Dsonic forecast profit in 2015 is RM110m
Protasco forecast profit in 2015 is RM102m

Dsonic market cap today is RM3,200 m
Protasco market cap today is RM660 m.

The operators in Dsonic should switch to Protasco. Am sure it is not difficult for Protasco to do a share split, more bonus issue, rights issue, and announces multi billion contracts.

RHB gives a Fair Value of the stock about RM4.08 per share on the forward PE of 25x and 24x for 2014F and 2015F. Is it reasonable for this type of business? Can they maintain double digit growth after 2015?

RHB forecast its earnings of RM110m in 2015, using PE of 20x (just an assumption), the market capitalisation is about RM2.2 billion. I wonder what is the market cap today? Is there a lot of upside?

If we separate CBIP into 2 core business, one will be the existing the mill construction & SPV and the second one will be the their own plantation in Kalimantan (which is slowly taking shape). Their existing sector already worth easily RM6 per share due to its double digit growth and strong expansion into new products.

As for their own plantation in Kalimantan, at this juncture, until it bear fruits, we can only value for its cost of development/biological assets. It is like a machine/asset that can only produce its product in the forth year. So, it is anyone guess at the moment what is the cost of production and price of CPO in four years time. Knowing that they are moving towards the upstream business, it is an indication that the Group is ready to add in a new line of profitable business.

Conclusion
My view is that the existing business (engineering & SPV) is already worth about RM6.00, so this stock is undervalued.

As for the second core business, one have to consider its associated company (started harvesting) and its planting program of 6000 ha each year. This part is very subjective, but certainly have value attached to it as land in Kalimantan is getting scarce for plantation. The price for good land will definitely increase.

I understand, once the land is fully planted and reached 4 years old, the value of the planted area can easily fetch 2 times the initial cost.

Overall sentiment towards property industry is very cautious due to recent GST, RPGT and DIBS implementation. Mr Tong gave a very convincing argument based on sales of top 8 developers, which has grown from RM12 billion to RM22 billion in year 2010 to 2013 and the units sold increased 50% over this 4 years. So, prices for property stocks (already discounted these news) are pretty quiet. The waiting game just started. In view of inflation + higher costs of construction, it is important that we should select property stocks that have higher margin and efficiency. IOIPG stands out. Like plantation stocks, it is a good time to buy when the CPO price is low, similarly, for property stocks, you buy it when there is a slowdown. HOWEVER, you have 2 choices, you can wait for a year or two to invest or you can BOTTOM FISHING now, and hold and wait, provided you are patient or wait for the turning point.

Last 3 years looks good. ROE increase from 9% to 15.5%. Revenue doubled from RM330m to RM660m and profit almost double as well from RM28m to RM55m. Dividend yield last 3 years is about 6%p.a. Worth to accumulate some.

Very interesting stock. If I am the directors, Hanifah and Chew Ben Ben, 15% and 12% respectively of a company which is RM3.2billion now, i will sell all of it. Hanifah will have RM480 million and Chew Ben Ben will have about RM380 million. The company only make in 2013 - RM22m, and 2014 Estimated by analyst RM81m. This is a no brainer for me. The Directors are super rich.

Cautious on the trade receivables, RM137m (Debtors turnover about 192 days) & high PE of 30x). The stock market cap. went up from RM300m to RM3bil (in less than a year). This is the few stock that can grow 10 x without requiring much CAPEX. Best biz model to be followed.

One of the oil and gas stock which is not covered by analyst is SILK. Everyone thought it was Kajang Ring Road. Actually SILK today is a restructured company with 19 OSVs + Kajang Ring Road. Both earnings are growing, and the share price only reflected 50% of its intrinsic value. at the moment it is 61sen with expectation of 120sen.

Dsonic will win the stock of the year for increasing shareholders' value hands down for 2014. Lets hope it can sustained up to end of 2014, with 2013 PE of 35x and estimated 2014 PE of 30x. Imagine those who bought at RM2 and today is RM21.50. The operator(s) should also be given the award as well.

