KC Loh, you are right. For example, P/B for Jobstreet is 6, Prestariang 5.8. The reason being this type of company requires little physical assets. Their assets lie in the human capital which is not listed in the balance sheet.

For financial companies like banks, insurance companies, closed end funds etc, assets are marked to market and hence Price-to-book value is the ultimate determination of value, together with ROE.

for non financial companies, I haven't paid much attention to price-to-book all this while. My view has since changed after reading through some academic research that book value is important with the following findings:

1)P/B is actually the parameter that has the most correlation with the stock performance.

2)Even for non-financial companies, stock price change is more correlated to the change of book value, EBITDA and operating income than revenue, net income, and cash flow.

feberlicious,
Semua lulus except cash flow. See my explanation about cash flow below. But that is just one year cash flow which is not representative. You should use an average, say 5 years and see if average CFFO> average NI.

In term of FCF, check if average is >5% of revenue as a benchmark.

Note ColdEye just mentioned about the 5 things to look for for value investing. He did not give any benchmark numbers. I think benchmarks are arbitrary and different for different people. If you follow mine, those are mine and may not suit your personal risk profile.

In your business, you would expect that all your debtors pay you promptly and that you don’t have to stock up a lot of inventories which will tied up your capital. Otherwise you would have to put in more capital each year even though you make money. I would expect the hard cash I can received must be about the earnings I make each year. My business would also require capital expenses each year to keep it going, better growing bigger so that I would earn more in the future. This I would need to buy more and replenish the equipment , buy or open more shops etc. It would be ideal if these expenses can be met with the cash I receive each year and not having to come up with more of my own money or borrow from bank. After that, I would be happy if there is still money left for me to draw out (as dividend), or the company can have extra money to invest in other lucrative business. This money available after all the capital expenses is termed as free cash flow, or FCF.

High dividend yield is indeed a very popular strategy in Bursa. But is high dividend yield providing you with a better total return? I doubt so. If you are interested, you can refer to the thread below:

http://klse.i3investor.com/servlets/forum/900271553.jsp

But still high dividend yield can be a good investment strategy if you look out for a couple of things, like whether adequate reinvestment in capital expenses is being used productively for future growth. the other thing is if company is borrowing to pay that high dividend.

Posted by inwest88 > Aug 18, 2013 07:08 AM | Report Abuse
kc, i f you take a look at the Muhibbah thread, it seems that the price will jump following the announcement by the PM on a big job. What do you think ? Just to get your opinion. Normally I do not subscribe tot he herd mentality.

inwest88, by now you should know about my investment philosophy, haven't you?

Tell you what, I would normally pay attention if just one of the forumer talks about it and nobody else pay attention. When everybody talks about it, I normally don't bother. It is just me.

TanKW,
You are damn great!

Btw, TanKW posted so many good articles on FA. To me they are better than what we wrote about in our stock picks. Just wonder anybody interested in learning FA read them.

Posted by ladzatz > Aug 18, 2013 12:34 AM | Report Abuse
2nd question kcchong is...fr your chart, what made it jump down from jan 2010 at about 65 cents to about 22 cents just few months before jan 2012?


DIDN'T I SAY A DROP OF ABOUT 50% OF ITS NET PROFIT?


Posted by ladzatz > Aug 18, 2013 12:51 AM | Report Abuse
well i think i answer mysel the 2nd question. After ichecked the no.of shares has increase 3 times which is from 67m to 193m (then few months latter into 200m)..may be that's why...

THE PRICE CHART FROM YAHOO FINANCE HAS ADJUSTED FOR BONUS, RIGHTS DIVIDEND ETC, I BELIEVE. DO YOU SEE ANY SUDDEN DROP IN PRICE FROM 65 SEN TO 22 SEN?
----
now this give rise to 3rd question...why it doesn't depreciate just after the increase in no of share 'immediately'???...why fr 65 to 22 cents in 2 years?

YOU ARE CONTRADICTING YOURSELF HERE, AREN'T YOU?
----
is it because the directors/major shareholders sell slowly? within 2 years with most approximately "uniformly" downward?
Doesn't this shows that the directors/majority shareholders are manipulative?

GOOD TO QUESTION YOURSELF BEFORE BUYING BUT DO YOU SEE THE CHANGE IN THEIR SHAREHOLDINGS?
----
within 2 years falls almost uniformly...this is what u called

"slow torture" + "acute torment"

YEAH BE CAREFUL OF GETTING YOURSELF INTO THIS SITUATION. BUT HAVE I ASKED YOU TO BUY HOMERITZ TO GET YOU INTO THIS SITUATION?
-----
buy but take profit not too much or u'll be tortured for long period
purposefully deliberately.


REGARDING YOUR OTHER QUESTIONS, OBVIOUSLY YOU ARE CONFUSED WITH WHAT "INTRINSIC VALUE" IS AND WHAT THE 5-YARDSTICKS OF COLDEYE TRYING TO MEASURE. GO GOOGLE WHAT IS "INTRINSIC VALUE" IS AND WHAT ARE THE WAYS OF TRYING TO GET THIS VALUE.

Posted by faberlicious > Aug 17, 2013 09:05 PM | Report Abuse
Ok.I paste here your posting

2 Cash flows
(CFFO 20071 203% Yes)
FCF 18925 >NP Yes

My question refers to that(in brackets).Macam mana u dapat itu 203%?


I also don't know how I got that. It should read:
CFFO/NI= 20071/16750=120%. Typing error in that percentage.

The conclusion remains as CFFO/NI>100%.

Posted by faberlicious > Aug 17, 2013 12:44 PM | Report Abuse
Hi KC,I refer to Homeritz
How did u get the 203% in CFFO 20071 203% and 45% in "The quality of the business comes from its pricing power as shown by its high gross margin of 45%.

Don't get your question on CFFO. Can you check and see what is your question again?

Regarding gross profit margin, not very sure if it is right as there is no item on "cost of goods sold" as a line in the income statement. I took the gross profit as the revenue less "change in inventories" and "raw materials used".

So gross margin is gross profit/revenue.

What is the intrinsic value of Homeritz?

Financial theory postulated by John Burr Williams in his “The theory of investment value” says that the value of a stock is worth all of the future cash flows expected to be generated by the firm, discounted by an appropriate risk-adjusted rate. This theory has since been extensively used in contemporary finance.

