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.

The company has never been able to deliver any meaningful profit to its shareholder for the past 10 years. Even at the height of its revenue of RM683mil recorded during FY17, it still recorded a core profit loss of RM8.9mil (after deducting impairment loss on receivables and forex loses). The 6m19 result also did not provide any confidence to management’s ability to help turnaround the company with revenue dropping by almost 70% to RM61mil from RM189mil recorded in 6m18. Profit did a lot better but still too small to be consider as a turnaround at only RM250k for the 1H19.

With short term debt amounting to RM40mil and cash reserves of only RM7mil, management will need to raised the capital fast in order to pay their obligation.

That being said there is still some potential for Bintai especially from its acquisition of Optimal Property Management (OPM) back in Mar 2017. OPM is the contract holder for the RM121 mil concession of Kolej Universiti Islam Malaysia. As of Sep 18 the division is still recording losses.

If you are looking to diversify your portfolio outside of Bintai Kinden (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.

Any future turnaround of the company will highly be dependent on the outcome of its helicopter division in particular the Eurocopter EC225 Super Puma the largest in its 9-helicopter fleet. The company was somewhat unlucky when it first took delivery of the EC225 back in Apr 2016. During the same month there was a crash in the North Sea that killed 13 people on board which led to the grounding order of all Ec225 by European Aviation Safety Agency in June 2016. No income was ever recorded for the asset. However, the company is still obliged to pay the financial costs relating to it.

It does not help also that most of its other business are also recording negative growth in terms of revenue and profit. In particular, the cable business which saw a decline of sales and profit by 33% and 52% respectively.

In terms balance sheet, the company has RM606mil of current liabilities (of which RM437.1mil are debt) but only RM450mil of current asset (of which only RM36mil is cash). The company will most probably try to refinance the debt but given the upward trend of interest rates, they will have to pay higher interest rate cost in the future. This will depress the PBT margin even further. If refinancing fails, the company will need to try to raise the capital via assets sales or equity capital raising (for this type of quantum right issue will be the best option).

If you are looking to diversify your portfolio outside of Sarawak Cable (due to the perceive weaker market 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.

The new plant in Pulau Indah has been completed which is expected to boost the paratha production by 3-fold and freezing capacity by 5x. However, it is still not sure if the plant will be able to run at a high utilisation rate as the demand from some of its main market has seen negative growth in particular North America market where 9m18 sales was down by 17% compared to last year. Malaysia, Asia and Europe markets on the other hand saw their combine sales increase by 5% during the same period. Even with the growth from these 3 markets the overall sales of the group actually saw a small decline of 2%.

But the more worrying issue lies on the compression of Kawan’s profit margin. 9m18 PBT margin fell to 13.5% vs FY17 margin of 18.3%. If the Pulau Indah plant could not operate at a high enough utilisation rate, investors need to be prepared for a further drop to the group’s profit margin.

That being said the group has a very strong balance sheet. As of sept 18 the group is still in a net cash position of RM19.8 mil. This will provide the group with some support when trying to manoeuvre out of the current challenging period.

At the current price, Kawan is currently trading at a valuation of 30x PE which is really high considering that the group might face difficulties in delivering profit growth to its investors. Kawan had only managed to deliver a profit of RM17.2mil in 9m18 compared to the RM23.2 mil achieved in 9m17. This represent a drop of profit of more than 25%.

If you are looking to diversify your portfolio outside of Kawan Food (due to the perceive weaker market 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.

Hi tasas,

I think investors are not doubting Eco World business performances. Tan Sri Liew has a track record on delivering value to shareholders. He and his management team has been able to deliver an average profit of around RM170mil to its shareholder for the past 3 FY (FY16-FY18). To deliver this type of result would require very special ability from the part of management given that the company was only set up less than 5 years ago. Just go to their website and you will see that they are way ahead of other property developers in Malaysia in terms of their marketing and branding positioning.

The only thing that worry investors is the valuation which is now around 20x PE which is a lot higher compared to other property developers (SP SETIA 11xPE, Mah Sing 7.5x PE, UEM Sunrise 10x PE, Sunway 9.6x PE etc). The only property players that is trading above the 20x valuation are Sime Property and Eco World International which both are also facing share price pressure due to perceive high valuation by investors.

That being said average analyst are expecting the company’s profit to grow to RM221 mil by FY20 an average growth rate of more than 15% for the next 2 financial years. Valuation will fall to only 12x PE which might be why some investors are still interested in the company.

Hopefully Eco World managed to deliver on the high expected profit growth in the near quarters to dispel some of the worries that investors has on its rich valuation.

If you are looking to diversify your portfolio outside of the property industry (due to the perceive weaker market 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.

Hi mcmann,

The company outlook is highly dependent on the steel price. Given that the commodity has seen some price pressure (in Yuan term, steel has fallen by more than 20% in the past 2 months. In USD it should be higher) some investors are anticipating that the future performance of the company might be negatively affected. That being said average 2018 price is still higher than 2017 so I don’t think the company’s core performance will be worse than FY17.

However, please take note that the disposal of Eastern Steel Sdn Bhd (ESSB) to Jianlong was completed on the 1st Nov 2018. The company is expected to record a loss of disposal amounting to RM21.8mil in the 2Q19 which will most probably drag the company’s overall performance for the quarter to a loss of around RM10mil.

That being said it would also signal a potential turnaround of ESSB given the expertise that Jianlong (8th biggest steel producer in China and 16th biggest globally) would bring to the company. Hiap Tek losses from FY15 to FY17 was mainly due to the bad performance of ESSB (back then the company exposure was 55%). The core business itself was profitable but very volatile in line with the volatility of the steel price. If ESSB can even record a small profit in the future, that would actually mean a potential improvement of at least RM50mil to the company’s PBT. Investors will need to be patient though, as the turnaround may take some time to realised with FY20 being the earliest in my opinion.

If you are looking to diversify your portfolio outside of the steel industry (due to the volatility of its performance), 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.

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 analyst has 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.

Guys,

Just want to give some updates on MBMR (but actually on Perodua).

Perodua sales numbers in Nov 2018 was at 21,110 which is a 27% increase compared to Nov 17 sales of 16,636. In addition, the combined sales of Perodua in Oct and Nov of 40,638 cars represent already 80% of the total sales number in 3Q18 (which deliver a PATAMI or RM38.1mil).

It is safe to bet that 4Q18 result would most probably be higher than 3Q18 and 4Q17. I am expecting a PATAMI of at least RM40mil in 4Q (however if sales in Dec is still high at around 20,000 cars, 4Q PATAMI should be a lot higher).

Thanks.

Hi beachboy & mcmann,

I see the 2 deals of DNEX selling Forward Energy Sdn Bhd (FESB) to Dato Azmi and DNEX buying Forward Energy Generation Ltd (FEGL) from Forward Energy Ltd (FEL which is a subsidiary of FESB) as more of a corporate reorganisation exercise.

