adui..if i sell 1 lot at RM3.00, and i also buy it myself - yes, this can be done - then, Gadang has achieved RM3. But then, where is the volume to support it? If you notice, the volume is coming down and so is the price. Expect it to drop below RM2.50 and hovers at RM2.40 to RM2.50 price range.

looking at the intra day trading charts for today and yesterday, it seems there are profit taking elements. The price is no longer solid and show signs of crack. The graphs no longer taper upwards in a nice and steady fashion indicating steady accumulation, but rather it moves up and down in waves. But Gadang did remarkably by staying above RM2.50 despite profit taking and world uncertainty.

Now, whether RM2.50 will be the new norm/ support line hinges on the quarterly results to be released at the end of this month. If Gadang do well, then, RM2.50 will be the new norm.

I am looking forward to Gadang winning more Petronas contracts and MRT project.

it seems from the intraday chart for these 2 days - there are elements of profit taking .....hence, the chart no longer represents a steady accumulation. now, just wondering, who is stronger - the sellers or the buyers????

@ karwai...adui...at first, I thought they won MRT contracts and announced via bursa...

market is bad but gadang does not wanna give discount - very kiam siap

gonna muntah darah liaw...

shiittt...somebody please KILL ME~!!! i contribute so much to this forum's research - yet i no buy...pleaseee KILL ME~!!!

gonna jump down from Petronas twin tower liaw......

looking at the momentum this morning, i suspect some elements of profit taking has creep in
price has start to show some cracks.

now, is the best time to shop for property counters like Tambun INdah, Matrix and SHL. The best time to buy is when no body is buying....i think...there is no need to fight with so many people jacking up the price.

There are many things i like about this company - especially the part on the recurring cash flow generated by its Capital21 project, affordable housing segment and utility business and strong and prudent management team. I have been looking around at other good companies like CCB (Cycle, Carriage and Bintang). At the end, i still prefer Gadang. I don't mind paying top dollars at RM2.50 to average up because the earnings visibility is there coupled with good operating cash flow. For Q2'16, the operating cash flows is even higher than PBT.

However, there is a concern about the volatility of global economy - but then, sometimes, when we invest - we invest relative to the company and not to the global economy. As Force sifu has correctly pointed out, "Seriously tell u if gadang drop, dont miss the chance must buy more else very fast jump back or higher."

If we dumb dumb hold, and assuming if the P/E is re-rated to RM10, then at year end 2016, this company is worth RM3.
EPS per RHB research = RM0.32 (not what i say but what RHB said),
P/E = 10
Price = RM3.20 (but we kasi discount sikit at RM3.00).

But then again, at that point in time, i may still dumb dumb hold to RM3.50 if the earnings is still growing. It depends on both your window and your holding power. Warren Buffett has stated that of all the stupidities of Wall Street, one of it stands out clearly; "You cannot get broke by taking profits". If you take profit at RM2, now the price has gone up to RM2.50. If you take profit at RM2.50, the price has gone up to RM3.00. I think Gadang still has a long way to go. The best is to shut down the laptop and not to look at the market for Gadang until the end of 2016.

However, what begs the question is the quality in terms of gross profit margin (%) and payment from the principal. Kok Onn has stated that "we always do government job, seldom do private job". This is what differentiate between Gadang and Mitra. I dare say, moving forward, the bulk of the order book will be made up of contract wins from RAPID Petronas. During the AGM, Datuk Kok Onn has explicitly stated that Petronas holds Gadang in very good regards and Gadang is very busy with RAPID. In fact, Gadang has tendered for 10 projects, of which he is very sure to win a few more and this will be announced within 6 months (AGM date 19th Nov 2015). In addition, Gadang is the first deliver the viaduct in Jan'15 and has won 3x awards for speed, quality and safety. Currently, MRT2 tendering is only open for prequalified contractors who have worked at line one - and there are just a few of them. Based on this performance, Datuk Kok Onn thinks that Gadang stands a good chance to win the MRT2 package.

Another determinant is the Q2'16 results that will be released soon. If the results are good - and i am sure it will be better than Q2'15 - say profit after tax is being maintained at RM20M, then this coupled with the good order book may justify a re-rating to a P/E of 10. Let us not forget about Capital 21. During the AGM, Kok Pei Ling had explicitly mentioned that the contribution from Capital 21 is RM20M for this year. This will surely contribute to the bottom line for Gadang for Q2'16/ FY16.

actually, that is a good question - whether this counter is worth PE10. Honestly, i have been thinking about it the whole weekend. Also, the article in Focus Malaysia, "UNdervalued Gadang aims to convince" has stated that at RM2.50, Gadang is considered fairly priced. To answer this question, I think it will boil down to the size of the order book and Q2'16 results - both of which is something that we have to forecast into the future. Luckily, i attended the AGM :-)

Based on RHB research report "A Value Play" 16th Dec 2015, RHB assigned:
a forward P/E = 8.5x for FY2016F (admittedly, they used a lower P/E compared to the industry average for similar sized developers which hovers at about 10x to 14x),
Fair value = RM2.70 and
EPS = RM0.32.