There are two major assumptions used in the computation for the intrinsic value, or the present value, of the expected future cash flows of a company; earnings growth rate and the discount rate. Slight deviations of the assumptions can yield a vast difference in the intrinsic value.

The discount rate is related to what is the required return by the equity and debt holders respectively; i.e. how much risk premium above the risk-free rate would be required. For most practical purpose, in contrast with the academic approach in capital asset pricing model, a risk premium applied is related to how stable the earnings and cash flow of the company and its financial health. The 10-year MGS rate at the moment is about 4%. Homeritz has a squeaky clean balance sheet. So it would be reasonable to apply a risk premium of 6% above the MGS rate, or a required return of 10% (4%+6%). Using a before-tax borrowing rate of 7%, it weighted average cost of capital is about 9.8%. This WACC will be used as the discount rate for the valuation of the firm.

The more difficult part is the assumption of future cash flows of the company which is related to its expected growth rate. A difference in assumption of growth of 5% will yield a completely different intrinsic value of the company.

When I carry out the computation of IV to decide whether to invest in a company, I would prefer to use conservative assumptions in its growth rate. In Homeritz’s case, how about the assumption that its business will be stagnant, and there is no further growth, not even grow with the rate of inflation? In this case I would use the Earnings Power Valuation popularized by Columbia University Professor Bruce Greenwald. For those who are interested, please refer to the following link:

http://www.scribd.com/doc/15987706/Greenwald-Earnings-Power-Value-EPV-lecture-slides

The intrinsic value of Homeritz using the EPV is 64 sen per share as shown below.

Revenue 2012 103246
Adjusted Ebit 17292
less income tax -2594
Net operating profit after tax 14699
Add average D&A 1389
Less average capex -3730
Normalized Ebit 12358
Cost of capital, R 9.8%
Capitalized earnings=Ad Ebit/R 125497
Add cash 24471
Other investments 0
Less debts -3054
EPV 146914
Less minority interest -17983
EPV to common shareholders 128931
Number of shares 200000
EPV/share 0.64

The margin of safety in investing in Homeritz at the present price of 46 sen is 28.6%. Note that this is assuming Homeritz business will not grow anymore from now, not even with the rate of inflation.

Why is Dato Gan buying SKPRes shares and at the same time selling its warrants?

Posted by eht6769 > Aug 16, 2013 01:32 PM | Report Abuse
Dato and Gan Poh San sold out WA 4500 lots at 0.105........meaning too much on hold for these Gan family...need to release some in market only can goreng more untill the TP as they 're like to see.

To me it is very obvious. Everybody is chasing the warrant because it is seemingly "cheap". Is it really so? Then Dato Gan is stupid, is he?

Using an option pricing model, when the underlying share price at 38 sen, the fair value of its warrant is less than 4 sen. This is basing the assumptions of 30% historical volatility of the underlying share. Although option pricing is not an exact science, the market value shouldn't be such a big difference (>100%) from its fair value.

The "killer" for the warrant is the high dividend yield of 6.7%. Only common shareholders enjoy the high dividend, not warrant holder. The high dividend of the underlying share destroys the value of warrants.

TA gave a sell call on Fibon as followed.

[Valuations
We maintain Fibon’s target price at RM0.37/share, b
ased on unchanged 7x
FY14 EPS. Note that Fibon’s share price has advance
d 18% since early August,
we downgrade Fibon to Sell from Hold previously, as
we believe the share price
has already run ahead of its fundamentals.]

My usual questions are:

1) why based on valuation of Fibon at 7 times Earnings? Why not 5 times, 10 times, 15 times?
2) Fibon has an excess cash of 20 sen per share. Has TA taken this into account in its valuation?
3) What if Fibon has a net debt of 20 sen per share but still earns the same EPS, will the valuation still the same? If yea or no, why?
4) What if Fibon distribute all this excess cash as special dividend. And it is still debt free. Will the valuation still the same?

If the answer is affirmative to questions 2,3 and 4, then would Fibon worth 58 sen (38+20)?

What about in view of the steady earnings and cash flow and healthy balance sheet Fibon has? Shouldn't it be accorded a higher PE ratio?

I have already described the great business Homeritz has. Can we use the 5 rules of cold Eye to evaluate if Homeritz is a good buy.

Homeriz 0.460 16/08/2013
1 ROE 20.2% >12% Yes
Net profit 14698
Equity 72785
2 Cash flows
CFFO 20071 203% Yes
FCF 18925 >NP Yes
3 PE ratio 6.3 <8 Yes
Price 0.460
EPS 0.07349
4 Dividend yield
Dividend , sen 0.030
Dividend yield 6.5% >3% Yes
5 Price/NTA 1.3 <1.5 ok
NTA 0.36


Yeah, semua lulus belaka.

Homeritz Corporation Berhad

Share price performance
Homeritz was listed in Bursa four to five years ago at an IPO price of 65 sen. Owing to a drop in its net profit by 50% from 20m to 11m for the year ended August 2011, its share price plummeted to a low of 22 sen at the end of year 2011. Since then it recovers slowly and steadily to a close of 48 sen on 15th August 2013. Figure 1 below shows the three years historical share price from 18 December 2008 to 2 August 2013.

Figure 1: Historical share price of Homeritz


The business
Homeritz Corporation Berhad is engaged in the design, manufacture and sale of upholstery furniture products and investment holding. Its products include sofas, dining chairs and bed frames where it undertakes original design manufacturing and original equipment manufacturing activities. It also has its own brand of lifestyle furniture under the brand name Eritz. Its products are mainly for the overseas market s covering 40 countries.

Quality and durability of business
Homeritz does have a durable business albeit a small one which derives its income mainly from the export market. Revenue averages to about 100m a year with net profit of about 16m. The quality of the business comes from its pricing power as shown by its high gross margin of 45%. Net profit margin is also high at 16% which result in a high ROE of 20% (>15%). ROIC is even much better at 25%, more than twice the cost of its capital.

Homeritz’s business provides very good cash flow each year. For the last 4 years, average cash flow from operations (CFFO) is about the same as net income, while there is abundant free cash flow (FCF). Last year, FCF of 19m is 18% (>>10%) of revenue and 32% (>>12%) of invested capital respectively. With its relatively enormous amount of FCF, Homeritz distributed 3 sen dividend last year which is equivalent to a good dividend yield of 6.8% at its present share price of 44 sen.

Market Valuation
As Homeritz has a business which is durable and of quality, one would expect it should be accorded with reasonable good valuation from the market, but does it?