I think both imenwe and Mr Koon are right. One is from a financial analyst's perspective and the other is from a business perspective. I can understand that the plantation is a cyclical biz, hence, from a biz perspective, we take advantage of it while it last (not here for long term). Hence, it is a short term investment (it would not be too smart to invest in FGV for long term knowing that the management is not up to par).

FGV is the largest plantation company listed in Malaysia, it is hard for big funds to ignore it. I understand the unit trust funds size is say RM350bil plus and grow about 10-15% yearly, where do the funds go? So, they will buy and sell, only long term holder like EPF/PNB/Long Term Holders (e.g. investment in MAS) will suffer eventually. So, the risk of them going down is low (since CPO already traded at a low of RM2250 in 2013).

Another lesson we should learn here is 'the high tide will carry all boats higher' (so management efficiency is not important + they also need a bit of time to use up the RM5bil). Lesson learned. Thank you imenwe and Mr Koon, for their opinions.

1. Imenwa - very good analysis. It confirmed that it is not that straight forward to calculate FGV's additional profits. In short, a lot of guessing work. So, one have to explain why with 2012 average CPO price of RM2843 gives a net profit of only RM900m? Lack of transparency?

2. GLC + inefficient and quality of management seems to go hand in hand. Not many GLCs does well in long run.

3. The problem about the more you know equates to the less you know. Sometimes, knowing too much makes one to be adverse in investing.

You are right. Miscalculated. So Insas current NTA (March 28) should be RM1.96. Hope Insas can catch up. Another company that does not follow this theory, is iCap.biz, the NTA is RM3.02 and the share price is RM2.35.

Inari on 30June2013 (MCap = RM210m @ 72sen), 31Dec2013 (RM500m @RM1.72) and latest (RM794m @RM2.72). Insas NTA @ 31Dec2013 = 1.71. Latest NTA should add about 1.71+0.15 = RM1.86 for INSAS.

The MGO expire soon. Looks like it is staying above the MGO price. I suppose, holder expect it to go up higher. Other than that, I do not see why they hold on to it. Perhaps they have confident that the new owner going to add lots of value to it. At this junction, nothing is visible yet.

An alternate to IOIPG is the CA, CB, CC. Should IOIPG goes up say from 2.66 to 3.16 (50sen) in one year, i believe the CA, CB and CC will follow, at least 80% of the increase (40sen). At the moment they are only traded at 7sen to 16sen. Of course, it only has ONE year to expire. This is similar buying an OPTION (with a one year period). Similarly, you can do it on Plantation companies which Mr Koon recommended. Of course, your horizon is a lot shorter. But your gain is many times higher, together with the RISK as well. Just a view.

Insas owns 34% Inari. Inari market cap is RM1.2bil. 34% of Inari equals to RM438mil. So, theoretically, Insas, like any investors in Inari, should reflect market value of Inari in their books or share price. So why Insas price did not fully reflect this? Because they worry Inari's price will drop back to the same cost of investment in Inari. I believe it will catch up and drop accordingly.

Dsonic - CA holders must be cautious. Is it fundamentally OVER or UNDER valued?

UNDERVALUED - yes, based on RNAV
POTENTIAL GROWTH - yes, with projects to be launched and projects in hand
PROPERTY INDUSTRY - is cyclical, like palm oil, 2014 is a lousy year for Property Stock, just like 2013 is lousy year for plantation (CPO is RM2250/ton average). Hence, when property industry recover in a year or two, property stocks profits will GROW, RNAV will improve + PROPERTY INDUSTRY will be the favourite.

UNDERVALUED + POTENTIAL GROWTH (>10%) + INDUSTRY AT LOW POINT = GAIN in future

SILK's OSVs business can be compared with Perdana which is bigger in size. Perdana is trading at about 15x PE, and SILK in 2015 will bring in RM32m x 15times = RM480m. Plus its toll biz, about RM400m, TOTAL value = RM880m (Market cap now is about RM300m)

The recent quarter was down, mainly due to dry docking & timing to despatch the ships. The purchase of 49% remaining of 4 ships has yet to complete, hence, not contributing more. On top of that, they are waiting for delivery of 2 ships. When all the ships are in + the 49%, the contribution from shipping will improve a lot.

