Kossan has always been a laggard

I bought more of Supermax at 16.38 and 17.58

Anyway, i did bought back Kossan at 15.70

Since last Thursday until today morning were the perfect opportunity to collect on weakness.

And I did.


Stock: [SUPERMX]: SUPERMAX CORP BHD

Aug 18, 2020 4:17 PM | Report Abuse

Bought at 16.38 and 17.58

Cheers, guys!

Bought at 16.38 and 17.58

Cheers, guys!

Careplus announced another land acquisition

https://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download?id=105767&name=EA_GA_ATTACHMENTS

The Proposed Acquisition is undertaken in line with the Group’s future and immediate expansion plans to increase its existing manufacturing capacity via Careglove, due to current strong demand, by commissioning new production lines. The Building would be demolished and reconstructed, together with a new building to be constructed on the Empty Land, will be able to house up to 15 new production lines. In addition, the Group would also benefit from the strategic location of the Property, which is neighbouring its existing production plants, which will facilitate and streamline management control, resulting in operational synergies and efficiency.

RHB raised target price to 91 sen

https://www.theedgemarkets.com/article/rhb-says-mah-sings-diversification-healthcare-products-should-pay-raises-target-price-91-sen

Sold all my positions at 19.50

Sold all my positions at 10.90

Tenaga has drop below 11. This is interesting

Another record today.

15.6bil in volume and 10.1bil in value

Average trading value for 1st half is around 3.19bil translating to EPS of 18.7sen
If can maintain throughout the year, annualised EPS of 37.4sen (PE 30x = RM11.22)

If average trading value to increase by 20% to around 3.96bil, EPS = 43sen (PE 30x = RM13)
If average trading value to increase by 40% to around 4.62bil, EPS = 50sen (PE 30x = RM15)

July has been a very good start to Q3, highest trading volume recorded on 20 July of 12.5bil. But August has started even better, we have seen 13-15bil.

Analyst have been quick to underestimate retail participation. But robust trading volume should be supported by short selling ban until year end and not forgetting, potential catalyst includes election flows and further rate cuts by the central bank.

Over the longer term, i do believe the Fed's unlimited QE to spill over to emerging markets including Malaysia, just like post GFC.

When shares are being pushed to sky high valuations.

Market does occasionally provides reality check.

No doubt, PE multiple is a function of market sentiment. It may continue to be high as long as the story remains believable but no one can predicts the tipping point in reversal of psychology.

At the end of day, share price is by and large driven by earnings. It's the earnings executed by the management that matters.

The right question to ask then, it's the implied valuation given by the market reasonable vis-a-vis the earnings growth? Take the annualised earnings of 26sen as the base, and given that management has guided a gradual increase in ASPs in the coming months, would you think Harta can double its earnings in the coming quarters?

This is sooner than expected.

Have traded TITAN twice, both on the basis of its balance sheet value.

Looking to enter for the 3rd time.

Stock: [LCTITAN]: LOTTE CHEMICAL TITAN HOLDINGS BHD

Jul 17, 2020 9:17 AM | Report Abuse

If it drops back below 2, i will buy back again

2 key catalysts that will propel the next upleg

1) Possible inclusion into FBMKLCI index component
2) Potential announcement of bonus issue

Watch this space

I'm late to discover this gem.

Bought at 1.88

Almost 20% return in less than 2 days

Stock: [CAREPLS]: CAREPLUS GROUP BHD

Jul 29, 2020 11:33 AM | Report Abuse

Managed to grab some at 3.0

Keep accumulating.

I have disposed all my holdings at 4.85

It was a good ride

Managed to grab some at 3.0

Average trading value for 1st half is around 3.19bil translating to EPS of 18.7sen
If can maintain throughout the year, annualised EPS of 37.4sen (PE 30x = RM11.22)

If average trading value to increase by 20% to around 3.96bil, EPS = 43sen (PE 30x = RM13)
If average trading value to increase by 40% to around 4.62bil, EPS = 50sen (PE 30x = RM15)

July has been a very good start to Q3, highest trading volume recorded on 20 July of 12.5bil

Robust trading volume should be supported by short selling ban until year end and potential catalyst includes election flows and further rate cuts by the central bank

Key financial highlights:

Profit After Tax and Minority Interest at RM151.0 million, increased by 62.0%
Annualised Return On Equity at 39%, increased by 18 percentage points
Basic earnings per share at 18.7 sen, increased by 7.2 sen
Operating revenue at RM320.7 million, increased by 33.6%
Operating expenses at RM127.1 million, increased by 3.7%
Cost-to-income ratio at 39%, improved by 10 percentage points
Average daily trading value for Securities Market’s on-market trades at RM3.1 billion, increased by 52.8%
Market capitalisation as at 30 June 2020 at RM1.6 trillion, decreased by 9.9%
Securities Market velocity at 50%, increased by 21 percentage points
Average daily contracts traded for Derivatives Market at 76,956 contracts, increased by 55.9%
Average daily trading value for BSAS at RM33.0 billion, increased by 2.5%

Managed to grab some at 6.93 this morning.

