@enning22 my comment was general in nature. I wasn't even addressing it to you. It's all good.

Santa Claus rally usually starts from Boxing Day until the first few trading days of the new year.

On Christmas Eve many would be merry-making from lunch onwards. Don't think they'll care too much about the market today.

I've been following GCB for close to 10 years now. Through the ups and downs.

But I have been skeptical for the past 2-3 years and I have been proven so wrong.

Max2838 is entitled to his view, and we are entitled to disagree.

Time will tell how the investment in Africa will pan out. I'm sure there will always be some administrative and operational hiccups, especially dealing with new regulations, people and culture.

But the focus should be on the demand/application. And demand remains and is expected to remain robust.

The logic is very simple too. If you expect the mother to increase, son will too. Even if there is no premium for WB, the % gain is much higher.

If GCB goes up 50c from 3.05 to 3.55 = 16.4% gain
If GCB-WB goes up 50c from 1.48 to 1.98 = 33.8% gain

I doubt many buy the mum just for its div yield of 1.3%. Which means the market is buying into the expected growth potential. The div yield is a bonus. Extra bonus if mgmt decides to increase div payout. Even then, the % gain is still much better from WB.

Disclaimer: This is a short term view, say maybe over 2-6 months. If you're taking a much longer term view then of course the mum is the best to buy into.

GCB will be huge. 4th largest cocoa processor globally. This is a BIG deal.

GCB-WB is a steal at current prices. How can a stable company with much expected growth have warrants that trade at such a low premium? And these are new warrants with a long window to expiry.

Once WB breaks 1.48, everyone will chase.

@Mabel, KNM was purely a case of insider buying and the rest followed. If there was no insider buying, the rebound would have been more gradual.

Nonetheless, I did say "But who knows, 30-30.5c could be the so-called psychological support."

As for Armada, I think it's ripe for some nibbling at 45-46c.

Sardin appears when the stock is up. LOL

The fact remains you continue to ask people to buy at high prices. Where were you yesterday when the price was 30.5-31.0c? Why weren't you aggressively asking people to buy?

It is clear this is an operated stock. Yes, market makers are needed in the stock market, else the market would never move.

Insiders buy, operators push further, retailers become FOMO and chase.

@Flyinghorse, ESOS exercise price is 11c. Meaning ESOS holders exercise and sell. If they're selling at say 31c, that's a 20c handsome profit.

Question is why are they exercising now and not when price was >40c?

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Posted by Flyinghorse > Dec 18, 2019 2:42 PM | Report Abuse

Tomorrow ESOS listing at 0.110? Massive selling? Will push KNM further down?

@Mabel, my two cents:

1. The rally from the lows of 7c was the turnaround story. From years of -ve to +ve earnings.

2. Follow through rally due to 2nd consecutive Q of +ve earnings

3. 3rd consecutive Q of earnings continue to be +ve but not showing earnings expansion ie below market expectations. Therefore sell.

4. Will continue to sell until those who wanna take profit are done selling. When will this end? Anyone's guess. 200-day SMA is 29c. But who knows, 30-30.5c could be the so-called psychological support.

5. Contract wins have been small. Cash cows hasn't translated to earnings expansion.

6. If many bought below 20c, then many are taking profits off the table. Especially now that the chart looks horrible. The more it falls the more people wanna secure profits and sell.

7. The TA guys will tell you that a falling share price on increasing volumes is never a good sign.

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Posted by Mabel > Dec 18, 2019 1:43 PM | Report Abuse

BTW

Does anyone knows what the lowest it can go this round?

Looks like it has dropped so much...

3 consecutive quarters profits
Lots of contracts wins
Lots of cash cow.

Still going down..

Surely Sharks also wants to make money. What's their motivation to bring the price down?

@EanWeeSoon, arguments are good. It's good to hear two sides of the story. It's good to question the logic and reasoning of others.

For eg, I do not deny that Borsig is a good asset on KNM's books. But having a good asset alone is no point. The asset has to deliver earnings. Even if Borsig is delivering, KNM as a whole isn't.

So it's good to question and debate. Nothing wrong with it if done respectfully.

To those who believed so much, if you bought at >40c, why are you not buying now? You should be buying more. right?

Why buy at >40c but afraid to buy at 31c? You should be doubling down.

