VenFx - thank you for reading. I will need to go back to check on Hibiscus.

qqq3 - thank you for the kind words and indeed that is my aim to be a multi-millionaire like Mr. Philip. But I need ammunition, and I am of the opinion that Dayang, while you think is not a great company, is a company with RM3.7B in hand. Anywhere it is another big debate what are the attributes of a great company.

7300 - thank you for commenting.

jefferykong - Please google it. Thank you for reading and taking time to comment.

Tomorrow, interesting time.

qqq3 - many thanks for your sharing. But is the query an abuse as "Report Abuse" - I do not understand this.

Choivo Capital - thank you so much for the well wishes. I am not good at psychology and I am going to need tons of well wishes given the RI just announced.

And qqq3, your take on the RI is most succinct. Yes, bankers prefer to lend to a stronger entity than a weaker one. I need to internalized this.

From the many comments, there is no mention that with this regularization, local institutions will now be allowed to invest in Dayang / Perdana. Whether they will return is another issue.

Again to all of you, readers and commentators, thank you again for sharing and I hope these exchanges make all of us better investors.

@dusti - thanks for your comment. Yes, I was trying to be short and concise, but heck. Point taken and I will attempt an executive summary in future.

@Choivo Capital - Jon, I did not compare with competitors as I was lazy to be honest, yes if I analysed all the questions you asked, I will be working full time with some IB. I am not and I am in my sunset years, no excuse but sometime my gut tells me this is enough. It is actually hard-work and stressful too (skin in the game) despite now the much much easier access to information.

Nonetheless, for info, I used to ride on this type of AWB - enough said. But thanks for the comments. I will ponder on it.

Have a productive coming weekend.

@qqq3, thanks for reading. Yes, knowledge can kill if not use properly. But I think this is better than NATO - no action talk only.

You are interested in Dayang? Why, because of the famous person or all these write-up that gives you comfort to look? Yes, price now is better than 1.70 Care to share the many buts ...... it will certainly help sharpen my forecasting and be a better investor, many thanks.


@rajachulan - yes character of management or good management in general is very important in investing. I have friends who know the top management very well and it is a comfort what they (my friends) said.


Happy investing.

Thank you all for reading. Comments - thank you for taking time to pen your thoughts. And the likes - many thanks.

@rajachulan - I am not sure they read in detail and appreciate the nuance (subtle hint). Of course I may be totally wrong in my assumption that coming Q1, compared to previous years Q1 will be about the best ever in Dayang history.

@pjseow - indeed Dayang can do more and RM1.1B is highly probable. In my alternative analysis, I have RM1.17B (err i'm spiting hair here) but I stayed on the conservative side in the write up.

@titus - yes, this hedge fund is a pain in the ass. This selling would go on for about a couple of weeks. Need to be patient here. Eventually, there is no denying Dayang coming superior performance. Hedge fund by nature are short term in thinking and respond to small changes in big way, thus causing increase volatility. Patient.
I just wonder what that person going to say to his/her boss for losing a couple of millions.

Have a good weekend.

You are fired!

LKC003, please provide link to the write up, thanks

birkincollector - my bad, it is correct, man is indirect while numeric is direct. Nonetheless, the amount is RM 86.83m, no small sum.

Thank you.

It is incredible. Man and Numeric each bought a total of 58,609,000 shares (23/4-50,125.8 lots & 24/4 8,483.2 lots) i.e. estimated investment of RM 86.83m for a total of RM 173.66m.

Surely this is not for a week or two. The transaction cost would be running into the millions plus the wire cost to move the money from outside Malaysia.

Such confidence of Dayang future.

Investsucess, appreciate if you will advice why you think it is on the high side. Thanks

ToTo - why "investors" will shy away from Dayang if Perdana makes a right issue? It will be investors shying away from Perdana, no?

Nevertheless, depending on the type of "investors" - short term (day traders to less than a month); medium term (>a month to 1 year); long term (>1 year), the thinking would be very much different.

