And a lemon!

Rchi, I am in no position to say if you should hold or sell. I believe nobody is sure to give you that opinion. The market is unpredictable as I have mentioned earlier on.

Data sonic share price rises so sharply may be due to buying by some funds, or people may suddenly realize its true value. If the share price rises just because of the split of the share, I think that is very very irrational.

As usual, the market reacts irrationally on this share split thingy. Share split adds zero value to the intrinsic value of Datasonic. It is just psychological.

faberlicious, thanks for pointing out.

Yeah, after spending 1.35m in capex, the FCF is 26.4m as shown, not 26.4m in capex.

Good to know that you actually go check the figures.

How is Tambun?
Posted by G4M3RZ > Nov 17, 2013 08:30 PM | Report Abuse
Hi kcchongnz,
may i know ur view on Tambun & Fibon?

Let us refer to ColdEye’s 5 yardsticks to determine if Tambun, at RM1.44 now is worth investing.

Yardstick 1: ROE
Tambun reported an earnings attributed to common shareholders of 40.7m, or EPS 15 sen for the year ended 31/12/2012. With its net asset backing per share of 72 sen, ROE is 18.3% (>12%), very good.

Yardstick 2: Cash flow and free cash flow
The cash flow from operations (CFFO) is 84.1m. This is 147% of its total earnings of 57m. This shows its good quality of the earnings. After spending 26.4m in capital expenses, there is a free cash flow (FCF) of 82.7m. This FCF is very high at 28% (>>5%) of its revenue.

Yardstick 3: PER
Tambun is trading at 1.44 at the close of 17/11/13. With EPS of 15 sen, the PE ratio is less than 10. This is inexpensive.

Yardstick 4: Dividend yield
Tambun paid a dividend of 9.1 sen for the last financial year, or a dividend yield of 6.3%, higher than the FD rate. This dividend is paid through the FCF, not from borrowings or additional share issues. This is another tick.

Yardstick 5: NTA
The net asset backing per share of Tambun is 0.77 compared to its price of 1.44. this is ok, bearing in mind it has an excess cash backing of 96m.

Tambun seems to meet all the criteria of Cold Eye as an investment. Hence according to the 5 yardsticks of ColdEye, Tambun is an investment grade stock.

davidkkw79, you still don't get it, do you?

Datasonic's share price continues to rise unabated. Many technicians have mentioned that it is already overbought, RSI high and charts showing this and that.

This stock's share price movement shows that few people can predict share price movement. Not the chartists who rely on past share price movement, not even the fundamentalist who try to forecast its future prospects.

Simply said, the stock market is unpredictable. The future cannot be foretasted with any degree of accuracy.

Posted by G4M3RZ > Nov 17, 2013 08:30 PM | Report Abuse
Hi kcchongnz,
may i know ur view on Tambun & Fibon?

Please refer to the my writeup at the link below. However, since then its share price has almost doubled.

There are some valuations done for Fibon too. Judge yourself if it is still worth buying.

Good luck.

TA Global, trotting all around the world

Posted by kcchongnz > May 30, 2013 11:30 AM | Report Abuse X

Posted by joe2703 > May 27, 2013 06:11 PM | Report Abuse
@kcchong, I'm your fan and I learn a lot of things from you, you have given a lot of useful information and advice. Thanks.
What do you think about TA Global ? Need your advice.

TA Global, property development and investment all over the world! Wow!! Don't really know much about this company but I doubt it is really that lucrative to invest all over the world where many places you are not familiar with.

Just by looking at its latest financial statement ended 31/1/2013, I don't see it meet my view of a good company. Huge outlay of total capital of 3.6 billion with debts closed to equity. Net income is just a pittance of 92m, for a ROTC of just 4%, a huge destroyer of economic value.

But is it cheap. as a bad company can be a good investment if it is selling cheaply.

The price-to-book is ok at 0.7. PE ratio of 18 for this type of performance, not cheap at all. I won't invest in it even PE is more than 10. I would think it would appear even much more expensive if one takes its enterprise value into consideration.

Regarding the true value of its land, I have no idea and I won't invest just because somebody says its land is so undervalued. There are so many other property companies here which also have land which have not been revalued long ago and I am more sure about this than that of TA Global. Besides they are doing very well in their financial performance too.

