Investors should expect MBMR to post better 1Q19 result vs 1Q18 (to be out end of May) mainly due to the good performance of Perodua during the first quarter. In March, Perodua managed to sell 23,300 cars to bring the total 1Q19 sales to 60,673 cars which is 9.2% higher compared to 1Q18 sales. Perodua’s 1Q19 sales was even higher than 4Q18 which is really encouraging given that 1Q of every financial year are normally the slowest quarter in term of car sales for the industry.

This year’s profit contribution to Perodua will also indirectly come from Toyota sales given that Perodua is actually producing (and selling back to Toyota) the engine used for Vios and the whole of Toyota Rush (which is actually a more expensive version of Perodua Aruz). For 1Q19 Toyota managed to record a sale of 13,723 units of which more than 70% is actually coming from the Vios model which is great for Perodua. The other 2 main models sold are Hilux and Rush (again this is good for Perodua).

However, there is still improvement to be made for Perodua especially in the sales of the new SUV Aruz. Perodua managed to sell 4,200 units of Aruz in the 1Q19 but investors can expect the sales of the SUV to increase rapidly from the 2Q onward given the healthy bookings that it received (more than 14,000 as of March).

All these will directly benefit MBMR’s bottom line for FY 19.

With MBMR trading at only 7x trailing PE and 6.2x forward PE, it is still the cheapest automotive company in Bursa. The average PE for the automotive industry is around 15x. As a comparison, UMW (another company with direct exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Regards.

Morning guys,

Just some update on Perodua and indirectly MBMR.

https://www.thestar.com.my/business/business-news/2019/04/19/yaris-makes-a-comeback/

Even though Yaris is a Toyota brand, investors need to understand that the model is actually using the 1.5L NR engine which is actually the same engine that is currently being used in the new Vios, new Rush, Perodua Aruz and the new Myvi. The engine is being produce by Perodua. Basically, Toyota is buying engines from Perodua and assemble it at the new plant in Bukit Raja for the Yaris model.

With Yaris having a sales target of 75,000 units in 2019 this would indirectly contribute to Perodua's bottom line. Indirectly, this will also help push MBMR profit as well.

At the current price, MBMR is still the cheapest automotive company in Bursa with PE of only 7x vs the industry average of around 15x PE. For me this does not make much sense given the company direct exposure to Perodua who is the market leader in Malaysia (normally that would carry a premium vs the industry average).

I am expecting MBMR to achieve a profit of RM200mil in FY19. But even if the profit was only RM185mil, MBMR would still be only trading at a mere 6.2x PE. As a comparison, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Regards.

Not sure why the share price went up substantially from only 13 sens to more than 20 sens (even reaching 30 sens before paring most of the gain) last week. There was no corporate development announced since the run up of its share price.

In essence, the company reported negative earnings for FY18 with revenue falling more than 50% compared to FY17. In 2018 most of its business segments except for Fintech recorded losses. Investors need to wait for the 1Q19 result to see if the company managed to turnaround the IoT and Greentech businesses. The average quarterly revenue for 2Q18 to 4Q18 was only RM2.2mil vs FY17 average quarterly revenue of RM6.4mil during the same period. If the low revenue persists in FY19, investors need to be prepared for the company to record another year of losses in 2019.

If you are looking to hedge your portfolio outside of Sedania (due to its weak earnings outlook), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 7.0x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.8x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

Not sure why the share price went up substantially from only 12 sen to more than 30 sens at the end of March. The only thing that I can see that might be the reason for the sudden price increase is the appointment of Mirzan Mahathir (Tun M’s son) as one of its independent directors (he has no direct or indirect exposure in the company). Investors might be hoping for some contract awards to the company which is just speculative in nature at the moment.

Looking at the company’s fundamental, it has been recording losses to its shareholders since FY14. FY19 looks more likely to end in the red as well.

However, what is more worrying is its weak balance sheet. As of Dec 18, the company only has RM20k in cash and an immediate debt obligation of more than RM16mil. Current liabilities of RM45.4mil are a lot higher than the current assets of only RM22.9mil. The company would most probably need to raised more capital soon to help strengthen its balance sheet.

If you are looking to hedge your portfolio outside of Gets Global (due to its weak earnings outlook and liquidity issues), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 7.0x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.8x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

Hi Joyce,

In terms of valuation this company is actually not that expensive. Most analyst has a target profit of around RM60mil for FY19 which means the company is currently being valued at only 6.5x PE.

However, you need to take note that the company could potentially face some liquidity issues in the future. Based on 4Q18 report, it currently has a cash balance of around RM35mil but RM22mil is pledge to the bank which leaves them with only RM13mil for working capital. This might not be enough which is why the company had decided to take in more debt in FY18 to fund their working capital. Debt has increased RM130mil in FY17 to RM275mil as of Dec 18 with most of the new debt in the form of short term debts.

Another thing to take note is management indication of the company reluctance to participate in any future ECRL contracts even if the government decides to revive the project later. This is mainly due to the very thin margins of the contracts for the projects (which is logical given the government target to cut the cost to almost half from RM66bil to around RM35bil).

If you are really interested in the company, i would suggest you to maybe wait for the 1Q19 result at least to see if the cash reserves of the company has improve. If they failed to do so, management might be forced to take in more debt which will result in lower profit in the future due to higher interest payment ( the new debts taken in FY18 mostly carries higher interest rates). Or worst they might be forced to make a capital call exercise.

Regards.

Widad is a company that specialises in construction and integrated facilities management (“IFM”) services. Even though constructions accounts for more than 65% of the group’s revenue, the main contributor to the group’s profit is actually the IFM business (around 60% of operational profit). The 2 biggest contracts for their IFM division are the Istana Negara and Johor Baru Sentral contracts of which the latter had actually expire last month. Istana Negara contract is up to 2022. With the construction industry still facing intense challenges, IFM division will provide investors with consistent profit at least until the construction industry rebound back (government start to focus back on infrastructure projects).

That being said, Widad is actually trading at a lofty valuation of 31x PE. Even if you project a profit of RM25mil in 2019, at the current share price, the company would already be valued at 25x forward PE.
Given the government cost savings initiatives/ drives, I don’t think the lucrative contracts that Widad won during the previous administration will repeat itself under PH government. Widad need to show that they are able to win similar contracts from the private sectors for it to be valued at a PE of above 20x (more recurring and will not face the risk of any government policy changes in the future).

