kcchongnz, thank you. That formula is much simpler.

Posted by kcchongnz > Nov 7, 2015 05:13 PM | Report Abuse

shinado

Use this

http://klse.i3investor.com/blogs/kcchongnz/51631.jsp

"Must have brands" and "big name designers" usually equal more $$$. In this kind of economic situation that our country is facing, do we buy really want to spend more on items that we might just not need?

“We buy things we don't need with money we don't have to impress people we don't like.”

Companies are cutting down on cost and laying off people. Even the government has announced budget cuts for some gov departments. Surely a typical working class Malaysian will be affected by the economic situation as well. They will be looking to buy something for a great value, like Padini which still have brand recognition. Padini knows the market needs and cater well to them.

Hi kcchongnz, great analysis on Padini. I do have a question:

What is the formula that you use for ROIC? The one that I know of is this:

ROIC = NOPAT/Invested Capital

whereby,

NOPAT = Operating income - (1 - Tax rate)

Invested Capital = Total Asset – Current Liabilities – Excess Cash

and whereby,

Excess Cash = Total Cash – MAX(0,Current Liabilities-Current Assets)

There are so many formulas and interpretation for Invested Capital especially and it's rather confusing. Based on the formula above, I am getting roughly 30% in ROIC whereas you get 40%.

I hope to hear your feedback on this matter. Thank you.

pap9163 I have previously mentioned that corn and soybean price went down as well. Thanks for pointing out the exact figures for that period. But as you may know, MYR depreciate against USD by 19% so far. So naturally, cost should be up slightly. But since MYR also depreciate against SGD, we will definitely gain more revenue and profit from exports to Singapore.

Malaysia September export up 8.8%. E&E export up 13.6%. http://www.thestar.com.my/Business/Business-News/2015/11/06/Malaysia-September-exports-exceed-forecasts/?style=biz

But it's still a good stock to hold for long term.

When you see paper is white, you say white. That's just how it is.

ridah118 thanks but I would like to caution on the weaker ringgit against the USD because of the cost of soybean and corn will be affected. Really need to see this quarter report to understand if they can cope. Past 5 year results suggest that they will be able to cope though.

duncan2 looking at the how things go now, there might be a slight pullback in price today. But yes, you get to pocket the dividend which is considered your profit.

duncan2 use your price to times 2 and divide by 3. Formula is price x (2/3). Or use your previous number of units held. Example: 1000 units priced at RM5.8. Now you have additional 500 units. So new total you have 1500 units. So divide your previous units by your current units and times with your average price. You get 1000/1500 x 5.8 = 2/3 x 5.8 = Roughly RM 3.87 per share.

For those unable to hold for a longer term, of course this counter sucks. Only those of us who hold long term benefit the most here. But well, if you guys say this counter sucks, then sell and move on to another counter.

Don't worry, I'll wait. Just like how I waited 17 months now. Best decision ever made.

RosmahMansur same for me too, one of the best in my portfolio.

ykinvestor thanks for sharing this info.

Well I just got into this counter this week at 0.40. You are right, this is one fundamentally sound company. Average 5 year gross profit margins at 50%, 5 year average ROAE at 19%, and both CROIC and ROIC almost double up in past 5 years. It's a shame I didn't notice this company much earlier. Oh well, at least I'm still holding on to Teo Seng at this moment.

livestrong you are also in this counter?

I remembered someone previously ask if there are manufacturers for Nike footwear in Malaysia. Well, just for info sharing, I found this interesting and interactive website for list of manufacturer/factories for Nike globally: http://manufacturingmap.nikeinc.com/

It will open up the world map. Click on Malaysia and select 'view/export factory list'. There are currently 22 factories as of August 2015 (some are same manufacturer but have more than 1 factory locations). So far can only see 1 for equipment while the rest is apparel.

I hope you got it, I don't want people spamming my mailbox. Thanks.