At the price of 44 sen, the PE ratio is 6.0 and enterprise value four times its Ebit, or an earnings yield (ebit/EV) of 25% (>15%). This may be due to its small market capitalization of just 80m and hence not a liquid stock. There isn’t a single analyst covering this company. Besides that, one hardly has heard anything about this company. However, this could be a good opportunity to invest in a hidden gem at a cheap price. Hopefully when it is slowly discovered in the future, an ugly duckling may turn into a beautiful swan.

So Homeritz at 44 sen, is the eighth stock in my new portfolio.

TA gave a sell call on Fibon as followed.

[Valuations
We maintain Fibon’s target price at RM0.37/share, b
ased on unchanged 7x
FY14 EPS. Note that Fibon’s share price has advance
d 18% since early August,
we downgrade Fibon to Sell from Hold previously, as
we believe the share price
has already run ahead of its fundamentals.]

My usual questions are:

1) why based on valuation of Fibon at 7 times Earnings? Why not 5 times, 10 times, 15 times?
2) Fibon has an excess cash of 20 sen per share. Has TA taken this into account in its valuation?
3) What if Fibon has a net debt of 20 sen per share but still earns the same EPS, will the valuation still the same? If yea or no, why?
4) What if Fibon distribute all this excess cash as special dividend. And it is still debt free. Will the valuation still the same?

Posted by cksoon > Aug 16, 2013 02:10 AM | Report Abuse
Hi KCChongz, one of my friends also went for this seminar and learnt a lot from him. Awaken by him to plan my own financial wisely to survive the future inflation via investing. I am too, a new born baby in investing. Although knowledge gathering had been done via reading, I still could not perform a decent FA before reaching to a conclusion. Picked the wrong stock in the end and had to sell to reduce my losses. May I have a copy of your FA to have an idea of the criteria that should be looked at before buying a stock? My email is soonck87@gmail.com. Thank you=)

I can send my spreadsheet to anybody, no problem. But most people will just put it aside, never bother any more. First of all, the spreadsheet was prepared by me as a non-professional (I do borrow a couple of valuation spreadsheets from Prof Aswath Damonaran). The spreadsheets are hence not user friendly. So don't expect too much from it. A handful do benefit from it and have been using it fruitfully, I believe. A couple of them are very new in finance and investment but they are doing very well now, occasionally posting simple and good analysis of stocks here.


I have just posted this two days ago, which I believe is the right path for you to follow if you are interested.

Isaac Newton once said
“If I have seen a little further it is by standing on the shoulders of Giants.”

We know from hindsight that Newton was brilliant, if not genius, in the field of science, physics and mathematics. But as he says, he did not get there by himself. He took the wisdom and knowledge of Giants who paved the way before him and made it into his own.

Who are the giants in finance and investing? Let me start with a few first. Others can add on.

Warren Buffet, Philip Fisher, Charles Munger, Peter Lynch, Benjamin Graham, George Soros etc.

Besides 冷眼, there are a few local bloggers which you can follow. I just append some of their blogs here if you are interested.

http://www.intellecpoint.com/
http://blisswise.blogspot.co.nz/
http://www.stocks-unleashed.com/
http://whereiszemoola.blogspot.co.nz/

Please note the above blog list is by no means exhaustive. In investing, don't always just look up but look down often. Instead of always thinking how much you can make in a bull market, think of how much less you could lose in a bear market.

anbz,
That is the problem of many punters in the stock market. They always think of finding tips and rumours of whether this stock or that stock will be goreng, when is it going to be goreng, by who etc. How many times i have said, yes there are insiders and manipulators goreng up or down share prices, but you will be too naive and the stock market is not a place for you, if you keep on thinking they are gorenging to make money for you. For me if ever I hear any stock going to be goreng, i will avoid it because i always believe that nobody is going to goreng stocks and make money for me.

Cold Eye is a multimillionaire. He was just a reporter. He is what he is now mostly from investing, following certain rules, some good and intuitive rules. Look at the his portfolio put up by TanKW recently. How much is the return of his portfolio compared to the broad market?

Don't you think the 5 rules above make more sense than waiting for rumours from i3 and other places that which stock is going to be goreng and punt on it?

Only when the share price has spiked then analysts start to cover the stock. Isn't it too late already? So the way to make extra-ordinary gain in the stock market is to discover those hidden gems first before investment banks pay attention to them and start to write about them. It is not the other way round, ie buying only stocks recommended by the investment banks. Am I right?

The common comment I make to investment bank's valuation is they always base on a PE ratio to value the stock. For example Kenanga wrote the following as extracted from its report:

"Trading buy, but… PTARAS rallied strongly, gaining 23.6% since early-August to its all-time high of RM6.44. Although we value PTARAS at RM6.80, based on a targeted FY14 PER of 10x (in line with our average PER of the small-to-mid size construction companies), we suggest investors to accumulate on weakness at between RM5.50-RM5.60 for a potential upside of more than 20%."

Why use a PE ratio of 10, and not 5, 8, 12, 15, or 20? What about the huge amount of cash and cash equivalent Pintaras has, 153m or 1.91 per share? Will the valuation the same if Pintaras doesn't have this excess cash? What if Pintaras has a net debt of 100m?

Homeriz anyone?

This guy wrote this below is good. For your information, he just started to learn analysis financial statement recently. He had no background at all on finance. Who say learning fundamental investing is difficult?

I have taken his recommendation and bought some Homeriz because it is a great but young company trading at attractive price.

Posted by TeckChuan Lee > Jul 30, 2013 02:17 PM | Report Abuse
Dear All, can anyone give comments on HOMERIZ RM0.38?

FY2012
1. ROIC 27.84%
2. FCF 19mil
3. DY 0.08
4. NTA RM0.36
5. Earning Yield 41.18%

FY2013 Q1, Q2, Q3
1. ROIC 16.31%
2. FCF 17mil
3. Sales dropped slightly, still waiting for Q4 results to reconfirm
4. NTA RM0.38
5. Earning Yield 23.15%

Extra notes.
1. Very good figures of Receivables/Revenue. Only 30 to 40 percent in FY2013 quarters
2. Young company with only 4 years of results to evaluate.

Tis goeth down to a fundamental aspect that “An investment in knowledge pays the best interest”

- Benjamin Franklin

Posted by inwest88 > Aug 15, 2013 09:43 AM | Report Abuse

SKPR cannot be compared with Eastlnd. Look at the fundamentals of the company.


inwest88, you learn fast!