If you are looking to hedge your portfolio outside of Widad (due to its relatively high valuation), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.7x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.6x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

If you managed to look past all the corporate exercises, you will see that Advance Synergy is still a company that has under delivered in terms of profit to its shareholders. FY18 marks the 7th consecutive years of losses made by the company. Excluding the RM5.2mil gain on disposal of subsidiary and the RM6.1mil fair value gain on venture investment portfolio, the company net losses to shareholders would have been more than -RM10mil. With the still challenging operating environment in FY19 (mainly the hotel, tourism and IT industries), investors need to prepared for another loss making year in FY19.

If you are looking to hedge your portfolio outside of Advance Synergy (due to its weak earnings outlook), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.7x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.6x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

Hi cchin,

Normally just before 1Q19 announcement. So end May. Last year it was on 24th May 18.

Regards.

The company highest profit was achieved back in 2016 when it recorded a bottom line of RM4.4mil. Since then, the company had failed to deliver any substantial profit to its shareholders. In FY 18 the company only managed to record a small profit of RM1.4mil. At the current share price, the company carries a lofty valuation of around 50x PE. Given management track record, I doubt 2019 would be any different.

If you are looking to hedge your portfolio outside of Innity Corp (due to its weak earnings outlook and relatively high valuaiton), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.7x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.6x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

Some investors are attracted to the company due to its turnaround story, where it managed to return back to profit in FY18. If you exclude all the profit due to EPCC contract (already handover the FSO to Hess Energy), the company was still able to deliver a profit of around RM10mil in FY18. Excluding forex and impairments, the company’s profit would have been around RM20mil. At the current share price, the company is currently being valued at a PE of around 12x.

However, the issue with this company lies on its weak balance sheet. The company has current liabilities of around RM350mil (of which RM139mil is in debt) and only current assets of RM64mil of which cash is only RM14mil. And even that, most of the cash are already pledge to the bank with free cash for operation only amounts to RM6.6mil. If you go through the 4Q18 report, you would see that the company actually had to seek help from its major shareholders in the form of “loan from shareholders” amounting to RM60mil (refer to page 21 of 4Q18 report). Without that RM60 mil the company would have faced working capital issues in 2018.

Another issue is the payment claims by MMHE for works done on the FSO Mekar Bergading. The total maximum exposure to Eatech is around RM120mil (http://www.bursamalaysia.com/market/listed-companies/company-announcements/5937861)

The most probable outcome is a fund-raising exercise to increase the company’s cash balance. I don’t think asset sales would bring the company with enough cash given the soft tanker/ vessel market at the moment.

If you are looking to hedge your portfolio outside of Ea Technique (due to its weak balance sheet and liquidity issues), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.7x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.6x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

I think a lot of investors have yet to appreciate the full implication of the recent 6 sens dividend announcement made earlier this week. The 6 sens would bring the total payout for FY18 to 12 sens or almost 30% dividend payout from FY18 profit. The 12 sens dividend is also quadruple of the total dividend payment made from FY17 profit.

As mentioned in my previous posting, management strategy in prior years was mainly focusing on reducing the company debt from their balance sheet. They had managed to decrease the debt from a high of RM550 mil in FY12 to now only RM145 mil as of Dec 2018 (most of the existing debt are actually trading related debt which is being backed by the company’s inventories and trade receivables). Given the current strength of the company’s balance sheet couple with higher free cash flow generation, investors should expect a higher dividend payment in the future.

Another positive catalyst would be the disposal of OMIA (alloy wheel division) which will free up the company’s working capital even further and result in a higher free cash flow. Hopefully when this happens, management will reward shareholders with higher dividend payout (if they decide to pay 50% of the annual profit that would already bump up the dividend to at least 20 sens per share).

Anyway, at the current price, MBMR is still the cheapest automotive company in Bursa with PE of only 7x vs the industry average of around 15x PE. For me this does not make much sense given the company direct exposure to Perodua who is the market leader in Malaysia (normally that would carry a premium vs the industry average). I am expecting MBMR to achieve a profit of RM200mil in FY19. But even if the profit was only RM185mil, MBMR would still be only trading at a mere 6.2x PE. As a comparison, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Regards.

FY18 marks the 3rd consecutive years of losses for the group. However, some investors have become slightly optimistic on the company’s outlook based on the profit of 4Q18. But if you take out the RM26.3mil reversal in writedown of trade receivables and the RM1.2mil writeback on receivables, 4Q18 would have resulted in a core net loss of a whopping -RM22.9mil. This would bring the total core net loss in FY18 to around -RM38mil. Expect the company to continue making losses in FY19 as well given that the outlook for the construction industry in general is still quite challenging with reviews, cost cutting, cancelation and delays of large projects by the government.

That being said, the biggest issue with Zelan is actually its weak balance sheet. As of Dec 18, the company has total current liabilities amounting to RM410mil (RM184mil is in short term debt) and only RM101mil in current assets (with cash of only RM4mil). The company will likely need to raise capital from the market soon in order to strengthen its balance sheet.

If you are looking to hedge your portfolio outside of Zelan (due to its weak earnings outlook and weak balance sheet), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE based on FY18 profit of RM166mil. PB is low at only 0.8x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.7x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

If you look pass beyond the share price movement and the speculative rumours, you will see that KTB is just another loss-making company. The last time it managed to irk in a small quarterly profit was back in 3Q15. 4Q18 marks the 13th consecutive quarterly losses for the company. FY18 core losses is around -RM23mil (excluding the RM13mil loss on disposal of ppe).

However, the bigger issue for the company at the moment is its weak balance sheet. Excluding the goodwill, the NTA of the company is actually a negative of -RM35.3mil or -8.8 sens per share. The company has also a current ratio of only 0.5x (current liabilities is higher than current assets) which means it might potentially face with liquidity issues in the near term. The company might need to raise some capital soon.

If you are looking to hedge your portfolio outside of KTB (due to its weak earnings outlook and weak balance sheet), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.7x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.6x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

Hi moneykj,

second part...

For MBMR, the reason to invest into the company is mainly on its very undemanding valuation and very strong fundemantals (P&L, Balance sheet and Cash Flow). At the current share price the company is only being valued at a PE of 6.5x (based on FY18 RM165mil profit to shareholders) and a PB of only 0.7x.

That being said, I am still projecting a profit growth in FY19 vs the RM165mil achieve in FY18. The catalysts for the growths are:
1) Still high demand for the new Myvi

2) Sales of SUV Aruz. As of February, the sales is already at 3,400 units with bookings of more than 14,000 unit. The best part is that 85% of the sales and bookings are for the higher end version which commands better profit margin for Perodua.

