Hi Cyrus,

The company’s 1Q19 result was highly affected by the cessation of logging operation of its FMU 5 area in Sabah. As of early January 19, there was still no news on whether the cessation order was lifted or not. For October and November there were zero log production (refer to the monthly timber production report) which means that 2Q19 result would most probably show a loss to the company. Until the cessation order is lifted, investors need to be prepared for the company to post continuous losses.

At first glance it seems that the company has a very solid balance sheet with equity to shareholder of RM428mil. However, after further verification, the company might face a liquidity issue with cash balance of only RM4.4mil and total debt of RM 38.1mil of which RM22.4mil is due in 12 months. If the cessation period is not lifted soon, the company might need to go back to the capital market to raised cash (most probably via right issue again). They have just completed a right issue that raised RM108mil back in Aug 2018 of which most of the money were used to pay off their debt.

If you are looking to diversify your portfolio outside of Priceworth (due to its earnings uncertainties and liquidity issues) I would recommend you to look at MBMR.

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 target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. I am projecting a profit to shareholder of RM160 mil for FY19 which at the current price values MBMR at only 6.2x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

Hi ryan,

The financial statement in the 2017 annual report is already been audited by KPMG. If there was any adverse opinion from KPMG in their previous audited account, Bursa would have placed this company in PN17 status already. So, you can rest assured that there is low probability of hanky panky (at least until KPMG says otherwise) from the company’s audited accounts.

That being said, the fundamental of the company is not that great with the company having difficulties delivering meaningful profits to its shareholders for the past 5 years. In Fy18, they only managed to record a profit of RM850k. 1Q19 profit to shareholder was RM470k. Even if they managed to replicate the 1Q results to the other remaining 3 quarters and deliver a profit of RM2mil in FY19, at the current share price the company would still be valued at more than 30x PE which is high given its failure to deliver any constant profit growth in the past.

On the other hand, the company has a very strong balance sheet with net cash of RM6mil. NTA per share is at 55 sens which values the company at only 0.6x PB. However, it might be a while before investors can profit from the high NTA unless management suddenly decides to sell some assets and pay dividend to investors (which I doubt).

If you are looking to diversify your portfolio outside of Paos (due to its weak earnings and growth outlook) I would recommend you to look at MBMR.

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 target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. I am projecting a profit to shareholder of RM160 mil for FY19 which at the current price values MBMR at only 6.2x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

This is a company that has never been able to deliver any meaningful profit for the past 10 years with FY17 being the only profitable year (but only recorded a miniscule profit of RM270k). 9m18 result was a loss of RM700k. To think that the company can suddenly turnaround in FY19 might be a bit of a wishful thinking on the part of the investors.

The company’s balance sheet however looks stable except for maybe the equity to shareholder represent only 57% of the share capital. If it falls under 25%, the company will be place under PN17 by Bursa. But this is unlikely to happen anytime soon (unless the company suddenly make high impairments to its assets). Cash reserve is at RM5.5mi with only debt of less than RM1mil. The NTA is at 8 sens per share which means at the current price the company is already trading at a PB valuation of 1.4x. I consider this to be high for a loss-making company.

If you are looking to diversify your portfolio outside of Sersol (due to its weak earnings outlook and the perceive high PB valuation) I would recommend you to look at MBMR.

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 target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. I am projecting a profit to shareholder of RM160 mil for FY19 which at the current price values MBMR at only 6.2x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

When it first listed its share to the public back in May 2016, most investors were bullish of the company’s prospect (in particular the potential profit growth) given the amount of budget allocated by the government for healthcare averaging RM25bil in FY16 and FY17. More importantly was the government’s commitment to build new hospitals while improving facilities of existing government hospitals which should bode well for LKL (which main business consist of supplying medical beds).

Surprisingly, the financial performance of the company fell when compared to their performance prior to the IPO. In FY15 the company managed to record a revenue of RM39mil and a profit of RM6mil. Upon its listing, FY17 (being the first full year performance) only managed to record a revenue of RM33.8mil and a profit of RM4.4mil decreasing by 13% and 27% respectively. In FY18 it was worse as the company revenue fell to less than RM30mil and recording a loss of RM1mil. FY19 seems to be a bit better than last year but still far from the performance prior to the IPO (1H19 Revenue RM17.3mil and Profit RM140k). Even if the company managed to deliver a PAT of RM1mil in FY19, it would mean that the company’s is currently being valued at 45x PE which is high given the doubt of the LKL’s ability to grow the profit.

The company’s balance sheet is ok with debt of RM7.8mil and cash of RM10.3mil. At an NTA of 14 sens per share the company is currently trading at around 0.9x PB.

If you are looking to diversify your portfolio outside of LKL International (due to its weak earnings growth outlook) I would recommend you to look at MBMR.

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 target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. I am projecting a profit to shareholder of RM160 mil for FY19 which at the current price values MBMR at only 6x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

Investors that are interested in putting money into this company need to be aware that the company has never been able to deliver substantial enough profit to its shareholders for the past 10 years. 1Q19 result was a negative of RM200k and full year FY18 result was a loss of RM1.3mil. Expecting the company to suddenly churn out profit in FY19 might be a bit of a wishful thinking on the part of the investor.

At certain times, investing in loss making company might still have its appeal if the company’s market cap is a lot lower than the NTA. The NTA is around 5 sens which means at the current share price, the company is already valued at 1.7x PB which is not cheap for a loss making company.

Further study of the balance sheet reveals that the book value itself is already really weak with debt totalling to RM16 mil and cash of only RM900k. Almost 60% of its asset value is under “amount owing by an Associate” of RM40mil which is actually amount owed by Pan Malaysia Capital Berhad (which was delisted back in 2014 after falling into the PN17 status). I have my doubts that the company will be able to collect this amount in full. This create a big risk to Pan Malaysia Holdings as its equity value at the moment is only around 50% of the paid-up capital. If the company’s equity value fall under 25% of paid up capital then it will be put under PN17 status by Bursa.

Those that are invested in this company need to verify if the RM40mil amount due by Pan Malaysia Capital is still possible for collection. Any potential write-down of the amount will put the risk for the company to fall under the PN17 status. Another way to prompt up the equity level is by making further equity injection like private placement (would not be enough) or right issues.

If you are looking to diversify your portfolio outside of Pan Malaysia Holdings (due to its weak earnings growth outlook and risk of its weak balance sheet) I would recommend you to look at MBMR.

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 target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. I am projecting a profit to shareholder of RM160 mil for FY19 which at the current price values MBMR at only 6x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

Ruberex is the cheapest nitrile glove manufacturing company in Malaysia with a PE multiple of only 8.5x (using 12 months profit to shareholder). However, please take note that their production output is really small compared to other glove makers with capacity output of only 1.5bil pieces annually vs Kossan (smallest among the top 4) of around 25bil pieces annually. With the small capacity there is a limit to the type of clients that the company can approach mainly due to its higher per unit cost compared to other bigger players, which limit the company’s ability to compete on pricing.

In terms of financials, it seems that the company earnings peaked back in FY16 with PAT of RM21mil. In FY17 profit fell to only RM13.3mi and in FY18, the company is expected to only able to reach a profit of around RM10mil. At the current price, the PE valuation is actually at 11.5x which is still not that expensive vs the gloves industry average. However, it is still to be seen if the company can record any growth in FY19 given that all the big players are expected to bring in new capacity supply this year (almost 20bil pieces per year of new capacity combined). All gloves maker might need to compete in terms of pricing to attract new customers to fill in their now bigger capacity and in general the one that usually lose out are the smaller players.