Scicom? Yes, Yes, Yes

Posted by mansor80 > Aug 13, 2013 02:59 PM | Report Abuse
KcchongNZ, how about Scicom. P/E 10.65, Divident Yield 6.19%, ROE = 20.7.
KC Chong what is your view? Thanks in Advance

Scicom (MSC) Berhad is engaged in the provision of customer contact center services within the business process outsourcing (BPO) space. It provides customer contact center outsourcing services, customer services training products, as well as contact center consulting and marketing services.

Scicom has a very good business. Its operating and valuation numbers are even better if you look at the enterprise angle. ROIC is 35%. Cash flow, my favorite, is very good with average CFFO 130% of NI. FCF is aplenty at 10% and 24% of revenue and invested capital. Very good.

Eksons a gem? Really?

Posted by TeckChuan Lee > Aug 14, 2013 05:34 PM | Report Abuse
KC have you done any analysis on EKSONS? Please point me to the thread if you do?
This is the data I got from EKSONS FY2012, MARCH
1. ROIC 14.9%
2. ROA 9%
3. ROE 10%
4. CFFO/IC 165%
5. DY 0.05
6. P/NTA 0.46
7. EV/EBIT 4.2
8. EY 23.7%
9. P/BV 0.46
Price is still low for this counter. Considered a GEM?

TeckChuan, the data you provided is for march 2012, why not March 2013? Do the same thing for the latest annual result and tell me if it is a gem.

aukh,
Another property company? It does seem it is moving from logging and saw milling to property development.

I concur with house about the transient good performance of Seal last year. Previous years were not good. ROE was between 5%-7%. The question is after Bayan City, what is next? Any? Property companies always have the same problem, after this development, what is next?

I would like to talk about one thing which could be important which most investors fail to pay much attention on, the capital allocation by the management. Does the management makes use of the capital wisely to enhance the shareholder value?

Seal has a lot of cash last year, 40.9m cash (note cash flow is not cash, see your tabulation above)and 25.4m in unit trust, or a total of cash or cash equivalent of 66.3m. This was a huge increase from two years ago of only 16m. Good eh? But where did this cash come from? From the cash received from doing the business? it doesn't seem so. The cash was from issuance of additional shares (8m, hence dilution), from delay payment to creditors (25m), draw down of term loan and redemption of unit trust.

How did Seal spend money? Did it pay any dividend last year? Did it pay any dividend for the past 5 years? None, kosong. Instead it used the money to buy unit trust, 21.6m in total last year.

So judge by yourself what kind of management is that. does it have the interest of the shareholder in mind?

nokenzo, again, i don't know much about this company. all I know is it is a well established and professionally run company.

I don't look at it in detail because its earnings is very volatile and hence hard for me to judge what is the intrinsic value of the company. One year it can earn 56m but the following year lost 93m.

It is beyond my level of competence to understand this type of business.

"Don't start attacking" was not directed to Charles. It was directed to the one and only one who likes to kachau me. Anyway, I would like to share with you this:

Isaac Newton once said
“If I have seen a little further it is by standing on the shoulders of Giants.”

We know from hindsight that Newton was brilliant, if not genius, in the field of science, physics and mathematics. But as he says, he did not get there by himself. He took the wisdom and knowledge of Giants who paved the way before him and made it into his own.

Who are the giants in finance and investing? Let me start with a few first. Others can add on.

Warren Buffet, Philip Fisher, Charles Munger, Peter Lynch, Benjamin Graham, George Soros

Charles, CFA course would be the right one. No, I don't have any. Financial accounting knowledge could be more helpful. Ultimately it is some basic knowledge, the practice of analysis and experience that count more. Just academic is not good enough. I dare to say that.

Posted by iafx > Aug 13, 2013 09:19 PM | Report Abuse
the thread will always there to prove si tipu pusing roti canai copied and modified other's comment to make story, yet she apologized then claimed GHOST did it! wow, very fundamental! very analytical! indeed very entertaining, hahahaahhaaha....
btw, tks for yr endless promotion :)

" 如果 股市极端疯狂，给出高的离谱的价格，你还坚守长期投资不 出售， 冷眼认为你就不是做股票投资的料子"

I don't know which God you believe in. Watch out every religion has this "thou shall not lie". There won't be good ending for those who lie, persistently, without any remorse. Watch out one morning when you wake up, your kukuchiew no more there.

If I were you, I have no face to face others now, not to say keep on accusing the other side lying. By the way, have you sworn already or not that you have not changed that word "revenue" to 'profit" and then claimed that I changed "profit" to "revenue" in that Kfima thread? I had long ago that I didn't do it!

Citing Cold Eye's phrase? So you think Pintaras share price is ridiculously high now? I am not going to argue with you if the share price is that ridiculously high. But just want to know what measurement are you basing on? PE, EV, P/Sale, price/Cash flow, etc?

You have 2275 posts now, wow, but I haven't seen anything, any number from you yet.

"你是做股票投资的料子"? Show us something. Where were your stock picks; previously and now? What returns are they? Can compare with mine or OTB's or not? You need some solid thing to prove that you are good, aren't you?

Posted by iafx > Aug 13, 2013 09:43 PM | Report Abuse
@tl, for this one is all about the 1:1 bonus, which is written on this thread long ago. nothing strange,quite a few cases like cimb, plenitude etc already.
btw, there was a pity petty auntie claimed 1:1 is bad, will share here soon, hahahaaaa..


I thought you said this?
"god bless u ptaras to issue 1:1 bonus share, good luck all :")

Oh btw, show me my posting which I said bonus issue is bad. Don't lie any more. If not one day, your kukuchiew disappears again.

Posted by Charles Lee > Aug 13, 2013 11:54 PM | Report Abuse
Hi KCCHONG, do u possess a CFA cert?

What a good question. Shy to answer lah. No, i don't. So what I am doing is the work of a non professional.

But think of it, I doubt any of the great investor has any CFA; Warren Buffet, Peter Lynch, Charles Munger, Nasim Taleb, George Soros etc etc.

No, I am not comparing myself with those guys. Don't start attacking.

Allow me to discuss something which this thread was originally created for with this iafx.