3) Future uplift in sales from the newly revamp Alza sometime in 2H19.

4) Sales to UMW Toyota Motor. Please take note that the Toyota Rush is actually being manufacture by Perodua. The engine of the new Vios is also currently being manufacture by Perodua as well.

5) Improvement in sales of automotive component divisions. As mentioned MBMR is the biggest manufacturer of locally assemble automotive component in Malaysia. Given the new SST structure, a lot of brands have decided to start sourcing their automotive parts components locally in order to reduce the cost from higher SST and import duty.

6) The potential disposal of OMI Alloy Sdn Bhd (the alloy wheel business) which will immediately increase the company’s profit, strengthen its balance sheet and free up MBMR’s cash flow. In FY17 OMIA recorded a core net loss of around RM30mil. I would assume the losses in FY18 was still in the RM20mil level. As an example, MBMR core profit to shareholder would have been around RM180mil in FY18 if we were to exclude OMIA result.

I think MBMR would be able to achieve the RM200mil profit to shareholder target in FY19. Even if profit only reaches RM185 mil in FY19, at the current share price, the company would still be valued at a mere 6x PE, the lowest in the industry even though it has a direct exposure to Perodua. Most of the time, market leaders normally command a premium vs the industry average. In MBMR case, they are actually trading at a discount of 60% (based on industry average of 15x PE) which is weird.

Regards and good luck on your investment in Orion. Will take a look on Redtone later.

Hi guys,

Had a discussion with a forumer on this company. Just sharing for the benefit of others.

Hi moneykj,

As mentioned in my comments on the company back in February, I believe Orion is still a very speculative play stock given that the company’s valuation is a bit high when compared to its bottom line. The RM3.5mil recorded in 1H19 was mainly due to a RM1.4mil reversal of impairment allowance and a RM0.7mil writeback of allowance relating to liquidated ascertained damanges.
Excluding these 2 non-recurring items, Orion 1H19 profit would have only been around RM1.5mil. Assuming similar results for the 2H19, the company is currently trading at a very high PE of 42.3x.

However, the company has a potentially lucrative arrangement with Sukaniaga Sdn Bhd (of which Orion owns 10% interest).

On October 2018, Sukaniaga has a service level agreement to develop the E Angkasa Az Zahara loan application system for MyAngkasa Holdings, a wholly own subsidiary of Angkatan Koperasi Kebangsaan Malaysia (not sure if it was based on open tender of direct award). Sukaniaga will earns a fee for its service based on the volume of loans and loans amount that it processed and approve under the system. The system will be developed (and actually operate) by Ganda Integrasi (which is a wholly own subsidiary of Orion). Ganda will earn 85% of what Sukaniaga received as fees for the system.

Currently Orion is proposing to acquire another 10% interest of Sukaniaga Sdn Bhd for RM10mil (valuing the company at RM100mil) from THO Travel Sdn Bhd. Upon completion the company will hold 20% interest in Sukaniaga. Effectively upon completion of the additional 10% interest of Sukaniaga, Ganda will have a total of 85% + (20% x 15%) = 88% rights to the fees paid for the loan system.

If you ask me, the deal with Angkasa is a bit dodgy given that Sukaniaga is actually receiving 15% of the service fees for just winning the contract. Effectively, it would have been a lot cheaper for Angakasa to directly award the contract to Orion. Sukaniaga has a share capital of only RM100k. Shareholders of Sukaniaga consist of mainly Ahmad Khir Bin Dato Haji Khairuddin (22.5%), Titian Kotamas (57.5%), Ganda Integrasi (10%) and THO Travel (10%). From here you can see that the shareholders of THO Travel (Sheikh Ahmad Nafiq Bin Sheikh A Rahman and Nor Fariza) will already make a very high profit of almost RM10mil for their initial investment of only RM10k in Sukaniaga.

Orion has proposed for a private placement exercise to raised approximately RM27mil of which the usages of the proceeds are:
1) Acquisition of 10% of Sukaniaga from THO Travel. RM10mil
2) Development of theMyAzZahra system: RM16mil
3) Expense for Private placement. RM950k.

Please take note, in their earlier announcement back in January the estimated proceeds to be raised was only around RM17mil. And out of this, only RM3.2mil was for the development of the system. Refer to page 3 of January announcement (http://www.bursamalaysia.com/market/listed-companies/company-announcements/6027073). Now the cost of development has suddenly gone up to RM17.8mil (of which RM16mil is from the private placement). Not sure how the cost can suddenly go up by 6 times in just a span of 2 months. Investors should question the directors on this during the EGM on 15th Apr. Anyway, given the actual cost of development is considerably low (if you take out Sukaniaga out of the equation, that’s already a 15% savings), I just feel that there might be a potential review of the contract awarded by Angkasa to Sukaniaga by the government (as what had happened with Prestariang with their Skin contract). Investors need to take note.

to continue....

Hi moneykj,

second part...

For MBMR, the reason to invest into the company is mainly on its very undemanding valuation and very strong fundemantals (P&L, Balance sheet and Cash Flow). At the current share price the company is only being valued at a PE of 6.5x (based on FY18 RM165mil profit to shareholders) and a PB of only 0.7x.

That being said, I am still projecting a profit growth in FY19 vs the RM165mil achieve in FY18. The catalysts for the growths are:
1) Still high demand for the new Myvi

2) Sales of SUV Aruz. As of February, the sales is already at 3,400 units with bookings of more than 14,000 unit. The best part is that 85% of the sales and bookings are for the higher end version which commands better profit margin for Perodua.

3) Future uplift in sales from the newly revamp Alza sometime in 2H19.

4) Sales to UMW Toyota Motor. Please take note that the Toyota Rush is actually being manufacture by Perodua. The engine of the new Vios is also currently being manufacture by Perodua as well.

5) Improvement in sales of automotive component divisions. As mentioned MBMR is the biggest manufacturer of locally assemble automotive component in Malaysia. Given the new SST structure, a lot of brands have decided to start sourcing their automotive parts components locally in order to reduce the cost from higher SST and import duty.

6) The potential disposal of OMI Alloy Sdn Bhd (the alloy wheel business) which will immediately increase the company’s profit, strengthen its balance sheet and free up MBMR’s cash flow. In FY17 OMIA recorded a core net loss of around RM30mil. I would assume the losses in FY18 was still in the RM20mil level. As an example, MBMR core profit to shareholder would have been around RM180mil in FY18 if we were to exclude OMIA result.