The company has actually a quite strong balance sheet with only RM 49.7mil debt vs a cash reserve of RM23.6mil. This brings the total net gearing to only 9.5%. The company can easily expend its capacity or undertake any new project by taking more debt in the future. In addition, the companies also have shown abilities to generate very good cash flow from its operation (almost RM30mil in 9m18).

If you are looking to diversify your portfolio outside of Rubberex (due to its weak earnings growth outlook) I would recommend you to look at MBMR.

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 target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. I am projecting a profit to shareholder of RM160 mil for FY19 which at the current price values MBMR at only 6x PE.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

Since Brahim’s Berhad lost its lucrative contracts from the dissolvement of Malaysia Airline System to the newly created Malaysia Airline Berhad back in May 2015, the company financials have been on a downward trend (14 consecutive losses since the loss of the contract). Those investors that think that the company would be able to turnaround its financials in FY19 might be putting too much hope on the current management.

The company has a total of RM76.6mil of debt and a cash reserve of only RM6mil. Looking at the cash flow statement, the business has not been able to generate any positive cash flow from its operations since it lost the MAS contract. The disposal of 49% interest in Brahim Airline Catering Holding (BACH) to Singapore’ SATS Ltd back in FY16 for RM110 mil (total amount was actually RM208mil but the remaining RM108mil was tied to financial performance of BACH which we can assume did not go that well) has help the company to stay afloat for a while. But given the bad performance of the business, cash from the sales has also started to deplete to only RM6mil (RM64 mil was used to pay off debt. So, there was still RM44mil to be used for operations). Excluding the intangibles and goodwill, it is highly likely that the NTA to shareholder is actually negative (Shareholder equity RM89.5mil – Brahim portion of intangible and goodwill of RM196mil/2 = -RM8.5mil).

If you are looking to diversify your portfolio outside of Brahim’s Holding (due to its weak earnings outlook and weak balance sheet) I would recommend you to look at MBMR.

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 target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the newly revamp Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

Hi bibi,

This is a company that has been recording losses for at least 10 years. And to think it will suddenly turnaround in FY19 might be a bit of a wishful thinking on the part of the shareholders.
That being said it actually already has a regularisation plan in placed to take it out of the PN17 status which consist of:

1) Capital raising via first a private placement of 27.3mil new share at RM0.10 per share amounting to RM2.7mil. Second will be via a right issue of 477.6mil shares at RM0.10 to existing shareholders (5 right issue for every 1 share owned) amounting to RM47.8mil. This bring the total of new capital to around RM50.5mil. Shareholders will need to subscribe to the right issue or risk being diluted later. They will also be missed out on getting the free warrants which are tradable once listed.

2) Reduction of debt. The company managed to negotiate a reduction of debt from its creditors. The company will “pay” most of its debt via issuance of 116.6mil new shares at RM0.10 and 58.3mil warrants.

3) Lotus Essential, a supplier to KFM will see RM15mil of its debt being repaid by issuance of RCPS of 300mil units at RM0.05 per unit which can be converted to 1 share for 1 RCPS. Here, there is another very big potential dilution to shareholders later since Lotus is given the right to buy new share at 5 sens compared to other investors at 10 sens.

4) Another RM16.4mil amount owed to Lotus will be set off from the proceeds of the Private placement and right issue exercises.

The remaining cash from the private placement and right issue amounting to RM34mil will mainly be used as working capital for existing businesses (wheat flour and tapioca starch businesses).
In summary, current shareholder will need to be prepare to add in another RM0.50 per share of their current investment. If let say you decide to buy KFM today at 12 sens, you will need to prepare another 50 sens later for your subscription to the right issue. So, your total investment is actually will be 62 sens.

Investors need to take note of the big potential dilution later especially if Lotus decides to convert their RCPS (worth 5 sens per unit) to KFM share which will push down the price given the steep discount. They can convert this anytime they want within the 5 years.

Another thing to take note is that the core business will still be the same. If you look at FY18 results, there is actually no finance cost being paid. So, all of this exercise would actually not improve the company’s bottom line (if business environment remain the same as 2018, then they will still be making losses). The improvement will be on the balance sheet via the elimination of debt and injection of new cash.

If you are looking to diversify your portfolio outside of Kuantan Flour Mill (due to still weak earning outlook and big potential dilution later) I would recommend you to look at MBMR.

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 target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the newly revamp Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

Perodua just officially launch the new SUV Aruz yesterday.

The SUV has already 2,200 bookings. Management is targeting to sell around 2000- 2500 units per month (total annual target of 30,000 units) which will increase Perodua sales by more than 10% when compared to FY18 target sales of 209,000 cars (even that was achieved in Nov. New target should be around at least 225,000 units). In general the SUV should deliver a higher profit margin when compared to its other offering. This would benefit MBMR directly given its exposure to Perodua via its 22.6% equity interest.

Given the RM145mil profit target for FY18 (9m18 is already RM106mil), MBMR should be able to reach a profit to shareholder of around RM160mil in FY19 (an improvement of around 10%) backed by:

1) Sales and profit of the new SUV Aruz which as mentioned above will add more than 10% to Perodua annual sales.

2) Turnaround of alloy wheel manufacturing which will see an increased in production from the new Perodua SUV but more importantly the collaboration with China's biggest alloy wheel manufacturer Citic Dicastal. MBMR will help produce alloy wheels for Citic for its European market.

3) Still high demand of the new Myvi as shown by the Oct and Nov 18 sales (hopefully Dec as well).

4) The launch of the all new revamp Alza expected in 2H19.

At the current share price, the company is only being valued at a forward PE of 6.1x which is a lot lower than the industry average of 15x.

Regards

Those that are interested in this company need to be careful when buying its share. The company has stop operation and has not recorded any revenue since FY18 and is not expected to do so anytime soon. A GN3 company is similar to PN17 just that GN3 is given to listed company in the Ace market while PN17 to companies in the Main Market.

The potential delisting of Perisai next month shows the risk of investing in a PN17/ GN3 companies. G Neptune currently has a negative equity of RM3.5mil. For it to come out of the GN3 status it needs to first raised equity capital (via right issues most probably) and then find another business to invest in (after paying it creditors off course). This would mean current investors would also need to be prepare to fork in additional capital for the said regulation plan (which has yet to be shared by management).

If you are looking to diversify your portfolio outside of G Neptune (due to going concern uncertainties) I would recommend you to look at MBMR.

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 target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

Hi kok wai,

Since it sold its glove business to Aspion Sdn Bhd in 2012, the company has never been able to find a replacement business that could deliver similar profit level as its previous gloves business. In FY13 (post disposal of glove business) the company only managed to record a core net profit of RM4.4mil. In FY18 (ending Oct 18) the core net profit has dropped to only RM 1.6mil which values the company at 37.2x PE.

Now the company is planning for a right issue of ICPS to raised approximately RM50mil. This means current shareholder of the company need to prepare to come up with and additional capital of around RM0.33 sens per share for the subscription of the ICPS. Those who do not subscribe will risk of further dilution upon conversion of the ICPS to shares and also will lose out on the free warrants given to subscribers of ICPS. Most of the proceeds will be used for business expansion of the healthcare distribution, strelisation & warehousing and home dialysis businesses. In summary when you buy this share at a price of 38 sens, u need to prepare at least another 33 sens later for your subscription to the ICPS. So total investment in this company should be around 71 sens.

If you are looking to diversify your portfolio outside of Adventa (due to the earnings uncertainties in the near future) I would recommend you to look at MBMR.

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 target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

Hi Lovelife,

The potential delisting of Perisai next month shows the risk of investing in a PN17 company. For Eka Noodles Berhad the reason for the company to fall into PN17 is the same as Perisai. Its shareholders’ equity is currently at -RM28.96mil (yes negative equity. Theoretically when you buy this company shares, you actually owe creditor 9 sens per share. You don’t own asset but debt).