The fact is no one has infinite amount of capital. I don't think anyone on this forum has super deep pockets. If you do, you wouldn't even be here.

That is why it's important to not get stuck. If you had bought at 45c, you're already close to -30% down. If you managed to lower your average to say 36c, and KNM recovers to your average price, chances are you'll exit once you hit breakeven. So all those capital and time wasted and you earn nothing.

But I guess you learn not to make the same mistakes again. Because the market always gives you another opportunity. All the time.

I own up to say I was wrong when I said the chart was bottoming out at 34-35c. I actually bought a bit but sold it off. I don't like to get stuck.

The chart has now broken down again. Next support 29c.

Even if you want to be an investor, one needs to know when to buy. Imagine buying at 45c. So average down all the way? Your capital will be stuck.

What happens if a Black Swan event happens tomorrow? Borsig to save the day?

Don't blindly follow people. Those of us here who have been against simply buying KNM are not haters. We were merely trying to caution against chasing.

This is now bordering on silly. This is pure hindsight, any clown can make a hindsight call. Apple would have gone bankrupt if Bill Gates didn't bail them out.

Don't let the ego blind you into thinking you know better.

You said you entered KNM at 7c. You are obviously sitting on lots of profits and it is in your interest to say positive things about KNM. Imagine how many people have bought into your story at 40c and above?

These guys are now >-20% down.

Did you top up or sold at >40c? Did you buy any at >40c?

---------------------------------------
Market is always wrong, there are so many examples in the history, just yesterday someone mentioned Apple... was Apple a bad company in the past? Apple was bleeding and close to bankruptcy.. Market shows apple shares are useless, but now what happened ?

So easily achieved that's why KNM has been bleeding for more than 10 years after they acquired Borsig. LOL!!! More jokes.

The dangers of wanting to be right. Mr Market is the only one who's always right.

I'll just wait for the dust to settle.

Guys, it's Xmas time. Europeans already on leave. Borsig being German, is also on leave. So KNM share price on leave also la.

LOL notice the tone of Sardin's comments changing.

Previously it was all about Borsig engineering and expertise. 100+ year old company etc. Give youtube link on Borsig etc. As long as you have Borsig, you will be king of the world. Jokes!

All of a sudden he wants to comment on earnings and margins? LOL

Don't talk about earnings la. Talk about Borsig. Don't need to generate earnings. Just have Borsig. People hear the name and they'll give KNM money.

We shall see next Q results. Finance costs also remains an issue to be addressed. Margins will not improve so easily. Been eating into profits since mgmt acquired Borsig for that huge premium back in 2008 (one can clearly see the goodwill of c.RM1.0b on the balance sheet). KNM took on lots of debt to acquire Borsig and been servicing the finance costs ever since.

If KNM has some non-core assets that they can dispose off, they should do that to pare down debts. Instant margin improvement while they wait for the turnaround to really come into fruition.

Haha, I think many here were hoping KNM would hit RM3 immediately after initially seeing RM3 being mentioned. Many bought because they think having such a great asset and expertise as Borsig would move share price up. Wrong!

KNM acquired Borsig in 2008. They've had Borsig for more than a decade. Assets/expertise don't drive share price. EARNINGS derived from such asset/expertise drives share price.

More EARNINGS improvement and more significant job wins needed to push share price. So yeah, RM3 can be achieved. But when? Only with significant and consistent improvement in QoQ earnings over the next few years. If KNM continue to report 3% net margins, share price won't go anywhere.

This is a value stock people. It will take time. The quick money was done from 7c to 47c. Again, without any significant improvement in earnings or large job wins, there won't be any catalyst to push share price higher.

In any case, chart looks like it has bottomed out today. Buying could kick in from tomorrow onwards.

MM78, holding it till 15c and allowing for your investment to be -80% is surely not the best use of capital. Unless you bought shit loads at below 20c to significantly lower your average, then maybe at current levels you're finally seeing some profit?

I'm sure even Buffett has a cut loss strategy and wouldn't allow his investment to fall that much.

Armada has not been a good counter. But it has been a good turnaround story. Timing is everything.

Haha chill guys. @spyking is right to point out that WB is indeed very dangerous to play. It's would be somewhat ok if say the exercise price is RM0.45. But ex price at RM1.00 and only 5 months left to expiry, playing the WB is really asking for trouble.