2Q20 results already known to be a record. Looking at the start of Q3, perhaps Q3 can be even better.

Reasonable estimates of EPS between mid 30sen to 40sen at least.

Thong Guan share price all time high was reached on 27 Feb 2017 at 4.87

1 billion market cap is within reach

why chasing high now?

only few months ago i bought KAWAN at 0.975

https://www.theedgemarkets.com/article/better-prospects-plastic-packaging-companies-economy-reopens

To achieve 1bil market cap, the share price has to reach

SCIB - RM8.13
KPOWER - RM8.85

To achieve 1bil market cap, the share price has to reach

SCIB - RM8.13
KPOWER - RM8.85

Global semiconductor sales are forecast to increase 3.3% y-o-y in 2020.

Refer to this week The Edge issue


Posted by hoh13 > Jul 20, 2020 11:45 AM | Report Abuse

Rm5bil kpower? Whr to get this, is it really?

KPOWER - renewable energy play

- RM5bil market value in 5 years
- order book of 1.2bil with target of another 2bil next year
- 9M2020 net profit 5.48mil on revenue 56.5mil. net profit margin 9.7%
- Gross margin EPCC contracts 15-18%
- Net cash 11.8mik

SCIB - Sarawak construction thematic play

- order book 1.0bil target to reach >1.5bil by year end
- anticipating strong 2H2020 earnings recognition
- leveraging on Dato Karim's established experiences and connections from Serba stronghold markets especially Middle East
- potential order wins include Qatar World Cup 2020, Indonesia - relocation of capital from Jakarta to East Kalimantan, Sarawak 2021 election - state budget allocations

KPOWER - renewable energy play

- RM5bil market value in 5 years
- order book of 1.2bil with target of another 2bil next year
- 9M2020 net profit 5.48mil on revenue 56.5mil. net profit margin 9.7%
- Gross margin EPCC contracts 15-18%
- Net cash 11.8mik

SCIB - Sarawak construction thematic play

- order book 1.0bil target to reach >1.5bil by year end
- anticipating strong 2H2020 earnings recognition
- leveraging on Dato Karim's established experiences and connections from Serba stronghold markets especially Middle East
- potential order wins include Qatar World Cup 2020, Indonesia - relocation of capital from Jakarta to East Kalimantan, Sarawak 2021 election - state budget allocations

Kenanga just issued a report on SCIB. TP 3.90

https://cdn1.i3investor.com/my/files/dfgs88n/2020/07/20/1514355946-1209014206.pdf

From RHB report:

Top Pick: KPOWER. We initiated coverage on this counter, with a BUY and TP of MYR3.46 pegged to 14x FY21F P/E. Being a sector pick, the company is the process of transforming into an energy & utilities services player with the emergence of new shareholders – Dato’ Dr Ir Ts Mohd Abdul Karim Abdullah (founder of Serba Dinamik) and Mustakim Mat Nun – and management team since Jun 2019. We are upbeat on this stock, as it offers an exponential earnings CAGR of 149%, a potential doubling of its orderbook by end-FY21, superior ROEs, and an undemanding valuation of 9.7x. The recently-proposed 35% placement will provide funds to execute jobs in hand, while strengthening the company’s balance sheet. KPOWER is expected to remain in a net cash position in FY21-22, assuming only MYR11-36m of debt/credit line drawdowns.

If it drops back below 2, i will buy back again

From Malacca Securities:

LHI – Chicken prices on the way up after reopening of business

Leong Hup’s was affected on the back of closure of business overall and declining demand throughout MCO/ CMCO period. However, we noticed chicken prices are back on the rising trend following the reopening of business. Hence, we should anticipate mild recovery towards their earnings moving forward.

Compared to its peers, SAM is a deep laggard

Please look at its valuation vis-a-vis earnings prospect and not its share prices

RHB too has revised their DCF-derived TP higher to RM1.18.

The thesis is simple...poultry prices.