As of Sept 18, the company has total debt of RM 72mil and only total cash of only RM8.7mil. They actually have a restructuring plans already to bring the company out of the PN17 status. Below is the summary:

1) There will be a right issue exercise for the current shareholder. For every 1 share, the shareholder is entitled to subscribe to 5 new shares at RM0.05 per share. Basically, here you need to be prepared to add up to at least another RM0.25 for every share that you have now. If you don’t subscribe to the right issue then you will get diluted. The right issue is expected to raised RM108mil.

2) The company will then use the proceed from the right issue to pay the debt. In total RM38mil will be used to pay the debt. Other debt amounting to RM31mil will be paid via the issuance of new shares at RM0.05 (or 620mil new shares) which means you will then get diluted.

3) Then the company will buy another company called Kepala Batas Bihun Sdn Bhd at a price of RM55mil of which RM33mil to be paid by cash (from the right issue) and the rest by new shares at RM0.05 (or 440mil new shares). This again will dilute your position even further but will bring in profit to the company in the future. The vendor is guaranteeing a profit of RM8mil in FY19 which is actually not that bad if the profit can maintain at the level for the foreseeable future. At that level, the company after all the new shares issuance, will be valued at 8.6x forward PE. Which is not that expensive.

Upon completion of all this exercise, the company should be able to lift itself out of the PN17 status. But investors need to be prepared to basically add in an addition 25 sens per share into their current investment. In summary, when you buy Eka shares now at 6 sens, your total cost is actually supposed to be 31 sens per share to take into account the future right issue.

If you are looking to diversify your portfolio outside of EKA (due to the uncertainties from the regulation plans) I would recommend you to look at MBMR.

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 target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

The potential delisting of Perisai next month shows the risk of investing in a PN17 company. For RGT Berhad (previously known as Asia Knight) the reason for the company to fall into PN17 is not the same as Perisai. It did not fall into PN17 due to shareholders funds falling below 25% of paid up capital but because of its auditors has express disclaimer opinions on the company’s audited account of FY2014. For me this is worse than Perisai since investors cannot be sure if the numbers reported by the company are actually true or not.

That being said, the company was fast with coming up with a regulation plan of which was successfully implemented last year. The regulation plan for this company evolve around Asia Knight acquiring a 60% interest in Rapid Growth Technology (hence why the name change) for RM48mil which was funded via last year’s right issue exercise. With this acquisition it is expected that RGT would most probably be lifted from the PN17 status in FY19. Hopefully this time, the auditors would not find any major concerns on the accounting treatment of the company’s books.

Based on the 2 most recent quarterly report (1Q19 & 4Q18) the company now can achieve a profit to shareholder ranging around RM1-1.2mil per quarter. Assuming they can manage to deliver a profit of RM6mil to shareholder (average profit for 1, 2 & 3Q19 needs to be RM1.6m), at the current price the company is already valued at 17.3x PE. If you include the warrants (since it is already in the money), that would mean that the valuation would actually go up to more than 20x PE which is high considering the current market environment.

The company’s current balance sheet looks healthy with the company currently having a net cash position of RM20.6mil. The company has an NTA of RM40mil or 7 sens per share. At the current share price, the company is currently trading at a PB valuation of 2.6x.

If you are looking to diversify your portfolio outside of RGT (due to its rich valuation) I would recommend you to look at MBMR.

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 target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

The potential delisting of Perisai next month shows the risk of investing in a PN17 company. For HB Global the reason for the company to fall into PN17 is not the same as Perisai. It did not fall into PN17 due to shareholders funds falling below 25% of paid up capital but because of its auditors has express adverse opinions on the company’s audited account of FY2012. For me this is worst than Perisai since investors cannot be sure if the numbers reported by the company are actually true or not.

Assuming that the numbers of the most recent 3Q18 result is true. If you study the balance sheet you will see that this company is actually facing liquidity issues with debt of RM64mil (of which RM51.5mil is short term debt) and cash of only RM107k. Even though the company recorded a small profit in 9m18 it does not translate to cash from operation. If you were to recategorized the interest expense as CFO, then cash from operation for 9m18 would have been -RM2.5mil. To pay off their short-term debt, the company keep refinancing those debts. This may proof to be futile in the end given the increasing interest rate trend. The only way out is for the company to do an equity capital injection or sell some of their assets.

If you are looking to diversify your portfolio outside of HB Global (due to weak balance sheet and risk associated to a PN17 company) I would recommend you to look at MBMR.

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 target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

Hi OMR,

The company’s financial performance reflects the challenging market environment faced by the retail apparel industry especially with the fast-growing threat from the online businesses (for Malaysia it has to be Lazada who is backed by Alibaba). Asia Brand has been making big losses for the past 3 financial years (from FY16 to FY18). 1H19 showed some improvement (profit of RM2.4mil) but is still far from the company’s glory days when it managed to record a profit of RM28mil in FY14. Assuming the company managed to reach a profit of RM5mil in FY19, at the current share price it is still being valued at roughly 17.6x PE.

Bigger issue consists of its balance sheet where as of Sept 18 it has a total debt of more than RM100mil (of which most of it needs to be settled in 12 months) and only RM6.7mil cash. The right issue had only managed to increase the cash balance to RM47mil which means that the company still need to raised some more capital in order to pay its debt. Another way is for the company to refinance the debt but given the increasing interest rate trends, it would mean that the company will have to pay higher interest rate in the future.

A big portion of the company’s assets are actually in the form of intangibles (brands) and goodwill. Total net tangible asset (after right issue) should be around RM30mil only or RM0.13 per share. This would mean that the company is currently trading at a high of almost 3x PB.

If you are looking to diversify your portfolio outside of Asia Brands (due to weak earnings growth and weak balance sheet) I would recommend you to look at MBMR.

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 target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

At first glance, the company seems to be undervalue given the low PE multiple of 4.5x. However, after further verification, a big portion of the profit in 3Q and 4Q 18 was mainly due to fair value gain on investment amounting to RM25mil. Excluding those gains, the combined profit for the 3Q and 4Q18 would have fallen to only around RM500k. 1H19 core profit excluding gain on investment is only RM2mil. This means the 12 months trailing core profit for the company is only RM2.5mil. At the current price this would mean that the company is actually trading at a very high PE valuation of 50x. Even if the company managed to record a profit of RM5mil in FY19, this would still mean it is trading at a forward PE of 25x. Normally, investors would expect a steady profit growth of at least 15% (for the profit to double in 5 years) which the company might find it difficult to deliver given the current market condition.

If you are looking to diversify your portfolio outside of Atta Global (due to the high PE valuation and the weaker earning growth in the near term) I would recommend you to look at MBMR.

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 target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

Hi tkl88,

I think we have 2 different strategies. Mine mostly evolve around fundamentals while yours i think is more on a study of share price movement. I don't think its wrong just that we have different views on how to invest.

If you like to study price movement (technical analysis) i would suggest you read a classic, Reminiscence of a Stock Operator which tells a story of Jesse Livermore who is one of the most renowned speculator and price movement analyst ever. Some of his observation still stands till this day.

Good luck

Hi ronaldo,

Most people will try to exit even at 0.005 sens. If u decide to hold the stock, u will be a minority shareholder in a private company which might be a bit challenging especially in terms of information transparency.

Good luck.

This company has been loss making since 2014. Their venture into the Indian IPP has backfired and now seems to be the one dragging its shareholders down. It doesn’t seem that management can turnaround the company at least not in the near term. Expect further losses in FY19.

Balance sheet looks a bit risky given the high quarterly losses that the company is currently facing. Debt is high at around RM 933.8mil and cash at around RM418.2mil which puts net gearing at 105.7%. This would be ok if the IPP in India is profitable and generating sufficient cash for the company but given the operational struggles (loses of RM142mil in 9m18), it is actually has become the main worries for the company since it started operating.