Posted by iafx > Jul 12, 2013 03:32 PM | Report Abuse
whenever si-tipu-roti-canai start to "punt" a counter with wonderful cerita, making formula here and there, that counter is sure to drop. now kps $1.66... tks to this taufu-fa again
don't believe? juz briefly follow his bogus posting and c for yourself. hahahaaa... can't even get the roe def correct, yet so shameless
time will tell, when market goes down all these taufu will disappear :D

iafx said that "whenever si-tipu-roti-canai start to "punt" a counter with wonderful cerita, making formula here and there, that counter is sure to drop."

Now I want to tell him that since January 21th this year when my original portfolio was posted by TanKW, the average return of all the stocks in my portfolio is now 42.3%, more than 4 times the market return of 9.7% of the same period as shown in Table 1 below. Not a single stock is in the negative territory, absolutely none.

I started with a new portfolio, together with OTB exactly two weeks ago. Thanks TanKW for compiling it. Now the return of the new portfolio is 11.4% as shown in Table 2 below, 10 times the return of KLSE of 1.2%. Again none of the stock selected is in the negative territory.

So what say you? Don't you think that you must withdraw you statement that "whenever si-tipu-roti-canai start to "punt" a counter with wonderful cerita, making formula here and there, that counter is sure to drop."

Table 1
Reference date 21/01/2013 13/08/2013
Stock Name Ref Price Price now Div rec Change %change
Kfima 2.02 2.11 0.080 0.170 8.4%
Pintaras 3.12 6.44 0.100 3.420 109.6%
ECS 1.06 1.17 0.025 0.135 12.7%
Plenitude 1.85 2.28 0.050 0.480 25.9%
Jobstreest 2.4 4.10 0.080 1.780 74.2%
Pantech 0.78 1.11 0.012 0.342 43.8%
SKPRes 0.34 0.34 0.000 0.000 0.0%
NTPM 0.47 0.58 0.015 0.125 26.5%
Kimlun 1.5 2.07 0.048 0.618 41.2%
Prestariang 1.21 2.13 0.055 0.975 80.6%
22.330 0.465 2.1%
Average return 42.3%

KLCI 1637 1795 158.0 9.7%


Table 2
New 13/08/2013
Pintaras 4.99 6.44 0.000 1.450 29.1%
Kfima 2.060 2.110 0.000 0.050 2.4%
MFCB 1.700 1.870 0.000 0.170 10.0%
Haio 2.670 2.790 0.000 0.120 4.5%
Fibon 0.330 0.395 0.000 0.065 19.7%
CBIP 2.830 2.910 0.000 0.080 2.8%


Average 11.4%

Posted by kcchongnz > Aug 13, 2013 07:02 PM | Report Abuse X

AhPek, it is strange ah as Pintaras still keeps on going up, isn't it? Incidentally i found this posting by somebody trying to mock me just half a year ago when Pintaras was less than RM3.00. Wonder what he thinks now also.


Posted by iafx > Feb 17, 2013 12:16 PM | Report Abuse

there is no securities house covering this counter - why? no need to reply here, go & do yr homework.

SEE NO SECURITY HOUSE COVERING. NO GOOD HE SAID.

what a joke, tons of books/www/classes/software nowadays on how to read statement, find figure etc etc; what's so aiyaya about being able to read paper? especially copy & bs around it... sigh.

SEE HE GOT TONS OF BOOKS/WWW/CLASSES/SOFTWARE TO PROVE THAT I BS THAT PINTARAS IS A GOOD COMPANY.

simple, should paper fact is so accurate, why ppl still cannot make enough based on it, why market does not respond accordingly since it is sooooo good as tau-fu claimed it is? in fact, many make loses following these papers, not to mention those who followed bs story.

SEE MANY PEOPLE LOST MONEY FOLLOWING MY BS STORY IN PINTARAS.

ptaras solely a family business, no liquidity, core value is never about retail investors, they would rather place $ into private fun(d). mega infra prjs r not forever, after ge13 many will realize "lots of prjs in hand" on the "paper", but only few r running & probably not running at the size stated, not to mention not all running prjs make good $ - what u read is only lum-sum, data in the passed.

SEE NO LIQUIDITY, CRAP HE SAID. AFTER GE13 SURE KOYAK ONE. GOOD PERFORMANCE IN WORK AND BOTTOM LINE IN THE PAST NO USE ONE

ptaras a pick only bcos it is small & relately safe given its cash (also means $ not utilize); maybe could exercise bonus (hopefully not yet another private placement). given its outlook, it is actually too expensive already. given that price, there r a number of other counters worth better than this one. those who grabbed it during the 1.4-1.5 days a bless of god (no need say anything :). those who buy above 2.7 should continue to assess the viability of holding this counter. GCruey could have done a right thing by disposing it now & wait for next opportunity.

TOO EXPENSIVE ALREADY WHEN PINTARAS AT RM2.70. MANY OTHER COUNTERS MUCH BETTER. BUT DON'T KNOW WHICH HE REFERRED TO. WAH SOME MORE MADE GCRUEY DISPOSED HIS SHARES AT RM2.70 6 MONTHS AGO.

god bless u ptaras to issue 1:1 bonus share, good luck all :)

WAH HE WAS RIGHT, GOD REALLY BLESSES PINTARAS SHAREHOLDERS WITH THE BONUS ISSUES. HE MUST BE A MESSIAH.

Posted by iafx > Aug 13, 2013 07:48 PM | Report Abuse
that's right, no need copied & paste make long bs story, certainly no need cheat using other's comment to cut kuku, hahahhaaaahaha... loooooooooong ago already expect 1:1 bonus issue. now waiting for ex date to sell half :D :D :

I think most people here would agree with me whose kukuchiu should be cut. of course the one who dare not swear that he didn't change the "revenue" to "profit" in the kfima thread, and then accused me changing "profit" to "revenue". But I have sworn that I didn't do this type of thing which only low life would do. Have you swear?

Posted by kcchongnz > Aug 13, 2013 07:38 PM | Report Abuse X
I "promote" it so much and i didn't sell any. So of course I still have it. It is my second largest holding and as it has appreciated a lot and catching up with my biggest holding soon.

Oop sorry. the above statement is misleading. I have sold some and bought back some at various time. but it is still my second largest stock holding in my portfolio.

Read this qualitative analysis of Pintaras. Very good article. This is exactly what I think about Pintaras, the company.

http://klse.i3investor.com/blogs/treasures/34735.jsp

I "promote" it so much and i didn't sell any. So of course I still have it. It is my second largest holding and as it has appreciated a lot and catching up with my biggest holding soon.

fei mau, have I ever said i have sold my pintaras?

