Malaysia segment recorded lower profit before tax for the current quarter mainly due to
lower gross profit margin resulting from weakening of US Dollar against Ringgit

tell me why weaker USD can cause lower gross profit margin? someone please explain. thanks

and i would like to recommend felicity, the blogger for serious investing is doing so well on these method. I love how he did the analyst. Logic with proven data.

Those valuation method are heavily depend on past year figure to make future projection, it is even more subjective when comes to deciding what rate to use? After all these and you come out with your valuation but somehow it is Mr market who decides the price of the stock. Holding a stock which you deemed as undervalued but it seems like never achieving the target price appeared to be stubborn for me. I have gone through this and ever since i changed my strategies, the fruit bears (well maybe i am lucky). I am looking more on the business as i believed the value lies within the business, the competency of management, or even a windfall sometimes! Value might be something not everyone can see, if everyone can calculate that, can see that i dont think there is value anymore, market are more than efficient to close up this gap of opportunity(of course we all know valuation is not the only factor affect the prices). If the business model is so good that it is gaining more and more profits, isn't it a value that you found before it happened? If the management are capable to adapt on market competition or any policy change, isn't it a value too? I agreed that past year performance is important for us to judge a company as of today, but never buy a stock just depend on the past year figures. What i am trying to say is both methods are subjective, in fact investment is subjective, but neither one is foolproof. That's why a combination of both is vital, and i believed putting more effort on anything related to the business are rather important...and yes, figures can always be manipulated, that is what i learned thorough financial reporting. Cheers

i guess OTB is trying to say he helped his client to make millions instead of created millionaire clients?

"I had created many millionaire clients in my life as their remisier. "

wow, with all due respect OTB must be a super investor cum remisier.

How much capitals your client had invested to become a millionaire? Putting 500k need 100% return to squeeze into millionaire list? Wait, that 500k invested cannot be everything your clients had right? I mean when people afford to invest 500k in stock, he/she must be a multi millionaire to do it right? By that, without you they are millionaire already. For the amount of money invested by a non-millionaire investors, OTB must be super outperform to make them become millionaire, with the power of compounding too i guess. Bravo yo

or maybe we should be more objective when it comes to investment? sort of...

Personally i am investor of Padini for years and i used to love Padini brands clothes,but for now i would rather shop at Uniqlo than Padini. Despite that. it doesn't stop me from holding this stock. I think we just cannot fall in love with the stocks we buy. The decision of keeping this stocks is because the company always able to deliver values to shareholders, and they are too, capable to deliver value to the customers. I know it sounds contradict but in fact it is logical. It is like,i might have changed my preference over brands but still i did not fail to see the strength of Padini,..

as i can see a lot of people in this forum saying that," if you want to make profit in stock market, you must follow the big fish, never swim against the wave". They said that when they able to make profit by follow the big fish. Thereafter when the big fish start to sell off, and they got their shares trapped or suffer from losses, a lot of conspiracy theories, or name calling comments come out. Guys, seriously? Big fish no need to eat? Whale need to survive to keep the ecology balance right? simple food chain theory don't understand? lol

Posted by Beary > Apr 28, 2016 03:11 PM | Report Abuse

Ipomember, grumpy says VS now is at fair value, not me. I'd say VS now is very much over valued.

same question dude, since you say VS is over valued, how do you get that "overvalued"

@loveygramps

will try to share my view on VS when i have time, and yes, definitely i would like to know yours too. Thanks

Posted by Beary > Apr 28, 2016 01:44 PM | Report Abuse

A smart investor buys undervalue shares and sells at fair value. Looks like you are anything but smart.


Looks like you know VS in and out? You even know what is the fair value? Why don't you show to us instead?

would like to listen what beary has to say about VS. please share your view with substantial reason. Thanks.