If you are looking to diversify your portfolio outside of Mudajaya (due to earnings weakness in the near future) I would recommend you to look at MBMR.

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 target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

The company profit dropped substantially in FY18 when it managed to only record a full year profit of only RM4.4mil vs RM61mil in FY17 and RM110mil in FY16. For 1H19 the group only managed to deliver a profit of RM2.9mil (of which RM1.6mil is from forex gain. Core net profit is only RM1.3mil). FY19 is also expected to deliver very mediocre profit given management decision to focus more on clearing existing inventories (RM66.5mil) and on-going projects rather than pushing sales from new property launches. This is normal given the current weak property market sentiment. Only when market improve will the company consider to make any new property launches of which the biggest will be Puchong Horizon with an estimated GDV of RM2bil (but it will not be in FY19 or FY20). So, any bump up of earning will only be seen in FY21 the earliest (if property market improves).

Assuming the company manage to achieve a core net profit of RM6 mil in FY19 (average 3Q & 4Q profit to be around RM2.4mil per quarter), at the current share price the company is valued at more than 20x PE which is really high for a property company at the moment.

In terms of balance sheet, the group has a higher debt level when compared to other small & mid size property developers. As of Sept 18, the company has an accumulated debt of RM472mil (of which RM155.2mil are short term debt) and only RM14.7mil cash. Net gearing is currently at 75%. The company need to increase its cash reserves quickly given that there is a short-term debt obligation of RM155.2 mil to be paid soon. Any debt refinancing decision will affect its bottom line even further given the increasing interest rate trends (company will pay higher financing cost in the future).

That being said the company is only trading at a PB valuation of 0.2x. Given the earnings uncertainties, this company might be a good candidate for investors with a longer investment horizon (more than 5 years).

If you are looking to diversify your portfolio outside of Hua Yang (due to earnings weakness in the near future) I would recommend you to look at MBMR.

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 target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

The arrest of Dato’ Siew Ka Wei, Vice Chairman of Ancom Logistic, has put a spotlight on the company. However, I don’t think the news would actually affect much of the business. The MACC investigation evolved around a RM100mil contract given by Tourism Malaysia (when Dato Siew was its chairman) to Geeko Tech Sdn Bhd for a digital marketing campaign on behalf of Tourism Malaysia. It has nothing to do with Ancom Logistic.

That being said, Ancom Logistic has never been able to deliver any meaningful profit to its shareholders for the past 10 years with profit only recorded in FY11, FY12 and F14. Even then, it was not due to operational profit but mainly due to gain from disposal of their investment (RM20mil gain in disposal of investment in FY14 and RM11mil gain from disposal of land in FY11). Without those gains, FY11 and FY14 would have recorded losses as well just like any other FY for the past 10 years. FY19 would not be any different given that the company only managed to deliver a small profit of RM160k to its shareholder in 1Q19. I doubt that management will be able to deliver any substantial profit to its shareholders in FY19.

The company has a relatively strong balance sheet with net gearing of only 1.2%. In the event management decides to take up any new projects, the company would not have any issue in raising capital via debt. At the current share price, the company is trading at a valuation of 1.8x BV which is high considering that it is a loss-making company (future NTA will fall if the company continue to record losses).

If you are looking to diversify your portfolio outside of Ancom Logistic (due to earnings weakness in the near future) I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.3x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

The company has never been able to deliver any meaningful profit to its shareholders since 2011 with profit only recorded in FY17 and even then, it was due to gain from disposal of their business in China. Most of the time the company actually deliver losses to its shareholders. FY19 would not be any different as well given that the company already recorded a loss amounting of -RM8.5 mil in 1H19 alone. I doubt that management will be able to turnaround the company in 2H19 or in FY20. Expect losses to continue in the near to mid-term.

That being said the company has a relatively strong balance sheet with net gearing of only 11%. In the event management decides to take up any new projects, the company would not have any issue in raising capital via debt. At the current share price, the company is only trading at a valuation of below 0.2x BV. However, any upside to investors will only be possible if management decides to disposed of some of the assets and pay dividend to shareholders.

If you are looking to diversify your portfolio outside of YLI (due to earnings weakness in the near future) I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.3x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

Previously the company has always managed to deliver a profit of at least RM50mil to its shareholders (last achieved in FY17). In FY18 the group only managed to record a full year core profit of RM35.5mil.

This downward profit trend continues in FY19 with 1H19 profit of only RM10.2mil. Management blames the lower performance due to an increasing trend of operating cost in particular raw material, labour and energy cost which combined resulted in lower profit margin to the business. This is more pronounce in the Paper Product segment where revenue has actually increase but profit fell due to profit margin compression from the higher virgin pulp and waste paper cost. If the profit margin stays at the current level, NTPM is only expected to record a profit of around RM20-25 mil for FY19. At the current share price, a PAT of RM25mil would value the company at a PE valuation of 24x. Normally investors would want a profit growth of at least 15% per annum (profit to double in 5 years) for them to pay a high PE valuation.

The group balance sheet is not that bad with net gearing of 60%. In term of PB the company is currently trading at 1.2x PB.

If you are looking to diversify your portfolio outside of NTPM (due to earnings weakness in the near future) I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.3x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

Looking at the 3Q18 result, a lot of investors are getting worried that the profit of only RM100k would be the new norm for the company. However, the reason for the very low profit level was due to an LAD of RM4.1mil relating to a previous already completed EPCC project. Excluding this, the profit would have actually been around RM4.2mil (which is still 40% lower vs 3Q17).

Excluding none core costs (impairments, forex losses and LAD), Rohas 9m18 core net profit is actually higher at RM18.5mil. Assuming that the company managed to achieved a PAT of RM7mil in 4Q, this would bring the total core profit for FY18 to RM25mil. At the current share price, the company is valued at 13x PE which is not high but still above the average construction industry PE of around 10x. It has an EPCC orderbook of around RM450mil which is expected to provide steady revenue and profit for the next 2 FYs. Near-term issue that it currently faces are delays in some of its projects both domestically and abroad (Laos in particular). Revenue should normalize in FY19.

The company has a strong balance sheet with net gearing of only 8.2% giving it the ability to take on more EPCC projects in the near future. Management has indicated that they will be trying to add around RM500mil to their current orderbooks in FY19.

If you are looking to diversify your portfolio outside of Rohas (due to earnings uncertainties relating to project delays), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.3x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

The company has never been able to deliver any meaningful profit to its shareholders in the past 10 years with profit only recorded in FY15 and FY16. Even then, the profit was only at RM500k and RM700k respectively. Most of the time the company actually deliver losses to its shareholders. FY19 would not be any different as well given the 9m19 result of -RM400k. I doubt that management will be able to turnaround the company in FY20 as well.

The one good thing about this company is its balance sheet strength where currently it has no debt at all. NTA is at RM0.62 per share which means at the current share price the company is trading at 0.7x PB. That being said, the only way for investors to gain from this is if management decides to sell most of their assets and pay up dividend to the shareholders. I don’t think it will be anytime soon (if ever).

If you are looking to diversify your portfolio outside of Xian Leng (due to its continuous weak earnings outlook), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.3x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

Hi tkl88,

In my view, even if the general markets (Bursa, S&P or Dow Jones) are showing improvement, it still does not change Komarkorp outlook given its’s core business declining trend.

The company has never been able to deliver any meaningful profit to its shareholder in the past 10 years with the highest core profit recorded back in FY10 and FY11 of only RM2mil. Most of the time the company actually deliver losses to its shareholders. FY19 would not be any different as well given the 1H19 result of negative RM5.2mil vs 1H18 losses of RM3.7mil. I doubt management has the ability to turnaround the company in the near future given that it has actually loss market shares to its competitors in their main markets such as Malaysia and Thailand (revenue fell 25% and 20% respectively in 1H19). That being said, management has invested money to bring in new machineries that will potentially help boost revenue in the future.