So it is a no-brainer for me which property company is a better bet.

But you don't have to follow me.

Posted by sklyte > Nov 16, 2013 06:05 PM | Report Abuse

Hi Kcchongnz, thanks so much! This forum Calvin provide most of level2 info. It would be nice to have u to kindly provide the level 3 info bcos most of us don't know how to work it out. Thanks.

The third level is about having an idea of the value of a stock, and then compare with the market price and see if it is worth buying. There are different ways of doing it and I just use the following one as an example. Again I am talking about invest in a company business, not a trading activity.

Lets use the method of estimating the future free cash flow (FCF) and then discount back to the present value, using a discount rate of say 12%, as this is my required return for investing in this company.

Let us say PM Corp will have 5m Free cash flow next year and this FCF grows at 20% for the next 10 years and then tapers off to a terminal growth rate of 5%. Using some finance mathematics, the present value of these FCF is worth 224m, or 29 sen per share.

Don't forget that PM Corp has quite some excess cash and investments in some quoted and unquoted shares amount to a total of about 183m, or about 24 sen per share. Hence the value of PM Corp with the assumed 20% growth for the next 10 years and with a discount rate of 12%, the intrinsic value of the share is 53 (29+24) sen per share. Compared to its offer price of 26.5 sen, there is a margin of safety of 50%, which is very attractive.

What if the 20% growth rate doesn't materialized and say it only grow at 5% forever from now? then its chocolate business is only worth about 10 sen per share, or the total share value is about 34 sen, or a margin of safety of about 20%. Are you comfortable with this margin of safety?

Hence this valuation thingy is a very subjective matter. How sure are you its chocolate business can grow at 20% for 10 years, and then 5% subsequently? I don't know. But at least one has a feel of its value to be able to make an informed judgement of how much to pay for the price of the stock?

Doesn't this third level thinking make sense?

FCF is CFFO less capital expenses. But if you talk about owners earnings in warren buffet context, then you add back the change in working capital. Agree?

Mktwatch,
From your data, there are cash flow from operation on average. 5.73 and 0.64m respectively for the last two years. Why do you say bleeding cash for years?

As I mentioned, there is even free cash flow of 3.8m last year.

Posted by xxxvalue > Nov 16, 2013 06:29 PM | Report Abuse

Tq Kcchongnz. Just want to recheck wt u again, co made small net earnings past 2 yrs. But my calculation on owners earnings (cash) is -ive. I'm a value investor 2, we may not be looking at different thing, will be good we can share...knowledge. I can relate with u on the `few layers of thinking' as I read something similar in `The Art of Valuue Investing' by Heins Tilson.

The Art of Value Investing. Yes a good book. I just borrowed it from the library. Every value investor must read.

Now regarding owners' earnings of PM Corp. Last year, PM Corp has a CFFO of 5.03m. After capital expenses of 1.2m, FCF is 3.8m. If you talk about owner's earnings, then you must add back the 3.8m in the change in working capital, giving an owner's earnings of 7.6m. Do you agree? This is what I think, not 100% sure because nobody discusses owner's earnings with me before.

Of course this is just last year. But you do the same for the year 2011, there is also positive owner's earnings of about 7m, no FCF though.

mikekong55, you are of the same age as Ang Kok Heng. AKH and I graduated from MU in Engineering the same year in 1980. We used to have chap fun in Lucky Garden every lunch and dinner in those days. Those days chap fun is less than a ringgit. Time flies.

If you follow AKH, I won't think you will go wrong. You will earn a lot more than the broad market. AKH is a growth investor. His Phillip Capital fund in Malaysia is the top three funds. But bear in mind that past performance does not guarantee good future returns. But he is good and I believe he will continue to outperform most fund managers.

Like him, I do not invest in blue chips. I opine that you can't get good price from blue chip, and hence won't be able to get extra-ordinary return from them. Almost every fund owns blue chips hence they are probably fully value already.

xxxvalue, my opinion is the business of PMCorp seems ok as it has a high gross margin, and it did make profit and generally has reasonable good cash flow. Look at the average of a few years. However, for the present moment, its business is very small. Hence its net profit is small because of the relatively high operating costs, due to the relatively low revenue.

