then only use the usd multiply by 0.39.

Thanks for the update Faye. I am also expecting a better Q4 but it will be partially offset by lower FFB volume though average CPO price is better. Solid counter and if Q4 is higher, it will attract analysts' attention soon.

My view...IB will not cover bcos lack of liquidity. Mgt also not keen to get more coverage. Money placed with related company might as well return to shareholder for further investment instead of earning FD rate. Good business and operation well managed but not efficient financial resources utilisation...merely providing cheap "loan " to related company in the form of deposit

Good company indeed, the only negative I see is the biggest asset item - cash all placed with related company (non rated) while its parent company only with BBB+ rating. Wish that is placed with FI with stronger rating.

Intention to trade could be either way. Past trend tell us that mgt sell their esos shares rather than buying more fr market. But that doesnt mean profit no good..they may want to sell when good news are out. We will know soon.

not sure if fong siling has gone in much earlier as 2013 reports has more funds holding more than 1 mil share..hence his name may not appear even he was in already.

My guess based on what can be derived from 2014 annual report..Ng family bought back almost all shares placed out to funds in 2013 ( thats why they keep buying when fund was throwing at around $1.0,, - $1.10 in Mar).

What puzzle me was the purchase of sg buloh land..still got plenty of land bought way back in 90s not developed yet, why buy some more in 2014 where property market is soft? fund managers don't like it either. Only rationale is carey island and other existing land not in prime location, Sg buloh land (with Kwansa project in same area) may be more ready...but why now? I would hold till sg buloh project is launch and see what kind of contribution can be derived from it. All in all, still not a gem yet but I also dont think it will be a lemon..For me, by end of FY15 will be time for review whether continue to be on board or time to jump ship.

My guess:-

1) need to support price at some level close to private placement done last year ( may be some pressure to do so)
2) privatisation in the pipeline ( Hunza just announced)
3) carey island development plan get approval for better mix
4) hand some dividend coming ( not likely as i see company need to preserve cash for balance payment of sg buloh land purchase)

Let's wait and see

Hi Kcchongnz, I think the FA of Plenitude looks pretty good as a value stock. but what is your view on the recent departure of CEO within a span of abt a year with the company? Previous CFO left within 2 months....wonder its people issue or accounts issue.

Hi bsng....just to highlight yr calculation 50.7 - 19.4 shud b 31.3, not 21.3.

HI Pradeep, PB stands for price to book.

HI Ykloh, I agree with you if the bottom line doesn't increase. If that is the case, I will also dump this counter as the management is not doing justice to the fund raised. The rationale behind the fund to be raised is to increase capacity and upgrade machinery, it should hv +ve impact to bottom line.

Some peers comparison, TGuan's valuation still attractive.

PE / PB / Div yield
Daibochi 18.4 / 3.16 / 3.2
SLP 11.2 / 1.42 / 3.89
BP Plastic 12.8 / 0.84 / 5.58
Tomypak 10.5 / 1.36 / 5.88
Scientex** 11.6 / 2.1 / 5.72
TGuan 8.1 / 0.79 / 3.68


** Scientex has property biz, not so comparable.

I have commented on SLP's price fluctuation why it happened.
For MKH, really can't think of why it drops at this point.
My reading( morning up afternoon down or vice versa) leads to 2 possibilities,
1) someone who has "first hand" info trying to cash out before results next month - but I dont get it, it is expected to be good in view of +ve development in CPO price, rupiah, property sales.
2) someone need to accumulate more at lower price before results announcement, push it down first before it flies higher.

HI Pradeep, the opening price for ICULS should be close to the ex-right price of the mother share as it is convertible to mother share on 1 : 1 basis ( though only can convert after 2 years).

Warrant price will be below RM 1 unless mother share goes up a lot before ex and ex-right price is above 2.45, then warrant may be above RM1 also.

my guess...bonus issue or transfer to main board could be coming soon. Proposed to amend M&A, let's see when circular is received whether it is to increase authorised share capital.

bonus warrant will be issued to warrant holders and there will also be adjustment to warrant's exercise price.

Just to share :-

Most ICULS on BURSA are converted based on certain no of ICULS for certain no of mother share ( eg 1 for 1 or 1.5 for 1). In some cases, you can combine certain no of ICULS + cash for certain no of mother share ( eg 1 ICULS + 50 sen for 1 mother share).

In TGuan case, it is 1 ICULS for 1 mother share ( no additional cash outlay).

Extract from TGuan announcement:-

Conversion Price : The conversion price for the ICULS is RM1.00 for every one (1)
new TGIB Share

Conversion mode : By surrendering for the cancellation of the ICULS with an
aggregate nominal value equivalent to the Conversion Price.