Ooops I made a mistake in the dividends section. Should be as below:

Magni 2015 2014 2013 2012 2011
Dividends 15sen 13sen 13sen 9sen 6sen

But yes, you do get the point. More free cash equals more dividends & able to expand business without borrowing too much of money.

RosmahMansur you are welcome. I hope more people can share knowledge in this forum. Cheers :)

Cash Return on Invested Capital (CROIC) measures how much free cash or 'owner's earnings' that can be generated based on the capital that is invested into the business. It's different from Return on Invested Capital (ROIC) that measures based on net profit.

So in other words, we are measuring free cash that the business does not need for operations or capital expenditure. It's free cash that they can choose to either redistribute as dividends or accumulate as cash reserve or even to be used for future acquisitions.

Any CROIC of more than 10% is good, but generally we look into the CROIC of the past few years to determine if the amount is increasing. An increasing amount means business have the ability to generate more and more cash from its invested capitals over the years, which is good for us investors.

Just for sharing, the CROIC of Magni for the last 5 years:

Magni 2015 2014 2013 2012 2011
CROIC 10.72 9.15 9.21 8.85 5.57
Dividends 29sen 29sen 25sen 20sen 5sen

It's going on an uptrend. That is why it can announce more dividends, bonus issues of shares and even potential acquisitions.

For the sake of comparison between Prolexus and Magni:

2015 Prolexus Magni
Operating profit margin (%) 9.19 9.69
Net profit margin (%) 7.09 7.27
ROAE (%) 21.79 20.53
FCF vs Revenue (%) -0.12 6.45
CROIC (%) 4.82 10.72

Both have similiar profit margins and ROAE. The only difference is the free cash flow and CROIC which clearly Magni is the winner.

Nice, keep it up!

Wow an honest disclosure, I salute you! Question: why do you keep 47% in cash? I think the market is low enough, you can purchase nice stocks at a discounted rate already.

zbaikitree2 digi is an overpriced shit. get out fast and buy xox.
1 lot digi you sell can buy 20 lots xox.
28/10/2015 23:58


Let's look at some key data based on 5 years from XOX to determine if it's a better buy:

2015 2014 2013 2012 2011
Revenue 90952 57050 40807 61719 16789
Net Profit 1223 -1576 4514 -20670 -15974
Profit Margin (%) 1.34 -2.76 11.06 -33.49 -95.15

Based on these data, we can see that XOX is in red 3 times for the past 5 years. Plus, it's a penny stock that has never declared any dividends since listing. Of course we never know if in year 2016 XOX can perform much better. But I'm not convinced at this point to even attempt to look into deeper details such as cash flow position of the company.

On the other hand, overpriced or not, we have Digi which consistently payout dividends each year.

So, I let you judge this by yourself.

Disclosure: I do not previously or currently own either XOX or DIGI shares.

Jester, I'm in no position to teach. I'm a learner just like you :)

Will I be using dividend investing solely for my portfolio? No. But with this back-testing result, it gives me an idea to incorporate maybe one or two dividend stocks into my current portfolio especially during these tough times which can be full of uncertainty.

I would like to think of it as part of a 'Margin of Safety' although I know that's not how it really means. At least you can fall back to dividend gains when prices go down south.

And not to forget that other factors such as bonus issue and share split was not taken into consideration. I would still think of it as a decent return.

kcchongnz Thanks for the formula, but I think your CAGR is calculated based on 10 years, while mine is 16 years. So I believe my CAGR should still stand corrected. Am I right?

hi kcchongnz, thank you for your comments. As to reply your comment no. 1, I get the output from a CAGR calculator from this site: http://www.miniwebtool.com/cagr-calculator/
Do let me know if the calculator is wrong, thanks!