The company’s cash balance has fallen from RM6.2mil in 4Q18 to only RM2.6mil as of 2Q19. It seems that the company is currently depending on debt to fund its operation. This reliance on debt would potentially deteriorate the company’s bottom line even further in view of the increasing trend of interest rates (need to pay higher finance cost in the future). The company might also face some liquidity issue in the near future given that the company actually could not generate sufficient cash flow from its operations. With short term debt obligation of RM4.8mil vs cash of only RM2.6mil (of which RM750k is pledge to banks), the company might need to do some equity fund raising to help increase its cash reserves.

If you are looking to diversify your portfolio outside of Komarkcorp (due to near and mid term earnings uncertainties), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.3x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

Even though the company is currently trading at only 12 months trailing earnings of 8.4x PE, it might not be sustainable going forward especially with the drop of profit recorded in 3Q18. Given the expected higher cost of operation due to higher log, glue and labour cost, it is expected that the profit level will most likely remain at the 3Q18 level in FY19. To make it worst, the oversupply of particleboard has depressed the average selling price of the company’s products (which also had affected the profit margins). However please take not that 3Q18 positive result was mainly due to an investment income of RM10.1mil. If you were to exclude this, the company would have actually posted a loss for the quarter.

Assuming the market improve and the company managed to record an almost similar profit level of FY18 (core profits were better in 1Q and 2Q of the year. However, 2Q18 result has also a negative goodwill of RM8mil. Excluding that the PAT would have drop to around RM4 mil) of around RM20mil in FY19. This means at the current share price, the company will actually be trading at a forward PE of 14.3x. This is higher than the industry average of below 10x.

The company has a strong balance sheet with net gearing of only 9.5%. Currently the company is only trading at a PB valuation of 0.3x. It might be a very good candidate for those investors with long term investment horizon (more than 5 years).

If you are looking to diversify your portfolio outside of Evergreen Fibreboard (due to near term earnings uncertainties caused by weak particle board market), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.2x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

Even though the company is currently trading at only 12 months trailing earnings of 6.5x PE, it might not be sustainable once the 4Q18 result is out next month. 9m18 profit is only RM6.1 mil which is a drop of more than 40% vs last year 9m17 result of RM10.3mil. The group recorded a high profit of RM9.6mil (however RM6.6mil is due to fair value gain of investment properties) in 4Q17 which will be hard to replicate in 4Q18 given the lack of new completed projects achieved in 4Q18. A profit of RM3mil in 4Q18 would already be a good result for the company given the current weak property market sentiment. However, this would mean that the full year profit of the company would only be around RM9mil which means at the current share price the company will be trading at a valuation of 11.2x PE. This is actually not that high but given the current market sentiment, there is a lot more property developers (with more growth prospect in FY19) that is trading at a lower PE valuation than Gromutual.

The group has a very strong balance sheet with only a net gearing of 8.4%. As of Sept 18, the company has an NTA of RM0.94 (of which more than half is in the form of land for development). At the current price the company is only trading at a mere 0.3x PB which is a lot lower than the industry average of below 0.8x. The company might be a very good candidate for those investors with long term investment horizon (more than 5 years).

If you are looking to diversify your portfolio outside of Gromutual (due to near term earnings uncertainties caused by weak property market sentiment), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.2x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

Hi darksoul,

Maybe you should wait until there is a clearer picture on when the bauxite moratorium will be lifted. Currently the new deadline is end of March (deadline has been extended multiple times since the first moratorium on Jan 2015) to provide time for both the Pahang state and the Federal government to finalise the new SOP for bauxite mining, transport, stockpile management and export. More importantly it will also provide time for operators to clear off their stockpile at Kuantan Port.

The group’s other main divisions, both the construction and O&G are facing challenging prospects in view of the government decision to review most of the infrastructure project (for construction) and the high cost overruns of its O&G Rapid project. Its contract for West Coast Expressway also incurred high cost overruns last year. Unless management will be able to negotiate with the project owners (both Petronas and WCE Holdings) it is expected both the projects to continue incurring losses in FY19.

For me the biggest positive catalyst would be the lifting of the bauxite ban. Prior to the bauxite ban, mining business is the biggest contributor to the group’s profit at around RM20mil per year. Until then, WZ Satu will most probably record quarterly losses.

If you are looking to diversify your portfolio outside of WZ Satu (due to near term earnings uncertainties), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.2x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

Hi Louise

The positive result (still small though) recorded in 1Q19 was mainly from the better performance of its gas division which saw a higher demand for its maintenance service for the O&G industries. Management believes that this trend will continue and is hopeful that division will be able to post profit for FY19. Concrete division on the other hand is still recording losses but at a smaller amount. For the company to achieve a PAT of RM1mil for this FY would already be a very good achievement.

The group balance sheet is not that bad with net gearing of only 13%. The company’s main issue is still on its ability to deliver profit to its shareholders. The company had only managed to deliver 1 full year profit to its shareholders (in FY13) for the past 10 years. It would actually make more sense for the company to close its business and liquidated its assets which currently has an NTA of RM0.65 per share (more than double its current share price).

If you are looking to diversify your portfolio outside of Big Industries (due to earnings uncertainties), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.2x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

Feel free to highlight to me any errors that I made in assessing the other companies when I was promoting MBMR. I will take out my comments on the companies’ forum if the assessment made was wrong. However, I need to highlight that most of the assessments are made based on public info (mainly from bursa website).

Have a nice weekend

Hi Choivo,

It is expected that some people might not approved of my methods. In general, what I am actually doing is marketing MBMR to the investment community. The issue that I saw with this company is that even after delivering good quarterly results and having a firm financial growth prospects, investors has yet to notice of its appeal (as highlighted by icon8888).

Last month, I decided to try out a marketing strategy for the company. At the current market environment, I believe most investors are finding it difficult to find potential companies to invest in either because of the valuation (most good companies are already trading at a premium vs Bursa average) or the lack of near to mid term growth (due to various issues most pronounce is the trade war between US and China which has affected export nation like Malaysia). From there I had come up with a list of companies where the current investors might be looking to diversify their positions. If you go through the list of companies where I had promoted MBMR, mostly are:

1) companies that has been loss making for more than 2 financial year

2) companies that currently trading at high market valuation (and facing difficulties in delivering earning growth)

3) companies that are facing earnings uncertainties due to change of market environment

I believe by diversifying their position into MBMR they will actually improving their portfolio strength. I will not go and promote MBMR to investors of an already good companies which I define as having good earnings outlook and decent market valuation. For example, I would not be going to RCE Capital, Freight Management, BCB, Yee Lee, Johotin, Dufu, Myeg or Ekovest to promote MBMR as it would not make much sense for the investors to sell their current positions in these companies to invest in MBMR. Most of these companies are already trading at low market valuation and their share price are mainly affected due to the market sentiment. I believe their business fundamentals are still intact and investors need to ride the short term volatility for a while (just like what happened to MBMR prior to the December rebound).

In general, the reason why I believe MBMR should be added into most of the investors’ portfolio are (sorry, this will be quite a repetition for some people):

1) It’s a proxy to a strong brand (Perodua which is the market leader in its industry)

2) Domestic focus market (not effected by the current trade war uncertainty)

3) Limited client concentration risks

4) Entry level market focus. The new SUR Aruz is priced at only RM72k to RM77k. In challenging economy most, people will still need cars to move around in Malaysia. It just that some might decide to buy a cheaper brand. As mentioned before, please use Mcdonald performance during the 2007-2009 crisis as reference. Sales and profit of the company actually went up during the recession due to most people preference to go to their cheaper fast food chain vs to going to more expensive restaurant.

