kcchong, which spreadsheet?

http://pages.stern.nyu.edu/~adamodar/

Hi Kcchong,mind to demonstrate What formula you used to get 2.37?


Ebit = 90.2m
Expected growth for the next 5 years=10%
Terminal growth=3%.
Cost of equity=10%

EV=1.09b, or RM2.37 per share

Thank you

to kk123, if the water asset is acquired by federal government, the tariff may be reduced due to the financing rates enjoyed by PAAB as a government owned unit.

Hello, Selangor Folks, any water supply disruption? ANSWER>NO. REASON>The water treatment plants have not received any notification from the Selangor state government about the licence being removed and I believe the Federal Government is still finalising its offer to take over the water assets

http://www.thestar.com.my/Business/Business-News/2014/01/16/Water-issue-remains-unclear-Licence-termination-among-Selangor-concessionaires-cloud-sector.aspx/

“I have called the companies and it seems that everything remains status quo. I am not sure what the Selangor Mentri Besar Tan Sri Khalid Ibrahim is hinting at with the raw water licence termination, but I hope the Federal Government is leaving the discussion for now since it has invoked Section 114 of the Water Services Industry Act 2006 (which means there will be no water supply disruption).

“The water treatment plants have not received any notification from the Selangor state government about the licence being removed and I believe the Federal Government is still finalising its offer to take over the water assets,” he told StarBiz.

I don understand the rationale behind the termination of the license. If Horas is able to supply water to the whole state, then the takeover event would not take place.One of the reasons of acquiring water assets is to solve water crisis. In fac thet termination is a good sign because the Puncak's main shareholder may compromise and expect lower euiqty value(
the worst is 12% ROE), the value for Puncak should be higher than current price. This is panic selling.We shall see a clearer picture soon.

Hi JyYeo, I have same thought as Kcchong, could you share the companies that have high EBIT/EV>Earning yields and EBIT/(NET fixed assets+ net working capital>ROC.

As explained by Joel GreenBlatt in the book,

Using EBIT/EV is to find a cheap stock
Using EBIT/(Net fixed assets+ Net working capital) is to evaluate whether the company can generate good profits using capital.

In short,the investors can find a cheap stock with good quality business(fundamentals) using the magic formula.

I would also like the companies that can generate high FCF or High CFFO with little spending on Capex? I dont mind even though its profit is growing slowly.hahaha.

Kcchong, Thank you for your sharing. Greatly appreciate it.

Hi Sensemaker, thank you for your sharing as well.
Mind to explain why you have decided not to invest in Kfima and Cenbond?

Hi Kcchong, I have a few questions.

1:If using NOPAT/IC where IC = PPE + net working capital
Where net working capital=receivables+ inventories - payable
The "total assets" consist of many other stuff not concerning the "ordinary" business; for example some property investments for some non-property companies; investments in associates and joint venture companies; some "other investments" etc. These stuff are generally not consolidated into the financial statements of the company, and hence by using your formula, you nay have over-estimated the invested capital, and hence resulting in a lower actual ROIC.


Then, do you include Share of profit of associates and Investments in associates when calculating NOPAT/IC for Kfima(sorry for a spam here)?Do you include Non-ordinary(non core) business when calculating NOPAT/IC?

2: what is your view for the below statement. How do you treat deferred tax assets and tax liabilities when calculating IC

Actually, including taxes payable is a judgment call. Many analysts let this item remain as a source of invested capital (as we did here) because most companies never pay these deferred taxes. These taxes are perpetually deferred, and for this reason, some call them "quasi equity". If the company were going to pay these taxes, we would exclude taxes payable from invested capital, but since the company - in practice - is going to hold onto the extra cash, we are going to charge them for the use of it.

If I am not mistaken, Joel encourages the investor to use EBIT when calculating ROIC because different companies have different debt and tax rates, using ebit can avoid the distortions arising from differences in tax rates and debt levels.

3: what is your valuation method for Tas offshore? its CFFO and FCF has been negative for a few years. but its price is still increasing.

since pakatan rakyat has been given mandate to rule selangor, I believe that pakatan rakyat will not disappoint people! what is their ultimate objective? to rule the country! who is going to trust them if they cant even manage a state?

no doubt political influences also affect the deal. what if bn doesnt want to compromise with pkr? there will be no deal, the situation will become worse, then i willl be an independent candidate in selangor in the next election? Reason? people are suffering from water crisis and they cant even use one of the necessities(water),many factories and developments also get affected. Can human survive without water? So....there must be a deal!

time to ignore this counter until further update/annoucenment

ignores short term volatility and looks at the business prospects. as long as its fundamental remains promising, then the long term investors should not get worried about the price fluctuation.....