AhPek, it is strange ah as Pintaras still keeps on going up, isn't it? Incidentally i found this posting by somebody trying to mock me just half a year ago when Pintaras was less than RM3.00. Wonder what he thinks now also.


Posted by iafx > Feb 17, 2013 12:16 PM | Report Abuse

there is no securities house covering this counter - why? no need to reply here, go & do yr homework.

SEE NO SECURITY HOUSE COVERING. NO GOOD HE SAID.

what a joke, tons of books/www/classes/software nowadays on how to read statement, find figure etc etc; what's so aiyaya about being able to read paper? especially copy & bs around it... sigh.

SEE HE GOT TONS OF BOOKS/WWW/CLASSES/SOFTWARE TO PROVE THAT I BS THAT PINTARAS IS A GOOD COMPANY.

simple, should paper fact is so accurate, why ppl still cannot make enough based on it, why market does not respond accordingly since it is sooooo good as tau-fu claimed it is? in fact, many make loses following these papers, not to mention those who followed bs story.

SEE MANY PEOPLE LOST MONEY FOLLOWING MY BS STORY IN PINTARAS.

ptaras solely a family business, no liquidity, core value is never about retail investors, they would rather place $ into private fun(d). mega infra prjs r not forever, after ge13 many will realize "lots of prjs in hand" on the "paper", but only few r running & probably not running at the size stated, not to mention not all running prjs make good $ - what u read is only lum-sum, data in the passed.

SEE NO LIQUIDITY, CRAP HE SAID. AFTER GE13 SURE KOYAK ONE. GOOD PERFORMANCE IN WORK AND BOTTOM LINE IN THE PAST NO USE ONE

ptaras a pick only bcos it is small & relately safe given its cash (also means $ not utilize); maybe could exercise bonus (hopefully not yet another private placement). given its outlook, it is actually too expensive already. given that price, there r a number of other counters worth better than this one. those who grabbed it during the 1.4-1.5 days a bless of god (no need say anything :). those who buy above 2.7 should continue to assess the viability of holding this counter. GCruey could have done a right thing by disposing it now & wait for next opportunity.

TOO EXPENSIVE ALREADY WHEN PINTARAS AT RM2.70. MANY OTHER COUNTERS MUCH BETTER. BUT DON'T KNOW WHICH HE REFERRED TO. WAH SOME MORE MADE GCRUEY DISPOSED HIS SHARES AT RM2.70 6 MONTHS AGO.

god bless u ptaras to issue 1:1 bonus share, good luck all :)

WAH HE WAS RIGHT, GOD REALLY BLESSES PINTARAS SHAREHOLDERS WITH THE BONUS ISSUES. HE MUST BE A MESSIAH.

A rare but excellent qualitative report about Pintaras Jaya. Can’t help myself to add some comments here.

鹏发的打桩地基工程属于短期性质，通常是3年9个月，好处是建筑成本容易计算，少有失误，打桩是建筑工程中最早执行之工，收账较为顺利。
Yes, foundation works is a very short duration contract ranging from 9 months to a year, not for a duration of 3 years nine months. If you do so for that duration, you bankrupt already with over-run of overhead costs and liquidated and ascertain damages imposed by the consultants. The biggest uncertainty in foundation work is the underlying soil condition of the project. Your cost can overrun by a wide amount if the condition is much worse than expected. So sometimes you make mistakes in the cost estimates if the soil condition differs greatly. Hence noarmally a big margin of safety is built in for this uncertainty.Yes, collection of debt is easier as it is the first work to be carried out.

另外，福布斯亚洲（Forbes Asia）早前公布的“营业额10亿美元以下200强企业”（Best Under A Billion），共有12家大马企业上榜，鹏发就是其中之一。
I didn’t know about this. This is a plus point.

在“才”方面，鹏发总执行长邱汉强博士在年轻时已经是才子，考获土木工程系一等荣誉学位后，再取得博士学位。在“德”方面，从财务管理上，鹏发已是一家亿令吉级有钱公司，充份显示总执行是诚实可靠。
Absolutely. Pintaras is good at his work. Dr Chiu is a straight forward civil engineer. Honest and no hanky panky.

更可贵的是，他也具有“有福同享”的美德，派发越来越多的股息，让小股东分享公司的财富。
Yes, the management shares the success of the company. Dividend has been increasing every year. This year, it is expected that 25 to 30 sen of dividend will be distributed.

鹏发正是巴生谷最著名的专业打桩公司
See, the best piling contractor in the Klang Valley! Why only Klang Valley? so that all contract works are properly managed and carried out in accordance to budget and time.

一家企业即使经营有利可图的行业，如果领导人缺乏“大才大德”，也难以取佳绩。鹏发总执行长才德兼备，管理素质高，公司赚大钱是顺理成章。
A company involve in a niche market, management good at his work and creditable, a proper managed company. So how not to make good profit and enhance shareholder value? Management also the majority shareholder and hence proper alignment of interest of the management and shareholders.

在宣布红股建议以及兴业证券研究报告建议买入鹏发之后，鹏发已经飙涨价20%至5.95令吉，使得它的股价走势技术指标进入超买情况，所以它可能随时会面对卖压而下跌。
The share price is still going up every day. It is now RM6.44.

inwest88, I have my own opinion on this. My opinion is completely opposite that of OTB. Because I am an investor, not a trader.

Posted by kcchongnz > May 31, 2013 06:50 PM | Report Abuse X
So many investor (or shall I call them punters) are just too obsessed with quarterly report; result of short term which could very well be affected by seasonality, timing of orders and delivery etc. They see the trees but miss the forest.

Posted by kcchongnz > May 31, 2013 07:06 PM | Report Abuse X
How do you describe a company with an uninterrupted compounded annual growth rate of 17% in both revenue and net profit for the last 6 years with huge cash flows from operations and heaps of free cash flow; and a very healthy balance sheet with no debt and growing cash and cash equivalent? How many of this type of company can you find in Bursa?

Posted by kcchongnz > May 31, 2013 07:08 PM | Report Abuse X
And yet it is trading at a PE ratio of just 7.6, and enterprise value of just 4 times EBIT. Its ROE is 20% and ROIC of 33%!

I am an investor, not a trader. If you are a trader or speculator, most people here are, my opinion follows OTB.