5) Strong balance sheet. Currently MBMR is in a net cash position. So, there would be limited risk of being pressured due to higher interest rate trends.

6) Potential financial growth in 2019 (hard to find a lot of companies being able to deliver this at the moment). Growth to be driven by still high demand of new myvi (as of sept there was still 22k firm order of myvi yet to be deliver) and the new SUV. The new SUV will actually create a new customer segment as previously Perodua customers ranges from those with RM20k to RM65k budget for a new car. Now the SUV will carve out a new customer segment of RM70k to RM80k for Perodua. Hence potentially will increase Perodua car sales numbers even further and boost its revenue and profit. The company in previous financial years was highly affected by the under performance of its alloy wheel and auto component businesses. Every year since 2015, MBMR had to make impairments (mostly in 3Q & 4Q) to reflect the deterioration of these 2 ventures. In FY17, the company had decided to fully impaired these 2 businesses which is why it had recorded a big loss of RM145 mil for FY17 of which RM250mil is actually due to impairment (so basically core pat was still at RM100mil). Management had reassured shareholders that there will be no more impairment plan going forward (they mentioned this during the AGM back in May 18. You can go through the minutes for confirmation).

7) And finally, the undemanding valuation. Currently it is only trading at around 6x PE even though the auto industry average at the moment is around 15x PE.

In the end, the objective of all this is to invite people to discuss on MBMR potential as a company for them to invest in. The decision to buy or sell is still at the hand of the investors.

Regards

Hi paperplane,

Management is targetting a partial opening of the highway by june this year. But overall completion is only expected by august 2022.

Good luck.

Since its listing in 2015, revenue has grown by an average of 5% per year however profit could not follow suit. In FY16 (Apr 15 to Mar 16) profit to shareholder was at RM12.7mil however the most recent 12 months trailing profit is only at RM7.3mil. At the current share price, the company is trading at a high of 20.8x PE which investors would normally expect a PAT growth of around 15% per year (after 5 years profit will double). Given the intense competition of the logistic industry at the moment, growing the profit of the company might proof to be a difficult thing to do in the near term. That being said the fall of oil price might help improve the margin a bit.

The company’s balance sheet on the other hands looks pretty healthy with net gearing of around 50%. The only issue it the cash balance which has depleted to only RM3.3mil from RM6.7mil early of the financial year. That being said it won’t be a big issue to the company as it still has the ability to take some debt to finance any shortfall in cash for its operation.

If you are looking to diversify your portfolio outside of Xin Hwa (due to earnings uncertainties in the short term), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.0x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

Hi RainT,

I think the reason to why the share price went down was due to the cost escalation of the West Coast Expressway (WCE) project from the initial RM5.94bil to now RM6.69bil. The impact to shareholders is that now they will need to fork up more money to be injected into West Coast Expressway Sdn Bhd (WCESB) which is 80% owned by WCEHB. Total equity to be injected has gone up to RM1.56bil from the initial RM1.2bil.

As of Nov 18, the company has already injected a total or RM600 mil. The announced RCULS is expected to add another RM318mil additional equity injection into WCESB which brings the total amount to RM918mil. So, the company still need to raised another RM642mil from equity after this.

Basically, if you decide to invest into this company you need to prepare another RM0.50 per share for the RCULS subscription and another RM0.62 per share for future equity fund raising. This brings the total additional cash to be invested to RM1.12 per share (on top of the current share price of RM0.495). Off course you can always decide not to subscribe to any of the fund-raising exercises but it will dilute your position later.

You can actually read all this info from the 28th Nov 18 announcement. http://www.bursamalaysia.com/market/listed-companies/company-announcem...

If you are looking to diversify your portfolio outside of WCE Holdings (due to funding uncertainties of WCE project), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.0x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.

Good luck.

The company has been loss making for the past 12 quarters. All its 3 main segments have been reporting weak results for the past 3 financials years. The group luxury hotels and resort brands has won a lot of recognition but in terms of financial performance, it still fails to record any profit due to the low occupancy rate outside of the holiday period. The biggest revenue contributor to the group is still the travel agency business (which mainly focus on Singapore and HK markets) but has seen revenue decrease year on year as the numbers of Chinese tourist has fallen since its peak recorded in FY16 (even then it fails to make any profit). The group decision to focus on the Johor property market will take some time before it will be able to deliver any profit to the shareholders given the overall weak market sentiment.

Currently the company is using short term debt to fund their operations. Given the upward interest rate trend, future financial performance of the group might be affected in the near term (need to pay higher interest rate).

That being said there is value in the company’s properties. As of Sep 18, the company has an NTA of RM0.29 per share. But most of its properties and lands has yet to be revalued to the current market price. Take the 25 acres Port Dickson land (for property development) as an example. The land was last valued in 2004 and now carries a value of RM100mil (should have more than double in the past 14 years). If all the lands are revalued (those in KL especially), NTA has the potential to be more than RM0.50 per share which means the company is currently trading at less than half its potential book value. However, investors might need to have a longer investment horizon before these land value can be unlocked (via direct sales or via property development projects).

If you are looking to diversify your portfolio outside of Avillion (due to the earnings uncertainties from its hotel, travel and property businesses), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.0x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19 and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.18.

Good luck.

Excluding the forex losses and other exceptional items, IJM’s 1H19 core net profit is actually around RM230mil. The tepid performance is mainly due to the under performance of all the company’s divisions in particular the construction, industry and plantation divisions.

Progress for the construction projects are expected to be slow going forward especially the RM1.1bil LRT3 contract. It is still unclear if the main contractors (Gkent and MRCB) will try to negotiate for a lower contract value (and profit margin) given the government decision to scale down the size of the project and stretch longer the project's duration (from 2020 to 2024). The division will still be the main contributor to the group’s revenue and bottom line backed by the RM8.8b orderbook. However, investors need to expect a lower profit margin in the near to mid-term in line with the federal government objective to cut cost (some of the projects might be under review for cost optimisation).

Plantation division is expected to post weaker revenue and profit for the rest of FY19 given the weak CPO price, weak Rupiah and higher operational cost mainly from the increase of labour cost.

4 analysts are projecting a core profit of RM424mil for FY19 which means at the current price, IJM is trading at a valuation of 13.5x PE which is slightly higher than the construction and property industries average of less than 10x PE. That being said the same analyst also expect profit to grow to RM480mil in FY20 which means valuation for IJM will drop to only 12x PE. But this all depends on a smooth progress of the construction’s projects in hand, better property sales and also a rebound of CPO price. Any hiccups on these bullish assumptions will push the profit lower.

If you are looking to diversify your portfolio outside of IJM (due to the earnings uncertainties from both the construction and plantation divisions), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.0x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19 and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.18.

Good luck.

Hi biohazard,

4Q18 result was really a bad quarter for the company mainly due to the drop of gross profit margin from 11.9% a year ago to only 5.8%. This in turn resulted in the company posted it first quarterly losses in more than 2 years. Management blame the drop-in margin was due to higher feed cost (a bit weird given that average corn and soy bean price actually went down compared to a year ago. The increase is maybe due to the weakening of RM vs USD) and distribution cost as well as lower average selling price of broilers from RM4.99/kg a year ago to RM4.52/kg.

That being said, investors should expect the company to perform better in 1Q19 given the improvement of the broiler price (http://www.dvs.gov.my/index.php/pages/view/440). However, the average price is still lower compared to 1Q18. So, I don’t think the company will achieve a core profit of RM10mil per quarter anytime soon.

If you are looking to diversify your portfolio outside of CAB (due to the earnings uncertainties), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.0x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19 and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.18.

