pixiu, your article is a good read and you even take EP into consideration.
I used to own Teo Seng share's. Here's a few things for you to ponder:
1. Teo Seng's revenue will most likely continue to rise, but profit wise is not a guarantee. 2. Profit is determined by USD dollar vs Ringgit, price of corn & soybean, and as well as selling price of egg which is controlled by Malaysian Government. 3. Future prospect of an egg company? Probably a mixed bag of M&A and growth in egg production farms.
Hi Yong Jui Foo, I do not have a blog. I can't call myself a sifu or mentor because I am a learner just like you. I do share what I learned by myself or from others though. But I'm sure you can find other investment-related articles and here in I3investor is a good start.
Hopefully, I can find some time to write more articles in coming weeks or months. Thank you.
I am going to write a fair comment here and I am not gonna side with anyone.
Let's take a look at the returns of OTB's portfolio for the past few years (all figures as claimed by OTB himself):
Assume you start with RM 100,000.00.
2013 - 104% ROI - Your total value is now RM 204,000.00. 2014 - 61% ROI - Your total value is now RM 328,440.00. 2015 - 129% ROI - Your total value is now RM 752,128.00. 2016 - -21% ROI (based on current result) - Your total value is now RM 594,181.00.
Yes, in year 2016 you have a bad year with around RM 150,000.00 being wiped off from your total value. But you still end up with almost 6 times your original investment value. CAGR or Compounded Annual Growth Rate is 81.12% over the period of 3 years which is very impressive.
So it shows one thing; one year of bad result is nothing. The most important thing in investing is consistency. If you have 1 bad year but 9 more good years, does it means your result is bad? No.
Then again, no one thus far can keep such high returns over a long period of time (20 - 50 years). Can OTB continue to perform well each year? We don't know, will have to see it for ourselves. Did OTB cheat his subscribers and prioritize VVIPs? I don't know, I'm not one of his subscribers. Is he being unethical? I don't know the guy and his dealings, I can't tell from my point of view. But I do know his record is still an impressive one.
Only time can tell how well or bad will his performance gets as it goes on. So I suggest we stick to facts and see for ourselves how his performance will be for the next few more years.
Don't need to thank me. I am just helping to give back to the community here. For those underperforming, hopefully can catch up by year end. For those already performing exceeding expectation, keep up the good work!
"It is pertinent to note that the exceptional revenue and profit before tax for the corresponding quarter last year was due to the expedited delivery of equipment and services in view of the imminent implementation of the Goods and Services Tax before the 1 April 2015 deadline."
"Our order book for Cash Recycling Machine (CRM) remains robust. In the first quarter of this year alone, our order book for CRM has exceeded that for the whole of last year. Barring any unforeseen circumstances, this backlog should translate into strong revenue for the remainder of this year. However, it is worth noting that our margins will be subjected to the foreign exchange rate on the ringgit."
In summary: - Lower Q revenue & profits. Due to one-off goodwill written off RM 4.8m in current Q & RM 10.5m property sale previous year Q. Minus these out and actually performance in this Q is better. - Slightly higher Profits & Margins for current FY compared to previous year. (11.8% vs 11.3%) - Higher Dividends for current FY compared to previous year (2016: 11 sen vs 2015: 10 sen). - 38.4% of revenue from outside of Malaysia, so might continue to benefit from weaker Ringgit. - ROAE at 18.6%. - ROIC at 26.7%. - CROIC at 25.5%. - Free Cash Flow (FCF) vs Revenue at 11.7%. - DY at 5.56%
Valuation: - P/E: 13.56 - EV/EBIT: 13.22 - Price to FCF: 13.79 or 7.3% cash yield.
Risk/weakness: - Competitive local market in Fast Moving Consumer Goods industry. - Stronger Ringgit might signal less contribution from overseas.
pingdan, if company A and B running the same type of business, then obviously company A is better. But more important is how much of profit can be generated from invested capital (ROIC). In my opinion, that will be a better benchmark than ROE.