Glove industry had a moat pre-pandemic but the metaphorical draw bridge was lowered during the pandemic, leading to a ton of invaders entering the castle. Now, those invaders are all stucked in the castle battling each other out. Many of them has accumulated nuff resources for a long drawn out battle. Thats the scenario. Hartalega, Intco and Kossan is likely to emerge victorious but at what cost in terms of money and time? Investment is about timing so assuming the glove industry normalize in 5 years time, what would be the cagr earning? Thats the question I am asking myself.

Cut my harta at 25% loss. Bigger question right now is how long will the asp stay at such unprofitable level? If we take cue from the condom industry, karex was in the doldrums for 6 years. Is it not an apple to apple comparison but it shows how long the consolidation phase can be, with major factors such as covid lockdown and reopening playing a role in the supply-demand dynamics for condom. For gloves, there is not a brightspot atm, with asp hitting fresh low, I think it will be a long drawn out inter-intra battle involding the cash-rich old boys and yet-to-give-up new boys. On the demand side, sadly I think gloves wont hit the so-called 10% growth per annum in the next 5 years due to the normalization of covid. I mean, just see how many people is still wearing masks these days. Statistics and probability is on the side of not having another pandemic occurring so soon again. Even if demands picks up exponentially again for some reason, many gloves companies with their dormant production lines can kick in instantly hence dragging the asp down again. I think its better stay as an observer in the time being

Current plan is buy rm5k of Harta every month. Rm70k savings will absolutely be for backup. Only touching it if there is some compellable bargain.

@rl68, glove asp has bottomed it seems. Only thing to do is to buy a meaningful sum to not miss out.

I need to formulate a plan and gain clarity of the situation.

Now that I have roughly rm70k which is around 40% cash left..

Not proud to say I went on to buy a total of rm100k of Harta. FOMO ruled to some extent. I also didn't want to miss up on this top calibre company. Really no fear holding it over the years. Its a no brainer.

Don't be greedy period. Its okay to reduce risk, make lesser but at least have the capital for any sort of bargain hunting.

One thing I really learned is to protect your capital. Its BETTER to leave your money untouched than to risk it all for a chance of profiting. Protect Capital > Make Less > Lose Money

Hartalega seems great. Currently, only considering this stock. Plan to put in RM16k every month into it.

Sold Gkent at big loss. The management is unfortunately not of top calibre. Fell out of love with the construction and glove biz.

Perhaps bought GK at a premium. If we use the industry standard of 10% profit margin, at 150m water meter revenue, at pe 15 for a historically low, 5% cagr growth in revenue business, gk's metering biz is worth 225m. Glove's prospect and net cash balance are assumed to cancel each other out. Construction is hard to value atm due to lack of orderbook. 10mil a year at pe10 = 100mil. Total 225m + 100m = current market cap of gkent (325m), seems about right - very conservatively. Smart meter growth and surprise job wins are not factored in yet.

lol, this is nuts.

https://www.marconline.com.my/car/60538900365

Gkent has projected net negative cash flow from
operations this year due to their construction of Dynacare. We will be lucky if we can get 2.7c div this year. Both package 2 & 3 of rasau is won by taliworks. I don't think ranhill won anything.

Honestly, the chances for gkent to win package 1 is quite low, judging from the amount of strong tenderers like gamuda and Ijm. Gkent is rumored to have partnered with a state own entity to jointly bid. Could it be KPS?

A bird in the hand is worth... X birds in the bush. Johan has to compete with existing players n China. Things won't be easy for sure. I hope they suceed.

Guys, Johan has done it. Diners club sold.

Typo error. QR released on 2nd July* @jlex11 I hope so too, but trying to be objective here.

In Johan latest QR released on 2nd June, they mentioned "The transaction has yet to be completed pending the fulfilment of Conditions Precedents ("CPs") by the purchaser." I hope the deal has not fallen through.

sorry lads, puchong factory is under mukim petaling which means EMCO. https://www.malaysiakini.com/news/581309

@danny They didnt secure any project since 2016, after LRT3 by the way. But to be fair, their hands were full until 2019. During PH time, basically all contractors suffered due to lesser gov projects rollout. For year 2020? We all know what happened lah. Probably after GE15, only will the projects be given out if not new gov will come n kacau again.