Warrant can exercise anytime upon issuance but ICULS can only be converted from year 3 onwards. I thought this is well structured to avoid drastic dilution to EPS and allow company to grow profit to counter a larger share base later.

my guess: someone still accumulating, not enough volume yet. Let's see the chart pattern whether it tell us something.

http://w3.einvest.com.my/gcHDBS/download/20140228%20(Part%201%20of%202)%20&%20(Part%202%20of%202).pdf

MKH; BUY; RM3.87
Price target: RM5.40; MKH:MK
Exciting times ahead
1QFY14 results in line. Twin earnings boosters - Plantation and Property – to drive impressive 3-year earnings CAGR of 31%. High conviction pick; reiterate BUY with RM5.40 TP.

well, too high expectation of good results! Still, it has the highest profit in FY2013. with 8 sen tax exempt dividend. Prospect wise, Tguan is still on growth path..

Chinesetea, I share the same thought like you, because operationally it would have recorded eps 10 sen per share in Q1 just announced (on CPO ard 2400-2500) but distorted by forex loss.

Can see plantation is growing strongly with high GP margin and will continue to grow much faster than last year. when the forex stabilised or making a reversal, it will show the true calour.

noted and thanks, Pradeep. Taking a cautious view also.

sorry..ksl not considered hidden gem bcos already got many fund in there..just still not shining yet.

Yes, Pradeep. I saw that..Most property companies trade below their NTA, KSL has not revalued most of their land, that is the reason why it has very high GP and net profit margin. Mid size company with quite a number of funds appear in 30 largest shareholders..this is quite a hidden gem..I suppose the only set back..pay low dividend !

Pradeep, what news you have for KSL? Let's do it at KSL forum.

Dear fellow Mmode shareholders/potential shareholders,

My reading on its results : Mmode must have been too confident it will again get the pioneer status for tax exemption (where it has enjoyed in past years)..now it still didnt get it after waited for a year and has to make full year tax provision in Q4, shocked some shareholders to dump. Shall return to stability once the matter is made clearer,,just dont understand why the company never explain in its announcement.

Tony, well I have very few counters in my portfolio. MKH, Tguan, CBIP. KSL and Mmode. Mmode gave a -ve surprise lately, hopefully the other 4 will have all +ve to balance up.

Great sharing, Tony.

tonylim, how you get 3.50 valuation?

A quick comparison with Daibochi, FY13 results (4 quarters) 27.8 mil (eps 24.5 sen, div 15 sen), share price RM 4.(PE 16, div yield 3.75%)
Tguan results for 3 quarters= 21.8 mil (eps 20.8 sen, dividend ??), now at 2.44, I believe Tguan has more upside, especially if 4th qtr results is good

Pradeep, like to share my limited knowledge on this scenario:-

This case is not so straight forward as ICULS not convertible immediately and there is warrant.
Instead of putting an target price for ICULS & warrant, I assume all converted (ICULS & warrant) on day 1, it shud be 1.82.

Based on diluted basis on expected earning of 2013, PE will be ard 10 times. If earnings can be sustained(Q3 results), then forward PE ~8 times.

Again, its about the confidence you place with this company's mgt. My own judgement, past 10 years with dividend track record, done bonus issue before, first time doing cash call from shareholders in the last 15 years. I guess it is a quite "safe" to bet your money with them. i hope I am right cos i really bet on them..haha

I hope so,,better still if there is bonus issue to reward shareholders ( since they can easily do 2 for 1 Bonus issue)

check out this from chinese daily

http://biz.sinchew.com.my/node/89490?tid=6

ya..tat was in May 2012. In Nov 2012, it did rights issue. Tguan shud hv packaged some BI like u said..

tonylim, just FYI that is the same view I hold when MKH was doing its rights issue back in 2012. I still hold the warrants, no regret.

tonylim, my guess-
company has choice to do bonus issue( even 1 for 1 bonus) to increase capital and borrow more from bank, but then borrowing cost will be high and EPS dilution is immediate

instead, they do ICULS where share capital will be increased much later and at 5% rate, it shud be much lower than bank borrowings. (note say can save abt 220k interest pa) and earnings dilution will be much later and hopefully earnings can pick up due to expansion.

From the proposed utlisation of cash raised,abt 1/3 for repaying loan, 1/3 for asset purchase. i don't see why this is a bad news, only those who do not wish to come out with money or dont think company will continue to grow will cash out now. Again, like I said earlier, one can always sell the OR later n hold mother to continue to enjoy dividend.

Again, personal view ya.

Though that could be one possibility but I think it is a less likely scenario. One can always sell OR later without having to sell mother if don't want to come out with money.

Assume you have 4 shares of TGuan, you can get 2 ICULS for $1.00 each and 1 Free warrant.

ICULS - you get 5% pa interest paid twice a year. Van only convert to mother share after 1 year on 1 : 1 basis.

Warrant - can subscribe to mother share at exercise price $1.50 per share

With such sweetener, mother share should jump! After the rights issue, may come down a bit as there will be dilution to earnings when there is conversion of ICULS or warrant. However, if earnings pick up and counter the dilution effect, share price may continue to climb. This could be the case as the money is partly used for expansion/upgrade of machinery. My 2 cents.

This company is a hidden gem...need more patient to get more return.

Well, time to reward patient shareholders with steep discount in ICULS n warrants. Very attractive rights proposal. Hold on tight,this proposal together with expected good results announcement..I hope it will break 3.00 soon.

HI Nicky, its 2.26