PAAB had only verbally agreed in principle in various official meetings
involving the Federal Government and the Selangor State Government to
take over the water assets of PNSB and SYABAS at the total value of
RM4.039 billion;

cannot sell this share if you look at the big picture. i believe my own analysis that this problem(consolidation) has to be resolved ASAP! Puncak will rise soon!

water assets to be acquired by paab get the remainig ammount(5.594b-1.555b)...so, paab is going to pay for the amount?

1.555billion derived from =1.117(equity contribution plus return on equity for pnsb)+0.437(equity contribution plus return on equity for syabas)

The net proceeds that Puncak will receive from KDEB for the proposed
purchase of 100% equity in PNSB and 70% equity in SYABAS amounts to
RM1.555 billion only, as opposed to the Total Equity Value of RM5.594
billion as stated in the two (2) separate letters on the Offers from KDEB
dated 21 November 2013;
ii) There shall be no further consideration to be paid to Puncak apart from the
proposed RM1.555 billion;

don understand, why the person says mb only offers 1.555billion instead of 5.594 billion? where does 1.555billion come from?

this announcement is neutral, subject to how our state government respond to the conditions.

prahadude, you just read the key points: page 3, e.

........now we need to wait for the response from kdeb....puncak kicks the ball to state government..hahaha........

i m using osk, you?

ok..ya...also 20lots at 3.5

what is your present value(using which valuation method)? thanks

ok. the result will be out in 1 hour. head i win, tail i win.haha

icon8888,where did you get the information about sector from klse.i3investor? thanks.

ok.i answer for careful investor. Who is in control? Puncak. If Puncak and shareholders are not happy with the offer price because it is lower than our expectation, we can reject and wait for a better offer price! Khalid is very keen to solve this problem and hopes Puncak says yes to the deal....hahaha...

whatever the outcome on wednesday. i will hold it for long term if mb cant seal a deal with puncak. i am still waiting for another catalyst(oil and gas) from petronas.anyway carefulinvestor you got your point.

yeah.increased salary is a good sign . anwar and pakatan rakyat members also complaint about salary increase-political risk. If Khalid cant resolve water issue, this is another political risk. He may not be able to become a MB.

no need to guess. if the investors are not confident with the takeover deal and relucant to take risks, they can run. We will know the answer in one week.

which valuation method did they use to derive the value of RM3? thanks

why do you think mphb is worth RM3?

another doji today...all investors are waiting for announcent from the takeover deal

Total water tariff compensation claims submitted to the Selangor State Government up to the period ended 30September2013 is RM3,235.8million.As the legal proceedings between SYABAS and the Selangor State Government is still on-going,SYABAS is only paying proportionately to all the water treatment operators, including PNSB for the outstanding amount.

will the market react to this quarterly report?i think whether they agree to sell the water assets is priority.

its book value also increase

interesting, water segment posted higher revenue and pbit

ok...revenue and eps decrease, was mainly due to lower profit contribution from GOM Resources as a result of Petronas deferring several works to next year and higher operating cost.During this financial period,the oil and gas segment incurred higher overheads to prepare for its expansion programme into other disciplines within the sector.

Interesting. Gamuda's price will increase due to this news.......

any news today?

what is happening today?

one of the possibilities is that the federal government take over the debts.

http://www.theedgemalaysia.com/business-news/264435-game-changer-in-selangor-water-impasse-say-analysts.html

the tp given by sj securities is so low

http://www.theedgemalaysia.com/business-news/264469-alam-maritims-results-beat-estimates.html

undeniably Our MB manages a state like running a corporation. He believes in prudent spending, so he should also be wise enough to foresee the situation if he cant settle the situation.

no worries. MP needs to resolve this issue ASAP. 841 projects were affected in selangor due to water disputed as claimed by SPAN. If this problem carries on, the situation will be worsened and the tax revenue will be affected as well. The water reserve margin is not sustainable. I believe the Selangor Government is very keen to settle this problem.

ok..received the offer, the board and management need to reply by 4 dec.

* eps compared to last quarter's