Major revenue depends on two (2) customers (63% of total revenue)

mind to share where u got this figure? coz i got a totally different figure as compare from u. i got my figure from AR 2015, so probably im outdated? Please share. Thanks

Best buy 471 shares.
Best Sell 993 shares.
This counter is entering the resistant zone where more shares are asking to be sold than the number of shares that people are willing to buy. Buying interest is entering the fading zone.
Check FGV counter.
Best BUY 11549 shares
Best SELL 584 shares.
You see, so many shares asking to be bought and so little shares asking to be sold. This share is up trend.
If in a counter more shares are asking to be sold than the number of shares asking to be bought, stay away, this is future down trend.


reply: do you have any ideas on what you are trying to say?

Let's see, how many quarters of exceptionally good results you are going to show your audience your true colors. Debts also is quite high at around 450 million while your share capital is only 200 million. A lot of fixed assets means high depreciation even though you claim that your gearing ratio is 0.5 times. I doubt you can pay good dividends in the future due to the high debts you need to service. But your share price has gone up while not all the company's fundamentals improving. You have an improving share price, partly with the help of the depreciated ringgit. But we will see...how optimistic your sales figures are going to be 6 months from now. You are not going to hit lottery everyday! No one can do that!


Reply: I mind you checking on V.S balance sheet again. Look at the trend, V.S is clearly showing improvement. Private issued to raise cash to pare down debts somemore. And wait,if you know what is the reason for V.S profit growth, you have your reason to judge whether it is sustainable or not. I have no comment as i do not know.

Kian Leong Lim, your comment on V.S shows that you are not a decent fundamental analyst, you clearly do not understand that market don't give too much shit about pass figures. Are you buy/sell a stock based on dividend and Nta? Do you understand how this figure derived? Perhaps you should try to understand what is behind the figures in financial statement. I hope you understand that investment is not just based on financial statement. Sense of logical, market expectation, management credibility or expertise should be taken into consideration as well. Look at how much the profit growth within this year? Are they going to do well in coming years? What is the PE ratio before the price rally and after the price rally since the profit is growing? Again, price is not equal to value. You dont see the price shoot up and then you shout it is overpriced/overvalued(whatever you call). Just my 2 cents

look at their receivable!

great to read all the comments. I will think that it could be different view or different angle that we overlooked when it comes to analysis..

However, there is something i think we should really ponder

comment from frank soweto
"anyway, KC to me has been proven time n again that his method of investment is less risky n in the longer term always give good above ave consistent + returns if not spectacular "

Is that true?really?Analyse all the past figures really provide you a safer investment?Making decision based on past figures is a better decision? Like KC, i did a thorough research on financial report, at the same time i also study current business condition, study the management, the industry and etc. Well, i do not come across to any foolproof method but certainly this is something we need to ponder while we are looking for less risky investment.

coffee cup, thanks for bringing up Amazon as example. For those who studies on Amazon, you will know how impressive Jeff Bezos is even though the company are making losses. His kind of business philosophy is just too outstanding from others. Cheers

hi NOBY,

I have to admit that V.S do not have FCF quite frequent. If i am not wrong, this is the first time they doing cash call(if i am wrong kindly prove to me. thanks) Btw, i am not trying to discuss about take-over methods. For me PE is a good norm even though it has its limitation. Same goes to Ev and others valuation method. I dont apply PE on every stock when it comes to analysis.

futhermore, with current market cap, you might think it is expensive. However, if you are the expert and you have the vision to look beyond this, how much would you pay if you have the money to purchase the whole company? I am not saying that V.S worth morein future, but isn't it one of the factors of successful stock investment is be able to identify a value of a company while others cannot see at the moment? Cheers

As for the comment posted by Imenwe
"Einhorn had cut his position in Keurig but it is still way too early to judge whether Keurig is a fraud. Do you know how many years Einhorn took to prove he is right in the past? Try to read books and articles related to Einhorn. I know Keurig had been performing for years but please remember price doesn't equivalent to value. Remember John Paulson? Before subprime he also lost his pant but once subprime happen he made tonnes of money. "


reply:of this is what i am worry more, but no one could tell the impacts.