As for the toll road, they are recording increase in traffic volume, which is as projected.

Dear inventors, don't get me wrong, what I wrote is just my 2 cents thought, although it is really based of facts (Volume really went up exponentially). If you think there is potential, solid earning growth, by all means accumulate. I am referring to those who are up due to operators taking advantage of the retailers.

1. Many small cap stocks & penny stocks went up over the last 3 months (more than 50%). Nearly every stocks is UNDERVALUED.

2. Volume for these stocks suddenly went up double, triple, quadruple and 10 times.

3. One can deduce that the SYNDICATES are back in the game, else how do you explain the SUDDEN increase in volume? SYNDICATES attract DAY TRADERS, and attract RETAILERS, that is why we can also see that the volume also shrink very fast.

4. Hence, small caps stocks trades at a DISCOUNT to KLCI because of its illiquidity. Now, small cap is ahead of KLCI at 25x vs 17x.

5. No one is in the position to poke this BUBBLE other than the SYNDICATES. So, one has to draw experience from 1994, 1997, 2008 and know when to leave.

6. Nearly most stocks that went up have catalysts for the increase, the question is how long can they sustain. Or how come suddenly these catalysts only comes about at the same time. Eg. Tambun, Scicom, Silk, CBIP, Protasco, Inari, DSonic, Yinson, Coastal, Insas, Pantech, Golsta, MKH.

7. So expert out there, who will know when the MUSIC stops. TA, any view? Operator? Do share.

If you ask the IR the net plantable area most will tell you that using a rule of thumb 70% for Kalimantan is reasonable. So, for the land that they purchase, follow this rule (there is VAT, there is also plasma land).

Don't forget, the first 4 years, there is no harvesting/revenue, one has to put in another RM15,000 per ha before it can harvest. So, to plant 10,000 ha, you need RM150m, to plant say net plantable 50,000ha, you need RM750m. It is not a bed of roses during the first 4-5 years, lots of amortisation of biological assets, depreciation for mills, finance costs, etc. Yes, it does worth RM2-3bil when all trees mature.

So, to plant 50,000 ha at 6000 ha per annum, you need about 9 years. Depending on the cost of planting (may increase) and the price of CPO then. It is very long term game.

Food that the stock did not go up too much, can accumulate more. Where to find a monopoly business (TOLL ROAD) + OSVs (LT Contract) valued at >50% of its intrinsic value. Especially they are growth in the toll traffic + rate (guaranteed).

As for OSV, they have a fleet of 19 ships, almost close to Perdana which market cap is RM1.4bil. Today, Silk's market cap is only about RM300m. Toll road NPV is about RM400m + OSVs (depends how much PE we give). An analyst give it a value of RM400m. So, total market cap is about RM800m vs RM300m today. The toll road per day is 180,000 and the max is 640,000 (27 years left, so, upside is good). Growth of traffic over last 3 years is 10-20% p.a.

Dsonic figures looks kind of too good to be true. ROE 46%. Wow, not many business can do that. How come earnings can go six times higher from 2011 without much capes. Very good business model. How come no competitor?

Another small cap stock, about RM200m. It's a turnaround company. ROE about 12%, for past 2 years. This group must prove its turnaround by growing its earnings, expanding its market share, getting new products, other than that, not much catalyst (although they are waiting for FDA approval)

3 years ago it was around RM1.30. Now,3.14. Not bad for 3 years investment.

GENERAL
Sabah, mature, high yield = RM70-75,000/ha. (Indonesia is much lower due to VAT, when they buy land they allocate 30% for plasma/native). So, every stage is different, like year 0-4 (no harvest), planting cost to maturity may ranges RM13,000 to RM15,000 per ha. So you cost of land and cost incurred to year 4, for indonesia, minimum RM16,000 per ha (exclude financing cost).