If what calvin says is true about the Tudor chocolate and so good, and a number of forumers did agree with him after eating it, it may have a good future. PMCorp just needs to sell more, a higher asset turnover, then everything will follow suit. But I think it will take a long time for that to happen. I mean when you talk about 1.50 per share.

If the business does not grow, then you can forget about those prices mentioned. Yes, selling assets and make money won't last.

mikekong55, by looking at your name, I guess you must have been in the market for a long time. Are you born in 1955?

Thanks for your kind words on me. Now my call on Datasonic was a fluke shot. I knew more or less Datasonic is doing well and will be doing well, but not the shot up of its price like that. It was a shock to me.

I am not the one who can give stock tips for anybody to make big money in short time. Not me. I am not good in predicting future stock price. I am a value investor, and value investing takes time to fruition, years. The return of value investors is in 12%-15% per year. He would be happy with that kind of return as it beats the broad market. Once a while he may hit jackpot and earn 100%, 200%, but that is for just one or two stocks, once in a blue moon.

With your market and trading experience, you would do better than me in that sense.

Good luck.

In investing, there are a number of layers of thinking. If one can go to higher level, the probability of making money is higher.

Take for example PMCorp. Those in ground floor know nothing about it as an investment. They buy and sell by just listening to rumours and hearsay. They know nothing about the business, its moat and its performance. Looking at the stock screen every minute. Buy in euphoria and sell in panic. And most people at this level are the losers. Sadly most people are in this level.

One can go to the next level, level one. When hear about this stock is a good investment, go find out why others say so. He can go read about its business and financial performance; analyse what is its value base on its present earnings,and/or its net asset value, Graham net net for example like what I did. Then decide if the market price is worth buying or not. But that is only level 1.

The next level is what calvin has been doing. He knows about PMCorp so well and he believes in its future, a great future. He does hell a lot of scuttle butting about the company and its products, even involves in its display in supermarket, for free. Talk to the management and the staff and get a lot of information which others don't have. Know how well the products are sold. Know how much undervalued assets it has etc. This is a high level, level 2.

I say there is a third level, level 3. In Level 3, one has to work out, make good projections on its sales and profit for the next say 10 years, and from there workout its cash flows and discount back to the present value, and see how much that cash flow worth per share, and compare with the share price now. Then he can see clearly if the value worth its present market.

No matter how good a company is; no matter how well it sells its products; no matter how much money it makes or will make, buying that company without knowing its true value, value of its future cash flow discounted back to present, and compare with its market price now if it is worth buying, is not a formula of success in investing.

I am not talking about trading here.

Oh I see. You are so excited that New Toyo is going to pay 2.28 sen special dividend. So much so that you have to keep on telling people to spend 32 sen to buy New Toyo. So what is so special about this "special dividend"? Wont the value of the company, and hence value to the shareholders, decrease by the same amount after the payoff?

In the process, you keep on talking not-so-good things about Tien Wah; things like profit dropping lah, dividend not sustainable lah, contract with BAT may not be renewed lah, debt lah etc.

But do you actually realize that in the article you appended, it mentions mostly about Tien Wah, which New Toya has a substantial stake; that New Toyo depends earnings and cash flow from Tien Wah. In fact other companies and divisions in New Toyo do not make money at all etc? In essence, Tien Wah is the savior of New Toyo.

So if Tien Wah is bad according to you, where does this lead New Toyo to? Holland?

Do you know most public companies borrow money to do business? That is what the debt market is for. Why don't they get most of their money from the shareholders?

Cost of debts is much cheaper than cost of equity. For me to invest in a public listed company, I would require a minimum return of 10%, whereas cost of debt is half or less that that. So if I am the finance director of a firm, I will distribute most of the excess cash as special dividend, and when I need money for the business, I borrow from banks.

Tien Wah's dividend unsustainable? What is your basis of your statement?

Company pay dividends generally through the free cash flow of the business. Free cash flow (FCF) is obtained by taking out some from the cash flow from operations each year for capital expenses such as buy new plant and equipment, upgrade production assets etc. From the FCF which is left over after capital expenses, company can distribute out as dividends, pay down loan, or invest in other ventures. That is exactly what Tien Wah's management did all these years.