Short term - no issue with regards to right issue, only depend on the mood of the day, whether got out of bed correctly or not.

Medium term - some issues, depend very much on the mood of the various forum members - run, sell, die loh, etc., huat liao, etc, I do not know actually.

Long term - how many companies have 3 billion contracts that will last over next 5 years and still tendering for more work? Petronas said that they will spend 15 billion in 2019 upstream. Dayang has the capability and now has the capacity - think about this.

Happy investing.

It is most sad to see the latest blog that there could be a right issue by Dayang to settle debts.

If the investor took the trouble to check, it is the subsidiary, Perdana that should be the one that may make a right issue and not Dayang.

Since Dayang bought 60+% of Perdana, it was and still is Dayang that is paying Perdana yearly loan. Even in this relatively OK time, Perdana cash flow is insufficient to settle the yearly loan installments.

Dayang on the other hand has good cash flow and (yearly) loan is no issue at all.

Question then is what is the quantum Perdana need that will be satisfied by a right issue, 150m, 200m or 300m?

Lets say 200m, Dayang 60% share is 120m - this is within Dayang cash flow for 2019.

There is no need for Dayang to raise fund through a right issue, Perdana will most certainly need to raise fund as it is under-capitalized. Of course there are other ways to resolve Perdana debt issues and these are outlined in the 2018 4th quarterly report.

Happy investing.

Dear Investors, this is routine. And as the concern has been addressed as well as other previously planned maintenance was also done (sign of good management). This is not serious.

Happy investing and to the many Christian, happy Easter.

Agreed

OrlandoSKIN, that is interesting news, you have a thread please, thanks.

And why the majority 90% cannot overrule the 10%?

Is this the Malaysia democracy? The 10% rule? Then why have election at all?

Jon, many thanks for sharing. Comparing 98 with 08, 08 was worse in my view. But my welder friend said 98 was worse as there was no work compared with 08. So all is relative.

Also the go go days of the 90s do have some valuable lessons - one of which is the set up of CDS. My father's many shares were sold by the remiser without his knowledge. Luckily he managed to recover all of them over a period of time and this episode caused much health damages.

Insights by ex-Banker was interesting.

Happy investing all.

On the revenue front, Dayang making anything north of RM 900 m is not an issue. Profitability could range from low of 20% to a high of 25% is also not an issue. EPS would range between 21 to 26 sens. Of course upside beyond this range would be welcome and possible too. Weather has been kind so far but that does not mean that Q4 19 will be calm too. PER is anyone guess and depend very much on market (local as well as world) sentiment.

As Dayang owned 60+% of Perdana, it remains an issue that will not go away.

There are several possible options proposed to the debt restructuring committee (under the purview of Bank Negara) - including but not limited to extension of tenure of borrowings, disposal of assets, special issue or placement of shares and rights issue.

On 13/12/18, Perdana announced that the private placement is off.

It appears that Perdana is under capitalized, and going forward, the cash flow might be insufficient to service the loans (without advances from Dayang). It appear that a right issue (at Perdana) would be the way forward.

Among my circle of investors, there is even talk of preferential shares issued to Dayang by Perdana. But this may not be acceptable as Dayang appears to want to remain at current shareholding and Perdana to remain listed.

This is just my thoughts. With the many experts here, appreciate views on how this (debt) might be resolved and how it will impact Dayang.

Many thanks.

pjseow, thank you for sharing your thoughts on the earning estimates. What are your views on the loan (perdana) restructuring? I mentioned in an earlier post that there might be a right issue.

Thank you.

Dayang owned 9 vessels themselves and yet still need to charter 2 AWB (accommodation work boat) from Perdana. This can only mean that Dayang workload is really full. Also, so far the weather has been calm (and hot). I have not heard from radio any warning of strong wind and high waves for months now. Those living along the east coast, appreciate your confirmation.

Or two of Dayang's vessels need to be dry-docked for mandatory inspection / maintenance.

Either way, there is continuous work to be carried out.

At this rate, Q1 and Q2 will be pretty good quarters. At least revenue of RM 200+ million/quarter.