CBIP
CBIP - via Associate has effectively say 6000ha (in Sarawak). If all mature, general calculation - 6000ha x RM60,000 per ha = RM360m

CBIP - direct (just planted) 6000ha - no yield. Land cost plus say year one planting cost RM1000/ha + RM5000/ha = RM6,000/ha. I will only sell it if someone willing to pay RM10,000 per ha x 6000 = RM60m. (next 2-4yrs, additional planting cost).

Most businessman are sharp when they see a biz is undervalued and has potential growth (especially on the biz that they familiar with). Their horizon of investment of course is different from analyst recommendation for only one year. They look beyond one year and definitely know the downside else, they rather put it into FD.

The major shareholders, although very rich, normally they do not invest unless they are confident to see its potential. So, be rest assure, this is an UNDERVALUED and with POTENTIAL GROWTH company. If you think he do it to support the price, chances are you are wrong. If I know EPF selling down more and more, I rather wait for it to go rock bottom before I get in. Look at Gamuda's major shareholder, sold during high, can accumulate double during the crisis.

I am not saying businessman don't make mistake, but, chances are lower than layman investor who know little about the biz. So boscokt, if you have stamina, accumulate. If even earnings goes up double digit and price never move, then you may let it go. Nothing is certain in this world.

1. The first 6000 ha planted in 2013 in Indo will provide a low yield in 2017 (just started for harvesting), and will break-even or result in small loss (meanwhile cost of planting will be incurred during 2013 to 2017). Another 6000 ha will come it in 2018. A 5000ha mature plantation with yield of 28ton per ha in Sabah is worth about RM300m.

2. In indonesia, it will be about a discount of 25% on the value of plantation due to VAT and leasehold land (for the mature plantation). Hence, it takes a while to realise its value.

3. Until its fully planted, it will take a long while.

4. However, the existing business is UNDERVALUED due to potential growth and high ROE (>15%).

5. So the Indo plantation part may bring down the EPS due to planting cost for the first 4 years. Imagine a planting cost to maturity of RM16,000 per ha, 6,000 ha require RM96 million (amortised over 25 yrs). If it is 60,000 ha, you will need RM96m x 10yrs = RM960mil, you will need capital funding.

6. EPS for next few years will be effected by the amortisation of the biological assets. Analyst won't look at it until it can produce substantial production like 200,000 tons or more.

To double your money in 1 year is superb. 2 years is excellent. 3 years is great. If it double (from 60sen) in one year, it will be a bonus. If the toll traffic continues to grow in double digits, with the guaranteed by government for increase in toll rate, earnings growth will come in faster. The OSVs pay for the price of the shares, you get a 37km toll road free. So, if it goes down, just accumulate.

1. If you notice, the price move upwards when he volume is above 3,000,000 units. It would be flat, if the volume just above 1,000,000.

2. Protasco did the right thing to explain the concern of O&G in the Edge. Based on the new structured deal, the risk is mitigated. Definitely better than SPACs which has no assets yet. And the entry cost of USD22m is a good start, only about RM70m, not major impact to the company with a market cap about RM600-700m.

3. Positive news from Nepal in today's Star. Few catalysts pointing that this stock is really expanding and the EPS will be growing with a healthy rate, with strong cash flow, resources will be well used.

4. From a business perspective, the GROWTH is good (10% at least), it is UNDERVALUED on ground of low PE for 2014 and 15 is at single digit.

1. Only 6,000ha was planted out of the 76,500 ha available (net plantable area is about 70%, due to plasma). You will have to wait for another 3 years before harvesting starts.

2. Yes, for the associates, was informed that its effective ownership is about 6000ha, still young and can be harvested.

3. Land size wise, TSH and CBIP is similar, but, TSH has stated planting at least 4-5 years ago.

4. Plantation in Kalimantan has different dynamics compared with Malaysia due to the tax structure (VAT @ 15%). Of course the land cost is a few times cheaper. Not forgetting, in Indo, they have to plant for the plasma (i.e. the native).