So why dividend is unsustainable? Is there no adequate FCF each year to pay dividend? Find out first before you make wild statement like that, just to promote your New Toyo.

What is this New Toyo? I would be interested to know if you can provide us with your analysis and valuation, and tell us why it is so attractive, not just make simplistic statement like that.

Freight Management is the best logistic company in Malaysia. Its management is top notched, never fail to enhance shareholder value year in year out.

For the last 5 years, the management has done so well in the business that the stock return a total return of 256% (see table below), of a compounded annual rate of 29%. Last one year alone, the stock return 64%. Note I haven't even take into consideration of the free warrants given last year yet. This performance is way way above the return of the broad market averaging 10% a year by hundreds of miles!

So who is really stupid?

I say the person who every minute looks at the stock price and if it doesn't move, keep on chanting "stupid".

Didn't I say the stock market is not suitable for this type of people?

Freight 1.56 15/11/2013
Period 2-week 6-month 1 year 2-year 3 year 4 year 5 year
Price 1.49 1.33 0.95 0.98 0.82 0.68 0.44
Return of stock 4.7% 17.3% 64.2% 58.6% 91.0% 128.3% 256.6%
CAR 230% 37.6% 64.2% 26.0% 24.1% 22.9% 29.0%

CBIP earnings surprise?

http://aswathdamodaran.blogspot.co.nz/search?q=earnings+surprise

Posted by coolio > Nov 2, 2013 04:21 PM | Report Abuse
best construction counter

This fellow 江鱼仔 siad the same thing here:

http://ikanbilisinvestment.blogspot.co.nz/2013/11/2013-11-06-fag.html

Posted by Robert Love > Nov 14, 2013 09:00 AM | Report Abuse
why are all the people so bullish about Tien Wah suddenly becoming so quiet?

Feeling dejected when nobody gives a damn to your apa ini New Toyo? Ok lah let me cheer you up by responding to the questions you were dying of getting a response.

Posted by Robert Love > Nov 11, 2013 03:40 PM | Report Abuse
how do we know that fundamentals have remained intact? is there any assurance that BAT will renew contract with Tien Wah when the current one expires in Dec 2015 (only 2 yrs away)?

I DON’T KNOW SERIOUSLY, BUT DO YOU? HOW DO YOU KNOW IT WON’T BE RENEWED? AND HOW DO YOU KNOW THERE WILL BE NEW AND MORE WORK FOR TIEN WAH? YOU GOT SIX SENSE AH?

Posted by Robert Love > Nov 11, 2013 07:43 PM | Report Abuse
Based on the latest KLSE announcement , armed forces have further pared down their holdings of Tien wah by a further 1.6 million shares . If Tien Wah is so good , why did armed forces sell off Tien Wah ?

I THOUGHT YOU ARE SAYING WARREN BUFFET, PETER LYNCH, JOEL GREENBLATT OR OTHER GREAT VALUE INVESTORS DISPOSING TIEN WAH.

Posted by Robert Love > Nov 12, 2013 09:21 AM | Report Abuse
If Tien Wah does not get the renewal from BAT, how then does we do DCF valuation when there is no cashflow ?

SO DO YOU KNOW IF THERE IS A RENEWAL OR NOT? WHY ARE YOU SO SURE THAT THERE WON’T BE ANY MORE CONTRACT FROM BATS OR WHOEVER FOR TIEN WAH?
SO HOW DO YOU DO YOUR VALUATION THEN? PLEASE TELL US.

Posted by Robert Love > Nov 12, 2013 10:01 AM | Report Abuse
impossible to cross even 2.60RM. Its revenue was dropping in last 2 to 3 quarters. It will drop below 2.50 RM in no time. It has dropped back to 2.54RM this morning..haha

LOOKING AT THE THREE QUARTERS RESULT, EPS WAS 24 SEN PER SHARE COMPARED TO THE PREVIOUS THREE QUARTERS. SO IS IT BAD? OR YOU PREFER TO LOOK AT QUARTER BY QUARTER WITHOUT TAKING INTO CONSIDERATIONS THAT THERE MAY BE SEASONALITY INVOLEVED IN EARNINGS?

Posted by Robert Love > Nov 13, 2013 04:16 PM | Report Abuse
Tien Wah dropping below 2.50 RM soon, probably would drop back to 2.30 - 2.40 RM level. Not sustainable at current level when revenue and profit are levelling off...