Do note that historically Q1 and Q4 revenues were always lower due to the monsoon seasons. (Q1 2018 revenue was only RM 149m.)

Obviously, the elephant in the room is the debt restructuring being discuss now and for the past one year of Perdana's debt. A right issue could be a possibility among many others possible solution being discussed.

Assuming a right issue, what is the amount that is required, RM 150m, 500m or what? This is probably where the investment bankers are a bit cautious and thus their warning due to dilution from the millions of shares that will need to be issued to raise equity (at Perdana level). Think Velesto, Sapura Energy, etc.

Stay calm and reasons out the fundamental. Stay calm.

Happy investing.

With 8,125,218,000 (dilute 9,638,618,000) shares issued, a RM 80,000,000 million net profit (this will be very stretch) for 2019 only gives 0.98/0.83 sen. You choose what ever PE you like and decide.

OK ok, NTA is 30+ sen ......

Happy investing.

https://tefd.theedgemarkets.com/2019/TEP/20190312tgj9n2.pdf today TheEdge Financial Daily page 15 has an article on Alipay and Wechat pay. Apparently they do loan out money to consumer.

JJchan, the reversal of impairment (or write back) should be back-off from the result and net margin would dropped to 27%. The cost of sale could swing as different type of works may required different cost input (some high some low). However, these are quarterly variance, the annual margin should be more reflective.

Happy investing.

This side-track is as per Management guidance last year as well as outlined in the upgrade reserve report for Anasuria. There could potentially be another side-track later in the 2nd half of 2019. Each side-track is projected to deliver about 1,000 bpd. So current production from Anasuria would be increase to about 5,000+ bpd for 1 side-track; to 6,000+ bpd if both side-tracks were carried out.

Coupled with the infill wells at ST Joseph planned for this April, total production could hit (conservatively) 10,000 bpd for next FY2020. An increase of 18% from current production of (averaging) 8,500 bpd.

And 2 cargoes already sold for 3rd quarters FY2019. This was stated in the Q2 report (pg 29) that was released on 19/2/19. Thus there is a potential 3rd cargo from 19/2 to 31/3 production.

Happy investing.

The annual production of Malaysia never exceeded 300,000,000 barrels per year and now only average below 250,000,000 barrels per year. And this gives about 700,000 barrels per day. Please check the sources quoted as well as www.statista.com/statistics/609019/oil-production-in-malaysia/

Thank you.

The average production of 1.7 million barrels per day quoted, appreciate confirmation of this figure as currently available data only show about 700,000 bpd of oil from Energy Commission - Malaysia Energy Information Hub, thank you.

To confuse the discussion further - FPSO Anasuria was designed to store 850,000 barrels. Labuan Crude Oil Terminal can store 1,680,000 barrels (50% Hibiscus share would be 840,000 barrels).

Morning Philip, I fully agree with the dictum a government that governs least, governs best to a certain extend.

However, the proposal was only on the number (one) of landed houses one is allowed to purchase not where, the type, etc.

Trust this clarify.

Sorry I meant to say wean and not whine. My bad.

Philip, as leading indicators show that (global) growth is reducing (Germany just missed going into recession), there is suggestion that bond should form some of ones investment. I had a look here and there and there is this AEONCr perpetuity bond paying about 6.4%. If one gets in now and the global economy slowed to a recession, then all if not most central bank will cut interest rate, there will be a rush to buy bond.

There will be capital appreciation as well as coupon payment (if one keep for at least 6 months and 12 months).

I agree with you - one house is more than enough. But I would go further - the country should legislate that each individual could only own one landed house (with 6 months grace to sell the other house if one upgrade or whatever). One can own more condo or commercial properties.

Happy investing.

risktransformer - you said that concentration on one or few stocks increases risk. I would say that depend. If the investor (in this case Philip) had research inside out this PCHEM and understand what products it make, how it is priced, the potential substitute to these products, raw material cost and the many buyers, etc and of course the moat, then I would say the risk is actually low.