Now, whether Gadang justifies an upgrade from PE 8.5x to 10x depends largely on the size of its order book. Typically, the bigger the order book, the higher the PE multiples is assigned to the company.

Yalor...headache ....Gadang moved too fast ....good companies like Gadang is hard to find

@ bluefun, me too - i like Gadang more (compared to KimLun) due to its earnings visibility...but then, have to think about affordability too.....Gadang moved too fast within 1 week ~! have to beware...

@ SJSoon, i kasi you 10 likes... :-)

SJSOON Monday 2.70. Day before QR release 2.90. After QR 3.20
08/01/2016 23:27

hahaha....
@ bluefun, just asking, what other companies do you invest in? Also, for KimLun, do you think now is a good price to enter...please share...thanks.

Somebosy please kill me.....should have bought at RM3.40....but was waiting for a bigger discount at RM3.30....arrrr....somebody...please shoot and kill me

Me damn pissed ....wanna average up on Gadang...but too late liaw...it flew too fast...
Wanna ask expert in technical analysis .....now, can still jump on the bandwagon???

this counter is too strong...until ah tiong also cannot suppress this counter.

tksw is a wolf in a sheep clothing - his 120units is actually 1200 lots = 120000 units....don't play play...

@ tksw, you no need to work is it? everyday - see you here at Gadang forum...watching the stock like security guard watching CCTV live feed like that...

@ tksw - you are right yoh....i admit defeat...white flag liaw

don't worry - just a few assholes pushning the price up -
China removed their circuit breaker today -
maybe the Ah Tiong tsunami can give us good discount -
maybe my nenek moyang is helping to create a big ah tiong tsunami....

shit - the ah tiong effect not strong enough to hold back this counter
my nenek moyang also help me...
adui....
i need to balik dong san...

you know BlueFun, last time, i should have listened to your advice to sell GOB.
Anyway, just asking, do you think we can get Gadang at RM2.20 to RM2.25??

@ BlueFun, you and i are long timers at Gadang - do you think can get at RM2.20 to RM2.25?

good morning....THE DOW JONES INDUSTRIAL AVERAGE FALLS BY NEARLY 400 POINTS~!!

hopefully, can collect on discount tomorrow.

you can trust me...normally, gadang will release during 3rd or 4th week of Jan'16.

that is why i do not believe in these heresay.,,,

waiting at RM2.20

Hi guys, just wanna check whether my calculation to get the PE is correct or not?
Qtr Net profit attributable to ordinary shareholders
30-11-14 $8511
28-02-15 $16168
31-05-15 $24552
31-08-15 $20862
Total $70093

Total issued share capital: 235113

EPS = $70093/235113 = $0.298124732

Current share price = $2.44

P/E (trailing 12 months) = 8.184493744

Is my calculation correct? Please help to advice.

@ superman99, just asking - how do you get the PE7.5 at current share price of RM2.44? Thanks.

SuperMan99, email sent. Thanks bro. Let us have an intellectual discussion... :-)

hehehe...turbulent spotted in the horizon - china share market closed on Monday - 1st day of trading of 2016 with 7% drop in the shanghai composite index...what will tomorrow hold? a big discount for CCB????

shit - this is really sad...whoever buy this company...really jialak~!!!!!

@ superman99, i have just enabled downloads for the gdoc.
Looking forward for your research article. Thanks.

Just click on the link below >>>>> then, go to "File" >>>>> then, Select the option "Download As".

https://docs.google.com/spreadsheets/d/11o6fG1fe_k9JdFLXhuou-WyXftzmuGTa9mubeCLehe0/edit?usp=sharing

Hi SuperMan99,
This can be found in the Annual Report FY14 on note 19: Trade Payables and Other Liabilities

This is the extract from page 65:
Included in other liabilities above is an interest-free amount payable to Mercedes-Benz Services Malaysia Sdn. Bhd. (“MBSM”) of RM41,735,452 pertaining to a revolving hire-purchase floor plan facility. A pre-determined interest-free period has been granted by MBSM. Any unpaid amount over the interest-free period shall be disclosed as borrowings in Note 21, if any.

