Plenitude issue is that they did some shady stuff in the past. They offered 111.5mil shares to take over Nomad. This represented a dilution of 41.3% to their existing share base. And the worse thing is, there was NEVER a chance that the Nomad takeover would lead to a similar 41.3% increase in net profits to simply maintain the same profit level per share, forget to increase profits per share.

So the Nomad acquisition has caused a major dilution, and has caused ROEs to plummet, and also caused the Book Value to be less valuable. Hence it trades at a large discount to book value.

None of the directors have any type of substantial shareholding in the company. Plenitude is linked to Daim (as was Nomad). I rather stay away from this type of company, even if the balance sheet is nice.

Maybe if it gets cheaper, to say 0.35X P/BV, I can consider, but not just yet at 0.41X P/BV.

@minute, yes the reduction in the "authorised and contracted for" should be reflected in an increase in PPE on the balance sheet.

Do take note that the utilization of rights issue proceeds breakdown does not fully reflect the cost of building the fabric mill, as a substantial portion of the fabric mill was to be made using internally generated funds (per the abridged prospectus).

Well, let's wait for Monday to see how the institutions perceive it. Kuci kuci sellers selling out at the open means nothing. Wait for the big buy/sell orders to see whether the downtrend continues, or we can recover to RM1.25-RM1.40 range.

I won't buy/sell anymore over here for now. Hold my horses unless a truly incredible bargain opportunity presents itself. Hold for the long-term in either case (3-5 years).

@appolloang, I don't think that's how the stock market works. Prolexus got beaten down from RM1.65 to RM1.15 in fairly short order, as long as some confidence is back, and given the closer timeframe to expansion in production capacity/vertical integration, I won't rule out recovery in the share price from here on out. The fundamentals, if you care to look at the balance sheet and cash flows statement, is as good as it has ever been!

@brain, hard to see that happening lah. Surely that is illegal by the SC to play the market that way? Also, Armada is fairly liquid. If illiquid counter, I can understand...but with liquid counter hard to manipulate. Can backfire very badly.

Another positive is that gross profit margins increased from 21.8% to 25.8%. Pretty substantial rise I'd say!

"Besides, there is one-off loss on deconsolidation of subsidiaries of RM 4,176,000."

Actually, can somebody please explain what the above "deconsolidation" could actually mean, and why on earth does it incur an administration expense of RM4.176mil?

To add, PPE of RM0.9mil was also written-off. So you can say that there was one-off expenses amounting to RM5mil during Q4 FY17....discounting this, the core profit is much better actually despite the reduction in topline. This probably means that operational efficiency (particularly in the new China plant) has improved.

The Vietnam plant delay had already been in the news.

http://www.thesundaily.my/news/2017/08/28/prolexus-plan-build-vietnam-plant-delayed

Since there wasn't much negative reaction then, I don' believe there will be negative reaction now. But according to my research the fabric mill is on target to become operational in Q2 FY18, i.e. by end of Jan 2018. You can see they started the hiring process 2 months ago. The capex spend is mostly for this. Email exchange with the CFO also confirmed that the fabric mill is on schedule while the Vietnam plant was delayed to next year.

EBITDA as a whole for FY17 is higher than FY16.

I think the price reflects much of the worst, on the better times ahead!

As ever, you can't predict the market...but if that manic-depressive Mr Market offers you some damn good bargains you best be taking them!

@daytona, that's correct! If they place just a mere 2 million in Islamic institution...then we are green to go! Thank you so much. I feel much better now!

Really heavy queues here. Feels odd. I honestly thought Armada close eyes can end year at RM0.90. Maybe I was wrong....or maybe our big brothers at the syndicates (i.e. Malaysian Wall Street = EPF, LTH, LTAT, KWAP, PNB + PMB, CIMB, AH, KNG, ES etc) are waiting for a solid proof of sustaining profits in next QR + to see the receivables have actually translated into actual cashflow. And of course, that darn Kraken. I must say Enquest's health has me worried. Could be GG i.e. game over for Bumi Armada if anything happens to Enquest.

Armada's assets (fixed assets + charter rates) are denominated in USD, as are their liabilities. So balance sheet wise, Ringgit up or down shouldn't be an issue. P&L statement however might vary according to the prevailing FX rates.

Just KIV. If you got already, hold. If you're interested, hold as well.

Set an entry price. Like 0.82X BV or 0.78X BV. Then wait for it. Buy it down every 10% or 15% loss.