I think MBMR would be able to achieve the RM200mil profit to shareholder target in FY19. Even if profit only reaches RM185 mil in FY19, at the current share price, the company would still be valued at a mere 6x PE, the lowest in the industry even though it has a direct exposure to Perodua. Most of the time, market leaders normally command a premium vs the industry average. In MBMR case, they are actually trading at a discount of 60% (based on industry average of 15x PE) which is weird.

Regards and good luck on your investment in Orion. Will take a look on Redtone later.

Hi moneykj,

As mentioned in my comments on the company back in February, I believe Orion is still a very speculative play stock given that the company’s valuation is a bit high when compared to its bottom line. The RM3.5mil recorded in 1H19 was mainly due to a RM1.4mil reversal of impairment allowance and a RM0.7mil writeback of allowance relating to liquidated ascertained damanges.
Excluding these 2 non-recurring items, Orion 1H19 profit would have only been around RM1.5mil. Assuming similar results for the 2H19, the company is currently trading at a very high PE of 42.3x.

However, the company has a potentially lucrative arrangement with Sukaniaga Sdn Bhd (of which Orion owns 10% interest).

On October 2018, Sukaniaga has a service level agreement to develop the E Angkasa Az Zahara loan application system for MyAngkasa Holdings, a wholly own subsidiary of Angkatan Koperasi Kebangsaan Malaysia (not sure if it was based on open tender of direct award). Sukaniaga will earns a fee for its service based on the volume of loans and loans amount that it processed and approve under the system. The system will be developed (and actually operate) by Ganda Integrasi (which is a wholly own subsidiary of Orion). Ganda will earn 85% of what Sukaniaga received as fees for the system.

Currently Orion is proposing to acquire another 10% interest of Sukaniaga Sdn Bhd for RM10mil (valuing the company at RM100mil) from THO Travel Sdn Bhd. Upon completion the company will hold 20% interest in Sukaniaga. Effectively upon completion of the additional 10% interest of Sukaniaga, Ganda will have a total of 85% + (20% x 15%) = 88% rights to the fees paid for the loan system.

If you ask me, the deal with Angkasa is a bit dodgy given that Sukaniaga is actually receiving 15% of the service fees for just winning the contract. Effectively, it would have been a lot cheaper for Angakasa to directly award the contract to Orion. Sukaniaga has a share capital of only RM100k. Shareholders of Sukaniaga consist of mainly Ahmad Khir Bin Dato Haji Khairuddin (22.5%), Titian Kotamas (57.5%), Ganda Integrasi (10%) and THO Travel (10%). From here you can see that the shareholders of THO Travel (Sheikh Ahmad Nafiq Bin Sheikh A Rahman and Nor Fariza) will already make a very high profit of almost RM10mil for their initial investment of only RM10k in Sukaniaga.

Orion has proposed for a private placement exercise to raised approximately RM27mil of which the usages of the proceeds are:
1) Acquisition of 10% of Sukaniaga from THO Travel. RM10mil
2) Development of theMyAzZahra system: RM16mil
3) Expense for Private placement. RM950k.

Please take note, in their earlier announcement back in January the estimated proceeds to be raised was only around RM17mil. And out of this, only RM3.2mil was for the development of the system. Refer to page 3 of January announcement (http://www.bursamalaysia.com/market/listed-companies/company-announcements/6027073). Now the cost of development has suddenly gone up to RM17.8mil (of which RM16mil is from the private placement). Not sure how the cost can suddenly go up by 6 times in just a span of 2 months. Investors should question the directors on this during the EGM on 15th Apr. Anyway, given the actual cost of development is considerably low (if you take out Sukaniaga out of the equation, that’s already a 15% savings), I just feel that there might be a potential review of the contract awarded by Angkasa to Sukaniaga by the government (as what had happened with Prestariang with their Skin contract). Investors need to take note.

to continue....

Sorry calvin..i got it wrong. The result will only be out next month.

4Q19 result of only RM3mil profit to shareholder was below most investors expectation. This brings the full year 2019 profit to only RM52mil. At the current share price, the company is being valued at a high PE of 22x.

I don't think that the palm oil industry will reverse their down cycle trend anytime soon given the general demand of the commodity is expected to go down in the future. China for example, is negotiating with US to take in more agriculture products from US which would potentially include soybean (or soybean oil). In general, Chinese consumption of oil would not actually grow that much. Any increase of soybean oil import from the US would actually means lower import for other types of oil from other countries (in particular palm oil from Indonesia and Malaysia).

Another issue is on the European demand of palm oil which is expected to go down exponentially given the proposed ban of palm oil use in food and biofuels industries in the future. They have already agreed to phase out the use of palm oil in transport fuel by 2030. Some countries like France, Finland and Norway have already started to move away from palm oil. Europe is the 2nd export market for Malaysia palm oil. Half of the import of palm oil into Europe are for Biodiesel use while the other half is for food related use.

With this in mind you need to have a slightly long-term investment horizon when buying into oil plantation companies like Kim Loong as the return to upcycle might not be in the near future.

If you are looking to hedge your portfolio outside of Kim Loong (due to its weak earnings outlook and relatively high valuation), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.4x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.3x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

In the past 10 years this company only managed to deliver a full year profit in FY17 and in FY18 and even that its was only a small RM1.5mil and RM800k respectively. For 9m19, the company only managed to deliver a profit of RM100k to its shareholder.

Even if the company managed to rebound back and record a profit similar to FY17, at the current share price, the company is already being valued at a lofty 33.3x PE.

If you are looking to hedge your portfolio outside of Vortex Consolidated (due to its weak earnings outlook and relatively high valuation), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.4x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.3x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

This company only managed to deliver a profit of RM560k to its shareholders in FY18. At the current share price, it is being valued at a lofty valuation of 1,000x PE.

Sometimes people invest in loss making or low profit company due to the appeal of their assets. Basically, a low earnings company would still make some investment sense if the market cap is a lot lower than the company’s asset value. However, this is not he case for Rapid Synergy. NTA of the company is only RM1.31 per share which means it is actually already being valued at a PB of 4.3x.

If you are looking to hedge your portfolio outside of Rapid Synergy (due to its weak earnings outlook and relatively high valuation), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.4x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.3x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

Hi calvinteo,

Should be by the end of this week. Profit to shareholder would most probably double compared to 4q18. Expect full year 19 profit to deliver above rm20mil to shareholders.