Basically, in the end it will be a value accretive for DNEX of RM3mil given that FESB currently has a negative equity of RM6mil (hence why the disposal is at RM1 only). This is not that big considering the DNEX current market cap of RM340mil. DNEX direct acquisition of FEGL from FEL will also see the company’s exposure to Banco Energy Generation Ltd (BEGL) increased to 7.6% from the current 3.8%. BEGL is involve in the development of a 54MW Heavy Fuel Oil fired power plant in Bangladesh. This power plant is already in commercial operation since Nov 2017.

If you are looking to diversify your portfolio outside of Dnex due to earnings uncertainty especially from the Vehicle Entry Point contract, 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.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Good luck.

Hi xcu843,

Agree with you on its bad performance. L&G 1Q and 2Q performances were highly affected by the management decision to put on hold on some of it Klang Valley property launches given the challenging property market outlook at the moment. Previously investors were hoping that these launches would help improve earnings visibility for FY19 to FY21. Investors need to be prepared for low earnings in the short and mid terms at least until there is a more clearer picture on the timeline of new project launches.

The company has a very strong balance sheet. Net cash is at RM170 mil representing 40% of the company’s market cap. But the biggest values lie in the company land bank of which most is still being valued at cost of acquisition. An example is the 14 hectares freehold land in Sri Damansara which is currently being valued at only RM3.6mi. The land could easily be value at more than RM400mil. The NTA of the company can easily be double from the current 35sens per share to around 70 sens. At the current share price, the company is only being valued at 0.2x PB.

That being said, it might be a while before the value can be unlock as the management would probably prefer to developed the land rather than selling it to another party. Given the current dimmed property market outlook, any new launches might only take place in 2020 the earliest.

The company has been steadily paying dividend of 1.5 sen to 2 sens every year since FY14. Not sure if the company will pay any dividend for FY19 given the tepid performance expected for the full year. They do however have the cash if management decides to pay.

If you are looking to diversify your portfolio outside of the property industry (due to earnings uncertainty), 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.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Good luck.

Hi stillloss,

The below expectation result in 3Q18 was due to a combination of both lower revenue (RM321mil vs RM374mil in 3Q17) and compression in profit margin where PBT margin for the quarter fell to 1.9% vs 4.6% a year ago. This was below some investors’ expectation given the group decision to disposed of the print consumable business in Europe and China back in 2Q17. With this investor was hoping that the company could start delivering consistent profit and growth. But after a year since the disposal, the growth has yet to be deliver.

Revenue was lower in the recent quarter due to lower contribution from German and other European countries. However, in terms of profit, these 2 segments actually deliver growth from an EBIT of RM11mil in 3Q17 to RM14.3mil for the quarter.

For Americas (Mexico, Colombia and Argentina) and Rest of the world (Japan China SEA and Middle East), both divisions recorded falling revenue, from a combined of RM69mil in 3Q17 to RM58 mil in the recent quarter. What is worst is that EBIT had fallen from RM13.1mil to only RM0.3mil wiping out any gains from the European market. The lower result was mainly due to the recession faces by Argentina where some outlet was forced to closed down in order to protect the group from the steep currency valuation faced by the Argentina peso.

4Q is expected to be a slow quarter for the group given that it’s a school holiday period in Europe. Europe should still record good performance for next year. Profit growth will mainly be driven by the forex exchange rate. The change of government for Mexico and Argentina will add into the political uncertainties of the countries. Outlook for the division in terms of profit might be affected for the near term.

That being said, Mr Loo has been adding his exposure in the company almost every day albeit at very low volume. Still that just show that he believes the company is currently undervalue. He has been adding his position little by little since April this year when the share price was at 70 sens. His position prior to the start of acquisition was 96.5mil. His current position now is at 96.2 mil. Why? Because he actually sold some 1.5mi shares in May at around 65 sens. But still from his last selling action he has acquired almost 1mil shares (price between 65sens to 30 sens).

If you are looking to diversify your portfolio outside of Pelikan (due to earnings uncertainty), 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.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Good luck.

Wow. From my first post explaining the corporate exercise calculation (13 dec) the share has drop by almost 30%. I had used 85 sens in my first example.

I think investors need to understand that a right issue (for RCULS or ordinary shares) does not always mean its a bad thing. To say its bad or good you need to understand where the money of the capital raising will be used later. If the projects is expected to provide good returns which will increase the profit for the company, it might actually be a good thing for the subscribers.

I am not an investor of the company. I am just worried that some investors might just be disposing their shares without understanding the overall situation of the right issue. Better take some time to read the circular.

http://www.bursamalaysia.com/market/listed-companies/company-announcements/5938429

Please take note that the ratio for the right issue of ordinary shares has change. And all the calculation in the circular are just examples. U need to redo it on your own later. Refer to my calculation explanation on the 13th dec.

Good luck.

Hi ramsyll,

I think investors are not doubting Dialog business performances. Tan Sri Ngau has a track record on delivering value to shareholders. He and his management team has been able to grow the financials of the company from a revenue of RM1.1bil and core PBT of RM150mil recorded in 2010 to revenue of RM3.1bil and core pbt of RM563mil in 2017. This translate to a an avg growth rate of 15.4% and 20% respectively. Not many companies are able to deliver this type of growth especially those from the O&G industry.

The only thing that worry investors is the valuation which is now around 34x PE. For this type of valuation people will be expecting a profit growth of at least 15% (at this rate profit will double in 5 years).

Most analysts are actually projecting a core profit growth for the company in the next 2 FYs at least (FY19 & FY21) with the core PBT in FY20 projected to be around RM672mil (avg of 5 analysts). Growth is good which show the management ability in growing the company but still the avg growth rate is only 9.2% which might be below some of the investors expectation. The average PATAMI for FY20 (from the same 5 analysts) is RM 536mil. At the current share price that would translate to 29.8x fwd PE.

Hopefully Dialog managed to deliver higher than expected profit growth in the near quarters to dispel some of the worries that investors has on its rich valuation.

If you are looking to diversify your portfolio outside of the O&G industry (due to the current oil price volatility), 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.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Good luck.

Hi Furtuneblooming,

I actually agree with you on Russia (along with Saudi and Opec members) will do something to help push back the price to USD60 level. That being said Russia 2019 budget was made based on oil price of USD40. However Saudi needs oil price to be at around USD70 to be able to balance its 2019 budget.

But i think they will wait first on the outcome of the trade negotiation between Trump and Xi Jinping schedule in January. If the 2 manage to reach to an agreement, global outlook would turn bullish (especially for China) which would increase most commodity prices including oil. Till then i think O&G investors need to be ready to face certain amount of volatility.

Hibiscus is actually the most relevant counter in Bursa if you are betting on the oil price to bounce back. Other O&G counters are mostly service providers which still depend on what Petronas will do. We have seen how Petronas had restructure their new service contracts. It is now mostly umbrella based and on call basis instead of time charter basis. Even if oil price go up it would not mean the service providers profit would go up as well. Another oil exploration counter is Reach and Sumatec. But both has capital funding issues.

If you are looking to diversify your portfolio outside of the O&G industry (due to the current oil price volatility), 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.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Good luck.

A friend asked me about the effect of the falling oil price to MBMR prospect given that today oil Brent is currently trading at around USD56 vs the USD85 back in August.