WOW, ANOTHER PETER THE OCTOPUSS.
GO AHEAD AND KEEP ON CHANTING ON YOUR NEW TOYO.

Retained earnings in negative position? You sure you hear it right?

The cash in Kfima is actually held by FimaCorp and not freely to be utilized by Kfima's management.

Again it is a matter which asset allocation is better; to buy back share or for capital expenses, ie buy more plantation land for future growth.

The pertinent thing is the major shareholders of Kfima have been buying Kfima shares. This is a more positive sign than company buying back shares.

Posted by bluewards > Nov 13, 2013 10:38 PM | Report Abuse
Hi kcchong, have you taken a look at cresbuilder?

bluewards, we have some discussions on cresbld on this thread on April 8 2013. Go read it and make your own judgement. My final take on it is as followed:


Posted by kcchongnz > Apr 9, 2013 05:51 AM | Report Abuse X

tptan45, you are absolutely right on all your comments above. I could see this things from their cash flow statement.

Just a glance at its financial statement ended 31/12/2012, I feel uncomfortable about investing in this company. The income statement lumps everything into revenue and profit, which includes that revaluation of its investment properties. This is inappropriate in my opinion. This stuff has to be specially separated as revaluation gain, or extra-ordinary gain or whatever, after the "profit from operations", and should not be classified as "other operating gain". How can a revaluation of assets be classified as "operating gain"? How can this gain be lumped together in earnings per share? Hiding the fact in the explanatory notes is irresponsible.

Financial Auditors: GEP Associates (2011). Who the hell is this?

I view it as a financial shenanigan. I may not be qualified to say so as I am no accountant. But I will definitely avoid this stock. There are so many to choose from Bursa.

Professor Glen Arnord, in summary:

•The present value of owner earnings gives a share of its intrinsic value.
•An investor selecting a share for qualities of value should, as part of the assessment, analyze its growth potential.
•An investor judging a so-called growth approach will not pay any price, and so will look to purchase at a low price relative to its future prospects.
•The investment shown by the discounted-flows-of-cash calculation to be the cheapest is the one that the investors should purchase-irrespective of whether the business grows or doesn’t, displays volatility or smoothness in its earnings, or carries a high price of low in relation to its current earnings and book value.

The key elements in a ValueGrowth strategy:
1.A business you understand
2.A strong and durable economic franchise
3 Operated by honest and competent people
4.Financial strength
5.Available at a very attractive price
6.Low diversification
7.Holding for the very long term.

When investing, focus on the business:
•Avoid equation with Greek letters
•Forget charts and graphs
•Leave aside mathematical formulas and asset allocations rules
•Ignore the market moods, fads and fashions
•Be very sceptical about tipsters, brokers’ recommendations and forecasters
•Leave turnaround situations alone
•Don’t be tempted by those firms that offer jam tomorrow, but will have no profit to show for the next few years, and are trading on a multiple of turnover.

house, look through the angle of "In search of excellence" and let me know.

Avocado,
Graham net net is used for mostly manufacturing companies at Graham's era. So properties were not in the formula.

I agree with you about your rational about properties percentage used. That is what I did.

Valuation is an art.

Yes, Graham net net working capital is 23 sen according to your computation. This is still lower than the share price of 26.5 sen. Hence the share price is higher than the Graham net net working capital. Hence it is not qualified as a net net investment. And you cannot say you are paying just 3.5 sen for its business. The business needs those working capital such as receivables and inventories and PPE etc.

But actually I think you haven't net off the minority interest which is quite a high proportion.

I did not treat receivables and inventories as zero value. I will use 75% and 50% of the book values respectively as by Graham. You add up the assets then subtract total liabilities and divide by the number of shares. That will give you the net net working capital. You then compare with the share price to see if it is higher than the share price. Read the following article:

http://klse.i3investor.com/blogs/kianweiaritcles/38350.jsp

house, AWC doesn't qualify as a Graham net net play as although it has high excess cash per share, it has relatively high total liabilities.

However AWC can be a great investment if you look at it from the angle of a good company (good ROIC and good cash flow) selling at a low price (earnings yield). And also from the angle of high dividend yield investing strategy.