Valuation is really low at PE of 4x and PB of only 0.3x.
Parq3 take up rate was at 70% in the last quarter. Hopefully it will increase again in 4Q19.

The Cinta Sayang resort is still a drag to the company's bottom line around rm4mil losses per annum. If management can come up with a solution for the resort, group's profit could potentially go up by another 20%.

One of the cheapest property developpers stock at the moment both in terms of PE and PB.

Future profit contributor will come from Vivus Seputeh and Parq3 Cheras.

Regards.

The 9m19 result of only RM3.4mil profit to shareholder is a far cry to the company’s peak result of RM108mil profit achieved in FY14 (9m14 result was RM86mil). 9m19 result is the worst result ever achieve by the company in the past 10 years. The disappointing result just show how challenging the property market has turn. FY20 is not expected to be any better with the slowdown of property expected to persist for the rest of 2019 (as per management guidance in the 3Q19 report).

Assuming Glomac can end the FY19 with RM5mil profit to shareholders, at the current share price, the company is being valued at a lofty PE of 58.4x.

If you are looking to hedge your portfolio outside of Glomac (due to its weak earnings outlook and relatively high valuation), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.4x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.3x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

A lot of investors are buying into the company with the hope of a special dividend once the disposal of Splash is completed. This was based on previous board decision to give special dividends to shareholders upon disposal of Kumpulan Hartanah Selangor Berhad (KHSB) to Kumpulan Darul Ehsan Berhad for RM212.8mil back in Sept 2013.

The difference between the disposal of KHSB and Splash is that the disposal of KHSB resulted in a gain on disposal to KPS of around RM335mil where else the disposal of Splash will result in a loss of disposal (amount will depend on when the disposal will take place. In the September 18 announcement, the loss on disposal was around RM330mil). KPS has already taken a big impairment on its investment in Splash in FY18 to reflect the lower offer made by Pengurusan Air Selangor.

Another issue that investors need to take into account is KPS future profit after disposal of Syabas.
Based on the 4Q18 result (where Syabas contribution was zero to reflect the potential disposal), the company could potentially deliver a profit of RM17.4mil to its share holder per quarter. However, the quarter high result was also due to a one-off fee derived from one of its international licensees which is non-recurring in nature. Excluding this, the profit could potentially fall to only around RM 2-3mil. By simply extrapolating the quarterly profit, KPS could potentially only deliver a profit of RM12mil to its shareholders upon disposal of SPLASH.

That being said, with the cash received from the disposal, KPS can actually use it to pay off all of its debt. This will result in a higher profit of around RM10mil per quarter derives from savings of interest payments. With the interest payment savings, the full year profit could potentially reach around RM50mil.

At the current share price, KPS would be valued at around 15x PE which is not that expensive. However, this all depends on what the company will do with the cash received from the disposal of Splash. If the company decides to pay more dividends then the cash left for payment of debt would be lower hence resulting in lower PAT in the future (as the company will still have to pay interest payment).

If you are looking to hedge your portfolio outside of KPS (due to the uncertainties of Syabas’ proceeds utilisation), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.4x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.3x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

The company has yet to managed to rebound back from the fire incident occurred in 2017. 1Q19 result was actually a small core net profit of RM100k (after excluding impairments, write downs, forex and fair value adjustments). Given that the full recovery of its main factory in Klang is only expected by June 2019 (the earliest), investors need to be prepared for the company to post at least another 2 quarters of disappointing results. We will still need to look if the company will be able to regain back the trust of some of the customers that were lost due to the fire incident.

Investors need to take note that the FY18 high profit does not comes from core operations but mainly from the insurance claims (relating to the fire). The total claims amount for FY18 was around RM160mil. If you were to exclude that (and also the write off and impairments) the core result for FY18 would have actually been a loss of around RM40mil.

If you are looking to hedge your portfolio outside of Notion Vtec (due to its weak earnings outlook) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.4x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.3x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

2Q19 marks the second consecutive quarter of losses by the company. The highly anticipated Encore Melaka has failed to live up to investors’ expectations. Even after reducing their average ticket price to only RM75 in 2Q19 from RM110 in 1Q19, Encore Melaka still failed to bring in the expected numbers of spectators. Average utilisation rate was only around 10%. This translate to a ticket revenue of only RM2.5mil. The company has blamed the fewer than expected Chinese tourist to Melaka as the main reason for the underperformance. Investors need to be prepared for the company to post further losses in the remaining FY19. The trend of the core losses would only be reverse if the utilisation rate of Encore Melaka can increase substantially (which at the moment has a very low probability of happening).

With cash reserves of only RM6.7mil and current debt of more than RM80mil, the company was forced to raised more capital via a private placement exercise. However, this exercise is only expected to raise less than RM20mil. Most likely the company will try to refinance the debt (but highly likely that it would be at a higher interest rate due to the company’s weak financials).

If you are looking to hedge your portfolio outside of Yong Tai (due to its weak earnings outlook) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.4x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.3x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

Kenanga only managed to deliver a profit of RM 11.9mil to its shareholders in FY18 which is less than half of what was achieve in FY17. The main culprit for this underperformance is the credit loss expense which amounts to RM29.8mil of loss vs FY17 of only RM1.6mil. If you look at the operating profit, the company actually delivered a rather flat result of RM51.4mil vs RM54.9mil in FY17. Unless the company is expected to record another massive credit loss again this year, expect FY19 profit to rebound back at around RM20mil.

That being said at the current share price and assuming a profit of RM20mil in FY19, the company would be valued at 18.3x PE which is considerably high.

If you are looking to hedge your portfolio outside of Kenanga (due to its high valuation) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.4x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.3x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

Excluding all the corporate exercises and share price movements, this company is still actually a loss-making company. The 12 months trailing result to shareholders was a loss of RM3.8mil.

Investors was hoping that the RM2.8mil profit recorded in FY17 would persist into FY18 but this had failed to materialised. This is mainly due to the depressing gross profit margin which fell from a high of 3.5% in FY15 to only 0.8% in FY18. FY19 margins should remains somewhat similar to FY18. Investors need to be prepared for the company to still post losses in FY19.

If you are looking to hedge your portfolio outside of Ta Win Holdings (due to its weak earnings outlook) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.4x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.3x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

1H19 result has been very disappointing with total profit to shareholder of only RM170.6 mil vs 1H18 of RM270mil. This represent a fall in profit by almost 40%.