I don't think there is any direct correlation between MBMR's performance (in particular Perodua) compared to the price of crude oil. Off course there will be some indirect correlation for example we would most probably see a weakening of RM vs Yen. But we will most probably see other commodities such as aluminium and steel fall as well (commodity price normally move in the same direction albeit at different quantum) which is a positive thing for the company. So the net net effect of the movement of the crude price to MBMR or Perodua performance is actually minimal. That being said given the depressing oil price, Opec and Russia would most probably do something to help push back the price to above USD60.

What about the outcome of the trade negotiation between Trump and Xi Jinping?

I don't think MBMR or Perodua performance would effect that much since the 2 companies are actually domestic focus. If the two leaders managed to make a deal next year (they are expected to meet in January), it would be a good sign for the global economy. Commodity price would probably go up, including crude oil. This will strengthen our currency (RM). If they fail to reach to an agreement, commodity price would most probably go down, including crude oil. This will weaken the ringgit.

But just like the issue with crude price movement, the net net effect to MBMR (and Perodua) is actually minimal since the companies are not trade focus. Sales of Perodua cars depends on the Malaysia market only.

My thesis (including most if not all analysts) is that 4Q18 result will be a stellar result due to still high sales of new myvi and Perodua push to reduce the new myvi backlog (22k undeliver myvi at the end of 3Q18). This thesis is backed by Perodua Oct 18 sales numbers an improvement of 18% vs Oct 17. Its even higher than Aug 18 (last month of the tax holiday period) number by 9.6%.

The company will continue to grow in FY19 backed by:

1) still high demand of New Myvi
2) launching of new SUV in Feb 19.
3) launching of new Alza in 2H19.

Please read some of the analyst reports as they might be some details that i had missed out.

https://klse.i3investor.com/servlets/stk/pt/5983.jsp

All have a target price of above RM3 for MBMR with the lowest being Hong Leong at RM3.13 and the higher Maybank at RM4.18.

Here is maybank report which is not in i3.

http://www.bursamarketplace.com/mkt/tools/research/mbm_resources_stellar_results_trounced_all_expecta-589394

Thanks.

Post removed.Why?

Hi Nexusglory,

I think you need to reassess back your thesis when you made the investment at RM5-6. I assume this was made prior to the announcement of the recent quarterly report. Does it still stands or has it change?

You need to analyse and come to a conclusion whether the low revenue (which resulted in lower profit) recorded in 1Q19 is permanent or is just a one off event. Some investors believe that Padini revenue and profit will bounce back in the 2Q and 3Q19. If let say the profit rebound back at RM40mil/ quarter (RM160mil if annualise) , then at the current price Padini is currently being valued at only 13.8x fwd PE which is not that expensive relative to its historical PE. However if you think that the 1Q19 result will be the new trend for Padini, then the company is currently trading at a multiple of around 28x PE.

Different investors have different thesis. You have to come up with your own. If you have doubts on your thesis, ask a friend ( that knows how to analyse the numbers off course) to look at them and provide some feedback. Sometimes when we are too entrench in investing in a company, we tend to have blind spots. It helps to get a fresh pair of eyes to relook at the investment thesis to see whether we had miss out some important data or not. That's why when you do investment, it is better to have another partner to confirm or recheck your thesis. It has to be someone you trust off course. In this forum everyone has their own agendas (myself included). Never take an investment advice from anyone without verifying the data/ thesis yourself. In the end what money you gain or loss is still yours.

If you think your thesis still stands. Then you should just buckle up and get ready to face the volatility. If you are right, 2Q19 results are good, investors should come back and relook at Padini. But let say you still have jitters and it effect your sleep or work for example, i would suggest you reduce some of your exposure to a more comfortable level. You might be too expose in the stock (in terms of % of portfolio). Investment is a long term journey. Try to survive and you can always continue with the journey later.

Good luck.

Hi Kaliz,

It might be a while before the company could turnaround its financial performances.
The company has been losing money since FY13 mainly due to the disruption causes by the 60MW thermal Libaran Plant in Sabah. Most of the disruptions were related to the ageing assets of the plant itself. Since 2013 the plant has never been able to operate at full capacity as the reparation works of the plant has yet to be completed till this day. The plant still only uses 2 out of the 4 diesel engines that it needs. Reparation was slow due to lack of funds.

Things just got worst in FY15 when its Sungai Kenerong Hydro plant in Kelantan was highly affected by the major flood occurred in late 2014. Most of the transmission lines and pipelines were heavily damaged. Reparation works has yet to be completed mainly due to the lack of funds as well.

As you imagine, this has affected the company financials in particular the company balance sheet strength. As of Sept 18, the company has a total of RM405mil in assets but only RM47 mil are current asset (of which RM7.4mil only is cash). Total liabilities stand at RM162mil but RM111mil are current liabilities (of which RM51mil is debt). The company will most probably face liquidity issue in the future.

Management has come up with a fund-raising exercise via Redeemable Convertible Notes to Advance Capital Partners Asset Management (ACPAM) for a total of RM60mil. The interest rate is really low at only 1% which at first, I thought was great. But the issue is that the conversion terms to ordinary shares for ACPAM is very favourable to them. They are able to convert the notes anytime within the 3 years at a price of 80%- 90% of an average of 3 days closing price taken from a range of 45 days before the conversion decision. Floor price of conversion is 12 sens. Let say the whole RM60mil is converted into shares at the 12 sens exercise price. This would mean there will be an additional 500 mil shares to be issued later vs the current 378mil shares. This means any upside potential for current shareholder might be diluted later. And given the favourable terms, ACPAM would prefer for the share price to be depressed for them to get the lowest conversion price. Once they see the share price rallying, then they will convert and most probably sell the shares straight away. Refer to the circular on the notes below:

http://www.bursamalaysia.com/market/listed-companies/company-announcements/5839797

That being said, till now ACPAM has only subscribe RM3mil out of the RM60 mil which itself is worrying as well. Even at favourable terms they still hesitate to subscribe to more of the Notes. Why?

If you are looking to diversify your portfolio outside of the power industry (due to the current industry 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 5.8x 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 launch of the new SUV in 1Q19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Good luck.

Post removed.Why?

The company property development is mainly focus in the Klang Valley area. Some of the projects that they currently developing are the mix development Kiara 163 with GDV of RM1bil (target completion 2020), Sfera Residensi in Puchong with GDV of RM426mil (target completion end of this year) and Menara YNH near the Golden Triangle area with GDV of RM2.1bil.

But the value in investing in the company lies in it vast land banks around the Klang Valley and Perak areas with most of them yet to be revalue since early 2000. It is safe to say that the NTA of RM1.74 per share recorded in Sept 18 is actually much higher ( most probably around RM3.00). As an example they have a 90 acre land near Genting that they had acquire in 2008. In their books the land is only valued at RM17.8mil but the company is planing for a mix development project with a GDV of RM2bil. At the current share price the company is only trading at 0.8x PB (if revaluation is done potentially this drops to only 0.5x PB). However, the unlocking of the asset value might take some time. Investors need to have a longer term investment horizon for this type of stock.