What is the intrinsic value of Tien Wah (13/8/13)

Financial theory postulated by John Burr Williams in his “The theory of investment value” says that the value of a stock is worth all of the future cash flows expected to be generated by the firm, discounted by an appropriate risk-adjusted rate. This theory has since been extensively used in contemporary finance.

There are two major assumptions used in the computation for the intrinsic value, or the present value, of the expected future cash flows of a company; earnings growth rate and the discount rate. Slight deviations of the assumptions can yield a vast difference in the intrinsic value.

The discount rate is related to what is the required return by the equity and debt holders respectively; i.e. how much risk premium above the risk-free rate would be required. For most practical purpose, in contrast with the academic approach in capital asset pricing model, a risk premium applied is related to how stable the earnings and cash flow of the company and its financial health. The 10-year MGS rate at the moment is about 4%. As Tien Wah has a quality business as described by me previously, it would be conservative to apply a risk premium of 6% above the MGS rate, or a required return of 10% (4%+6%). Using a before-tax borrowing rate of 7%, it weighted average cost of capital is about 8.9%. This WACC will be used as the discount rate for the valuation of the firm.

The more difficult part is the assumption of future cash flows of the company which is related to its expected growth rate. A difference in assumption of growth of just 5% will yield a completely different intrinsic value of the company. Hence when I carry out the computation of IV to decide whether to invest in a company, I would prefer to use conservative assumptions. In Tien Wah’s case, how about the assumption that its business will be stagnant, and there is no further growth?

Appended below is the valuation of Tien Wah with the data and assumptions as shown.

Revenue 000 408081
Ebit 46813
less income tax -6788
EBIT after tax 40025
Add average D&A 13234
Less average capex -17645
Normalized Ebit 35614
WACC, R 8.9%
Growth rate, g 0.0%
Enterprise value=Ad Ebit/(R-g) 402035
Add cash 35527
Other investments 14962
Less debts -73905
EPV 378619
Less minority interest -123849
EPV to common shareholders 254770
Number of shares 96495
EPV/share 2.64

MOS 5%


So using EPV, the intrinsic value of Tien Wah is RM2.64 per share. Hence there is hardly any margin of safety investing in Tien Wah at the present price of RM2.51, is there? So why bother?

The EPV above assumes that there is no more growth of the business of Tien Wah for the rest of its economic life (re-emphasized). Do you believe this conservative assumption? What about the growth of the Malaysian economy? What about inflation which will also raise prices and hence growth in accordance with GDP or inflation?

Let say Tien Wah’s business will grow at a rate even lower than the rate of inflation at 3% forever. The enterprise value of Tien Wah will increase from 402m to 608m.

Enterprise value=adj ebit/(R-g), where g is the growth rate forever.
With this EV, and after adjusting excess cash, debts, minority interest etc, the intrinsic value of Tien Wah is RM4.08, or a margin of safety of 38% if you invest in Tien Wah at the present price of RM2.51.

The following table shows a scenario analysis on the growth rate and the corresponding intrinsic value of Tien Wah.
Table 1: Scenario analysis of intrinsic value and growth rate
Growth rate 0% 1% 2% 4% 5%
IV 2.64 3.00 3.46 4.95 6.27

For example if one assumes Tien Wah’s earnings will grow by 5% for the rest of its economic life, its intrinsic value is RM6.27. If you think there is no more growth, then the IV is RM2.64. So which growth rate is the right one?

Posted by inwest88 > Aug 13, 2013 11:26 AM | Report Abuse
kc, you are indeed very sharp in identifying hidden gems as all these low liquidity counters are often ignored by investors. Is it possible you let us know the intrinsic value of Tien Wah

inwest88, I would like to take this opportunity to clarify a few things here.

1) I scout for ideas from this forum from people like you. Somebody here told me about Tien Wah with some metrics and I found this company interesting. Hence I went to study more about it and the industry, it does sound interesting after all. I hope to get more ideas from here. Seriously I think ideas like this is better than those written by investment banks because IB have completely different agenda than us.

2) I can give my valuation of Tien Wah, no problem. I am pretty good at this as you know. The maths part is sup-sup-sui. But why didn't I first provide this intrinsic value? The answer lies in finding the intrinsic value of a company is a very subjective matter. It involves some assumptions, assumption about the future which is really hard to predict.

3) Because of (2) above, I prefer to look at the business of the company; whether the business is durable, is the quality of the business good? What is the quality of this business? Any growth? and most of all, is it selling at a reasonable price? Of course if the business is good and it is selling dirt cheap, then it is a no-brainier.

4) To gauge if the stock is selling at reasonable price, we can go about doing the valuation and see what the intrinsic value is, and so what is the margin of safety investing in this company. Or we look at how much it is sold compared with its earnings, sales, cash flow etc and how is the price compared with the industry etc.

Tien Wah: A nobody-cares old economy printing company

“It is impossible to produce superior performance unless you do something different from the majority” Sir John Templeton

Tien Wah Press Holdings Berhad is reputed to be one of the top 5 printers in the country. It is engaged in rotogravure printing, photo lithography printing, trading and printing of tipping paper. Its major clients are in the big electronic corporations, tobacco industry etc. It has a 7 year contract to supply printed carton requirements of BAT in several locations in Asia Pacific region. This business is durable and would last for a long time to come.

Cash flows
What strikes me most about Tien Wah is the huge amount of recurring cash flows from its business. This is what I value most in a business. It is the hard cash that it produces which enable Tien Wah to reinvest for growth, to pay dividend or buy back shares, reduces debts and invest in other businesses for maximizing shareholder value.

Tien Wah’s quality of earnings is very good. Its cash flow from operations (CFFO) averages 45m, or 170% of its net income for the last 6 years (See Table 1). The CFFO for the last two years is particularly high at an average of 75m, about 190% of its net income. After capital expenses, free cash flow averages 55m. This FCF amounts to 14% and 16% of revenue and invested capital. Any amount of FCF which is more than 10% of revenue and IC is considered fantastic for me. What did Tien Wah do with the FCF?

Last year, Tien Wah distributed 12.8 sen per share in dividend, or a dividend yield of 5.1% basing on its closing price today (12/8/13) at RM2.51, much higher than the FD rate. It has been paying down its debts which gradually reduced from 176m in 2009 to just 73m now, while excess cash has also increased. These are the best forms of allocation of its FCF.