5. The impact from their own plantation can only be seen in next 3-4 years. So we have to wait and see what type of CPO price then. It is no doubt it is a long term investment.

Just read the Public Investment report and Starbiz article published in this forum. I am new to Daya, saw the chart, up and down like a mountain. Can anyone who know this stock well clarify:

(a) The two OSCVs, have they fully paid? Are they raising money now for the purchase? How can they deploy the ship in Feb when they haven't fully paid for it? What is the range of PAT margin for this biz? Is Daya new to this biz or hv experience running this OSCVs? During the first 10yrs, the company will need to amortise the OSCV, say, 10%, this will be RM95m. What is the % of loan? Say it is 70%, loan will be RM650m x 8% = RM53m p.a., What about operating cost over revenue? With such high operating cost, on depreciation + interest, what kind of profit margin like.

(b) Daya has RM1.5bil order book, what type of margin and how long? Is this the first time they have such a high order book. The company market cap is small, do they need to raise money to complete such huge order?

© with such are super OUTLOOK, why Public Investment only project it to be 47sen, actually upside is not a lot.

They cleared the confusion on the O&G acquisition, as stated in The Edge this week. I think correction is better than up up all the way. Disregard the O&G, Protasco do have about RM200 million in cash, which can be put into good us for the construction and property development. Lets wait for them to announce the private placement and bonus on the warrants. Like Uzma, after the announcement for the rights issue at a steep discount (70%), the price went up another 5%-10%, even though the issue benefits the major shareholders more than the company. Theory doesn't work in this world.

Those who are trapped have no choice but to wait. Set a longer horizon. As long as you know this stocks can grow in EPS (OSV and Toll increase and traffic) + at the moment it is UNDERVALUE in term of OSV biz + Toll biz, the share price will catch up. There is a 80-100% upside from 60sen. For 2-3 years, I think it is worth waiting, even at today's price of 66sen.

lately, many small cap stocks went up. A lot has been said it is undervalued. But, the small cap index seems to move up a lot, from PE 9x to 25x (2012-2013). The question is, are they overvalued, yes based on the index, so is the CI. However, there are a couple small cap stocks are also undervalue, in term of NTA, in terms of PE, and potential growth. So, if you are careful with your selection, they you are ok. Price is what you pay, value is what you get. Timing is also critical. Take a look at the FA, TA then the business. If you are convince all 3 are positive, worth to put some money.

Undervalued? Growth potential? Yes. yes. FA looks ok, is the TA looks good? And TA expert?

Look at the FA first, and find out roughly how much it is (based on current position). If it an undervalued stocks and with some growth potential, then worth looking. Buying on a pretext of RM6 billion property projects, one has to give it a further thoughts. One, confirm whether the land already inside, if it is, then there is value to it, if there is not, it stays at rumours.

There are many GDV projects out there waiting to happen, some are huge, RM10 billion, some even the land already in there, waiting for it to happen, such as Landmarks. Some take years. Some takes months. Of course, some bought shares on a pretext of visible earning growth, such as Protasco on the construction and development project, they have RM221 million. Looks like they have sufficient money to gradually develop the land (at least the initial part).

If I am the major shareholder, I will privatise it. (on assumption the actual land value is 10 times its existing market cap). Just sell the land, take the capital gain and call it a day.

SILK - from a business perspective, it is an undervalue stock, even at 60 sen. Similarly, MP Corp as mentioned by calvintaneng, the land itself (after discounting), is worth about 5 times the markep cap. Some worry about PN17, just sell part of the land and revalue the land, I think there is no PN17 issue. So, what is left is patient and timing.

Volume is very low. Less than 100k most of the time. Likely it is a cornered stock. Very much depends on the major shareholders, what they want. So far, based on the RI, they want to benefit themselves instead of the company. If there are projects coming soon, and if the major shareholders know, it would look like insider trading. Company will benefit from new projects, major shareholders, getting RI at 70% discount, I think they will makes a lot of money.

actually it is an ancient chinese saying.