Prices has seen sharp rebounds from the bottom reached in April. This is a function of normalising demand outstripping short industry supply. The demand or consumption recovered from May onwards, as both countries eased their respective lockdown initiatives. However, industry supply was unable to adjust accordingly, with smaller farmers struggling with finances and facing labour constraints.

In Malaysia, the reduced supply may persist and can be structural, as the COVID-19 crisis could erode or undermine small farmers’ financial strength. Hence, they will face an uphill challenge to upgrade their farm facilities to a closed house format, in order to comply with the conditions set out by Department of Veterinary Services (DVS) for a renewal of license. Besides, we understand that the lack of a succession plan may also phase out some of the smaller farms.

Barring the resurgence in COVID-19 cases, we believe the elevated poultry prices could sustain, given the supply-demand dynamics as discussed above. This will benefit enterprise farmers, with a larger business scale, such as LHI.

1% and 3% growth rate seems like terminal growth, you are that pessimistic regarding Liihen's prospect?

your PV of FCF, did you take into account its excess cash balances?

buy laggards have proven right

i have sold my positions

remember the no.1 rule, don't lose money, unrealised gains can be evaporated in an instant

trade carefully



Fabien "The Efficient Capital Allocater" Irregardless, i view Kossan as a laggard play.

In terms of forward valuation, it is the cheapest now. 1 year forward projected earnings growth is quite similar to Supermax based on consensus view, but earnings multiple is half of Supermax though i do note that Supermax is anticipated to record higher growth in the second year. So in terms of 2 year forward, Supermax is on par with Kossan. But the disparity can be seen in terms of P/BV, Kossan is much cheaper vis-a-vis ROE in comparison to Supermax.

If the consensus is right, i believe Kossan has more upside potential at current valuation.
13/07/2020 8:07 PM

When i bought it at 1.50, it was no a brainer as it was trading below its net cash of 1.77

and then i top it up at 1.80 as it was still very cheap, way below its NCA of 2.18

even at current price, it is at 0.4x of book value

as the earnings have been volatile and highly uncertain, my investment thesis was largely based on balance sheet

moving forward, my valuation of LCTITAN would be dictated by earnings

if earnings improved then re-rating of earnings valuation may be warranted.

next logical step is to monitor the quarterly earnings closely




Posted by JollyAndy > Jul 13, 2020 4:37 PM | Report Abuse

Mr Fab : the target is 2.83 like in the KAF report
Buy.

Irregardless, i view Kossan as a laggard play.

In terms of forward valuation, it is the cheapest now. 1 year forward projected earnings growth is quite similar to Supermax based on consensus view, but earnings multiple is half of Supermax though i do note that Supermax is anticipated to record higher growth in the second year. So in terms of 2 year forward, Supermax is on par with Kossan. But the disparity can be seen in terms of P/BV, Kossan is much cheaper vis-a-vis ROE in comparison to Supermax.

If the consensus is right, i believe Kossan has more upside potential at current valuation.

https://cdn1.i3investor.com/my/files/dfgs88n/2020/07/13/1514330958-138...

Following the spark US/China/Huawei tech war, many have rushed to develop their semiconductor capabilities, especially in leading edge (≤7nm) frontend fabrication (foundry) to be self-sufficient on the back of national strategic and security interests

Expect robust capex in near to mid-term on frontend subsector benefiting companies like Frontken, UWC & SAM.

Global peers valuation at forward PE of 35 times.

SAM Engineering

A hidden gem? Under-researched SAM Engineering and Equipment (not rated) has morphed into a sizable semiconductor contract manufacturer after successful diversification strategy from aerospace market. Its equipment business has outgrown aerospace in FY20 with revenue and PBT accounted for 52% and 63% of overall.

Supported by strong parents (SAM Group and Accuron Technologies), SAM has exposure in semiconductor frontend and storage devices with reputable customers (Agilent, Teradyne, KLA Tencor, Bosch, P&G and etc) in telecommunication, medical and automotive sectors. Conservatively, assuming that any slack from aerospace will be compensated by equipment’s strength and yield a flattish bottom line for FY21 (RM80m), SAM is currently trading at undemanding 13.6x PE. However, we do note the concerns of liquidity and severe-than-expected slump in aerospace segment which should be mitigated by its initiatives to divert capacity to equipment business.

https://cdn1.i3investor.com/my/files/dfgs88n/2020/07/13/1514330958-138...

Following the spark US/China/Huawei tech war, many have rushed to develop their semiconductor capabilities, especially in leading edge (≤7nm) frontend fabrication (foundry) to be self-sufficient on the back of national strategic and security interests

Expect robust capex in near to mid-term on frontend subsector benefiting companies like Frontken, UWC & SAM.