Good luck.

E&O had posted a very disappointing 2Q19 result. If we were to exclude the forex gain of RM9mil, core profit would have only been around RM10mil for the quarter. Investors are worried that the trend of slow property sales might persist in the near to mid term.

FY20 profit is expected to be lower than FY19 with 3 analysts projecting a fall of core profit to only RM70mil. At the current price, this will translate to a PE valuation of 20.7x which is high considering the average property industry PE is currently trading at less than 10x.

That being said, management is projecting a total combined of RM1.5bil new property launches in the for FY20 and FY21 which might help push the company’s earning from FY21 onwards. But all this will still be dependent on the property market outlook during the launches. If the market sentiment remains weak, management might decide to push the new launches further back which will affect any future earnings growth to E&O.

If you are looking to diversify your portfolio outside of E&O (due to the weak earnings sentiment given the weak property market), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.0x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19 and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.18.

Good luck.

Those that are invested in the company need to have a longer-term investment horizon before they can see any meaningful turnaround of Media Prima’s financial performance. As a reference, the company posted a core losses of more than RM30mil in 3Q18 and is still expected to post losses in FY19. Profit is only expected to be recorded in FY20 but it will still be very small. 6 different analysts are projecting an average loss of RM26mil in FY19 and a small profit of RM7mil in FY20. At the current price the company is trading at a 2 year forward PE of 50x. Any turnaround will be mainly driven by the company’s digital strategies but that will take some time before the division can provide any meaningful profit to the group. Till then, investors will need to be a bit patient and be prepare to have a longer investment horizon (more than 5 years at least).

Please take note that most of the company’s properties has already been through a revaluation exercise back in FY2017. This would mean whatever value in the company’s balance sheet is already marked to the market. As of Sept 18, the net tangible asset of the company is around RM320mil or RM0.29 per share. At the current share price, the company is already trading at above its net tangible asset in comparison to The Star which is actually trading at only 0.6x BV. Contrary to Media Prima, most of The Star properties are yet to be revalued (most of the properties still carries the value during its acquisition which is some 10-20 years ago).

If you are looking to diversify your portfolio outside of Media Prima (due to the weak earnings sentiment given the weak outlook for the media industry), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.0x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19 and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.18.

Good luck.

At only 4.7x PE, Ibhd valuation at first look pretty cheap even for a property developer company (most property stocks are trading below 10x PE and below 0.8x PB). Please take note that both the ICULS and RCULS are expected to mature in August to October 2019. Upon conversion, there will be more than 300mil new shares to be issued to the loan stock investors. This will bring up the valuation to 6.1x PE which is still low compared to the industry average.

However, the sudden fall of sales and profit in 3Q18 are a real worry to investors. If the trend of the slow sales persists and profit for FY19 fell to below RM30mil, this will bring up the valuation of the company to a PE of 16.6x (after taking account the dilution effect from ICULS and RCULS conversion). Unbilled sales have fallen to only RM160mil as of Sep 18 which is less than half of the company 12 months sales of RM455mil (from Oct 17 to Sep 18). The group near term performance will be highly dependent on the Hill 10 and Kia Peng 8 projects as all other future launches are expected to be held back given the challenging property market condition.

Hill 10 residence (in I City Shah Alam) has a take up rate of 94% which was a surprise at first given the hefty valuation of its unit (RM950/sqft). The high take up rate might be due to the appeal from the new mall located near the residence that is expected to be completed in 1Q19.

Kia Peng 8 on the other hand has only a take up rate of 22% which might be the reason why the progress for this project is so slow. As of end Nov, the project is only 47% completed which signals a potential delay to the original completion date of end 2019. Any delays will open the company to risks of LAD (10% per annum) which has the potential to reduce the company’s bottom line even further.

If you are looking to diversify your portfolio outside of Ibhd (due to the weak earnings sentiment given the weak property market), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.0x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19 and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.18.

Good luck.

For the past 10 financial years the company has found difficulties in delivering substantial profit for its shareholders. Revenue grew at an average rate of 4.8% from FY10 to FY18 however profit to shareholders failed to follow suit. In FY18 the company recorded a loss of RM2.8mil to its shareholder.

I doubt FY19 would be any different compared to the company’s previous 10 years performances. At best the company might be able to deliver a small profit to its shareholders (around RM2 mil max). Even if they managed to do this, at the current price the company is still being valued at more than 30x PE which is high considering the company’s past performance record.

If you are looking to diversify your portfolio outside of Diversified Gateway Solutions (due to the weak earnings sentiment of the company), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.0x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19 and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.18.

Good luck.

Hi Kebin,

Sorry, I don’t think there will be any good news coming from this company (at least in the near term).

The company has been able to grow its revenue exponentially from only RM12.7mil in FY14 to a high of RM56.5mil in FY18. This represent an average revenue growth rate of 45% per annum for the past 4 years. But this revenue growth does not translate to any profit growth to its investors which is the thing that is more important. Actually, the company has never been able to deliver any meaningful profit to its shareholders. In FY17, for example, the company managed to record a high revenue of RM53.5mil and a PBT of almost RM3mil. But in the end, PATAMI or profit to shareholders was only a very small amount of RM450k. Last year (FY 18) the company recorded an even higher revenue of RM56.4mil but a loss of RM2.5mil to its shareholders.

1H19 losses of RM2.8mil are already higher than the full year losses in FY18. If the company fails to deliver any meaningful profit in the 2H19, investors need to expect higher losses recorded for this financial year as well (revenue will still grow though).

If you are looking to diversify your portfolio outside of Technodex (due to the weak earnings sentiment of the company), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 5.9x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19 and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.18.

Good luck.

The group future growth (and potential recurring income) will come from the company’s 2 main industrial park projects. The first being the Tanjung Piai Maritime Industrial Park (3,500 acre reclaim land located near Port Tanjong Pelepas) and the second the Pengerang Maritime Industrial Park (1,700 acre reclaim land located near Rapid). Both will be developed as an O&G industrial park which is expected to provide the group with higher profit and potentially recurring income in the future. The company will still sell some of the land to 3rd parties to fund the development but a big portion of it will be held in the company’s book to only be sold once the projects are completed (fetch higher valuation) or to be leased to 3rd parties for steady future income. But this will not be immediate with the 2 projects only expected to be fully developed in 10 to 15 years.

Till then the company financial performances will be highly dependent on the sales of reclaim lands. As of Sep 18 the group has around 150 acre of reclaim lands (mostly in Melaka) for sale valued at RM250mil. The group makes a higher amount of profit in a FY if there is a big portion of reclamation land being disposed off during the period.

For FY18 there was 5 different land sales that was completed which help deliver a revenue of RM82mil to the group (representing 70% of the group total revenue for the year) and an EBIT of RM27mil. However full year PAT was still low at only RM2.4mil dragged by the high finance cost incurred during the year amounting to RM18.3mil. Quarter to quarter earnings are very volatile and will be hard for investors to analyse.

For 1Q19 the group had managed to complete the sales of RM19mil worth of reclaim land with another RM53mil deal entered but yet completed. However, investors need to be prepared for the PAT to still be small (or even a loss in FY19). As mentioned earlier, the big positive catalyst for the group will come from both the Tanjung Piai and Pengerang Maritime Industrial Parks which is not immediate. Those invested in the company need to have a longer investment horizon.

If you are looking to diversify your portfolio outside of Benalec (due to the weak earnings projection in the near and mid terms), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 5.9x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19 and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.18.

Good luck.

