Judging an elephant is not by touching its foot only. Assessing a value of a company is not by NTA only

To people who commented on RSawit : please be fair when writing something. We bought RSawit after Mr Koon and Mr. Dali recommendation on buying few years back. We made handsome return in a reasonably timeframe. Were you there at that time? Did you buy at that time? Did you sell after the price increased reasonably?

Mr Koon and Mr Dali had never forced you to buy, anyway. They were just writing with good intention telling people a good opportunity to earn money. He is not a God, cannot guarantee you a sure earning furthermore he does not owe you too.

Please be fair to others and yourself. Please contribute positive element to our community, if cannot so, at least do not throw in negative element.

Conspiracy Behind? Must be something wrong.

From the timing and isolated region (a street of Bangkok only at period of Q4), the political turmoil was not and could not be the key culprit of the 8 to 3 eps.

Business in big magnitude, consistent earnings for the last many years, very stable consumer products, healthy distribution channel, and still commanding high margin, no special one-off write off, so why eps dropped from 8 to 3 cents???

Think from the angle of a businessman, if your sale continues dropping significantly, first thing to do is reducing the very high margin to attract sales, am I right? Why Zhulian was not doing so?

They planned to have Q4’s eps at 3 cents ? For CIM -cw?

Very good points from you. It is very unfortunate that your points do not come couple weeks earlier. Since I have lost too much blood, I am now too weak to run but only able to crawl. Therefore it is very unfortunately that I am fated to see the sudden collapse of mountain to bury me. 惨不忍睹,有如 唐山大地震.

Keeping Info under thread FimaCorp:

再谈FIMACORP （衡量棕油园素质）- 闲谈股市，理财篇
http://klse.i3investor.com/blogs/kianweiaritcles/45125.jsp

再谈FIMACORP （PART 2）- 闲谈股市，理财篇
http://klse.i3investor.com/blogs/kianweiaritcles/45125.jsp

硬战fimacorp（印钞票+印政府文件+棕油业）- 闲谈股市，理财篇
http://klse.i3investor.com/blogs/kianweiaritcles/45125.jsp

Keeping Info under thread FimaCorp:

Posted by lmenwe > Jan 26, 2014 01:02 PM | Report Abuse
http://klse.i3investor.com/servlets/forum/600045451.jsp

My comment is the cash and profit margin is good and the business is monopoly (for printing). Of course this is a deeply discount counter and a rerating or privatization is justifiable. However it is lack of growth. It still can serve as a high yield defensive counter but for those seeking for huge capital gain forget about it. They are not utilizing their warchest to make acquisition for the last few years! Indonesia's land are so cheap! If the management are really ambitious they should acquire more than 100k ha of land up to date.

Keeping Info under thread FimaCorp:

Posted by Koon Yew Yin > Jan 26, 2014 09:15 AM | Report Abuse http://klse.i3investor.com/servlets/forum/600045451.jsp

If you look at Fimacorp 2010 annual report, you would see that my family owned 15 million shares when I bought them at Rm 2.20 and sold all after 18 months when it went above Rm 6.40 and made Rm 60 million. I am just joking.

As I said many a time, there are many stock selection criteria such as P/E ratio, NTA, price over book value, cash rich with millions in fix deposit etc. I consider the most vitally important criterion is good profit growth prospect. This is the key to my success in share investment because any share without this quality, its price will not go up. I will never buy any share if I am not sure that the company can make more and more profit in the next few years.

Fimacorp's EPS for 2008,2009, 2010, 2011, were 38 sen, 74sen, 79sen and 99sen. From 2011 its EPS has been reducing and it has no good profit growth prospect. That is why its share price has been flat since 2011 in spite of its huge Rm 225 million cash in fix deposit equivalent to about Rm 2.80 per share as shown in its account ending Sept 2013.

You must bear in mind that keeping too much cash is a bad sign. It simply means that the company cannot find new investment to make more money than the fix deposit rate of about 3% PA.

Fimacorp is a classic example to demonstrate my investment philosophy "Never buy any share if you are not sure it has good profit growth prospect"

Regarding gohchinlim's fear of market crush, I cannot tell if market will crash or not in the near future. This is an inherent risk in share investment. However, if you look at the price chart of JT even if the market crash, I believe it will drop relatively less than many other shares.

Keeping Info under thread FimaCorp:

Posted by kcchongnz > Jan 26, 2014 05:01 PM | Report Abuse

Is Fimacorp a good investment?

As usual, when I want to determine if a company is a good company, I look at its business and return of capitals, and cash flows. The two major income generators of Fimacorp are its manufacturing and printing of security papers (66%) and palm oil (33%). They appear to be good and durable business to last for some time.