Try that and let me know.

Posted by Fortunebull > Nov 13, 2013 01:34 PM | Report Abuse

[Those who lose their fingers now looking to wack Calvin, KCChongnz or OTB except Fortunebull! Ayamtua is lucky as he already lose all his feathers! Unfortunately for middleman Vincent Than, now all the anger will turn to him! Why! I don't know!]

Why is my name included in the list of to be "whacked"? I didn't see anybody "whacking" me except the only statement below when referring it to me.

[Posted by Fortunebull > Nov 12, 2013 06:26 PM | Report Abuse
For some people I am always wrong! I just keep quiet when I read someone promote PMCCorp like hell but gone after making profit pretending not to know about what he preach earlier!]

However, this fellow didn't substantiate when and where did I "promote" PM Corp. Of course he can't substantiate. For I did do a net net valuation but I never ask people to buy. People, just don't simply make statement without substantiation.

I didn't see anybody "whacking" OTB also? Why should anybody whack OTB? He never entice anybody to buy PM Corp. He may have said he also bought into PM Corp when it was about 20+sen, but he told the people here that he had sold and advised others to sell at when it was 28 sen.

May be this guy may say people whacked me because I did not tell them to sell when it the last two days. But seriously is it my duty? And how would I know whether it would go up and go down then? You think I am God ah?

But seriously what is wrong with PM Corp now? calvin talked about it when it was about 15 sen (?) and it has gone up to 36 sen in just two months. Who wouldn't have made a lot of money if they have followed calvin?

These two days the share price went down a bit in tandem with the broad market. And all the negative comments on calvin come out now.

What is wrong with you guys? When you make money you praise people like hero, but when the share price just corrected a bit, you curse and swear. What kind of culture is that?

miketyu, you are one of the very very few who spots my "mistakes". That shows you did look into the details of my analysis. This is good for me because as a lone ranger doing all these stuffs, there are bound to be mistakes everywhere. Correcting the mistakes would be good for me too as if not, I won't even know I have made wrong analysis. Thanks first.

However in this case, I didn't really went into very detail of finding what this "PPEs" are. So I just use an arbitrary lower percentage, ie 30%. I just want to be conservative when I want to invest in this share. You could very well use 50% or 75%, nothing right or wrong. But in this case, it doesn't make any difference, may be a sen more in net net value.

Similarly for other assets like receivables, may be one should go into details of what these receivables are more substantial, you would be more certain what value is more appropriate to use and come out with a better net net value.

Posted by miketyu > Nov 13, 2013 10:15 AM | Report Abuse
If a share is trading below its net asset per share, does it means that the share is undervalued? or we have to take into account of their cash balance as well?

Not all assets are equal. Would you prefer the assets of a company to be more valuable assets such as land bank at good locations which has not been valued for ages, commercial properties giving high yields, investment in liquid investment such as bank deposit, listed shares; or do you prefer assets in plant and equipment which is obsolete, inventories which is out of fashion and use, receivables which you don't even know they are collectible?

Read the article posted by Tan KW long ago below:

http://klse.i3investor.com/blogs/kianweiaritcles/38350.jsp

That must be another KC Chong, a financial adviser cum financial speaker believe. Not this KC Chong.

Although this KC Chong has been a financial adviser before, he is just a simple man, not an author of any book, as yet.

tsurukame,
Well done. What you have written here is exactly newbies and youngsters need to know and learn in their life journey to prosperity and financial freedom. Your writeup creates values and awareness here rather than just telling them to buy whatever, even rubbish when low and hope to sell high even though what you have bought is rubbish.

You said all those. I didn't say nothing.

Really a rule breaker, and a multi-bagger. Share price rose by 108%, in just a little over two months.

Posted by Fortunebull > Nov 12, 2013 06:26 PM | Report Abuse

For some people I am always wrong! I just keep quiet when I read someone promote PMCCorp like hell but gone after making profit pretending not to know about what he preach earlier!

Who said you were wrong. Buy low sell high is one of the strategies of value investing. Who said it is wrong?

I promote PM Corp like hell? How did I do that? This was my posting on PM Corp.