In the near term, the company currently facing falling revenue and profit which is in line with the general property industry.

Core PBT for 3Q18 would have only been RM4.8mil (instead of the reported RM13.8mil) if we were to exclude the RM3.4 mil gain in disposal and the RM5.6mil write back. For 9m18 property development division actually recorded a growth of 27% in revenue but this does not translate to higher profit. EBITDA and PBT for the same period has fallen by 10% and 15% respectively.

But the bigger issue lies on its balance sheet. The company is overly dependent on debt to fund their operations. As of Sept 18 the current liabilities of RM925mil (of which RM635mil is debt) is higher than the current asset of RM621mil ( of which only RM14mil is cash). The company might faces liquidity issue in the near future unless they can sell more of its assets to raise the cash to help settle their immediate obligation. Their cash flow statement in 3Q18 did not provide details but since there was a gain on disposal, they might have already started to sell some of the assets already.

The dependence on debt might also effect their future profit margin given the expected higher interest rate trend . 9m18 interest cost is RM29mil or 54% of EBIT.

Hopefully management can provide more clarification on how they plan to strengthen their balance sheet position. As mentioned before, given the landbank that they have at the moment (the list of properties under the company has 11 pages in FY17 annual report), the company has immense potential to create more value to the shareholder either by selling the land or developing it in the future.

If you are looking to diversify your portfolio outside of the property industry (due to the current negative 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 5.8x 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 launch of the new SUV in 1Q19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Good luck.

Hi balvin71,

Apparently based on the original plan, the production plant in Tanjung Malim was initially set to be completed in by early Feb 19 (as per what you had highlighted). But production will only start in September 19.

https://paultan.org/2018/10/10/proton-invests-rm1-2-billion-for-production-of-new-x70-and-next-gen-models/

But then on 21st Nov the deputy CEO of Proton, mentioned during the KL International Auto Conference that the plant will only be completed in 4Q19 (calendar year). Not sure if production can start straight away or it will also be by another 6 months to 1H20.

https://www.thestar.com.my/business/business-news/2018/11/22/proton-to-complete-plant-expansion-next-year/

Regard

Hi thinInvest,

Fair point. During the tax holiday the items that actually saw increase in sales are the high priced items. Items like clothing might not be priorities for the public given that it will only translate to a 6% discount (unless Padini also did a sales on top of the zero GST).

Hopefully your thesis is right and sales will go up in line with the holiday period in 2Q and 3Q.

Good luck.

Hi thinInvest,

Actually during the tax holiday, Perodua sales did not do that well compared to other auto companies. But its not because there was no demand, but its actually due to the New Myvi production issues. Production has already normalise since early October.

So during the 3Q (July to Sept period), sales of Myvi actually dropped from average of 23k cars in 1Q18 and 2Q18 to only 11k sales in 3Q . That being said MBMR still managed to record a PATAMI of RM38.1mil (mainly from contribution of Perodua share of profit).

For 4Q the reason i am confident that it can show profit growth is due to Perodua's October car sales numbers. They managed to sell 19,528 cars vs 16,491 on Oct 17. It is also higher than the August 18 cars sales number of 17,804 (which is the last month of tax free holiday).

This is where Perodua differs from other auto companies where mostly saw falling sales post tax holiday period.

All this numbers are all public info that you can get from the Malaysian Automotive Association (MAA).

It's hard to find profitable companies that can provide profit growth and still trading at low valuation at the moment. Most of the good ones are already trading at a premium vs their peers. In some cases the whole industry (like gloves industry) are trading at premium.

I actually like MBMR not just because of its financial performance but also due to its business positioning.

1) Its 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. Even the new SUV is expected to only be price at RM70k-80k. 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.

Just out of curiosity. Given the current market condition, where do you think is the best place to put your money into? Are you still invested in Equity?

Regards and best of luck.

Hi cashflow,

Based on the article that you provided, it seems that they already agree in principal for most of the debt to be converted to equity (first they will need to consolidate the shares ). So basically it is the 3rd scenario based on my earlier post. Sorry, i missed out the arrangement that they had with the creditors back in June.

But in essence it would not be good for current shareholders, as they will be substantially dilution once the debt holders become equity holders. Current market cap is only RM25mil. But debt is RM1.25bil.

Assuming there is no haircut on the debt and all the debt amount will be converted to new shares.

Due to the low share price, company will decide to consolidate the share first. If not you will end up with redicoulously high shares outstanding and to low share price would just be hard to trade. At 2 sen for exemple every move of 0.5 sens (smallest movement possible in Bursa) is 25 % market cap movement. Example of consolidation: Every 20 shares consolidate to 1 new share. So from 2 sens the new shares will be 40 sens but share outstanding will fall to only 63mil instead of the current 1.26bil. Market cap is still RM25mil. If now you hold 20 lots of 2 sens, after consolidate you will have only 1 lot but at a price of 40 sens.

Then, the company will convert the RM1.25bil debt to new shares. So there will be 3.14bil new shares at 40 sens per share to be issued to the debt holders. Total new share outstanding will be 3.2bil shares. In terms of balance sheet, the debt level will reduce to zero and share capital increased by RM1.25 bil (evidently no cash is actually being injected). Shareholders equity increased from -RM289mil to RM960mil (at first this sound great). In terms of NTA per share it would be RM960mil / 3.2bil shares = 30 sens/ share. P/B will be 1.3x.

Upon conversion of all the debt the company P&L will actually improve substantially. 9m18 core PBT for example (if you exclude all the impairment) would have risen to RM14mil if there were no interest cost to be paid. Annualise PBT could potentially reach RM20mil. Let say given the big accumulated losses they have in their balance sheet, they could potentially not pay taxes for multiple years to come in the future. So PAT will also be RM20mil. Again this sounds good.

But here is the issue, these new investors (creditors turned to equity investors) have mostly the objective of recuperating what ever residual values that is possible. Their intention was never to be a long term equity investors in the company. So there is 2 ways for them to get back their money.

First sell the new shares that they will received. Given that the the new share price will actually trade at a premium to the new Book value (1.3x PB) some of them might be willing to go as low as 30 sen per share ( will then trade at 1x BV). However it all depends if there is demand for the stock since even at 30 sens per share, it will be trading at RM960mil market cap/ PAT of RM20mil or 48x PE.

Second way for new investors to get their money back is via dividend. Let say they decide to pay a 100% payout of Net profit. This translate to a payout of RM20 mil or RM0.0063 sens per share or a yield of 1.56% per annum. Unless they managed to increase the level of profit in the future, this might just be too slow (after 10 years you will only get 15% of the total debt outstanding). So they might start to try to dispose of any assets that they can find willing buyers. However the book value of the assets is still only 30 sens. In most cases distress company asset will actually be sold less than their book value.

Basically for current shareholders, it doesn't actually looks that great.

In distress companies you can make money by buying the distressed debt from the current creditors (most of them will be willing to sell it at a steep discount). Its actually hard to make money from buying equity. That being said it all depends on the restructuring negotiation between Perisai and its creditors. The example that i gave above is just a plain vanilla example. Most of the time companies need to give incentives to creditors to accept their restructuring/ recapitalization plans. It could be that the new shares to creditors would be listed at a discount (bad for equity shareholders because it would just means more dilution).