Well, each to their own. To me, the Q result is not bad, not that great either. More worrying is the fact that it will miss out on Shariah list re-inclusion by a very small margin! The current cash:assets ratio is at 33.8%, just very slightly above the requisite 33.33%.

Thing with Prolexus is, there are definite growth catalysts with the fabric mill and the Vietnam plant. Topline growth + margin expansion from both the new plants. I'm happy to pay ~0.9X BV for almost assured double digit long-term ROE.

Come on guys, are you capable of doing any reading? There was a one-off expense of RM4.1mil billed in this quarter. You can see that's why admin expenses much higher.

Look at the ROE, very solid. NAPS also solid. Borrowings pared down even further. Fundamentals are sound.

QR is ok. Negatives should be priced in. But who knows, may drop to rm1. Problem is cash to total assets still don't meet shariah requirements. Gone case lah like this. Hold your horses guys. These will be some bearish months ahead.

Quoting my old comment

Posted by nikicheong > Aug 3, 2017 11:53 PM | Report Abuse X

Guys, don't talk nonsense lah. NTA was RM1.58 last quarter, fall to RM1.57 this quarter. The RM2.11/2.25 reported on Bursa is a TYPO likely referring only to total assets.

Stupid investors who sell today. Q report is the EXACT SAME! Look at my comments from two months back. I already point out their NAPS is wrong. It's a basic thing. You should know it. The financial statements themselves have no issue whatsoever.

Expect a jump up tomorrow at open, as The Star has published a positive sector report. But then expect a selldown given the volume/liquidity being offered.

sapurakencana, I believe the rights issue is unnecessary in the normal course of business. CWG's financial ratios, balance sheet and net debt/net gearing have all improved over the past few years. Profitability is increasing.

As such, to me, the rights issue is a very fishy move. If you read the financial statements, it seems they want to sell Arto to European market in larger quantities. This requires a larger working capital, which they will fund from this rights issue. Arto also promises higher profit margins given its premium product status.

Prior to the rights issue, one of the Director's and the Chairman's daughter have been aggressively buying shares from the market. It's either they are doing it to support the share price to ensure the rights issue takes place, or it is because they want to increase their stake because they know business will be better.

The Executive Director (with merely 14% ownership at present) has pledged to subscribe to 52% of the rights issue...again, this tells me that he knows something good is coming.

As far as I am concerned, my entry price is RM0.505. The book value per share ex-rights issue should be at around RM0.62-RM0.63. This means I buy in at P/BV of around 0.8x, which is an undemanding valuation. From a P/E ratio perspective, once you strip out one off expenses (and without factoring in future interest expense savings), I am buying in at a P/E of 8x...again very reasonable for a company that could very well experience growth of 15-25% in its bottomline annually over the next 3-5 years.

Yes, this requires some amount of extrapolation and confidence in the future of the business, but I believe I have created a sufficient margin of error for myself. CWG's product are of a good to decent quality. We have all used or seen their exercise books. Management is heavily invested in the company. Financials are improving. Valuations are undemanding. I see little downside risk, and substantial upside risk with the chance of this being a multi-bagger over the next 3-5 years.

Alas, time will tell if my investment thesis proves to be right.

Looks good. Can it fall to RM4.20?

Result will be out sometime next week. I will be cut off from the Internet (going for a one week off the grid trip).

Good luck to everyone. It's probably going to be lower profits by about 20%, but I believe everything's been priced in. If things drop below RM1.07, then I will top up on the following Monday (after re-assessing the company's prospects, of course).

I believe it will re-rate upwards however, as long as the cash position drops below 33% of total assets. For this to happen, the cash must be transferred to PPE, either to the Johor mill or the Vietnam plant. Once this happens, the company will gain Shariah status and the Shariah funds will re-purchase the stock to average down.

Either way, this is the stock market. Crazy things happen. It's up to us discerning investors to take advantage of Mr Market's mood swings.

Poh Huat is indeed undervalued, but the issue is there are 52mil outstanding warrants to be converted. So the dilution is about 25% to the total outstanding shares (less treasury shares). I believe this is a reason why the market is staying away.

Otherwise, the ROE is amazing.

If the quarter is bad and it falls to below RM1.75 I will consider entering.

For now I am holding Heveaboard, but that seems to offer little margin of safety already plus I have some nice gains in 4 months, so I am looking for a more attractive furniture company that offers a better risk-reward profile.

As at 30 March 2017, there were 31.8mil warrants (HEVEA-WB) outstanding.

By my calculation, till 22/9/17, an additional 20.9mil warrants have been exercised.

This means outstanding warrants should be around 10.9mil remaining. Potential dilution at this point remains extremely low.