So, the glove factory project is indeed timely for their construction biz, whether you like their glove venture or not, haha. Regarding LRT3 deadlock, here's the pros and cons if they sell:

Pros:
-They can get assured payment now when the future of construction industry is seem to be challenging due to lack of worker, material cost, gov instability, political risk n etc.
-They can focus on their water metering, hospital/WTP construction tender and glove biz which is a lot already.

Cons:
-They will miss out on a chance to prove their rail construction ability and a good project reference when completed, this track record might affect their chances of future rail project participations.

I prefer them to sell if the price is reasonable because less risk is always better.

If u see clearly, the construction biz itself without lrt3 contribution is loss making for the two months. It means their construction book is very depleted already.

and of course, the risk is also greater with such big heavy investment of Rm250m. Ouch. Still having mixed feelings.

With endemic becoming the norm, affecting construction heavily, and water metering to a certain extent, I am starting to think gloves venture is a good hedge. Two key things I will observe is the cost and selling price aka. profit margin. Mah sing should be a good case study in time to come. To be competitive, you need economies of scale which why they r going ham on 12bil pieces. Seriously, you need to go big and fast asap in order to suffer the next oversupply downturn. (When it comes).

It takes one to know one. Stock raider n friends knows better than anyone on scams and frauds. Listen to the master.

Lol ilurker spectacular failure on mr diy made me take him way less seriously.

Biggest question one must ask is: "are there anything wrong with the bussiness of Serbadk?" Before this incident and after it. Has anything changed? Is the recent fiasco just a red herring or a red flag of things to come. According to serba, kpmg seem to have picked out things which does not affect their business viability. But somehow there is a huge doubt on whether serba's book can be trusted or not. This is the Crux of the matter, I think.

@stockraider The thing is biggest mistake a person can make is buying because of Philip or selling because stockraider says so. I hope everyone here does their due diligence.

I have mixed feelings for this company because someone I respected is heavily invested here. I stay away from investing here. I guess at this moment, everything is unclear to the public, so thr market may react rightly or wrongly. If it goes into a selldown and serbadk is proven to be credible, any dip can be an opportunity. Anyway, hanlon's razor is also another possibility. Or if you are dead set on the other red flags triggered previously. All the best everyone. Past few day, I learnt that there is always something unexpected crashing your investments.

@Gettingreal Thanks for sharing, I understand your point.

@gettingreal Are you in the rail/rolling stock industry? As per my understanding, Gk's is more like a project manager, they hire specialist sub-cons for all their rail works. None of those works are done in-house. They basically sub out those jobs. So, whoever takes over and just hire those specialists again like CRCC, Bombadier, Siemens and etc. Yeah?

Still overpriced. 627million market cap.

Sold Pchem after holding for 2 years. The short term and medium prospect for it is excellent but the price upside for a mega big cap is the reason for my disposal. Also, I need some liquidity at hand. Bought Chin Well because 1. Steel products price increase 2. Big building mat. price increase in the US according to WB. 3. Housing & Infrastructure boom in US 4.Malaysia & SEA is most competitive in exporting to US due to US-China Tarriff. 4. China has removed the tax relief for steel products export hence EU will have less flooding of cheap fasteners fr China. Should be a medium trade only.

Sold mrdiy. (+36.44% returns) Totally good business but found better opportunity for price upside.

Sold Mr. Diy. Very very good company (superb ROE, Management, Moat) but the valuation has limited upside compared to Gkent. Bought more Gkent with the profit.

Whoopsie. Someone might get charged for abuse of power in Prasarana.. don't pray play..

https://www.thevibes.com/articles/news/26255/macc-submits-ip-on-probe-into-prasarana

@MiaoMiao7 ok noted with thanks.

@MiaoMiao7 Can show me where Karim increased his stake from 23% to 29% since 3 weeks ago? From my observation, he last bought some share on 17 March 2021. Appreciate it, thanks.

Guys, how is your experience visiting or hearing about Mr Dollar and Mr Toy? I visited both on Dec 2020, so-so crowd. How about you guys?

Prepare to fly tmr! :D :D

Incredible. Just incredible.

Chinwell is another decent example. Had I kept the stocks at rm1.00, it would be 33% gain as of today. However, the 3 lawsuits is still a YUGE red flag to me.

The ultimate lesson is time and hold. Luck just isn't on ur side when CCK-WA shoots up 10% after u sell. Welcoming Samchem to the family. Be patient and let time do the job. Quitted a good telegram channel because I plan to refocus on other things in life hence less stimulation is good. See ya!

Stable profits during good or bad times. Good dividend policy. More growth is easily foreseeable. This is why the stocks is valued at this price. Expensive but easier to predict 5 years down the line.

