https://www.bursamalaysia.com/about_bursa/media_centre/bursa-malaysia-announces-additional-relief-measures-to-alleviate-the-impact-of-covid-19-on-capital-market-players

Shell’s history more or less demonstrated the extreme pessimism (in fact, a valid one) at one point in time. While its turnaround is also very valid and justified, we must not forget the fact that the underlying fundamentals of the energy market is forever volatile. Crack spreads won’t stay high or low for long. So called mean reversions are also ever changing because too many circumstances are involved. Oil refiners are always in a very vulnerable position of getting squeezed from either side or even both sides of the value chain they are operating in.

To assign a maximum PE (whether on a relative or absolute basis) to current earnings is to assume that current events will unrealistically stay constant for a very long time. Incorporating a margin of safety is never about paying a cheaper price than fair value. It is about paying a price that takes into account the unsustainability of optimistic and pessimistic performances. So fair value is supposed to incorporate this margin of safety. Looking at long-term is not about forecasting how much a business can earn in the next 10 years or so, but it is all about understanding what we are certain to encounter in the long-term.

Forecasting that the market price will hit a certain amount within the year is neither right nor wrong. However, we need to understand that such a short term forecast without taking into account the long-term aspect of valuation is pretty much forecasting on how many more people are out there who are willing to pay an ever increasing price before realising that they have become the Greater Fools.

I have nothing against Hengyuan since after all i do own Hengyuan. While I would agree that Hengyuan to a certain extent can generate cash, I would disagree that it is considered as a "high cash generating machine".

I do not wish to project the idea that I am trying to find faults in everything I see, but I think there is some degree of misrepresentation based on the article’s notion about Hengyuan being a “cash generating machine”.

The real definition of a cash generating machine is one that can generate loads of cash without having the need to reinvest them in order to sustain future business. Capital intensive businesses most of the time do not fit into the cash generating machine category, and Hengyuan is clearly one of the many capital intensive businesses. Additionally, the mention of RM524 mln FCF failed to take into account the need for a huge capex which we know management has already committed within the year.

Assuming that FCF of RM524 mln is a correct figure, the recent results fail to convince me that the so called high cash flow generated is sustainable mainly because there is a failure in pointing out that such a high operating cash flow generated was also due to an extremely huge increase in trade and other payables balance. Sooner or later the high payables balances will need to be paid off.

To prove that a business is a cash generating machine requires more evidence than whatever that is being displayed in this article. There is too much focus on short term numbers and performance. While it is true that the past is the past, there is still no denying that looking back is still the crux behind security analysis. We need to look back into the historic performance in order to understand sustainability and real earning power. Otherwise, it is no different than selectively plucking numbers in order to paint an interesting, and yet half true and half false picture. The result will still be misleading.

>>>Posted by urfather > Aug 29, 2017 11:52 AM | Report Abuse

The apparent fluctuation in the recent two quarters are not exactly surprising given the fact that we know that FIFO method of inventories are used. Assuming weighted average method for inventories is used, the so called huge quarterly fluctuation should be lessened. Obviously whichever method used, choosing either one will have no effect on intrinsic value and everyone seems too caught up with such short-term fluctuations.

Even target prices given for the upcoming fiscal year end are very short-term in nature and may possibly be misleading as well. Hengyuan's recent good performance was also largely boosted by its utilisation of past tax losses carried forward to current and future years. Meaning it has not been paying taxes for quite some time because of the huge losses incurred when oil prices were very high back then. Because of this large current balance of unused tax losses, it is likely not needed to pay taxes probably in the next 2 to 3 years or so. This kind of medium term tax advantage should be factored into the purchase price, but the premium would only be quite small. If we were to value the business as if it need not pay tax throughout its entire life, then we would be overvaluing this tax advantage.

In my opinion, i think paying top dollar without a decent margin of safety for a business that is susceptible to strong cyclical forces is not advisable and I think 12 bucks is likely entering top dollar region. Anything above would be absurd from a long-term investment standpoint. While most people would agree that oil prices will stay low in the medium term, I don’t think anyone can commit on the long-term view on stability with certainty. We should only pay top dollar if LONG-TERM stability of industry factors is highly certain.

Disclosure of interest: I do own Hengyuan and my entry price was below RM5.00.<<<


Posted by probability > Aug 29, 2017 12:19 PM | Report Abuse
i see only two numbers here from urfather ..his buying price and fair value..

how did he arrive on the fair value..god knows.. some call this factual sound discussion? he he

more like grandmother story...suitable for urmother


Probability, firstly, I would appreciate it if you could actually refrain urself from attacking ppl’s names no matter how creative you may actually be.

Secondly, I did not assign a fair value or target price to Hengyuan. I merely stated what I think to be an acceptable maximum buying price which is entirely different. As for where I had gotten the number 12, I was merely referring back to the highest price investors had ever paid for in the past 10 years (source: KLSE Screener). In fact, the historic maximum closing price did not touch 12 at all, but I just round up for convenience sake. So 12 here is just a reference point and not a fair value. But it is fair that you point it out for clarification.