As of 7th Dec there was still no update on the restructuring plan.

Good luck.

Hi joan123,

True on the export potential. Maybe Malaysia was never a main target for Geely just a testing ground and a platform for their Asean ambition.

Hi balvin71,

Thanks for the update on the tanjung malim factory. Do you know why the delay? Is it physical structural delay or just strategic delays? From my understanding they are still negotiating with some of the local autoparts suppliers on the costing. For example, they are still negotiating with MBMR on the per unit price to supply alloy wheels for the X70. Not sure for other suppliers. So the production might need to wait until they get all the auto component supply ready first.

Hi michaelwong,

1 lot in bursa is 100 shares. So 10 lots is 1,000 shares.

But if you were to use 10,000 shares, then you just need to multiply every thing in my calculation by 10. But in the end the adjusted price will still be the same.

Good luck.

Hi newbie,

The contract is good news just that it is on a "call out basis". Meaning Alam will only get paid when there is a job order. Its not like time charter contract where they pay you based on a daily charter rates (so even if you don't have work, you will still get paid). Need to see 1Q19 if the financials improve.

Good luck.

Hi Ah ling,

The high price is also because the current offer is still for CBU model. When Proton decides to manufacture it in Malaysia (expected in 2H19), then the price should go down a bit. Not sure by how much though.

However, this still depends on the demand of the X70. If demand is tepid, i don't think DRB and Geely would want to fork out too much capital to build up a new production line for X70. Geely especially given that their cash investment in Proton is still small at the moment. The RM460mil paid for 49% of Proton was via RM170mil cash and RM290mil transfer of SUV platform.

What do you think? Will they still proceed to come up with the CKD version if sales of CBU are below expectation?

Hi iphone4,

You are right to point out that the RCULS can be convertible anytime within the 5 years. But for the calculation of the share price post adjustment, unless there are investors wanting to convert the RCULS at the same time as the listing of the new shares, the price adjustment for conversion will actually be done later. And given that the RCULS provide you with a 5% yield (meaning 5 sens per year) it would be advisable for you to convert the RCULS at the end of the maturity or if for whatever reason the company decides to give a big dividend payout (special dividend for example).

I'll try to give an example.

Using Friday closing price of 71 sens (different from my original example of 85 sens yesterday) . Total initial cost for 10 lots or 1,000 shares is RM710. Same as the previous example given, you will need to prepare another RM300 for subscription of RCULS and another RM200 for right issues of shares. In the end (after both subscription) you will end up with 300 RCULS, 250 warrants and 1,650 ordinary share.

Upon the listing of the new shares, the price will adjust. Calculation:

Price per share post adjustment = RM910/ 1,650 shares = RM 0.55 (after rounding).

Let say after 5 years the price remain at RM0.55 and you have yet to sell or buy any new share (you still have the 1,650 shares) and the numbers of total share outstanding is the same and all RCULS holders decides to convert their RCULS to normal shares. Each RCULS is entitle to 2 new shares at 50sens per share (you don't actually need to fork out any money. Just that the original RM300 that you paid earlier is now being used to pay for the new shares). After conversion you will have an additional 600 new share.

Your total of shares = 1,650 + 600 =2,250 shares

Your cost of the shares = price of your 1,650 share pre listing of new shares + RM 300 (for the new 600 shares) = (55 sens x 1,650) + 300 = RM1210

Price of new shares post adjustment (after conversion of RCULS) = RM1,210/2,250 = RM0.535.

But the adjustment to RM0.535 will most likely only happen in 5 years time hence that is when you actually used the 600 new shares (from conversion of RCULS) and the cost or RM300 in your calculation. It is not to be used now ( when the initial first round of new shares will be listed).

Sorry for the long post. Hope you understand it. Feel free to correct me if there is any mistake in calculation.

Good luck.

Hi abc,

Agree with you that the public might perceived that the price as a bit high for a Proton brand. And the % of conversion from booking to firm orders might be effected.

On the other hand, i think most people had already expected that on average, it would cost higher than RM100k mainly due to the comparable (if not higher) specs of X70 vs other SUV (not an expert but this is what i got from reading the car reviews).

Need to wait for updates from the management to see how many firm booking did the X70 will actually get. Or we can wait for MAA's January car sales numbers to see how many X70 was sold.

Hope they will do well. Good luck to DRB shareholders.

Just wanted to know, how much exactly did the SUKE contract contribute to the company's bottom line? Because looking at the financials, it seems only the Maintenance and Engineering services division are making money. Construction (which it think is where the contract is park under) is in the red this year but managed to post some profit in 2017.

If the project is already facing delays, isn't it better that they got terminated by the project owner? At least now they will not have to pay high LAD.

I am not an investor but just curious to see the fall in the share price today.

If you are looking to diversify your portfolio outside of the construction business (due to the current negative 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 5.8x 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 launch of the new SUV in 1Q19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Good luck.

Investors need to be patient with the Proton turnaround plans. To get a better picture of whether the turnaround plan is working or not, you have to wait until the 4Q19 result is out first ( May 19). This is because it will be the first full quarter result of Proton post launching of the X70.

To say management has failed in the turnaround plan now is really not fair. You need to give them time to show the result first.

Good luck

The corporate exercises are a bit confusing. For those that are interested in investing in the company you need to prepare additional money for your subscription to the RCULS and the Right Issues of ordinary shares. If you decide not to subscribe, you will face potential big dilution post the new shares listing.

Assuming you buy 10 lots (1,000 shares) @ 85sen. Your original total cost is RM850.

In order to not be diluted, your are advice to subscribe to both the RCULS and Right issue of
ordinary shares.

Based on 1,000 share, you need to prepare an additional RM300 for your 300 RCULS that you are entitled to (still ok because the RCUL pays 5% interest every year). In addition you would get 150 free shares and another 150 free warrants.

Then you need to prepare another RM200 for the right issue of ordinary shares where you will get 400 shares (RM200/ 50sen ) plus another 100 bonus shares and another 100 warrant.

All in all, if you want to buy 10 lot of MFLOUR shares, you would need to prepare RM 1,350 instead of just RM850. In the end you will get 300 RCULS, 250 warrants and 1,650 shares.

Calculation for the share price post adjustment are:
Total cost for the 1,650 shares are RM850 + RM200 =RM1,050. The RM300 is not included here because that is actually the cost for 300 RCULS.
Share price post adjustment = RM1,050/ 1,650 = 63.5 sens.

If you decide not to subscribe, you will end up losing 21.5 sens post price adjustment which will be a loss of 21.5sen x 1,000 shares = RM215 or 25% of your initial investment. You would also lose out on the opportunity to get 250 tradable warrants.

If you are interested in investing in the company, i would advice you to buy at least 20 lots or 2,000 shares. If you want to buy more than that make sure that you are buying based on blocks of 20 lots (meaning 20, 40 , 60 lots etc). This is in order to prevent having odd lots numbers of shares and warrants later which is difficult to trade.