The table below shows Fimacorp’s return of capitals for the last few years:
Year 2013 2012 2011 2010 2009 2008 2007 2006
ROE 12.5% 16.5% 20.9% 19.2% 23.3% 14.8% 13.8% 17.8%
ROIC 23.1% 32.5% 44.0% 31.4% 32.9% 16.5% 38.0% 34.9%

Return of equity has been all the time in double digit. Last two years ROE has retreated somewhat but it was still good. By the way, tell me which company with palm oil as a major earner has not got its profit and ROE reduced last two years? Some of them have even gone into losses. The lower ROE last year of 12.5% could also be because of its build up of excess cash in its balance sheet.

A better measure of its efficiency is hence ROIC, taking the whole firm into consideration. You can see ROIC is always very high, even up to 44% in 2011. Even the lower ROIC of last year of 23.1% is still well above the cost of capital of 10%-12%.

Yes the lower ROE and ROIC last year is because of the drop of profit. Again can you tell me which company, especially in the cyclical commodity business can grow its profit every year unabated?
Fimacorp’s cash flow from operations is above its net income on average. It always has free cash flow, averaging more than 20% of revenue. What else can you ask for?

After determining that Fimacorp is a good company due to its high return of capitals and good cash flows, the next thing I look into is if the price is good. You can’t make good return if you don’t know the value and simply pay exorbitant price for it as your return is determined by the price you pay.

At the close of RM6.40 last Friday on 24th January 2014, and with earnings of 72.4 sen in year ended March 2013, the PE ratio is 8.8, not expensive in my book, especially considering its high efficiencies. But as it has a lot of excess cash and also a substantial interest in an associate company, a better metric is enterprise value. It EV is just 3.7 times its ebit, or an earnings yield of 27%, fantastic.

So with this I would conclude that Fimacorp is a great company selling at bargain price. Do I need to consider its growth? I don’t think so, but if good growth comes, it will be extra bonus. But is Fimacorp really a no-growth company as opined by some people?

From the table below, one can see that Fimacorp’s revenue and net income has been growing at a CAGR of about 10% a year from 2006 to 2013. That is a reasonable high and sustainable growth rate. I don’t know much about its future but I do read about Fimacorp has quite a lot of land in Indonesia which has not planted yet. I thought I also read that they have been buying plantation land too. And according to the article in Chinese, its FFB production has been increasing. Its margins are also much higher than many other plantations.

So Fimacorp is definitely a good stock to invest in my opinion. But as I have already invested in Kumpulan Fima which holds 60% of Fimacorp, I do not want to put in money in Fimacorp again. By the way, Kumpulan Fima has a more diversified business and it is also more undervalued in term of EV.


Year 2013 2012 2011 2010 2009 2008 2007 2006
Revenue 305145 300174 298479 279110 223465 176788 157312 157190
Net income 61899 78917 84757 64570 59481 31372 27631 32208

Keeping Info under thread FimaCorp:

浅谈Fimacorp - 第一篇 - 糊涂http://klse.i3investor.com/blogs/kianweiaritcles/45304.jsp


浅谈Fimacorp - 第2篇 - 油棕业务 - 糊涂http://klse.i3investor.com/blogs/kianweiaritcles/45447.jsp

Hi KC Chong : Thank you very much.I need long time to digest and reproduce the numbers. The methods and numbers are more important to me.
Thank you, 预先祝贺你新春愉快, 球技进步.

Why the beloved CIMB drops ?
In my opinion, besides the depreciated Indo Rupiah, another potential risk is this one :纳吉进退失据 马哈迪再度逼宫
http://klse.i3investor.com/blogs/just4laugh/45452.jsp

兒子(14 岁):请用心读完。你写读后感，我回国请你喝星吧克，OK? 老爸

星洲网, 即時國際 http://news.sinchew.com.my/node/346148

調查：一句別管我,最傷父母心 2014-01-25

中國一項調查稱，老人家聽到兒女說“別管我”最傷心，“我很忙，沒有時間”、“你老了”、“別說了，沒用”分列第2、3、4位。
春節將近，家人團聚時刻即將到來，中國媒體《新文化報》針對長春市5家大規模養老院，進行老人心聲調查，得出上述結論。
68歲的魏姓受訪者表示，眼見女兒接近適婚年齡但仍“十劃沒有一撇”，總忍不住心急催促，但當孩子和她說“你別管我”時，心情如被刀割，“有時掛斷電話，偷著掉眼淚，覺得我這個當媽的不稱職”。
她也希望女兒能瞭解做媽媽的心情。
另外，調查顯示92%老人最喜歡的日子是春節和生日，因為子女會回到身邊，家人團聚；最討厭是兒女不在或清明節。
49%的老人最怕生病，有受訪者認為老人生病生活難自理。其次是擔憂經濟狀況，尤其是收入較低、退休金約人民幣千多元的老人都表示，儘量減少開支，不給子女增加負擔，但也希望子女能保障他們的生活。
（香港明報）

Tan KW : Ha ! we are asking the same question. While you asked Mr Koon, I asked Mr KC.
I doubt if Mr Koon can read Chinese, I guess he was english educated. Thks.