Global peers valuation at forward PE of 35 times.

SAM Engineering

A hidden gem? Under-researched SAM Engineering and Equipment (not rated) has morphed into a sizable semiconductor contract manufacturer after successful diversification strategy from aerospace market. Its equipment business has outgrown aerospace in FY20 with revenue and PBT accounted for 52% and 63% of overall.

Supported by strong parents (SAM Group and Accuron Technologies), SAM has exposure in semiconductor frontend and storage devices with reputable customers (Agilent, Teradyne, KLA Tencor, Bosch, P&G and etc) in telecommunication, medical and automotive sectors. Conservatively, assuming that any slack from aerospace will be compensated by equipment’s strength and yield a flattish bottom line for FY21 (RM80m), SAM is currently trading at undemanding 13.6x PE. However, we do note the concerns of liquidity and severe-than-expected slump in aerospace segment which should be mitigated by its initiatives to divert capacity to equipment business.

First target hit


Stock: [LCTITAN]: LOTTE CHEMICAL TITAN HOLDINGS BHD

Jul 2, 2020 7:55 PM | Report Abuse

net cash (after adjusted for dividend 159mil) is 4,033mil

price at 1.81, market cap = 4,177mil

you are paying 303mil for its entire business

net current asset is 4,495mil = 2.18 per share

even at 1.85, your return on NCA = 17.8%

first target NCA = 2.18

https://cdn1.i3investor.com/my/files/dfgs88n/2020/07/13/1514330958-1381086382.pdf

Following the spark US/China/Huawei tech war, many have rushed to develop their semiconductor capabilities, especially in leading edge (≤7nm) frontend fabrication (foundry) to be self-sufficient on the back of national strategic and security interests

Expect robust capex in near to mid-term on frontend subsector benefiting companies like Frontken, UWC & SAM.

Global peers valuation at forward PE of 35 times.

SAM Engineering

A hidden gem? Under-researched SAM Engineering and Equipment (not rated) has morphed into a sizable semiconductor contract manufacturer after successful diversification strategy from aerospace market. Its equipment business has outgrown aerospace in FY20 with revenue and PBT accounted for 52% and 63% of overall.

Supported by strong parents (SAM Group and Accuron Technologies), SAM has exposure in semiconductor frontend and storage devices with reputable customers (Agilent, Teradyne, KLA Tencor, Bosch, P&G and etc) in telecommunication, medical and automotive sectors. Conservatively, assuming that any slack from aerospace will be compensated by equipment’s strength and yield a flattish bottom line for FY21 (RM80m), SAM is currently trading at undemanding 13.6x PE. However, we do note the concerns of liquidity and severe-than-expected slump in aerospace segment which should be mitigated by its initiatives to divert capacity to equipment business.

Rightly so, strong balance sheet with net cash >80% of market cap, do you think the company deserved to be valued at less than 0.5x of book value?

https://www.theedgemarkets.com/article/indiachina-dispute-presents-opportunity-malaysia-boost-exports

The heightened border dispute between India and China presents an opportunity for Malaysia to boost exports to India as the South Asian country plans to impose strict rules and tariffs on Chinese goods, said MIDF Research.

This is on top of the global disruption of raw material supplies from China as a result of the COVID-19 pandemic, prompting key importing countries including India to consider import substitution or diversification.

The firm said there were no specific products emphasised in India’s tariff plan but they could generally include chemicals, steel, electronics, heavy machinery, furniture, paper, industrial machinery, rubber articles, glass, metal articles, pharma, fertiliser and plastic toys.

The fact that certain stocks have declined by more than 30% to 60% does make a compelling case for bargain hunting. As Bill Ackman pointed out, the simplistic approach of assigning a P/E multiple to analyst estimates of next year's earnings is not valid for the current environment as the next 12 months of earnings are not representative of the true long-term earning power of most companies. In fact, very likely, the current crisis will disrupt the cash flows for the next 12-24 months. Having said that, generally, the disruption anticipates to destroy perhaps 5 - 10% of the value of the business.

For the case of Muhibbah, i see downside risk is rather limited, of course no one knows how market perception will change in the future. But at current valuation, i'm looking at least 20% upside potential.

semicon upswing. look at the Chinese market, the chip makers were being valued at over 100times of earnings

look at domestic market, Dufu, UWC, Greatec..all being valued at 50 times multiples.

i will leave it to the wisdom of the market in deciding the correct multiple for SAM

MFCB remains one of my best investments ever. My entry price was at RM1.90. Buy and hold works wonderfully if you have selected the right stock.