Why? Because if you were to use the option pricing on Bloomberg, I bet the WB is close to being worthless. It decays a lot faster when it's closer to expiry.

If you get it right, say bought today and next week mum flies to RM0.50, then most probably you'll make a good gain on the WB. But there is no catalyst for KNM at the moment, so if mum continues to be range bound, WB will slowly decay.

So if you wanna play WB, by all means play, but be mindful of what the risks are.

Playing the WB now and hoping for a goreng or for mum to spike is what's described as the "lottery effect". Look it up.

Sometimes, I play warrants. When risk/reward is favourable. Playing WB now is really asking for trouble. Ex price is 1.00. Expiry in April 2020. Now, unless you think KNM can rally strongly until April, then by all means dive in. And good luck to you.

Meanwhile, those wanna get on board for mum can take some at current levels. Chart looks decent.

Yes, both FA and TA need to be applied. You need to know why you're buying/selling and when to buy/sell.

Plantations have been rallying strongly. Only a matter of time for Dolphin? Should see an improvement in earnings in upcoming quarters too.

LOL keeping with the times. Every damn thing is PC

Agreed dam82, but it happens everywhere, regardless. Just a different colour and a different story, but pretty much the same effect.

Apples are apples, there's good and bad. We focus on the good.

Also, we should mention businesswomen, not men only.

Stop making it a race/religion issue la.

All race have capable businessman. Focus on the brilliance and capabilities, not on the religion or colour of their skin or the language they speak.

Focus on the positives, block out the negatives.

This is typical with "expensive" Msian stocks with high insti holding. Not many retailers can buy RM4 stock. So only the big boys play.

If foreign funds don't come in to push, the expensive stocks can't jalan. But FF has been selling, hence KLCI continue to trend lower.

The only ones moving on Bursa are penny stocks cos everyone can play.

This is the sad sad state of our local market.

To summarise:

1) You bought your great big nice house for RM2m. You spend lots of money for renovations over the years. After 10 years, your house is valued at RM2.1m. After 20 years, your house is RM7.0m. But this is property and when owning a property one must have a long term view.

2) Sardin and his followers are VALUE investors. They see VALUE in KNM and are willing to wait for the earnings/margin expansion. When will this expansion happen, only time will tell. Maybe next quarter, maybe in 2 years. The q-o-q performance will be the indicator.

3) Share price moved up to 0.47 due to market expectation of strong results. But the the results have disappointed. Mr Market is always right, and therefore current price is a reflection of what Mr Market thinks KNM should be (I would like to speculate the sell down from 0.45 to 0.36, timing wise, was over a few days before results announcement, nothing to do with Shariah. Insiders probably knew about the lower-than-expected results).

4) Don't be too concerned with PE. If earnings are expected to increase (higher PE justified), market will buy. If earnings are below expectations (lower PE justified), market will sell. PE is just one really old indicator. So many other valuation multiples out there. If next quarter KNM reports a net profit of say RM50m, then at current price, KNM is "cheap". If KNM report RM5m, then at current price, it is "expensive".

5) KNM must address its high finance costs. >50% of EBIT is finance costs. Balance sheet is highly levered. This is still a concern as finance costs eats into margins, hence the low margins.

6) Finally, are you a long term value investor like Sardin and his followers or are you a trader? No right or wrong, the main objective is to make money.

At current price, KNM trades at an annualised FY19 PE of 18.7x. Expensive or cheap, open to interpretation (what are the local and global peers trading at?) Could trade higher, but earnings so far (in my opinion) is below market expectations.

Uptrend to continue only with bigger contract wins (so far all small wins) AND
1) earnings expansion, which then leads to
2) net margin expansion (currently averaging around 2.4%, which is super low margin compared to its heyday when net margins were averaging around 15%).

Earnings is recovering gradually. Further contribution is expected from WTE biz etc, but EARNINGS EXPANSION is a MUST. The Co needs to report much stronger earnings in the next quarter. It all boils down to earnings, the single strongest driver of share price, both to the upside and the downside.

May I please know what happened to KNM's share price?

I was under the impression that by having Borsig, the share price will be pushed all the way up to RM3?

I was made to understand that having world class engineering expertise alone would push share price up?