Hi KC Chong :
Two points attract my attention: (i) 还没有计算种植资产的Fimacorp最少就值 RM10了, (ii) 5%DY.

Since you have done detailed analysis on KFima, I believe you know FimaCorp well too. Would you mind to drop few lines on FimaCorp ?

浅谈Fimacorp - 第2篇 - 油棕业务 - 糊涂
http://klse.i3investor.com/blogs/kianweiaritcles/45447.jsp

Thank you very much.

无言乱语, 牛头不对马嘴. 只为稿费.

ppginvest : thanks for the very sensible thought. Assume it is true, then why people follow CIMB dumping Zhulian ?

In my opinion the below two sentences copied from NOTES TO THE INTERIM FINANCIAL REPORT(Q4) were the main reasons. Even I now lose confident on Zhulian.

i)“The decrease in revenue was mainly due to a FALL in the local market DEMAND.”
ii)“This was mainly due to DECREASE in overseas market DEMAND during the fourth quarter.”
Both sentences imply severe profit visibility going forward.
Thks

鑽石级最爱也出軌，叫我情何以堪。

最爱也有不美时。唉！

陳淑樺夢醒時分
http://www.1ting.com/player/b6/player_222276.html

Free Dinner: You are invited, hoped to attend but not obliged to attend

“With due respect, judging from your food and taste, you cannot be a good cook and you need to come to my house for a free dinner prepared by me and a senior well-known cook."

This was what exactly done by Mr KYY. I can read his good intention behind the lines, can’t you?

My actual result in local unit trust can contribute one data point to substantiate the above post by KC.

wwwcomment: you r not alone. My overall return from unit trust is easily more than double of those from my own investment in Bursa. Sometimes I also wonder If I should just sell all equities in Bursa and give all money to unit trust for higher return and no headache.

I do not do so is because I enjoy the process of investment in Bursa. A quote from WB:"investing is an exercise bringing you an excitement likes catching a fast moving elephant".

If I am mistaken, I have one closes to 20% per year for the last many years. Another 2-3 close to 15% per year, also for the last many years.

KC Chong : Ai yoh , you know lah, I was 發 to Holland loh. Worst still, the website disappeared after a year.
The initiate promise was 50% subscription fee for the subsequent year.

The program was originated from Australia.

Once upon a time, I was introduced a computer program which gives signals of buy or sell with different level of strength. The program demonstrated 500% or 1000% return. I was not somebody who can be cheated easily. I validated the program in many ways and cannot find any loophole, thus I paid about RM2K to 4K (cannot remember the exact figure) for the program.

I learned from National Geography that a group of wolfs has it's leader and a group of gorilla has it's leader too. How about a group of buaya ? N. Geography did not tell me. Anybody can tell me?

If China follows the "expectation/wants" of the developed countries who disguised behind the names of universal charity/human rights groups, China today is still in hard poor mud and labeled as "sick man of the east"東亞病夫。

What you talk/write reflects what you are. In my opinion, people made 600%, 1000%, 1300% , 1500% return is near status of God of Investment. People(if he exists) at that level will not boast.
周星驰在戏中说：“咁神奇？咁哂利？地球唔适合你。你快点返回火星吧啦！”

Houseofordos: umm! Invest in Bursa with money from EPF? This is a surprise. Will go KWSP's web to check. Thanks.
On KFima, sorry that I at last did not go in together. I used my fund on MKH as I think MKH will benefit from the anticipated uptrend on CPO more than KFima.

My 爽is more on the high return on those stocks which I studied a lot and invested for long time. Just like those young time, we spent lot of time in practice and finally won the champion in tournament.

I did recommend mutual fund too. But I personally do not invest in mutual fund with my free money. I invested significant amount in mutual fund with money from EPF. The return is higher than my own investment in Bursa.

One big reason I do not use own money in mutual fund is because there is no excitement. I enjoy the 爽/刺激感 excitement from Bursa.

My actual return is less than 10%, pulling down by the big lost in the early stupid years. I do not think my return can climb up to 10% in the foreseeable future,as every1% up requires many K. If I am still surviving, next bull should bring me the 10%.

So, pls do not "Play-Play", it costs you N years to recoup, or maybe you will never be able yo recoup the lost.

I think the title of “Warren Buffett of Malaysia” should be given to the person with return of 1000% - 1500%.

I doubt WB in Omaha will claim the same return. I also do not think Mr KYY from Meru will make the same claim.