Subsequently, in Note 21:
There is zero borrowings...hahahahahaha

@ SuperMan99, i think it is quite safe to park the money here for 3 to 6 months to enjoy extraordinary capital gains - aka to ride the mercedes sales growth....and "cabut" after that...for long term, i prefer Tambun Indah - even though it is a property counter but it is more like Matrix - it has got everything to offer - growth, constant dividend payout, good corporate governance (unlike that stupid GOB~!!), exposure to mainland Penang, Tambun Biscuit...it is hard to buy into TamBun Indah at present price of RM1.40 if not for the property crash, frankly, i am just here at CCB for the quick money.

apini - Tambun INdah banyak cantik...

I am just thinking about the interest free revolving hire-purchase floor plan facility from Mercedes. mmm...it seems that CCB can draw down the loan facility to run up the inventories and this is interest free...probably this is a corporate level agreement between Mercedes Daimler AG and Jardine Cycle and Carriage...cool...

Hi guys,
I just wanna share my findings for Cycle and Carriage Bintang Bhd. Please feel free to disagree with me.

I am trying to guess what is the FY16EPS and PE? Please refer to the GDoc link below:
https://docs.google.com/spreadsheets/d/11o6fG1fe_k9JdFLXhuou-WyXftzmuGTa9mubeCLehe0/edit?usp=sharing

What is the expected net profit p.u. for FY16?
• FY15 is the watershed year not so much because of the higher sales volume but rather a favourable shift in the sales mix to higher margin products. Hence, net profit margin (%) improved to 3.5% (RM3.5K profit per motor vehicle sold for FY15) vs. 1.1% (RM1.1K profit per motor vehicle sold for FY14).
• If you ask me how i derived the RM1.1K / RM3.5K profit per motor vehicle sold, please refer to the GDoc link above. Basically, i just divide net profit over total sales for both FY14 and FY15.

• What this means is that CCB does not need to sell as many cars as the improvement in net profit margin can make up for it. This is important because FY16 is challenging in terms of car sales.
• For prudence, we used RM3K of net profit p.u. for FY16 (a 16% discount to RM3.5K).

How many cars can CCB sell for FY16?
• Mark Raine (VP Sales & Mktg), “I see a good opportunity next year (2016) for us to chart growth in our sales and we are eyeing to beat the record we achieve this year for 2016”. Source: The Star.
• Despite the optimism by Mark Raine, the macroeconomics for FY16 will continue to be tough.
• If we refer to FY14 and FY15, the average sales per month is 851 units.
• For prudence, we use 850 units (kasi satu free).

How much is the EPS for FY16?
• EPS for FY16 = ((850 units x 12 months x net profit of RM3K p.u.) + (dividend: RM11,229K))/ 100745K = $0.42 = round down to $0.40.

How much is the PE ratio for FY16?
• Assuming if we use a PE multiple of 10, hence, fair value should be 10 x $0.40 = RM4.00

Is a P/E of 10 reasonable? I think so because:
• Trailing PE to date = (share price = $3.38)/ (EPS for FY15 = $0.50) = 6.76. We are just 3 more multiples close to PE 10.
• In addition, CCB has a sustainable competitive advantage over its closest rival, HapSeng Star and this justified P/E of 10.

Hi guys,
I just wanna share my findings for Cycle and Carriage Bintang Bhd. Please feel free to disagree with me.

What is CCB’s sustainable competitive advantage over its closest rival, Hap Seng Star?
• Personally, I don’t think the competition for CCB comes from Audi, BMW, Volvo and Volkswagen but rather losing the market share to HapSeng. This is because Mercedes nailed the design and this is evidenced by the good sales achieved in FY14/15.
• To recap, CCB is a 49% shareholder in Mercedes Benz Malaysia S/B. In addition to the guaranteed annual dividend from Mercedes Benz, CCB is entitled to draw down on the interest free revolving hire-purchase floor plan facility from CCB.
• I suspect this facility is not made available to HapSeng Star as this sort of transaction is not considered arm’s length.
• After digging through Hap Seng Stars: CCB’s sales outperformed HapSeng exponentially from FY13 to 3QFY15. The only year that CCB lose out to HapSeng is on FY12. Please note both companies used the Dec as the year end.

CCB (sales revenue $’000):
3Q 2015: 1,192,398 (+28% more than HapSeng)
2014: 922,463 (+25.8% more than HapSeng)
2013: 644,976 (+6.5% more than HapSeng)
2012: 656,192 (-16.2% lower than HapSeng)

HapSeng (sales revenue $’000):
3Q 2015: 858,730
2014: 684,030
2013: 603,078
2012: 762,755

Will there be any SPECIAL dividend of RM1 plus to be paid during FY2016?