EPF selling, I did said it could be to raise fund to pay the dividend. But indeed EPF is cash rich from all the collection / contribution from its members. Another dimension is the fund managers employed by EPF decided that they had reached their target (price) and therefore cashing out. I do not think it is EPF per se requesting to sell. Equally, EPF might have given instruction to the fund managers to diversify out of oil, oil products (much like the Norwegian fund). For this, maybe EPF annual report might gives some clue. But I think this is speculation and EPF selling per se need not be construed as something bad.

Global economy downturn - yes, this appear to be coming. But heck, every counters is going to be hit, not only PCHEM. So if the research is done well and this is a good company, then buy and average down when the downturn come.

Another simple way to look at this is - PCHEM had invested billions and Saudi had decided to buy-in, now they must have very good reasons to do so. Philip investment of a few millions pale to the billions already dumped in by PCHEM and Saudi. So PCHEM and Saudi has more to worry if this investment did not turn out the way it should be. Nonetheless, these people invest for the long terms - 20 over years, not short or medium terms.

Finally, the world population at this current moment in time and the decades to come will not whine themselves from the many products made from oil (except the plastic straws, maybe).

Just my 2 sens worth of thoughts.

Happy investing.

I have a theory. Because Hibiscus does not have any loan, the investment banks therefore do not promote this counter. One can see them promoting all those counters that have loans.

So it would probably be a good thing that Hibiscus borrowed some money even if Hibiscus does not need it.

Just a theory.

Happy Chap Go Mea to all.

Mr Philip, thank you for sharing. Indeed your view on oil just as feed-stock and able to pass cost increase to customers is enlightening.

My thinking is EPF selling to raise money for upcoming dividend payment to members rather than PCHEM is not performing.

https://www.marketwatch.com/story/saudi-aramco-halts-oil-output-at-the-worlds-largest-oilfield-report-2019-02-14

I will now make all effort to boycott all US good where possible.

Thank you all for reading and commenting. Most interesting ideology differences, especially about CCP which can also stand for chinese chauvinist pigs which also include me as I am a chinese too (but not from China).

In investment there is also the triple bottom lines - social, environment and financial.

I think in the social sphere that is where Huawei is lacking. In the social sphere there is stakeholders that also include shareholders, here the shareholders are all China Chinese. And they are collecting everything from the world (sapu all) and we all just suppose to look only??

Please don't get me wrong, I am also concern about climate change, inequality, justices, rule of law, etc., but to just sit and watch one person (entity-Huawei) take all, that is not on for me and I think for US too as they are going to lose big. So US fight as they know how.

So my thesis (ideology) is share the wealth - prosper thy neighbour and all will be well under the heaven.

You read them all, Ricky?

The PARETO 80/20 Principle.

In Q1 2019 FY, it is reported that the Gua P2 side-track cost RM 65.4 m (Hibiscus share only). In the January 2019 presentation, the P2 side-track is producing about 1,849 bpd (Hibiscus share, tested in November 2018). Now, say, 1500 bpd for a full year at U$ 60 gives U$ 32.85 m - RM 131m (exchange at 4). Within six months the cost of drilling the side-track is recovered. Yes, this is simple calculation, but heck, why complicate matter.

After AGM in December 2018, it was announced that RM 70 m was approved for N Sabah 3 infill wells (St Joseph) and U$ 30 m (x4=RM 120m) for Anasuria is pending (for 1 or 2 infill wells). Cash flow is strong hence the total capex of RM 190 - 200 m should be no issue.

It will be the development of Marigold / Sunflower that would require financing. This would probably be announced soon (within 6 months) to get first oil by end 2021 thus meeting the vision of 20,000 bpd production.

This finance could be bank loan or bond (ICUL or the likes) raised in the capital market.

Hibiscus has delivered before and should deliver in the coming years.

Happy Investing ALL.