@danny

Unless you are in the politician's circle, it's hard to speculate on the current tajuddin-najib-gkent's relationship. For example, tajuddin did turn up to support najib's judgement last year.

https://www.theedgemarkets.com/article/najib-arrives-kl-high-court-face-his-fate-src-trial

Also, notice the recent fiasco about removing gkent from lrt3, thanks to tajuddin? Zero comment from najib nor wee ka siong as transportation minister. Who knows if Tan is still buddies with Najib?

There's always a political risk when doing projects with the government. Luckily, lrt3 is almost 50% so it's harder to cancel as they progress. Also, gov is forced to reimburse dhaya maju - Ltat, due to project cancellation so they generally don't prefer to do it.

https://www.theedgemarkets.com/article/govt-seek-outofcourt-settlement-dhaya-majultat-kvdt2-contract-termination

All in all, I agree with you, specialize in water metering so well that gov have got no choice but to purchase ur products due to low cost and quality.

Railway systems? There are a lot of options in the market.

@pamaladu Not really. Gk will be a 40% equity partner so they will need to put in 40% of future financial backing if things go south. You can read more @ Johan's proposal document.

The total additional financial commitment of RM652.20 million required to put the
Gloves Business on-stream is to be funded through the RM100.00 million paid-up
capital in Dynacare and the balance through project financing/ bank borrowings and
internally generated funds from Dynacare's operations. If there is any shortfall in the
operating cash flow of Dynacare to fund the additional financial commitment,
shareholders will provide advances to Dynacare in the proportion of their
shareholdings.

Just assume Gkent is 40% of total ownership in this venture.

Going into glove business now is akin to going into a bull market. The risks of losses are much higher in the medium term. I have decided to keep my gkent's shares because the management is sincere in providing value for shareholders, why else would the common major shareholder of Johan & Gkent invest so much of the company's money (Their money too) into the new biz venture? If I am proven right that this is an unfruitful decision.. I am still quite confident in their metering & construction biz prospect.. HOLD for now for me.

@ Cockroach Paul Lee I don't think Gkent is using Honeywell's smart meter technology. First, it's mentioned as "home-grown smart metering technology" and secondly, they look different.

https://www.youtube.com/watch?v=3Ez5fdnxRZw&t=8s

https://www.google.com/search q=elster+smart+water+meter&sxsrf=ALeKk02Va08HHepE67JzuBm5eV1RsWIEmA:1616808401641&source=lnms&tbm=isch&sa=X&ved=2ahUKEwi6h8zTqM_vAhWCyDgGHTXsBvEQ_AUoAXoECAIQAw&biw=1920&bih=937

So Gkent would no longer recognise assets & liabilites from this MRT2 Project but not sure on revenue and profit..

@rainT From 2019 Annual Report

37. JOINT OPERATION
On 17 April 2017, the Company entered into an unincorporated joint venture agreement with China Communication Construction Company Ltd (“CCCCL”) and China Communication Construction Company (M) Sdn. Bhd. (“CCCCM”) (collectively known as CCCC) in relation to the “Projek Mass Rapid Transit Laluan 2: Sungai Buloh-Serdang-Putrajaya (SSP)”- Package SSP-SY-204: Trackworks, Maintenance Vehicles & Works Train (“the Project”).

The unincorporated joint venture has been treated as a Joint Operation and was proportionately accounted for by the Company based on its 49% share of participation in the Joint Venture.
In 2019, the Company entered into a Financial Obligation Agreement (FOA) with CCCC for the purpose of setting out their individual financial obligations and liabilities. The entry into this FOA does not change the Company’s obligations in relation to the Project. The parties to the FOA have agreed that in consideration of CCCC assuming the financial obligations and agreeing to indemnify the Company in all circumstances; the Company shall be released from all financial obligations in relation to the Joint Venture.

Arising from the above FOA, “joint control” has ceased to exist as it does not meet the definition of joint operation (as stipulated in MFRS 11 Joint Arrangements); and significant influence (as stipulated in MFRS 128 Investment in Associates and Joint Venture). Accordingly, the Company has derecognised its share of the assets and liabilities of the Joint Venture upon signing of the FOA.

@RainT Yes, you right. Gkent is indeed a very unloved stock. From darling to downing. IMO, the stock will only receive a re-rating when the metering aspect becomes dominant or they actually start winning construction project bids. I'll wait patiently.