As for sense maker comment "No sooner had I written about my concern over VS's rather big net debt position than it announced a cash call."

reply:I have no idea why the figure we got is so much different. Don't mind to show the calculation?



But putting cash aside, does V.S that compelling an investment as suggested by the investment bank?
“our TP is lifted to MYR4.50 (from MYR2.95), based on an unchanged recurring FY16 P/E of 10x”
Why based on 10X PE, why not 5, 15, 20, or 30? Is PE a good metric when V.S has so much debts?

reply: PE of 10 is acceptable for me, if you do a calculation of PE throughout few year, PE of 10 is at the top of 5 years range. Having considered V.S fundamental has improved so much in compare to past year, 10 is conservative for me.

At RM4.22, the present PE ratio is 14 and enterprise value is 21 times operating income. Is that cheap?

reply:how you get pe 14, what year eps are you using?


I try to train myself to look at business at the businessmen’s point of view, i.e. Cash is King, and No Cash No talk. So V.S obviously doesn’t fit into my category by miles. Yeah I know, I have missed it. But again I always try to console myself, “When everybody makes money and I don’t, it is ok”.

reply: you said you train yourself to look at business at businessmen's point of view, but your analysis shows otherwise. What i see is only figures from financial report. How about other qualitative factors? The expertise of the management(one of the top EMS provider in the world)? The integrity of the management? The willingness to share company profit with shareholder and etc etc.


my conclusion

I would think that V.S industry is involving in an unexciting industry as the CAPEX requirement is high, but somehow the management is capable enough to grow the company. The business will continue to remain tough based on various factors. It is a company that provides manufacturing services to big multinational companies like, Dyson, Sony, Panasonic, Keurig and etc, doing business in a tough industry but the managements able to grow the business. The company also showing record of share buy back throughout the years. Back to the time when i buy this company, it is only value at 280M, a stock traded lower than NTA with good future prospect is certainly a good buy for me. As for now, the private placement is diluting the existing shareholder's ownership, which is certainly not good in short term. But again,stock investment is always forward looking? What is the long term view then? V.S is a cyclical stock and the run up of USD is in favor of it. There are a lot of risks which is out of our control too. At the moment, it is a hold for me.

With no offence, i provide my view on V.S. Please correct me if i am wrong.

First you talk about FCF, please be realistic that not every industry has the luxury to enjoy FCF. The business nature of V.S is capital intensive, they need to reinvest to keep up the pace of the world's growing technology. The owner of the company knew it, those experts knew it, even the analyst who studies in detail also knew it.However, it is proven that the business is generating positive operating cash flow each year, which is more important figure to focus for me in this case.

as for the profit growth, please be noted that the share price of V.S started to move on last year, which is where the profit growth started to accelerate. If you have a closer look on V.S, it is not hard to find that they have spent a lot of money to increase their stake on VSI, which is their subsidiary. The revenue growth is mainly due to the consolidation of its subsidiary, but the profit growth on FY14 is genuine, mostly contributed from malaysia segment due to improved sales mix.Their profit margin is increasing too year on year. If you look on the first half of FY15, you will be impressed. Well, you might be saying that the past year record of V.S is not good enough for you to click the buy button, but i think stock investment is more on forward looking, and if you follow the company closely you will understand why the price is moving up in tandem with good financial result.

As for the return of equity & capital, of course i would prefer a company with higher return. However, that range of ROE/ROIC is not that bad actually, especially when it shows good prospect in other aspects.


As for the debt issue, i have mentioned before. The company is borrowing to increase their stake in VSI, that's why the borrowing amount ballooned. Borrowing money in investment got nothing wrong, especially when it is manageable. If you follow the net gearing ratio closely, it is in decreasing trend. The excellent result posted on FY15 even drive down the ratio a lot. (if you dont mind can compare FY15 with FY 14 net gearing ratio)

one should exercise independent view when it comes to investment. Hatred don't bring you prosperity hehe

thanks for the down ! haha

it could be something or nothing

awesome article. thanks kw

have a look on its cash flow from investing activities for this quarter and past few years. Do you see something fishy?