Even though some of the divisions profits like cement have improve slightly, it is still far from what the company had managed to achieve in previous years. The review, delay, cancellation or reduction in cost of some of the big infrastructure projects had somewhat affected the company’s cement and construction divisions performance. Given that the outlook of these industries is not expected to recover anytime soon, investors needs to prepare for the division to record similar profit level in the near future.

The weaker performance of the utilities and property segment has also dragged the group total performance. These weaknesses are still expected to persist in the rest of FY19 and also in FY20.

The average profit target to shareholders by multiple analysts are around RM450mil for FY19. This would mean that the company is already trading at a lofty valuation of 26x PE. Worst is that the profit is expected to fall further in FY20.

If you are looking to hedge your portfolio outside of YTL (due to its weak earnings outlook and its high valuation) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.4x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.3x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

Even though the company principle activities are in the business of property development & realty, infrastructure and energy, the main profit contributor (when there is one) is actually land sales. If for the year, Maju Perak does not enter into any land sales, then the bottom line would most probably be negative. Years where land sales are conducted would most likely brings profit to the company.

With this in mind PE multiple is almost irrelevant for this company. What is more important is the P/B. The company has an NTA or RM170mil or 66 sens per share. At the current price, it is only trading at a very undemanding PB of 0.3x (should be lower since most of the lands has yet to be revalued).

However, this type of investment is not for everyone. You will need to have a long investment horizon before you can see most of value being unlock by the company (as an example in FY18 there was only 1 big land sale. None in FY17 I think). You also need to have the stomach to see consistently negative quarterly results. In the past 5 years, I think the company only paid dividend in FY16 which I think was due to the plantation land sale in Sg Piah.

If you are looking to hedge your portfolio outside of Maju Perak (due to its weak recurring earnings outlook and inconsistent profit) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.4x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.3x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

Not sure why investors are still interested in this loss-making technology company. For FY18 the company recorded a loss of RM2mil to its shareholders which is almost 3x higher than the loss of RM700k recorded in FY17. The revenue of RM49.5mil in FY18 is the lowest level ever recorded since 2011. Expect FY19 to still be a loss year for this company.

If you are looking to hedge your portfolio outside of TFP (due to its weak earnings outlook) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.4x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.3x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

Investors that are hoping for Pensonic to suddenly turnaround and deliver a big profit in 2H19 or in FY20 might be putting too much hope on the management abilities. With the emergence of Chinese and Korean electric brands that are offering similar products at competitive prices, I am quite pessimistic on this company’s outlook. 1H19 result was a small profit of RM 200k (however it was due to higher tax rate given that the tax is for the trading divisions that recorded a PBT of RM2mil. The company could not use the losses from other divisions such as manufacturing to reduce the tax amount). PBT margin for the trading division has fallen from 2% recorded in FY17 to now 1.4% in 1H19 (even in FY17 margins was already depressed). Expect similar results in 2H19.

If you are looking to hedge your portfolio outside of Pensonic (due to its weak earnings outlook) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.4x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.3x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

The company made a core net loss of almost RM50mil in the 1H19 due to weaker contribution from both the palm oil and timber divisions. Analyst are expecting 2H19 should to post better result but I am a bit sceptical of this given that the price of palm oil is still at an average of RM2100/tn in 3Q19. The most likely outcome would still be a loss (or a very small profit).

Based on the monthly timber report, 3Q19 result could potentially be worst than 2Q19. The total logs production in Jan and Feb 19 was only 23k cubic meter which is less than 60% of 2Q19 production output of 39.2k cubic meter. Unless you believe the company can churn out at least 16.3k cubic meter of logs in March, the 3Q19 result for the timber division would most likely be worse than the -RM7.7mil loss recorded in 2Q19.

I don't think that the palm oil industry will reverse their down cycle trend anytime soon given the general demand of the commodity is expected to go down in the future. China for example, is negotiating with US to take in more agriculture products from US which would potentially include soybean (or soybean oil). In general, Chinese consumption of oil would not actually grow that much. Any increase of soybean oil import from the US would actually means lower import for other types of oil from other countries (in particular palm oil from Indonesia and Malaysia).

Another issue is on the European demand of palm oil which is expected to go down exponentially given the proposed ban of palm oil use in food and biofuels industries in the future. They have already agreed to phase out the use of palm oil in transport fuel by 2030. Some countries like France and Norway have already started to move away from palm oil.

With this in mind you need to have a slightly long-term investment horizon when buying into oil plantation companies like Jaya Tiasa as the return to upcycle might not be in the near future.

If you are looking to hedge your portfolio outside of Jaya Tiasa (due to its weak earnings outlook) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.4x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.3x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

This is a loss-making company with limited revenue. In FY18 the company only managed to record a revenue of RM3.6mil and a whopping loss of -RM7.6mil. Even after deducting all the one of expenses the core loses would still have been RM6.3mil.

I guess the appeal for this company comes from its balance sheet with net tangible asset of more than RM137mil (of which RM 52mil is in cash). However, at the current share price, the company is already trading at a PB of 1x. It would have been more appealing as an investment if the PB is a lot lower.
The management decision to enter into the cyber security segment has yet to show any financial reward to shareholder. Investors need to be a bit patient for this business to develop. Till then, expect further quarterly losses in the near future.

If you are looking to hedge your portfolio outside of Efficient E solution (due to its weak earning outlook) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.4x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.3x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

The 12 months profit to shareholders of RM51.7mil achieve in 2018 (calendar year) was only half than what was achieved in 2017 (RM99.1mil). The 1H19 result was highly affected by the slow progress of the MRT2 and KTM’s Klang Valley Double Track contract. The cost cutting measures on the MRT2 contract will only affect the profit margins of the companies that have exposure to the project, Pestech included. That being said, the work on the Combodia project is expected to progress faster in 2H19 which will hopefully support the profit level of the company.

At the current share price, the company is being valued at a PE of 16.6x. which is actually not that expensive. Just that investors need to take note on the potential lower profit coming from their Malaysia’s infrastructure projects given the government intense scrutiny of high value projects.

If you are looking to hedge your portfolio outside of Pestech (due to its slightly higher valuation and earnings growth uncertainties) I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.5x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.4x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

Initially, I was hoping that the temporary closure of the solar panel business would help reduce the losses and potentially return back the company’s bottom line to profit. This is because the PVC division has always been able to deliver a profit to the group of more than RM10mil. So, if the losses of the solar business decrease substantially, investors can actually buy into Tek Seng at a potential PE of only around 8.5x (current market cap of RM85mil/ PVC pat of RM10mil = 8.5x PE). But looking at the 4Q18 result, it does not seem to be the case. Even after excluding the impairments and provisions on inventories, the solar division still recorded a core net loss of RM5mil. Given that the PVC sheet business can only deliver RM1-3mil profit per quarter, the future quarter results for Tek Seng would most probably still be negative.