Feel free to correct me if i had made any error in calculation. I did this for a friend who was interested in the company.

If you are looking to diversify your portfolio outside of commodity based business (due to the current volatility of commodity prices), 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 5.8x 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 launch of the new SUV in 1Q19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Good luck.

Hi Daily8,

We can only speculate at the moment since the details of the contract are not made public. Most if not all concession contracts with the government falls under the Official Secret Act (OSA). Hopefully when drafting the agreement, Prestariang had used a very good law firm because i think the government will use a very strict interpretation of the contract terms in order to pay a lower compensation amount.

In my opinion it will takes some time before any amount can be reach. Till then investors need to be prepare for some volatility.

Best of luck.

If you can look pass all the corporate announcement of new ventures and corporate exercises (share consolidation and free bonus warrants) and look at the company's fundamental, Globaltec is still a loss making company since at least FY2013 which is the year after the merger of AutoV, AIC Corp and Jotech Holding. It was surprising to see that the company turn straight away to loss making in 2013 given that prior to the merger of the 3 companies, they actually made a combine profit of RM37.6mil PAT in 2011.

I am not sure what went wrong in just 6 months after the merger. They still managed to make profit in the quarter after the merger but was not as high as before at only RM2.2mil PAT. Then it just got bad in 3Q13 when they posted their first time loses as a new company. Can anyone provide some clarity on this?

I think it is better for those that are interested to wait for them to post a more sustainable profit before you invest into the company. If not, at least wait for a clearer picture on the development of the Tanjung Enim field which is supposed to be the company future growth catalyst according to management.

The last development that i heard off was the completion of the exploratory/test drilling in the Muralim block last week by Nuenergy. I think they are still testing to see how much recoverable gas reserve are in the tested well. There is also another well that they are currently testing but is yet to be completed. This is still not certain in term of recoverability. There could be gases in the 2 wells but might not be financially viable to extract. Hence why i think you should wait for the development of the well testing first before investing in this company.

For those already invested, you need to be prepare to face some market volatility in the short term. Maybe those invested could provide clarity on what are the other catalysts for the company besides the Nuenergy venture.

If you are looking to diversify your portfolio a bit (at least until the result of the Nuenergy test is out), 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 5.8x 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 launch of the new SUV in 1Q19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Good luck.

Those that are invested in this company are mainly bullish on the potential earning boost that will come from the Petersborough projects. Based on the company's projection, it should be completed by 2021. Since first announced back in late 2010, it has faced with multiples delays most of them in relation to funding issues. Hopefully the project can move forward and be completed on schedule this time around.

The Impress Ethanol plant in Thailand is still loss making but will see a doubling of its capacity to 500,000 barrels by next year. With the higher capacity, there is potential for the plant to start contributing some profit to the company. Management did not provide any updates on the expansion progress in the most recent quarter. Hopefully they are on schedule for 2019 completion.

However, i still think the company would be posting losses and negative cash flow from operation until Petersborough plant is completed and running.

Investors need to be prepare to face volatility in the near and mid term. You would need to have a longer time investment horizon (beyond 2021) to see the company posting meaningful profit.

Those looking to diversify their portfolio in companies that can provide profit growth in 2019 should consider MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 5.8x 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 launch of the new SUV in 1Q19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Good luck.

The thesis to invest in this company will revolve mainly around the compensation amount that the government is expected to pay Prestariang and its partners. Which means instead of focusing on the company's earnings (should be negative earning anyway if you take out the SKIN contribution), investors are actually investing based on the potential higher book value that the company can get if compensation is high. So basically the investment thesis is based on Price to book value (P/B). At the current share price the company is trading at 0.9x PB.

There are a lot of numbers being mentioned among the investment communities from zero compensation to the government having to pay the full amount of the concession of RM3.5bil.

For me, the based amount of any compensation should start from the amount due for works that had already been done amounting to RM126.4 mil (RM48.1mil in FY17 and RM78.3mil for 9 months FY18). However, please take note that if this is the amount to be paid, it would actually not benefit much to the investors given that the said amount is already in the company's book under "Long term receivables". Basically the book value would not change and at the current price, it will still be trading at 0.9x PB.

If higher compensation is paid, let say the govt agrees to pay double the amount of work done, or RM252mil, this would mean the book value of the company will increase by another RM 126mil or another RM0.26 per share. This would translate to a PB of 0.5x BV. Logically, the higher the compensation the cheaper Presbhd looks at the current price.

However if let say the government decide that the compensation should only be RM100mil (this govt really knows how to play hard ball), then there would actually be a negative impact of RM26mil in the company's book. First the company need to record a loss of RM26mil in their P&L and then reduce the book value by the same amount. At the current share price, valuation will actually be more expensive. PB will rise to 1.1x BV.

In both cases, compensation paid would not be that soon as negotiation would take a while before both parties can agree on an amount. If they can't agree, then it will be brought to the court which will take more time to conclude (govt will try to delay as long as they can).

So those that are invested based on the compensation amount thesis need to be ready to face market volatility especially nearing the quarterly results given that the company would most probably record a losses going forward (based on 9m18 result PBT would fall to -RM7.3mil if you were to exclude concession contribution). However, if the compensation is higher than the RM126mil mentioned above, theoretically investors could potentially make a high return out of the investment but you would need to have a long term investment horizon (i don't think it can be concluded in 6 months for example). Those with short term investment horizon should be wary of this.

For those looking to diversify some of their portfolio in waiting for the outcome of the compensation, i would suggest you look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 5.8x 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 launch of the new SUV in 1Q19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Good luck.

Hi charlie,

One of the reason for slump of TNB share price is due to the under performance of its 3Q18 result of only RM500mil PATAMI. Please take note that the fall in profit was mainly due to the impairment of its Gama Enerji plant in Turkey (RM292mil) and also a one off staff cost adjustment amounting to RM220mil. Earnings should normalised back to above the RM1bil level in the coming quarters.

Other than that, there is also the uncertainties raise from the potential sale of Khazanah holdings in the company (28.8%) in order to raise funds for the government. But i think the sales will be done based on how Khazanah sold it 16% IHH stake to Mitsui. They will sell it not in one go and at a price that is reasonable. They are not desperate seller.

Another issue that raises the uncertainty of TNB future is the new government determination to restructure the energy industry. One of the plan is to increase competition across the value chain of the industry especially in the transmission and distribution phases. Currently TNB holds the monopoly for both the transmission and distribution of electricity in Malaysia. If it were to be open to other companies, investors are worried that future profit of TNB might be effected.

7 analysts have an average PATAMI of RM6.6bil for FY19. At the current share price, this translate to a PE of only 11.7x. Quite low for a blue chip with stable cash flow.

However, investors need to be prepare to face some near term volatility mainly from the government intention to liberalise the energy industry which might effect TNB long term outlook. Until the government provide a clear policy on the issue, some investors might prefer to diversify some of their position into other companies.

If your are looking to diversify in companies outside of the energy/power 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 5.8x 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 launch of the new SUV in 1Q19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Good luck.

I think investors should stay away from this company. I doubt they can turnaround to make any profit soon. What's worst is their balance sheet. Currently they are trading at a negative equity.