Posted by kcchongnz > Sep 29, 2013 12:14 PM | Report Abuse X
Graham Net-Net Investment Strategy and Pan Malaysia Corporation Berhad

PMCorp’s latest balance sheet as at 30 June 2013 was used to compute the net tangible asset and Graham net net values. Besides cash, the net net values of quoted and unquoted investments owned are also taken as 100% of the book value. This is a fair assessment as it is believed that these assets are likely to worth more than their book value than otherwise. Note that tax assets, property, plant and equipment, Goodwill and “other assets” are taken as worth nothing.

The appended table shows that the Graham net-net value of PMCorp is 24 sen. This is 33% above its closing price of 18 sen on 27 September 2013.

PMCorp BS Amount Weight Net-net
Cash and equivalent 93950 100% 93950
Investments 81977 100% 81977
Receivables 21475 75% 16106
Inventories 18433 50% 9217
PPE 48040 0% 0
Goodwill 63190 0% 0
Other assets 1652 0% 0
Total assets 328717 x 201250
Less total liabilities -15471 100% -15471
Equity 313246 x 185779
x
Number of shares 773356 x 773356
NAB 0.405 x 0.240
NTA 0.323 x 0.240


This is a valuation of PMCorp. How do you construe it is a promotion? Sigh, I guess you can't differentiate what is promotion of stock,and what is valuation of stock.

Yeah when PM Corp share price went up way above the net net value, I sold it at 34 sen just end of last week. As I have sold, and its price also way above my net net valuation, and I see its ordinary business as a small one, what is that to make noise any more?

Nothing good to say any more so I just keep quiet lah. If not want? Talk bad about the stock?

Tan KW, another very good article on investment. Sigh, as usual, few people here bother to read, and those who have read couldn't get the right message.

Everywhere here and there, people talk about buy this share, sell that share. Push this share, pull that share. This share price and that share price.

So your article is a refreshing for those who wish to invest, invest the right way. Diversify,save and invest for long term, low cost, avoid frequent trading,etc. It is suitable for most people who wish to earn reasonable return of their investment.

Good work, again.

coolio, good to hear you make money following my threads. You know what? Most of the counters you mentioned above were from alert from the forumers in i3 here. Some of them followed up with some good analysis themselves.

May be you could pick up some fundamentals from my postings and try find some good stocks yourself and share with us here. I would provide my input like what I have been doing.

Investing basing on fundamentals in my opinion, provides you with the protection of the downside, and once the downside is limited, the upside will take care of itself.

Tafi's asset quality is not bad but not as good as those I posted on Graham net net valuation. But important thing a company cannot continue making losses. Otherwise whatever assets it has will be eroded soon.

OOP, forgot, I know nothing about charts. May be you should ask yungshen1. He has been holding KNM since years ago. He sure knows what the trend has been so far.

And he can predict share price of KNM too. He always does.

Posted by coolio > Nov 11, 2013 03:38 PM | Report Abuse
kcchongnz, is tafi a hidden gem?

coolio, why do you think tafi is a gem? Compared with other furniture companies, tafi appears to be one of the worst to me.

Just see the last two financial year results. the already minute revenue (<40m) is deteriorating and losses escalating. What a great combination of results.

For me,when a company is making losses most of the time, there is nothing else to see if it is worthy of investing.

Oh yeah forgot to clarify that I don't have a crystal to gaze at its future. Neither do I depend on chart to do my investment.

Posted by LeeYuan > Nov 11, 2013 06:56 PM | Report Abuse
haha....
already told Great Value at 40 sent ~~~
those alway said dont buy and no hope one those kind of ppl where hiding ready ah ???

Posted by yungshen1 > Nov 11, 2013 07:12 PM | Report Abuse
that person is kcchongnz and fransoweto.

Posted by LeeYuan > Nov 11, 2013 09:43 PM | Report Abuse
0.485 is still GREAT Value！
kcchongnz and fransoweto why so quite ready ar？


Hey I am here, right here. I am in i3 everyday. Where got hiding woh? It is just that I am not in KNM thread because it is a waste of my time here.

Ok, since you are shouting at my name, I can come over here, no problem.

So you wish to discuss with me anything about KNM, or have anything to ask about my opinion about KNM? Shoot!