The company posted a decline of 8.5% in revenue for FY18 and a fall in profit of more than 30% to only RM5.3mil from RM7.6mil recorded in FY17. Biggest fall in revenue comes from the company 2 main markets Malaysia (which saw a drop of 54% revenue to only RM5.2mil from RM11.3mil last year) and China (which saw a drop in revenue of almost 60% to RM3.6mil from RM8.8mil). That being said, the company managed to find new market ventures (Korea and Taiwan) to compensate for some of the revenue losses. Their balance sheet is strong with RM7mil cash reserve and only RM2.3mil of debt.

At a PE valuation of 20x, it is trading at above the semiconductor industry average (even above bigger local semicon companies) given that most of the counters have seen very high selling pressure since early Nov. To be trading at this valuation, investors will be expecting a consistent profit growth which might be difficult to deliver in FY19 given the negative sentiment of the industry (especially those related to Apple phones).

If you are looking to diversify your portfolio outside of Aemulus (to mitigate risks relating to the semicon industry uncertainties), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 5.7x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19 and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.18.

Good luck.

Ann Joo is the most cost-efficient steel player in the industry with the company being the only operator of hybrid blast furnace and electric arc furnace (BF- EAF) technology in Malaysia. This provide the company the flexibility to switch raw materials (iron ore and coke for blast vs scrap metal for electric arc) in order to managed their cost.

The company’s main products: steel billet, bar and rod are mostly produced for the domestic market in particular for the construction and property industries. Exporting to other countries with good margins is difficult to execute given that most countries have their own import duties imposed on steel products in order for them to protect their own steel industries. Malaysia itself impose safeguard duties on rebar, wire rod and deformed bar in coil until April 2020.

Given the slowdown of both the property (due to weak market sentiment) and construction (government decision to put on hold, shelves, scale down or cancel big projects like HSR ECRL, MRT3, LRT3 etc) industries, investors need to be prepared for a slowing down of both selling volume and selling price of Ann Joo’s product which will affect the future quarterly performance of the group. The company’s 3Q18 core PBT (excluding impairments, forex and one-off gains) was at RM20mil translating to a PBT margin of only 3.5% vs last year’s 10%. The decline in margin is both due to lower average selling price (due to softer demand) and higher input cost (higher coking coal, scrap metal, iron ore and electricity price). Unless the selling price of steel product improved, expect margins to remain in the lower level for the near future.

That being said, given the share price decline from its peak of around RM4 recorded early of the year to now RM1.25, all this negativity should have already been priced in. Analysts are not expecting the steel industry to fall back to the challenging period of FY12-15 when the industry was faced with oversupply from China. Ann Joo is still expected to post profit of around RM100mil in FY19. At the current price the company is still only trading at 6.7x PE.

If you are looking to diversify your portfolio outside of Ann Joo (to mitigate risks relating to steel industries), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 5.5x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19 and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.18.

Good luck.

Hi Jiahui,

One of the issues of this company is the revenue and profit recognition. I think most investors do not understand how revenue (hence profit) recognition of this company works. Unlike other property developers in Malaysia where revenue is recognised through progressive billings hence why the consistency in revenue and in profit, this company’s revenue recognition will only come once they hand over the completed properties to the buyers.

Take up rates for the group’s property launches in both UK and Australia market is high at an average of 80% which shows that demand is there for Eco World properties. This is mainly due to their projects strategic location which are always near public transports, city central etc.
With more handover expected to accelerate in mid FY2019, this could potentially provide more earnings continuation to investors (as long as there is new project launches). Projects in Australia are mostly expected to be completed in mid FY20. Unbilled sales are still high at RM6.6bil. The company decision to venture into Build to Rent (BTR) projects in London would also potentially provide investors with more recurring income in the future with completion expected in mid FY21.

However, investors might be a bit worried to hold this stock at the moment given the risks associated to the Brexit negotiation outcome. Theresa May’s Brexit deal is not expected to get the backing from her parliament members which raises the risk of a “No Deal Brexit” even higher especially with the 29 March deadline looming closer. A “No Deal” is expected to deliver a very negative economic outcome to UK in particular London City. Marc Carney, the Governor for the Bank of England, has warned that property price will most likely crash by at least 30% in a case of a No Deal Brexit (with UK going into recession and the pound tumbling). This create a big risk to Eco World International (as well as other London property developers) as some investors/ or buyers might just prefer to hold off their purchase prior to the completion.

Investors need to follow closely on the Brexit negotiation development. Recently, there was also a proposal from the Pro European parliament members that a second Brexit referendum should be consider again. Polls has it that if another referendum was made, the likely outcome would be Britain staying in Europe. This would be a very positive outcome for the company but for the time being it is yet to be confirm.

If you are looking to diversify your portfolio outside of Eco World International (to mitigate some of the risks relating to the Brexit outcome), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 5.5x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19 and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.18.

Good luck.

3Q18 result marks the 7th consecutive quarterly losses by Lafarge. And things are not expected to be any better in the near to mid term given the depressing cement price (of around RM186/tonne) which was affected by the softer demand from the construction and property sectors but also due to the oversupply of cement in the Peninsular market. Most cement companies had decided to expend their capacity earlier to take advantages of the potential high demands from mainly the big government projects (MRT, LRT, ECRL, HSR etc). But all these demands evaporated when the new government had decided to cancel, hold off or scale down most of these projects.

None of the analyst that are covering this company are projecting any profit in 2019. Investors need to be prepared for the company to continue posting loses up to FY19 at least albeit at a lower level thanks to the management cost rationalisation plans to be implemented in the near to mid-term. Any turnaround will still depend on the improvement of the cement price which will only happen if the government decides to refocus back on infrastructure spending.

If you are looking to diversify your portfolio outside of Lafarge (due to perceived future negative earnings in the near to mid-term), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 5.5x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19 and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.18.

Good luck.

Hi Dakewlest,

Yes, rapid is the next positive catalyst for the company given that CCM has already a chemical plant located in Pasir Gudang compared to the other big caustic soda player, Malay Sino Industries whose plants are located in Perak and Terengganu. Rapid will need around 100MT of caustic soda for its refinery once it starts operations. This is why management are planning to spend at least RM68mil to increase the Pasir Gudang plant capacity by another 50% which is expected to be completed by mid of next year.

However, you need to take note that the financial performance of the company is still highly dependent on the price of South East Asia caustic soda. Hong Leong analyst are projecting a profit of around RM40mil for the company in FY19. But this projection is still based on a caustic price of USD500/tonne. As of early Dec, South East Asia caustic price has fallen to only USD346/tonne vs more than USD600 a year ago. Until the price rebound back to USD500, it might be a while before CCM will be able to deliver a profit of more than RM40mil to its investors. The caustic price is tracked on a weekly basis which you can check via the Bloomberg Platform.

If you are looking to diversify your portfolio outside of CCM (due to the volatility of the caustic soda price), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 5.5x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19 and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.18.

Good luck.

Not sure what is so appealing about Asdion that there is still a lot of people willing to buy into the company shares. Those that are invested, can you provide the potential catalysts for the company to post better financial results in the future?

The company has never been able to deliver any full year profit to its shareholder for the past 10 years. Even at the peak of its revenue of RM19.8mil recorded during FY16, it still recorded a core profit loss of RM4.4mil (after deducting impairment and gain on disposal of ppe). The 6m19 result also did not provide any confidence to management’s ability to help turnaround the company. Eventhough the revenue almost triple to RM7.2mil from RM2.5mil, losses have actually widen by almost 30% to -RM1.4mil from -RM1.1mil.

In terms of balance sheet, investors should take note that the group has been very dependent on debt to fund its operations with free cash only at RM544k (the deposit of RM650k is pledged cash). Short term debt obligation is at RM1.4mil.

If you are looking to diversify your portfolio outside of Asdion (due to the perceive weaker earnings outlook), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 5.5x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.

For FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19 and also the new Alza in 2H19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.18.

Good luck.