Got some CWG-OR today. Will subscribe to their rights soon.

Does anyone here have any opinion on the impact of FX movements on Prlexus' bottomline? How much of their strong performance in FY15-FY16 can be attributed to the favourable FX rates?

walao gohkimhock, those are the two sectors that should most interest value investors given their bombed out valuations. but of course, need to be very patient, choose wisely and have to have holding power.

Beautiful, fall lower. I will get my second chance soon enough!

Not bad. http://www.theedgemarkets.com/article/hlib-research-starts-coverage-lii-hen-target-rm504

HLIB covering many furniture/wood companies now

Curious, how come their land held for development jump up so much in June Q result? Why no explanation provided?

I mean you can see UMWOG, one of the largest failures in corporate Malaysia, trading at 0.33X P/BV. MMHE at RM0.625 was trading at 0.39X P/BV. You think that makes sense, with such a beautiful balance sheet?

My recommendation, unless you fully know what you're doing, best to just stay away for a while until you see some re-rating catalysts.

Rocket, really? There are no near term catalysts. Unbilled sales at all time low in past 5 years, very few/low value new property being launched.

Yes, for long term is undervalue, but there is just no re-rating catalyst with likely very, very bad earnings and reduced dividends for the next 2 years.

@ekal, simple....cause the stock was trading at RM0.63...with RM0.415 in NET CASH! Super healthy balance sheet. Petronas group of company. It was far too undervalued. The contracts will start flowing in and earnings will return once Petronas and the PSC restarts its major oil and gas projects in Sabah/Sarawak.

Too fast back to 0.75, didn't give me enough time to buy at 0.65. Damn!

What the hell man.

Jon, it may not necessarily be super cheap on an absolute basis (eg: P/BV still at around 0.95X), but when you do factor in the future growth from the Vietnam/Johor plants (on a conservative basis) then it does absolutely become a bargain offering.

I'm quite happy in saying that in previous months I chose first Hevea, then Tchong and then finally Mhb over Prlexus, but now Prlexus offers the best value. If it drops again(below RM1.20) once the next quarter results out, buy more loh. Otherwise, just enjoy the ride for the next 2 years into being a multi-bagger stock.

Also, who cares about historical P/E ratios or industry-average P/E ratios. That's the biggest BS from Investment Banks. You must stop thinking in that way. A P/E ratio is effectively the market's confidence in the future earnings growth of a certain company. That's it. Magni was undervalued for many years before, that's why even when the earnings growth was high, the P/E didn't reflect it as Magni is kind of an "under the radar" stock. It wasn't covered by any major sell side analyst as far as I know as well.

I don't know in-depth about Magni, but a cursory glance over its financial position and price/balance sheet ratios tells me that it offers little margin of safety.

You must look at multiple angles. From a P/E angle this *may* look cheap, but from a P/BV angle this is expensive...at 2.34X. ROE is at 27%. To me, there is little margin of safety given the P/BV. I would rather the P/BV fall to ~1.5-1.8X before I come in.

Teh_Invest, this is because the bonus issue does nothing to improve the company's fundamental value.

So just a random up? Volume was high. Institutional buying simply because the price was too low?

Maybe someone report to SC. MD badmouth his on company, EPF start accumulating at 1.48, MD then gives positive information to HLIB. Seems like a rigged game.

Again, no point getting excited over one green day. Anything can happen.

R40s, unlikely for such a shift.

1) Topline for Magni still grew
2) Profits were actually also maintained YoY once your strip out FX gain/loss.

Magni was simply overvalued, Prolexus is simply undervalued. Magni would have sold off no matter what happened (not even a 20% YoY profit increase could have saved that from happening).

Magni was overvalued to be fair. Do you see the book value relative to ROE?

Epf already cleared.

Btw magni results out. http://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download?id=197711&name=EA_FR_ATTACHMENTS

Strip out FX and PBT is almost the same YoY.

Hot money...haha. Not going there.

I like this game. Now management realizing they screw up (or was it on purpose?) call HLIB for a meeting to push the price back up. They give info that RTA expansion line completed, China ASP can be raised due to stronger Yuan, etc.

Good thing. Nice game. We may head back to RM1.70 (if there is support from the FX also).

We can consider it a victory if can hit 1.17 today and close at least at 1.16

sheep debt need to settle first. Likely no dividend for FY 17 and FY18. Dividend back on the menu in FY19.

Today oil counters were sold down across the board, not just Armada.

First tanker offload from the Kraken field completed.

http://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download?id=81968&name=EA_GA_ATTACHMENTS