A good writeup of Pintaras in Chinese. Pinjam and copy here.

http://ikanbilisinvestment.blogspot.co.nz/2013/11/2013-11-06-fag.html

Tan KW has been re-posting good articles everywhere in i3 for the benefit of the people here. Most of the articles are very good and useful especially for fundamental investors' knowledge and information. I believe most people will benefit hugely if they care to read and absorb them. This is like a charity work.

Keep it up Tan KW. I am sure many people are thankful of your good deeds.

The Graham net net valuation gives a minimum value of Hexza per share of 81 sen. This assumes that the owners say we don't want to do any business now and let us sell us all the assets we have; the equity investment we have at market price, collect all the receivables and assumes that 75% of them are collected; sell off all the inventories, properties, plant and equipment and assuming get back only 50% of the book value of them, and then pay off all liabilities and share of uncontrolled interest. So one can see this is quite a conservative way to value Hexza, and yet it should worth at least 81 sen.

But Hexza is an established manufacturing company engaged in the manufacture and sales of formaldehyde based adhesives and resins for timber related industries, ethyl alcohol, natural vinegar, cooler, liquefied carbon dioxide and kaoliang wine for a long time. They have been consistently making profit and cash flows, paying dividends to shareholders for years consistently. It is still a viable going concern, albeit with little growth. So if the company wants to sell off its business, it can still base on an earnings valuation.

Hexza has an earnings before interest and tax (Ebit) of 9.33m last year. It has an excess cash of 129m, and no debts. If Hexza's business can be sold off at just a reasonable low price of enterprise value 8 times its Ebit, Hexza's market capitalization should worth about 200m, or a share price of RM1.00 per share.

Yeah, if one is bullish about Kulim, the company as well as the call warrants offer good punt. I said "punt" because fundamentally, I don't think Kulim is a good company. The return of the warrants has to depend on on the insiders to fry up the share price.

I prefer CN with a reasonable premium of just 5.2%, but a good gearing of 24 times, and expiring in more than 4 months time.

A high gearing is very good when the underlying share moves up high, but the reverse is also true if the share price goes the other way round.

So how sure are you about the movement of the underlying share price?

tsurukame, thanks for your elaborations. Yes, I agree with you that if what you say is true below, Tong Herr has high chance to regain its past glory. It share price could double or triple as a result.


Posted by tsurukame > Nov 10, 2013 02:58 PM | Report Abuse

kcchongnz,
To improve on current performance it has to manage costs efficiently, improve production efficiency and sell much more compared to previous years.

The European Commission had terminated the investigation in early 2013 and the chairman is confident of resuming sales of its fastener products back into the European markets.

There will be additional top line and bottom line contributions from the opening of new factories in Thailand and Vietnam in the first half 2013 to cater for domestic and the ASEAN markets. My take is the results will be reflected from 2014 onward as there will be teething issues to contend with in the two new factories during the second half 2013.

to improved cost management, resumption of fastener sales back to Europe and selling more into ASEAN market.

Posted by houseofordos > Nov 10, 2013 04:28 PM | Report Abuse
kcchongnz, not sure if this is a myth, but is there any study done to show that when smallcaps start to rise really fast like what we have seen recently then it is a signal that it is close to end of bull market... From my observation, this last 2 months, a lot of the small caps have been moving and there are fewer and fewer undervalued companies.. even those mediocre ones that I mentioned to you before like OPENSYS, REXIT already move up so much....

I have read quite a lot of academic research on finance and investing, but haven't read about this before. But I do believe if the stock market becomes too hot with all the rumours and speculating activities involving all the aunties and uncles in the fish markets, somebody will get burned. I am quite sure who are this "somebody". It can't be the insiders or big time syndicates and manipulators. But that could be limited to this group of people.

But I won't use the term "smallcaps". I guess it has to depend on whether the smallcaps gone up because of frying, or is it because investors start to realize their values. Good value Smallcaps have always been undervalued because no retail investors are interested in them. Institutions have no mandate to include them into their portfolio, and as a result, nobody even does any research on them.

Is the market really that high and "dangerous" now? Investors who have been in the market may not think so. Think of the rise of the market before the 1987 collapse, in the 1990s, the Malaysian second board euphoria in 1996, the internet bubble etc. Of course after the rise, there must be a fall. It is just that I don't think it is easy to predict precisely when is the doom and gloom.