Even if there is a trade deal agreement between US and China, Tek Seng sales to Taiwan Solartech Energy would still be affected as the tariff on solar panel import into the US is a blanket tariff to all solar panel manufacturers outside of US.

If you are looking to hedge your portfolio outside of Tek Seng (due to its weak earnings outlook), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.5x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.4x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

Hi calvin,

Thanks for the recommendation on Talam.

Based on the 2 postings above, your thesis on Talam are based mainly on it shares trading below its NTA with a potential value to be unlock when the ECRL returns.

However, my concern on its high adjusted debt made back in Feb still remain. Given that a big chunk of the adjusted debt is actually with IJM, Talam might be able to still renegotiate with IJM for a delay or a new schedule payment. But the "other payable" with IJM still carries a high interest rate of 6.5%-8.0% per annum.

Even if you take out IJM's "other payable", you will still be left with the remaining RM80mil immediate debt obligation which consist of RM33mil reported current debt (9-12% interest) and the Al-Bai Bithaman Ajil Islamic debt securities of RM52mil (9% interest) that is expected to mature in June 2019.

Yes, your are right to highlight that Talam can always raise the cash from sales of some of its land.

But based on the company's announcement to Bursa, the last land deal that they had entered was back in January for a disposal of 3 blocks of vacant lands in Serendah for a total value of RM31.7mil (vs carrying value of RM23mil). However, if you look at the terms of the SPA for all the 3 blocks of land, the immediate payment received by Talam was only RM10mil while the remaining amounts are set to be paid based on progressive development of properties launched on the lands. Basically, the amount is still not enough to pay the immediate obligations/ debt mentioned above. The company needs to somehow raised the cash quickly at least before the maturity of the RM52mil Islamic debt securities in June (or if possible, they should try to renegotiate the payment schedule). Anyway, we will know of Talam’s balance sheet strength later this month when the announce their January 2019 result.

Hopefully they can settle the issue with the high debt soon so it will be more appealing to some investors.

For MBMR, I am still projecting a profit growth in FY19 vs the RM165mil achieve in FY18. The catalysts for the growths are:
1) Still high demand for the new Myvi

2) Sales of SUV Aruz. As of February, the sales is already at 3,400 units with bookings of more than 14,000 unit. The best part is that 85% of the sales and bookings are for the higher end version which commands better profit margin for Perodua.

3) Future uplift in sales from the newly revamp Alza sometime in 2H19.

4) Sales to UMW Toyota Motor. Please take note that the Toyota Rush is actually being manufacture by Perodua. The engine of the new Vios is also currently being manufacture by Perodua as well.

5) Improvement in sales of automotive component divisions. As mentioned MBMR is the biggest manufacturer of locally assemble automotive component in Malaysia. Given the new SST structure, a lot of brands have decided to start sourcing their automotive parts components locally in order to reduce the cost from higher SST and import duty.

6) The potential disposal of OMI Alloy Sdn Bhd (the alloy wheel business) which will immediately increase the company’s profit, strengthen its balance sheet and free up MBMR’s cash flow. In FY17 OMIA recorded a core net loss of around RM30mil. I would assume the losses in FY18 was still in the RM20mil level. As an example, MBMR core profit to shareholder would have been around RM180mil in FY18 if we were to exclude OMIA result.

I think MBMR would be able to achieve the RM200mil profit to shareholder target in FY19. Even if profit only reaches RM185 mil in FY19, at the current share price, the company would still be valued at a mere 5.8x PE, the lowest in the industry even though it has a direct exposure to Perodua. Most of the time, market leaders normally commands a premium vs the industry average. In MBMR case, they are actually trading at a discount of 60% (based on industry average of 15x PE) which is weird.

Regards and good luck on your investment in Talam

At the current share price, the company is trading at a valuation of more than 20x PE. The 4 analysts that are covering Gas Malaysia has an average PAT of RM197mil. This brings the forward PE to around 18.6x. That being said, management guidance for 2019 is an improvement of Rev by 4-5% which means any increased of profit would mainly comes from the better expected profit margins mainly from the latest base tariff increase (gas selling price increase by an average 0.7%) back in Dec.

If you are looking to hedge your portfolio outside of Gas Malaysia (due to its relatively high valuation), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.5x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.4x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

This is a property developer company that has never been able to deliver any profit for the past 9 years since 2010. Those that think the company could suddenly turnaround and deliver profit in FY19 is putting too much hope on the company’s management ability. The most probable outcome would be another loss year for 2019.

The company is also facing liquidity issues. They have a short-term liability of RM113mil but only RM13mil of cash reserve. Unless the company can sell some of their lands quickly, the most likely event would be an equity capital raising (private placement or right issues).

If you are looking to hedge your portfolio outside of WMG Holdings (due to its weak earnings outlook and also weak balance sheet), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.5x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.4x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

Just not sure why people would want to invest in this company. Full year 2018 result was a loss of -RM38.6mil. Even after deducting the one off items (impairment and gain on disposal) the core net loss to shareholder would still be at a high of -RM15.5mil which is worst than the FY17 core losses of -RM13.7mil ( again you need to exclude the impairments and gain on disposal).

FY19 prospect does not seem to be that bullish given the management comments in the 4Q18 report. With still low average selling price of live broilers, investors need to expect a 1Q19 result that would most probably still be in the red.

If you are looking to hedge your portfolio outside of Sinmah Capital (due to its weak earnings outlook), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.5x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.4x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

This is a company who had barely made any profit for the whole of FY18 with total PAT of only RM500k. If you think that FY19 would be different, please take note that the company results for FY17, FY16 and FY15 was RM500k, -RM5.3mil and -RM2.5mil respectively. The company has never been able to deliver substantial enough profit to its shareholder for the past 4 years. A more probable result would most probably be a very small profit or a loss for FY19. Management gloomy outlook views (as noted in 4Q18 report) just reinforce the potential below par result expected in FY19.

If you are looking to hedge your portfolio outside of Golden Pharos (due to its weak earnings outlook), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.6x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.5x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

The company is still actually in the red for the 9m19 result. Excluding the RM26.3mil forex gain and the RM3.5mil gain on disposal, the 9m19 PAT would have actually been -RM25.6mil. Core bottom line would most probably still be negative for FY20 given that management is projecting a similar market activities level in the near future.