Growth
Even if the cash flow is great, investors would still hope for some growth of the business of the company, without which there will be no growth of the cash flow. It is hard to predict what would be the growth of the company in the future. But looking at its past, Tien Wah’s revenue and net profit has been growing at a commendable CAGR of 26% and 21% respectively for the past 5 years as shown in Figure 1 below and Table 2 in the appendix. I would be very happy if the growth can be just half or even a third of those achieved.

Figure 1: Growth in revenue and net profit

Quality of business: Return of equity and invested capital
What is the point chasing growth when growth destroys shareholder value? This happens if the return of capitals is lower their costs.

Table 3 below shows that ROE and ROIC has been steadily improving from mid single digits just two years ago to 14% and 12.6% respectively in 2012. These figures meet my minimum requirements. More importantly, they are improving each year.

The good ROE of 14% was achieved with improved net profit margin to 12% last year with moderate financial leverage of 1.6 and an asset turnover of 0.9. All Tien Wah needs to do is to get more contract works to increase its asset turnover, it will be on the yellow brick road to higher ROE.

Market valuations
With the great cash flow, especially in FCF, and reasonable good ROE and ROIC, we would expect Tien Wah to be traded at reasonably market value. But is it?

At RM2.51, Tien Wah is trading at a fair PE ratio of 9 times, though I expect it to be higher. Its enterprise value is also reasonable at 7.3 times its earnings before interest and tax, or a earnings yield of 14%. The enterprise value is also low at only eight tenth (<2) of its revenue. However, as there is plenty of cash flow and FCF, it may be more appropriate to look at the EV/Ebitda. Its enterprise value is particularly cheap at only 4.6 (<8) times ebitda.

So for a great business selling at a fair to low valuation, I have added its share as one of the major stocks (The seventh) in my portfolio.

Table 1: Cash Flow
Year ended 31/3/11 2012 2011 2010 2009 2008 2007 Av
CFFO 67900 80750 20190 57991 13683 30295 45135
Capex -8933 -31344 -21119 -22551 -4280 -3610 -15306
FCF 58967 49406 -929 35440 9403 26685 29829
FCF/Revenue 14% 13% 0% 11% 5% 21% 11%
FCF/IC 18% 14% 0% 11% 3% 20% 11%
CFFO/NI 168% 210% 107% 273% 70% 198% 171%

Table 2: Revenue and profit of Tien Wah
Year 2012 2011 2010 2009 2008 2007 CAGR
Revenue 408081 388575 354666 328610 186059 129663 25.8%
EBIT 46813 47626 26686 34164 26270 15526 24.7%
Net Income 40375 38374 18901 21256 19552 15296 21.4%

Table 3: ROE and ROIC
Year 2012 2011 2010 2009 2008 2007
ROE 14.0% 14.0% 8.7% 12.2% 13.5% 11.7%
ROIC 12.2% 11.6% 6.9% 7.6% 6.6% 10.9%

Posted by Tiago Gt > Aug 12, 2013 02:36 PM | Report Abuse
how bout asuprem sir????


I just wonder why do people so interested in this Asupreme common share. It is a rubbish share with little turnover; losing money every year; and manipulated like hell by insiders. How are you going to win when you gamble with big timers?

7% is the before-tax cost of debt, interest rate from bank borrowing, loan stock interest etc. It is an assumption as I don't really know exactly that cost.

25% is the tax rate, also an assumption but I think should be pretty close. So (1-25%)*7% is after tax cost of debt.

Actually don't worry too much about the calculation of WACC. One could just use say 10%, and that would be fine.

Pintaras didn't have any mandate to buy back shares. Not sure if they have now from the shareholders. Hence there is no treasury shares in the equity portion of the balance sheet. The management may think that it is not appropriate to buy back its own shares when the stock is already illiquid. The major shareholder have been buying the shares if I am not wrong.

Bonus issues arises with the increase of shareholders' capital. In Pintaras's case, from 80m to 160m, and a corresponding decrease in "retained earnings", or "distributable reserves" in tonylim's term. Pintaras has 184m in "retained earnings". The equity remains unchanged. So do you see the so-called "benefits" in this bonus issue exercise? Pintaras can even give a 2 bonus shares for 1 share held if it wants. But what is the point?

Of course the point is once bonus issues is decided, investors start to chase the share price of the company. In Pintaras's case, it seems to serve the purpose of "unlocking" the value of the company.

Treasury shares are normally used for share dividend distribution exercise. It has nothing to do with the share capital, unless the treasury shares are cancelled off.

Market capitalization=421.8m, Total debts=68.7m
Total equity + debts=490.5m
Weight of equity=421.8/490.5=86%
Weight of debts=68.7/490.5=14%
Cost of equity=10%
after-tax cost of debts=(1-25%)*7%=5.3%

WACC=86%*10%+14%*5.3%=8.6%+0.7%=9.3%

TanKW, well done. You have very good skills. Just some comments here.

In investing, past performance may not be an indicator of the future. Short-term performance is not an indicator for long-term return. More important is the long term return because investing is a long term endeavor.

But the Rules Cold Eye uses is widely used by value investors. They are intuitive. Research has shown that excess returns were earned by the value investing rules.

Posted by bighunter > Aug 12, 2013 01:15 PM | Report Abuse

Hi KCchongnz, pls forward a copy of your FA analysis template to my following email htyeap125@yahooo.com

FYI, i hv followed your advise and make some gains lately to pay off my mum's hefty medical bills, really appreciate your effort and generosity to share your valuable knowledge.

Oso, not to forget Mr OTB has also contributed positively and make this forum a wonderful platform for new investors, especially.


congrat to you. but just to put in as a record here. FA way of stock investing would not provide you with quick gain. If ever it will, it takes time because time is needed for good companies to show its performance, and time is needed for investors to realize that company is a good one. In investing, as oppose to trading and speculating, it is a long term thing. If one can get a couple of hundred basis points above the return of KLSE each year, he should be happy about it already.

No, FA way will not provide you with quick gain.

Posted by iafx > Aug 12, 2013 12:16 PM | Report Abuse
kfima not green, ada hantu! potong cucu!

Kfima 2.06 31/07/2013
3 year 4 year 5 year
1.00 0.635 0.42
113.0% 235.4% 407.1%
28.7% 35.3% 38.4%

Hey look at Kfima's stock return for 3, 4, 5 years. The compounded annual return was 29%, 35% and 38% respectively. These average 3 times those of KLSE return. Good or not? Why you still condemn it ah?