Would the strong supporters here continue buying all the way down, taking into account that the uptrend appears to be broken?

DGB-WA strike is 0.12. Expires in June 2021.

Should be ok to play small. Don't need to to take a lot.

LOL so many trying too hard to promote this conman Company.

This company is bleeding cash. Check out the latest quarterly results. And previous results too.

Trade the son, long the mum.

The son expires in April and has a strike of RM1.00. Time decay (theta) in play.

So whoever said son has to trade above 0.20 for mum to move is talking absolute cock.

Animoca Brands develops and publishes great mobile games based on globally loved popular brands like Garfield, Ben10, Doraemon, Ultraman and Astro Boy.

In addition to being listed on Nasdaq, also listed on ASX and Germany's XETRA.

iCandy has a strong backer.

eGames and eSports is big business.

iCandy listed on ASX and looking to list on Canadian stock exchange. Has some well known games.

Substantial shareholder Animoca Brands listed on Nasdaq owns c.9% of iCandy.

WTF did I just read???

Yo Will76, lay off whatever it is you're smoking man.

I think one thing needs to be clear: Pos has to do national service at pricing that is not profitable. Competitors don't have to. Competitors aren't interested.

So tariff increase is for national service.

If KNM's management can sell the earnings story to insti guys, then KNM share price will skyrocket.

Market is still skeptical if KNM can sustain its earnings. Finance costs remain high and has been a huge earnings drag for many many years.

It's all about the earnings growth.

But the main difference between Serba and Dialog is that they are highly profitable compared to KNM. Dialog has strong recurring income and Serba continuously reports strong earnings and announces big contract wins, over the past 2-3 years.

So Sardin, you can continue with your story-telling but the fact of the matter, which I've been saying since day 1 is this, KNM's earnings must improve. The numbers have to match your story, else no point telling stories.

You talk about reinvesting profit back into the company. Let's assume you're referring to Capex. This is good but ultimately the company has to report earnings from whatever capex or reinvestment plans the Co has undertaken.

Unless and until KNM's earnings improve consistently QoQ and contract wins continue, share price is not gonna go anywhere.

So Sardin, I think you need to change your story to talk about earnings. Earnings growth drives share price performance, not assets.

Btw, Maybank upgraded Alam to RM0.18.

Not a buy call, just FYI for those not aware.

@sony, interest costs have been dragging the Co down since 2008, among other things.

Earnings. Earnings expansion drive share price and share price momentum can only be sustained if earnings improve QoQ.

Finance costs still sucking the Co dry.

Not brewing...already brewed.

Should be positive given the cabinet announcement on the fiberisation plan.

BINACOM
OCK
OPCOM

Anything else?

Wow, buyers came in earlier than expected.

Broken all support levels with relatively low vols. No buyers at all.

RM0.82 - 0.85 entry.

Trade war suppressing oil prices. Brent needs to trade above $65, I reckon.

Disclaimer: I do not hold any Hibiscus shares.

But I think its cheap. Low PE, earnings expansion, clean balance sheet, net cash. Fundamentally strong. Don't be fooled by headline numbers from the quarter results. The numbers are a lot better YoY.

So I agree with @mneo, purely down to oil price which is a function of future oil demand which is a function of the trade war. Share price is lousy right now purely down to sentiment. Once sentiment improves, everyone gonna start rushing in again.

Also agree with comments on EVs, but fossil fuel will still be needed. Still a long way before oil dies.

Everyone's a keyboard warrior here, myself included.

rr88 probably just loves to troll, so if you get affected by it then he got under your skin.....lol

LOL guys, gotta look at the numbers in detail. Have you even studied the results?

Don't just see low EPS and jump. Jokers.

The reasoning and strategy behind the RPT looks good on paper. Perhaps in time, it'll turn out to be a shrewd call.

But let's call a spade a spade. It's a bailout, plain and simple.

@Agjl, I share your concerns. Mr Market feels the same way hence the share price plunge.

Considering you're in the money, might as well take the profit and look for other div counters. There are lots out there with better yields.

Market is not gonna go anywhere. Good to have some cash in hand.

For those who didn't see the announcement:

https://www.theedgemarkets.com/article/hibiscus-completes-threewell-st-joseph-infill-drilling-campaign