Its like an option to the mother share. However, it expires in Mar 2015 (one year). Should the mother share goes up from 2.58 to 3.20, the price will swing from 19 sen to increase 60 sen to 79sen i.e. four times.

Bottom line, if it is yours, it will be yours eventually.

Politicians has grown to be arrogant, instead of serving the people, they are taking from people. No offence to businessman out there, some are also taking from the states and benefiting themselves. So unfortunate, the politicians and businessman alike, the reverse robin hood, rob from the poor and enrich themselves. I am only referring to corrupted businessman. Anyway, politics & businessmen, money buy politics, politics get money, businessman get profits. Majority serve them instead the other way round. I prefers the people in the 60s and 70s, standard of morals is definitely higher than today, where have all the honest politicians and businessmen gone? Retired, i supposed. Why all the good values buried with them?????

great time to accumulate more.

It would be perfect timing if you buy a counter and it goes straight up the next day. Example, if you buy Golsta somewhere late Feb, it went up from RM2.36 to RM4.00 over the next 9 trading days, without a rest. Similarly, it came down from RM4.00 over the next 6 or 7 trading days to RM2.73.

It is the common expectation of speculators/traders. If they read their chart well, it would be great, timing is everything. But most just bought it and expect it to move up in a matter of days. I think they must set their timeline a bit longer, say months, if not years. Yes, I must agree if a stock does not moves it can be for ages, e.g Coastal, Protasco, Yinson but when it starts, it easily doubled? Coastal was doing at single digit PE for a couple of years. I think, it follows a trend, when the market likes oil&gas, whatever you said otherwise, people think you are crazy.

Remember the timber counter during the 1993. So what is the theme today? Oil&Gas, Construction, Plantations. It takes time, is no easy answer to that. It also need catalyst or some even to make it move, like, Protasco, new shareholders, property developments, construction, growth in maintenance of roads. Every STOCKS has its turn, but some takes donkey years. As long as you know roughly the intrinsic value, you should be able to sleep at night. And of course, some stocks that moves up for no reason, some by mere rumours, some new shareholders, some doing private placements, bonus and rights, and splits etc. Remember, price is what you pay, value is what you get. Warren Buffett buy a biz for 10 -20 years. Trades bought it for 1-2 days, speculator maybe 1-2 months, short term investors 1-2 years, long term investors 3-5 years?

Silk is quite a complicated stock to value. Read the analyst report, new shares conversion, loan restructure, toll increase delay, traffic below initial target (revised now), went through PN17, now added with a new business, chartering of OSVs, 4 vessels owned 51%, and recently purchase the balance 49%, occasionally profit drops due to dry docking of vessels. All in all, OSVs business should get an average of RM30 to RM35m p.a. with 19 ships (pretty sure about that).

Depending the PE allocated, it should worth around RM350m. They should sell its toll highway, which is weighing the profits down, however, if anyone wants to buy, an analyst said it is worth RM390m (based on new revised traffic projection), so, why it is traded 50% of the value of the company. Easy, toll roads grows gradually. If they start low, then it will take more years to get back the money, and they just saw its turnaround from losses recently. Next 2-3 years, when you see the growth, including the toll increase (guaranteed by government), you won't be shock to see in 3 years time, it is trading at 90sen or one ringgit when more analysts sees it.

So, this earnings are more predictable and sustainable, long term contract for OSV, increasing toll price and traffic, where to find?

MIDF's report looks very positive. TP @ RM2.90. At the moment RM1.80, with upside of about 60%. Good FA with positive TA, downside risk should be protected. With some sweeteners (free warrants coming), worth to take a look. Problem about FA, like what Protasco has been trading at RM1.00 over past few years, now, with catalyst of contruction & development, it falls under strong growth stocks, should accumulate below RM1.80. The market cap today is about RM600m, when it getting near RM1b, lots of fund manager will look for this type of growth stocks, and rerating will follow. Of course, the management MUST deliver the result.