Wow, 1000-1500% return, “you are the best, don’t you realize” as quoted by Stephen Chow in Shaolin Soccer.

Clarification : After shifting 20%, my investment in Mahsing is still very high, as I still deem Mahsing as a good stock to hold.

I can contribute 2 data points to KCChong’s Concord Fallacy which are AKN and Transmile. I lost till pant down.

Checklist #3. Were we wrong about the management or the deterioration of management decisions?

In my opinion, checklist #3 is the most critical one. If I have admitted this mistake or discovered the deteriorated management, the first and only thing is RUN. Else it will be like the example quoted by kcchongnz in post about “Sunk Cost/Concord Fallacy”( http://klse.i3investor.com/blogs/kianweiaritcles/44855.jsp), from RM4 to RM0.48 and then RM0.18. I can contribute 2 data points to KCChong’s Concord Fallacy which are AKN and Transmile. I lost till pant down.

The keys are : Can you admit this mistake ? Can you discover the deterioration of the management?

I have reduced 20% of my holding on Mahsing, shifted the fund to another property counter with higher dividend yield. I will continue for another 20-30% if prices are right as I love dividend more than self-pride.

http://klse.i3investor.com/blogs/kianweiaritcles/44860.jsp

Listed are 12 property counters with 3 rating only which are Buy, Trading Buy and Neutral. Our beloved Mahsing scores the lowest rating – Neutral. 你话死不死?

Talkking: welcome to the forum. Please scroll up , look for kcchongnz. Follow his posts and teaching. You can ask questions. He is very generous to teach fundamental of investing. Read the many good articles posted by Tan KW too. Happy learning.

Tan KW : Why my both losers cannot pass chklist #4: not buying today.

Notion : when I bought it, the biz of HDD was good. The contribution from camera segment was higher and higher each qtr. Thus I bought Notion. I am OK with the one off incidents such as flood, fire and currency lose. But I will definitely not buying Notion today due to the unattractive, if I do not describe it as dying, HDD.

JTiasa : I bought it during the high of CPO cycle. Today it is still very great if I follow the view of the highly respected Mr Koon YY. But, there are few doubts (uncertainties) surrounding the company, such as debt, CF and the PE. I am neither an expert nor rich man, so why should I buying a company which is relatively less certain. If I like CPO, I can choose KFima and MKH. Yes, both are not stocks with pure CPO but both will benefit from the up cycle of CPO too as JTiasa, while demonstrating a much clearer profit visibility and higher dividend yield than JT.

Every time I talk to you, I want to express my highest respect to your great contribution on great articles in I3. Thanks again.

Checklist #4: “If I didn’t own it, would I be buying it today?”
The answer is definitely: NO!

I have Evergreen too. Bought on 17 Aug 2010 at 1.57 and cut loss on 25 Feb 2011 at 1.37. Ha! Ha! I knew to cut loss too,

In fact, I am selective in holding losers; I am not really hopeless lah.(last night, in other thread I described myself stupid).

My losers are JTiasa, Notion. Nevertheless, my opportunity cost is significant as the few counters I bought in the last 12 months increased significantly such as GTronic and MKH.

Houseofordos : Ha ! Ha ! I have had many same experiences as yours. That’s why my wife gave me a nickname: “black star of the share market”股市衰星. After I sold, the price will go up. After I bought, the price will go down. The shares I hold will not move up. So if you need KFima to up, just ask me to sell lah. It is easy. This is “ming shui”命水。I cannot do anything about it.

Yes, holding on a “loser” is costly. But at least emotion is satisfied. Lesson learned is to be more careful in stock selection so that risk of getting “loser” again can be minimized. If I have more “loser” than winner in portfolio, I am a “loser” too.

I like this one from sunztzhe very much: “emotions get in the way to CLOUD decision making”. I opine this is one of the most reflective realities of the majority of investing community.
Thks.

There are many wrong matches in marriage especially in Chinese community. Both or at least one know that he/she had made wrong decision marrying her/him. But both just cannot decide to divorce and looking for another spring outside. The consequence is that “a complete family seeing from outside, the actual is suffering inside”.

Related point from 夜月:
决定的方法很简单，
公司价格高于公司价值，卖出
公司价值高于公司价格，买进或继续持有。

斤经济较：买股票是买公司的现在不是未来 - 夜月
http://klse.i3investor.com/blogs/kianweiaritcles/44847.jsp

wmliang : Thanks for the helpful info.

I have one: "Holding a Loser Until it Breaks Even".

In spite of agreeing with the author, I still can’t help myself holding on losers. It's easier said than done. If you are good, you go ahead to sell the losers. I am sorry that I enjoy being stupid. 无药可救了. 唉!
你呢 ?