"However, SHH would not be able to survive in bad times. Probably same goes to Latitude Tree."

Would appreciate if you can elaborate more on this

awesome. i love how the company delivers the message.

some people look at short term effect in which a fall on quarter result urges them to sell. Looking long term, its a good company to keep especially the housing data in US is showing a good sign. keep your eyes on pending home sales, existing home sales, new home sales and etc. Cheers

doesnt matter syariah or not. the most important is the business itself and the management

Justmayo just laucnched at HK few days ago, it is a threat for chicken eggs industry. furthermore, i really dont like when a company using the shareholders money to buy securities instead of expanding its major business. bad decision

how do you calculate P/E? Just a gentle reminder, when doing financial analysis, its better and advisable to look beyond the figure. Take whatever figure from the report and work out the maths is not pratical.

like you i think the company is solid, but long term wise, you might have to ponder

14% of total asset are marketable securities? For a company doing poultry business? Serious? it looks like it is a sell for me!

is that anyone of you able to find any information regarding of business expansion for LTKM? To be frank i can't !(if you can please share). The owner and his wife is quite a old folks already. Do they have any plans to expand the business? If yes why spend almost all of OCF to buy securities? If no, it is not a good share for long term holding. The good result comes after the disposal of non-profit business and solely due to egg prices recovery and stable feed costs?

the result is quite good but not surprising. However, if you put a closer look on the report, the company had spent around 20M out of 24M of its operating cash flow to invest in securities? ARE YOU SERIOUS?it is a NO NO for me !!

quite a satisfactory result isn't it? We bought this for long term ma, dont look on one quarter only. Despite the revenue/profit drops so much compare to preceding quarter due to seasonality reason, it increased so much compare to last year corresponding quarter ma.. Take it as a long term investment, if the US housing market really boom,there is no way you can buy at this price anymore.

just for the sake of discussion too, maybe it is good to look at Mpay if you are free, i personally take it as highly manipulated stock. Let's see whether you can outsmart the operators?

to win against the stock operator is very unlikely. they got their advance system as well as strategies. they are better off in experiences. they received information way faster than you all and contra players are the victims most of the times. you will definitely loss your money if you act like a lost sheep. basically normal investors are not in the same league with all the traders out there.

As for the newbie, certainly they should avoid this kind of method. Guessing and hoping is an act of lost sheep. They will change their stance very fast following the movement of share price and that is the danger part. Just for the sake of discussion, i think investment can be easy can be hard. You do not have to know a shit about TA, common sense will guide you well. I know someone who invests based on common sense, and with little knowledge on accounting(know to calculate the financial ratios)and he really did well. The key point when we talk about common sense is, you dont invest on what you do not know. Do what you know well is the best way for you to avoid mistakes. (eg: why care to buy into o&g companies when you know shits about their business?)

the so called technical analysis sometimes is just your fantasy,you are on the lucky side if you win

sometimes i am thinking, since stock is an asset, why do people trade on asset? Isn't it trading on index is more suitable? No offence but i think the above method is not reliable at all, you will never know what the other side is doing, stock operator with their advance system can easily bring you to holland. just my 2 cents

we have over 1000 stocks in bursa, but mas alone traded 1/3 of total volume for today. so sarcastic

please be reminded that Latitude had been shifting their operations to Vietnam gradually and Vietnam constituted a huge portion of earning. The outlook is very much dependent on the severity of riot.

"All factory buildings, machinery, inventories, office equipment, furniture fittings and ancillary installations are insured against the risk of rioting. LTV has reported the incident to the insurance company. At present, the insurance company and the adjusters are unable to assess the extent and quantum of damages as the rioting is still on going."

the problem now is, the productions are stopped without knowing when to resume due to the riot. Vietnamese cannot differentiate between Taiwan and China. lol

i love reading this

can't agree more. the market makes me confuse

yeah and everyone live on dream with the stretched valuation.

look at the sixth point, it is interesting and i believe on it.

yes thinker