Those that are invested should try to find other companies to put you money into. If you are still interested in O&G there are still some companies that managed to come up with some profit but have stronger balance sheet. These are the companies that will do well once Petronas decides to increase back its spending in the upstream segment. You can also go and invest in downstream related O&G companies. They will benefit from Petronas spending in 2019.

For those looking to diversify in companies outside of the O&G 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 5.8x 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 launch of the new SUV in 1Q19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Good luck.

Those that are interested in this company must be eyeing for the high NTA that the company has as of Sep 18 which is around RM1.64 per share. Even after paying off the RCPS, NTA is still high at around RM1.25 per share.

However, the company is stll expected to post losses in the near future and given the depleting cash balance of only RM7mil as of Sept, they might need to do something in order to raised capital. Even that RM6mil is pledged amount to banks. So their cash for operation is only RM1mil.

I doubt any banks will be comfortable to loan them any money given the negative cash flow that it is facing at the moment. They need to either sell some of their asset, convert their high receivables to cash or do another round of equity fund raising. Even after the recent private placement exercise last month, it had only managed to raise a total or RM7,2mil. I think the company needs at least around RM10mil per quarter to stay afloat.

A big chunk of the receivables have actually been in the company's book for more than a year. Not sure if they can convert a lot of the receivables to cash soon.

Selling of the assets might take some time to materialised. The biggest assets (in terms of value) is the 500 acre property land in Ulu Langat (valued at RM785mil). Other high valued properties are mostly industrial properties/ lands.

Investors need to be prepare for a potential cash call event. Hopefully management can unlock some of the value for the Ulu Langat land soon. Till then investors have to be ready to face some market volatility.

For those looking to diversified their portfolio outside of the ceramic or property 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 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. And FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Good luck.

Revenue and profit trend from their current mobile digital and SMS business has been trending downwards for the past couple of years. FY 19 is expected to be worst based on the 1Q19 result where revenue fell to less than RM3mil.

New revenue and profit growth was supposed to come mainly from its new telco venture in Thailand but all that was scrapped back in October. At the moment there is no indication by the management on whether they have identified any other businesses that has the same high potential as the Thai venture.

I was initially attracted to invest into the company due to its high cash balance and low debt level (net cash of RM30.5mil). However, most of this cash that was raised during during the last right issue exercise back in November are already assign to specifics projects. Most of the remaining RM30 mil will be used to expend further the company's current business.

You should only invest in this company if you believe that management would be able to turnaround the company via further expansion of the company current businesses. It would be better for you to wait for the next quarter to see if things has started to turnaround or not ( i have my doubts on this).

Hopefully all the new investment that the company had make and going to make will start to bear fruits soon and compensate those investors that had put their confidence in the company's management.

For those looking to diversify in companies outside of the Telco/ 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 5.8x 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. And FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Good luck.

Hi Sell,

Previously MBMR posted lower 4Q results is not due to weaker operation performance. Actually, in general core profit are mostly higher during the quarter when compared to others. The main reason for the lower performance in 4Q previously was due to management decision to perform impairment or writeoff exercise of its investment at the end of the year (RM20mil in FY15, RM34mil in FY16 and RM245mil in FY17). Most of these impairment/writeoff are for the company's investment in Hirotako (safety equipment division) and its alloy wheel manufacturing business. If you were to exclude the impairment, PAT would have mostly been higher in 4Q compared to 1, 2 or 3Q.

In 4Q17, management had decided to fully impair all of its investment in Hirotako and the alloy wheel businesses which is why the impairment amount for last year was so high at RM245mil. Management has also indicated that there would be no more impairment plan for FY19. In addition to that, October 2018 sales was 18.4% higher compared to last year which is why i am confident that 4Q18 result would be better than 4Q17 and 3Q18. So you will see a growth in profit for QoQ and YoY.

I also think that investors should invest based on the fundamental of a company instead of following what other investors are doing. If you were to based your investment decisions on what EPF sells or buys then you might be a bit confuse on their decision to buy and sell UMW share on the same day for example. Or their decision to increase exposure in Armada in Nov (at price of around rm0.40) to only dispose off it as early as Dec (at price below RM0.20). It would be better for investors to focus on the fundamentals of a company rather than focusing too much on what other people are doing. Those that decides to follow Tabung Haji decisions might not be too happy now. You can follow but need to do your own analysis of the company first.

EPF decision to buy and sell on the same day:
http://www.bursamalaysia.com/market/listed-companies/company-announcements/5999581

EPF Armada movement:
https://klse.i3investor.com/servlets/stk/annchsh/5210.jsp

On your target price of RM1, it would mean that you are valuing MBMR at a mere 2.7x PE and 0.3x BV. I don't think it's logical to value a company with presence in Perodua at a very low multiple given the industry average of 15x PE.

Based on your other comments in i3, i think you are actually a bit pessimistic on investing in equity in particular in Bursa at the moment. Out of curiosity, where do you think would be the best place for investors to put their money into at the current market condition?

Regards.

1Q and 2Q lower revenue and profit were mainly due to the disappointing results derive from the Mykad contract. There were no deliveries of Mykad to the government during the 2 quarters. 3Q and 4Q19 are also expected to be the same as the government will first used up most of its existing inventories. So we need to expect similar profit for these 2 quarters. Investors need to be prepare for the company to post negative profit growth in 3Q & 4Q19. Deliveries of Mykad should normalised in FY20.

The contract of Mykad will end in Dec 2019. Some investors are pessimistic on the company's outlook to win any new contracts from the government due to the accusation made on how some of its other contracts were won in particular MACC acquisition that it paid top government officials to secure the passport contract back in 2012. The other front runners for the Mykad contract is Iris Berhad.

Hope Datasonic can clear its name from all the acquisition made by MACC and bring back investors confidence to the company.

For those looking to diversify in companies that does not depend on government contracts (due to the current government commitment of reviewing contracts given during BN years), i would proposed you 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 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17. And FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Good luck.

Being a long haul budget airline, AAX is more sensitive to the movement of the oil price when compared to other airlines including its parent company AirAsia (which focus mainly on short distance travel). . This is why some people argues that oil price fluctuation are the flaw in the company's budget long haul model.

AAX cost per available seat kilometer excluding fuel (CASK) is actually one of the lowest in the industry at around 1.98 US cents. This is even lower then AirAsia's 2.2 cents and the full services carriers of about 5 to 6 cents. But given that it is a long haul budget service its revenue per ASK spread to CASK is very low compared to other airlines (basically this is the profit spread) . When jet fuel price increase, it could easily wipe out the profit and turn the operation into a loss which is what had happen this year.

Currently the jet fuel price is still trading at above USD80 per barrel (an average premium of USD20 vs Brent crude) which is above the level seen last year but a lot better than the 3Q18 average of USD90-100. Hopefully with the seasonally higher passengers carried and lower fuel cost, 4Q18 result might be able to return back to profit.

However for FY19 to be profitable it will all depend on the jet fuel cost. Anything above USD90 per barrel would mean a potential difficult year for AAX.

For those looking to diversify in companies outside of the airline 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 5.9x 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. And FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Good luck.