If you are looking to hedge your portfolio outside of Scomi Energy (due to its weak earnings outlook), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.6x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.5x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

Since its ipo, Heng Huat had managed only to deliver 2 good FYs. One on FY14 which is the year of the ipo and another in FY15. Rm10.1mil and RM10.4mil respectively. Since then profit has fallen substantially. In FY18, the group recorded a core net loss of RM1.1mil (excluding one off items like loss on disposal).

Given that demand for the company's product in China is facing some slowdown and is not expected to record any substantial growth in FY19, investors need to expect results that is some what similar to FY18 (either losses or small profits only).

If you are looking to hedge your portfolio outside of Heng Huat (due to its weak earnings outlook), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.6x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.5x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

Investors that are hoping for a turnaround of this company result might be better off looking elsewhere. Even though the O&G industry in general has started to turnaround, the same could not be said to the OSV industry. Given the still oversupply environment of vessels, it is highly unlikely that the charter rate and utilisation rate will improve that much which will only means further depressing financials for companies like Icon.

As of Dec 18, the total shareholders equity was a mere RM66.2mil which represent only 7.4% of its paid-up capital. Icon should have actually been already classified as a PN17 company as the shareholder’s equity is way below the 25% threshold level. Not sure why this is not the case.

If you are looking to hedge your portfolio outside of Icon Offshore (due to its weak earnings outlook and risk of being classified as PN17), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.6x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.5x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

After selling its entire business to Media Prima for RM73.5mil back in mid 2017, the company has yet to make any substantial moves to acquire a new business. So, for the time being the only logical way to value the company is by valuing its balance sheet. As of Dec 18, the balance sheet comprises of mainly cash amounting RM6.3 mil. Basically, the company net tangible asset value is only 5 sens per share. Which means at the current price the company is being valued at a very steep premium of 4.3x PB.

Any new business acquisition will need to be made via equity capital fund raising. So, if you are buying this company, once they have identified a business that they want to acquire, you would most probably need to pump in more cash later. I don’t think they can buy anything with only RM6mil. Till then, the company will continue to post losses of around RM1mil per year for administrative expenses.

On another note, the news of Rev Asia Holding Sdn Bhd acquiring a stake in a Chinese media company has nothing to do with Rev Asia Berhad. The former is actually a subsidiary of Media Prima ( who was the buyer of the entire business of Rev Asia Berhad).

If you are looking to hedge your portfolio outside of Rev Asia (because of the lack of any business and also the very high valuation vis a vis the asset that they have), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.6x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.5x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

The runup of the share price started back in Feb 2018 when the share price shot up from below 60 sens to a high of more than RM1.10 achieve in April. However, it was mainly due to speculative reasons as some investors are hoping that the company would be beneficiaries of any increase spending is the Sarawak state. This however did not materialised.

9m19 revenue (company FY ends in March) was rather flat at around RM283mil vs 9m18 of RM281mil. However the profit fell to only RM4.5mil vs RM6.9mil achieve a year ago representing a profit fall of 35%. 3Q19 result alone saw profit fell to only RM900k vs 3Q18 profit of RM2.4mil.

At the current price, the Pansar is being valued at a high of 38.7x PE. This is very high relative to it’s the construction industry average of around 10x PE.

If you are looking to hedge your portfolio outside of Pansar (due to its weak earnings outlook and its very high valuation), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.6x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.5x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

Systech’s revenue has grown by an average by a whopping 28% per annum since 2012. However, profit could not follow suit with average growth during the same period of only around 2%. This show that any revenue increased achieved by the company will be at the expense of its profit margin. In year 2012, the PAT margin was a high of 36%. In year 2018 it was only at 9.3%.

At the current share price, the company is valued at an extremely high PE of 40x. Given the profit growth rate of only 2%, the company can be considered highly overvalued.


If you are looking to hedge your portfolio outside of Systech (due to its very high valuation), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.6x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.5x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

This is a loss-making steel company for the past 5 years. There was some appeal in the stock last year due to the potential disposal of the company’s previous Klang plant. Initially, investors were expecting that the plant would be sold at near its asset value of around RM220mil (after deducting debt its net book value was almost RM80mil). But this did not materialised. The sale of the plant at only RM125mil to NS BlueScope represent a very steep discount to the value recorded in its balance sheet hence the reason for the massive losses in 4Q18.

Please take note that as of 4Q18 the company equity to shareholder was only RM44.5mil which is only 25.2% of the share paid up capital. If the company record another quarterly losses of more than RM2mil (which is most likely will be the case), it could potentially fall under the PN17 status. A company will be put under the PN17 status if the equity to shareholders falls below 25% of the paid up capital.

If you are looking to hedge your portfolio outside of YKGI (due to its weak earnings outlook and potentially falling into the PN17 status), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.7x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.5x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

This company has been in the red for the past 3 financial years. The reasons most investors are suddenly turning positive on Handal are mainly on the general turnaround of the O&G industry and also the emergence of a new controlling shareholder Mr Sunildeep Singh Dhaliwal who has since July 18 replace Mallek Rizal as Handal new Managing director. However, all of this is still speculative in nature.

The recent quarterly result, still shows the company recording a core net loss of RM2mil. Even Mr Sunildeep himself mentioned that he will need 2 years to turnaround the company’s financials which means any positive result can only be seen in FY20 the earliest. Investors need to be prepared for the company to still post losses in the rest of FY19.

But worst is actually the cash balance. If you look at the most recent quarter you will see that the total cash reserve is RM16.4mil. However, RM13.3mil are cash pledge to banks which means the cash that the company can used is only RM3.2mil. Given that the company has a total current debt of RM25mil, they will need to raised cash soon in order to be able to repay some of the obligation (they are planning to do this via a RM5mil private placement soon).

If you are looking to hedge your portfolio outside of Handal Resources (due to its weak earnings outlook and liquidity issues), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.7x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.5x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.

The company’s 12 months trailing profit is only RM1.1mil which is very low given its market cap of RM40mil . At the current share price, it is trading at a PE multiple of 34.5x. This is high for a company that is actually facing negative profit growth due to decreasing profit margins.

If you are looking to hedge your portfolio outside of Resintech (due to its weak earnings outlook and relatively high valuation), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.6x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.

FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).

MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.5x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.

Good luck.