It seems now that all their cash is tied in inventories but inventories turnover days is more than 1 month (44 days). I don't think this is high risk because after all, Mercedes Benz is the one who bankroll them and ask them to party on and Mercedes Benz stands to gain because their car sales went through the roof but it is better to keep vigilant on this.

Due to this short term liquidity issue, i don't think they can pay special dividends during 2016. In addition, if CCB wants to repatriate its profit back to the parent company, Jardine Carriage in Singapore, it needs to declare more dividends to make up for the shortfall caused by the weaker Ringgit. It is reasonable to wait for 2017. Also, in the Q3’15 Qtr report, CCB has mentioned it wants to expand its distribution network.

There is a possible short term liquidity issue and inability to pay special dividends during 2016:

Following CCB's rapid growth in FY14 to Q3FY15 (sales increased by 77.4% to-date), the Trade Payables and Other Accruals have increased significantly by 70.5% from RM119.3M (FY14) to RM169.1M (Q3FY15). In addition, they have to draw down a Banker's Acceptance of RM30.0M.

There is not enough cash on hand to pay off Mercedes Benz but i suspect Mercedes Benz is the one that ask them to party on.

Per Q3'15 report:
CCB has failed the acid test because:
- Trade AR and Other Receivables: RM94.9M
- Cash on hand: RM37.2M
- (excluding inventories because inventories are not considered liquid especially Mercedes Cars and motor vehicle spare parts);
Total = RM132.1M
- less: Total liabilities: (RM217.3M)
Total = shortfall of (RM85.2M)

The answer is:

Interest free hire-purchase floor plan facility granted by Mercedes Benz.

Hence, upon closer scrutiny on their Trade AP and Other Accruals (note 19 to the Annual Report for FY12 to FY14), CCB is able to use its position as a 49% shareholder in Mercedes Benz to draw down an interest free loan from Mercedes Benz in the form of an interest free revolving hire-purchase floor plan facility (i don't know what is that...).

That explains why Accounts Payable increased by RM37.2M (without a corresponding reduction in Trade AP turnover days) which help to boost the Operating Cash Flows significantly to pay off the Banker's Acceptance of RM90M in FY14.

Using this facility, CCB has managed to reduce the cash conversion cycle from 85.7 days(FY13) to 39.3 days (FY14).

@ SuperMan99, i am quite intrigued by what CCB has done in FY14 - whereby it paid off the entire Banker's Acceptance of $90M using purely operating cash flow. If proven, then this company has the hallmark of a franchise - which is what Warren Buffett coined a company with an enduring competitive advantage.

Just imagine the ranks of MAtrix Concept, Gadang and Tambun Indah.

Upon closer scrutiny on the Cash flows Statement for FY14, it seems that they are able to negotiate better terms with their Trade AR and has a good standing with Mercedes Benz Services.
- Firstly, CCB started off FY15 with a huge O/B of stock (from FY14) and they pared down by $31.7M. Consequently, there is a quantum improvement in stock turnover days from 81.6 days (FY13) to 44 days (FY14). This means they are selling like crazy and evidently, FY14 sales has improved by 42.3% over FY13 without the corresponding increase in Trade AR. Indeed, Trade AR stays largely the same btw. FY14 (RM50.3M) vs. FY13 (RM51.5M),
- they managed to reduce their Trade AR turnover days from 29.2 days (FY13) to 19.9 days (FY14) which shows they have amazing bargaining power over their Trade Receivables, but what is even more amazing is this:

- they managed to increased their Payables to RM37.2M as shown in their Cash Flows Statement. But then, we expect to see that their Trade AP turnover days to shrink considerably but the Trade AP turnover days remain largely the same at 24/25 days for both FY14/FY13.

How can this happen??
(I have shared the gdoc link here to the above ratios)
https://docs.google.com/spreadsheets/d/11o6fG1fe_k9JdFLXhuou-WyXftzmuGTa9mubeCLehe0/edit?usp=sharing

this is scarier than The Conjuring...

One thing i like about CCB's annual report is that it is
- transparent, and
- easy to comprehend...hahaha

definitely not an expert in car...indeed - i drive around in a beaten down 1996 Proton Wira...hahaha

But from a layman's perspective - the market for Mercedes is definitely niche - very high end sort of market.

For the C-class, it is not fair to compare mercedes with Hyundai, Mazda, Honda (all those korean and japanese brands) - it is an insult to the brand.

Mercedes must be compared against Audi, BMW and Volvo, those continental brands specifically targeted for the high end, exclusive and niche market segment.

I think Mercedes is actually competing against these 3. Then, we have a fair comparison.

The total available market (TAM) is indeed the summation of Mercedes, Audi, Volvo and BMW.

Please exclude volkswagen (it is the people's car (tank) in germany - hahaha).