@Dericlock, I went through the RISC report quickly and noted that the costs are all gross, i.e. Hibiscus share will be 50%. Will go through more thoroughly in the next few weeks to ascertain the profitability. Do not forget that the cash flow is very good and the recent acquisition (Marigold / Sunflower) was paid in cash. Should end this FY around RM 200+m, free cash flow, that is.

Also, Management has indicated (recent BFM broadcast) that all projects are assessed with oil price at U$ 50 per barrel.

Also, Hibiscus is also looking at doing 2 to 3 infill wells at Anasuria by calendar year 2019. So by FY 2020, the production from Anasuria should hit 5000 bpd as per projection by the company.

Actually, this is an exciting time for Hibiscus if one's horizon is 2 to 5 years. Cost for drilling is still low and new development cost also low (for Marigold / Sunflower).

Happy investing All.

Maybe this may help: https://klse.i3investor.com/blogs/kianweiaritcles/191125.jsp

Happy investing

The FPSO - Anasuria is 100% owned by the JV company (50/50 Hibiscus/Ping). This is obtained from the S&P posted in the Bursa as well as presentation material posted in Hibiscus website titled "The Anasuria Cluster" after the S&P announcement.

Thank you.

Thank you for sharing, I didn't know there are so many different ways to view PE (PEG and so on). There is no right or wrong and it is the investor own due diligent to adopt the one that suit themselves most. Let's us respectfully agree to disagree.

Have a good weekend ahead, all.

Just found this: http://www.theedgemarkets.com/article/petronas-sets-jan-crude-price-factor-us550bbl-highest-2-years

Dericlock, yes the report said there is more oil in the ground and the good news is that 3 infill wells should be drilled by July 2019. Thus production for FY2020 (N. Sabah) would be higher than current FY2019. Hopefully by then oil price maybe higher around 65 to 70, unless a recession hit (now seem a bit unlikely - but never know).

Philip (not Fisher), thank you for sharing.

VenFx thanks.

Winner, appreciate very much the "like".

GrahamNewman, thank you for your comments, appreciate it very much.

Choivo Capital, thanks.

supersaiyan3, thanks.

probability, hmmmm. I was wondering before I posted this along the same line as you. Then I think, if my posting can move the market, wow, to @#*$ with it.

Not too long ago, someone was illustrating some writers are pumping the market, or something along that line (if I understood it correctly) and impoverishing "investors".

I thought long and hard on this. My take is primarily SHARING (it also help crystallized my thinking). It is the reader's that need to separate the wheat from the chaff.

Ralph Waldo Emerson said "Nothing is at last sacred but the integrity of your own mind".

Paul Samuelson (won 1970 Nobel Prize in economics) said "Well when events change, I change my mind. What do you do?"

Then there are those that ----- "I have already made up my mind, don't confuse me with facts" (This is from Philip A Fisher, I bought the book in 20/2/1997 and re-reading for the umpteen time now).

Let this (forum) be not an "echo chamber", diverse views is important to provide the path to informed decision.

So readers, please exercise due care.

Have a good week ahead.

Choivo Capital, thank you for dropping by and appreciated the tip. Thank you for thinking so highly of me, that is, my capability to buy BH.

I had a peek at BH (A) during 2008/2009 crisis, the lowest then was USD 78,600 per share! Exchange was about 3.7; i.e. RM291k for ONE share, not 1 lot (1000) or 1 small lot (100), JUST ONE SHARE. But of course should I have such bread then, today, BH is selling for USD 292,500 per share (RM 4.14 gives RM1.2m), a 17% CAGR, yes some of those gains is exchange rate (~1.3%).

Some suggestion on Malaysian stocks would be very much appreciated.

Nevertheless thank you.

supersaiyan3, thank you for the kind words, 100 marks, you are too kind. I did some crystal-ball gazing, you think this is totally wrong? How can it be improved?

Flintstones, thank you, most kind.

i3lurker, thank you for dropping by.

Sslee, thank you for the like.

stockraider & shpg22, thank you for both your views.

To the rest who read, appreciated your time, I hope it is of value and improve ones understanding of the issue at hand.

Have a nice weekend.