The company 3Q18 result was really dissapointing given that most investors were hoping for a small profit as a signal for the company's turnaround back to profitability. Instead the company posted a loss of rm24.8mil eventhough utilisation rates were higher at 75%. Given the depressing charter rates, the company might only be able to record a small profit (relative to its market cap) even at a utilisation rate that nears the 90% level.

I think investors might be better off investing in other profitable businesses. I think in 2019 the company would still be in the red but hopefully at a lower loss level. If you are still interested in the O&G industry, it is better to invest directly in the oil field owners ( to take advantages of any increase of oil price) or to focus on Malaysian downstream related business ( to take advantage of Petronas focus spending in the downstream industry). Upstream focused companies outlook in the near future does not seem too bright. Given the volatility of the oil price and Malaysian government needs for higher dividend from Petronas, it might be a while before we can see the revival of the upstream service industry.

For those looking to diversify in companies outside of the O&G industry, i would proposed you look at MBMR (https://klse.i3investor.com/servlets/stk/pt/5983.jsp).' target='_blank'>https://klse.i3investor.com/servlets/stk/pt/5983.jsp).

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.0x 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. And FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Good luck.

A very inconsistent financial performance. In the past, every time the company managed to record a profit, it will straight away record a negative result in the next quarter reporting.

Need to wait for another quarter or two to see if the profit in 3Q18 is actually sustainable. I have my doubts on this. The main loss making divisions are still the trading & services and property divisions. Construction division is only profitable when u include the JV results. Excluding JV, it is still negative. Only the Vietnam water concessions is able to deliver consistent profit to the group but even that is not enough to cover the losses from the other divisions and the high corporate expense cost.

It would be better for investors to wait an see the result of 4Q18. Hopefully they can post another profitable quarter.

If you are looking to divest some of your portfolio into a low valuation company but still able to deliver short and mid term profit growth, 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 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17. And FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Good luck.

Hi Paul,

Not sure. Most (if not all) concession agreement with the government falls under Official Secret Act (OSA). We can't get a copy. So hard to predict the compensation amount.

Hi Daily8,

I somewhat agree with you on this.

I don't think the government can just cancel a signed concession agreement without paying any compensation to Prestariang and its partners. So i still believe there is some residual value to shareholders if the government are determined to scrap the SKIN project. I couldn't find a copy of the agreement so i am not sure how much will the compensation be.

If the compensation penalty is high enough, then i agree with you that the most likely outcome would be a renegotiation between the government and Prestariang. Probably the government is looking to lower the annual fee payment of RM295mil to be paid on the 4th to 15th year of the concession agreement (1st payment to start in 2021).

In the case where the compensation penalty is low (relative to the RM3.5bil to be paid during the concession period) then i would assume the government would just pay the penalty. But it does mean that there is some value to shareholders.

For those looking to diversify in companies that does not depend on government contracts (due to the government commitment of reviewing contracts given during BN years), i would proposed you look at MBMR (https://klse.i3investor.com/servlets/stk/pt/5983.jsp).' target='_blank'>https://klse.i3investor.com/servlets/stk/pt/5983.jsp).

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.0x 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. And FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Hopefully Prestariang has a water tight agreement for the SKIN project (meaning there is a compensation clause). If that is the case, shareholders can rest assure that there will be some residual value if the project is officially canceled.

Good luck

Not so sure why people are selling Frontken.

Revenue grew at an average of more than 10% since 2016 and still expect to grow in 2019.

Profit grew exponentially at a rate of 38% per year for the same period mainly attributed to the improvement of the average PAT margins from 10.4% in 2016 to this year's expected average of 16.3%. Just like revenue, profit is also expected to grow at a double digit growth rate in FY19.

Valuation wise, the company will be valued at 17.4x PE assuming a PATAMI of RM45mil in FY 18 (4Q18 PATAMI is expected to be in the range of RM 11-12 mil). If the profit managed to grow by another 20% in FY19 to reach a PATAMI of RM55mil, then the valuation will drop to only 14.3x PE which is not that expensive compared to the industry's average (but still a bit rich for my taste).

I can only assume that the current sell off is mainly attributed to the negative sentiment that investors have on the semicon & tech stocks at the moment. It is not due to the change of the company's fundamental (feel free to correct me on this).

For those investors that are looking to diversify outside of the semicon or tech industry ( due to the near term negative perception), i would recommend them to look at MBMR (https://klse.i3investor.com/servlets/stk/pt/5983.jsp).' target='_blank'>https://klse.i3investor.com/servlets/stk/pt/5983.jsp).

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.0x 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. And FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

I still think this company is a good buy for those looking to have an exposure to the Semicon industry mainly due to the lower valuation compared to its peers. Investors need to be ready to face the near term volatility at least until the 4Q18 result is out. Hopefully the company managed to deliver another stellar result which might help ease off some of the selling pressure.

Good luck

Another below par quarterly result delivered by the company in 3Q18.

Even though the company managed to deliver a PATAMI of RM83.5mil in 3Q18, this was mainly due to the RM55.3mil one off gain from disposal of Lekir Bulk terminal to Integrax (subsidiary of TNB). Excluding the one off gain, PATAMI would have fallen to only RM28.2mil which is the lowest ever core profit recorded since its listing.

The below expectation quarterly result was mainly due to unplanned maintenance for 3 of its power plants (Tanjung Bin, GB3 and Kapar Energy Venture).

It is expected that the 4Q results to be negatively effected by the Tanjung Bin boiler leakages and voltage regulator issues where repair works were only completed at the end of October.

9m core PATAMI profit fell by almost 50% to RM134 mil vs RM266 mil recorded in 2017. Core net profit is expected to see negative growth again for FY18. The group has yet to be able to deliver any full year core profit growth to its investors since its listing in 2015.

The main reason for the below expectation results of the group is the Tanjung Bin power plant which was initially supposed to be the earning growth catalyst for the group (as presented in the IPO prospectus). The power plant has consistently faced with unplanned maintenance every year since its first operated in early 2016.

Average PATAMI for FY19 from 4 analysts is RM209.9mil. At the current share price, the company is currently valued at 18.6x PE.

I still think the company will be able to record some profit growth in 4Q18 given that 4Q17 only managed to record a PATAMI of RM43mil (2nd lowest quarterly profit recorded since listing). If the company failed to beat last year result (maybe due to higher than expected cost from the reparation of Tanjung Bin boiler wall leakage during the quarter) you can expect that some investors might decide to shift their position to other companies.

For those already invested in the company, be prepare for some volatility in the near future (in anticipating the 4Q18 result).

Those that are interested in the company should wait and see the 4Q18 result first.

If you are looking for companies outside of the Power Industry to diversify your portfolio, i would recommend you to look at MBMR (https://klse.i3investor.com/servlets/stk/pt/5983.jsp).' target='_blank'>https://klse.i3investor.com/servlets/stk/pt/5983.jsp).

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.0x 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. And FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19.

Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions.

Hope Malakoff can start to deliver the profit growth that is expected of them in FY19. Hopefully there will be no more unplanned maintenance for next year.

Good luck