No regrets keeping this stock for 13 months now :)

There are many ways to invest and it's up to individuals on their preference. FA or TA. In TA you have many patterns and chart to choose from. Even in FA itself there are so many criteria that one can choose to focus. ROAE, ROIC, cash flow, EPS growth, EV/EBIT, PE, DY etc etc. At the end of the day, you choose based on the methods you are most comfortable with. Everyone have different risk appetites. It's like eating ice cream, so many flavours out there. You pick your flavours and someone else pick theirs. At the end of the day, you all still enjoy your ice cream.

So, at the end of the day, keep doing what you do best. Thanks kcchong for all these articles. It helps to have a look at investing in another perspective.

Apart from the proposed share buybacks, there is no visible good or bad news for Padini that we can see. So I can only guess 2 scenarios: 1) Investors react positively to the proposed share buybacks. 2) Insider or director buying that have yet to be announced.

If no. 2 is true, usually we can expect good results coming in next quarter announcement. Just my 2 cents.

it's just a small sum really...translated to 1.48 sen per share according to the announcement (because Jobstreet is only holding less than 5% stake). http://www.bursamalaysia.com/market/listed-companies/company-announcements/4885529

Corn price is roughly the same as 1 year ago, which is quite low, while soybean price is roughly 10% cheaper compared to 1 year ago which is quite low as well. The only other factor is weakening Ringgit which can work both ways as Teo Seng import these ingredients for chicken feed while at the same time export most of its eggs to Singapore. So we can mostly ignore Malaysian egg price here.

Overall, I think Teo Seng is still a good buy but need to see the next Q report to determine the actual damage done by forex.

Because Spritzer is moving so so slow........I am thinking of selling in favour of other stocks that are currently still cheap. But I might just wait for next Q report before deciding....

Good result compared with Q1 FY14! http://www.bursamalaysia.com/market/listed-companies/company-announcements/4844741

SpydyKing there is potential profit if you believe MYR will bounce back to normal....

Corn and soybean price is actually anticipated to drop soon, according to article from WSJ: http://www.wsj.com/articles/corn-soybean-prices-drop-as-usda-boosts-supply-outlook-1439403298. That's because US wanna boost supply.

As a matter of fact, corn and soybean prices are already dropping.
Corn: http://www.nasdaq.com/markets/corn.aspx?timeframe=1y
Soybean: http://www.nasdaq.com/markets/soybean.aspx?timeframe=1y

Unfortunately, USD continues to strengthen against MYR....

Most eggs are exported to Singapore market, so we shouldn't be looking at Malaysia egg price anyway....

wow really good buy seanchin! I bought 9 months ago @ RM3.18 per share.

You guys should join Towards Total Financial Freedom group in FB. We mainly discuss fundamentals there.

Price egg increase does not affect Teo Seng, since most of the eggs are exported to Singapore...

also, after consolidation, most punters will shy away as this is no longer a penny stock that they can goreng-goreng.

tanbb the simplest answer to your question is to look at KLCI and let me know why it keep dropping? When KLCI go south, most counters will follow....

Demand for egg in Singapore is still strong, chicken feed price still low, MYR still weaken. All this bodes well for Teo Seng so I see no issue on the fundamental part. As for technical, I really have no clue as I no knowledge on this field at all. But I believe this might present a good buying opportunity for some. The only downside is not knowing if KLCI will slide further down.....

FY2015 EPS 14.30sen. Although Financial year end changed and we can't compare with previous year, FY2014 EPS was at 12.90sen. I think overall is good news for us!

Q4 result out! http://www.bursamalaysia.com/market/listed-companies/company-announcements/4751445

The only difference between Padini & Uniqlo is the higher revenue from Padini while Uniqlo is suffering from less sales. Both are operating with lower profit margin.

WingTai Q report came out last night. Have a look at the poor performance from Uniqlo and you will understand that retail sector will not be doing well in the near future. All will operate with lower profit margin at least up to a year post-GST.

speakup Because Voir & Cheetah are not doing that well. Voir is not making any profit in FY14. So why should Padini get involved in a such a merger? It does not bring any benefit to Padini at all.

Albert Baker Jobstreet sold off their main business, therefore profit is larger.