Intrinsic value is a very subjective topic and it can never be reduced to a precise number. Intrinsic value by right should be best expressed in a range of possible values based on conservative estimates and not something that can be lightly shared because when u reduce something to a number, everyone will be focusing too much on calculations instead of understanding business problems.

You just need to look at past records and you will understand how volatile results can be from one year to another. The future is not going to be any different. Plus, the business has already spent more than RM1 bln in capex (it doesn’t matter whether with internal cash or otherwise) in the past 8 years and its main market is only the local market. Imagine how much will be needed over the longer term if you assume that they are going for exports and at the same time try to maintain local market share. Unfortunately, I am not sure to what extent their capacity utilization is like right now, but I would opt towards close to full capacity.

Looking at sell side reports, you will notice that some companies have severely declining target prices over time, but the analyst still consistently give a buy call. For those who follow the advice for every single report will probably end up asking who is crazier, the reader or the analyst ? But such a phenomenon is typical of market valuation moving along the intrinsic value range and this makes specific target prices very misleading because they are not reliable at that specific point in time. That is why I did not give a fair value or target price because at any point in time, the valuation will fluctuate within the range of possible values and yet are neither undervalued nor overvalued.

The apparent fluctuation in the recent two quarters are not exactly surprising given the fact that we know that FIFO method of inventories are used. Assuming weighted average method for inventories is used, the so called huge quarterly fluctuation should be lessened. Obviously whichever method used, choosing either one will have no effect on intrinsic value and everyone seems too caught up with such short-term fluctuations.

Even target prices given for the upcoming fiscal year end are very short-term in nature and may possibly be misleading as well. Hengyuan's recent good performance was also largely boosted by its utilisation of past tax losses carried forward to current and future years. Meaning it has not been paying taxes for quite some time because of the huge losses incurred when oil prices were very high back then. Because of this large current balance of unused tax losses, it is likely not needed to pay taxes probably in the next 2 to 3 years or so. This kind of medium term tax advantage should be factored into the purchase price, but the premium would only be quite small. If we were to value the business as if it need not pay tax throughout its entire life, then we would be overvaluing this tax advantage.

In my opinion, i think paying top dollar without a decent margin of safety for a business that is susceptible to strong cyclical forces is not advisable and I think 12 bucks is likely entering top dollar region. Anything above would be absurd from a long-term investment standpoint. While most people would agree that oil prices will stay low in the medium term, I don’t think anyone can commit on the long-term view on stability with certainty. We should only pay top dollar if LONG-TERM stability of industry factors is highly certain.

Disclosure of interest: I do own Hengyuan and my entry price was below RM5.00.

Ok, I understand where you are coming from now. So if let us say debtholders will release funds only when payment for construction costs are due, the NPV for this project would be drastically lower, would that be correct ?

Owning the rights to future cash flow of an asset that is a going concern is very different from owning the rights of the future cash flow of an asset that has a limited useful life. By including PV of loans, we assume that the debt levels are sustainable for the business model to continue generating future cash flows in perpetuity (theoretically). This is the reason why bank borrowings have significant value to a moneylender because the loans are fundamental to the long-term capital structure of the business. Still, the important assumption for this moneylender is that its profitability must be sustainable in the long run with no major default risks for its loans extended to its customers. Valuation for a concession is in an entirely different position because the borrowings are not “everlasting” and needs to be paid off eventually. Even if project diversification is applied by a normal construction company that depends entirely on debt financing, the sustainability of the debts in the capital structure is limited to the dollar amount and sustainable overall margins of future projects. If there is a slightest chance of insufficient future projects, PV of debts will have extremely little to no value for investors. The same also applies for the moneylender or any other business models that rely on significant debt levels.

Again, as I am still in my preliminary stage of understanding service concessions, I would be happy to revamp my understanding of such a business model if you can help to rebut on my thoughts above. Until then, I’m afraid I’m still stuck with this understanding of mine. So any feedback on will be very much appreciated.

P.S. I suppose once MFRS 15 kicks in in 2018, the recognition of construction profits will no longer be recognized in the first year as what was practiced before right ?

Hi Jay and DK66. I think my comments previously may have been unclearly written.

I will try to clarify what I was trying to say by giving a somewhat far-fetched example of a property-related purchase, and contrast this with the typical concession arrangement. It will be quite long, as I am unable to think of any other way to convey my thoughts..lol..

I managed to borrow a sum of money directly from a bank, and I appointed a construction company to build this castle of mine, which takes 3 years to build. The arrangement for this 100% debt-financed house will be such that my bank will progressively release to the construction firm, cash payments based on the agreed milestones achieved by the latter throughout the 3 years. Of course, I myself will be obligated to periodically pay off my debts owing to the bank. In a separate arrangement, I have also appointed another firm that will help me maintain security for my castle, once the construction is finished.

To tie this example as closely as possible to a concession, I may be the equivalent of the grantor of the concession, whereas the construction and security firms are the so called concessionaires. For this example, how would you value the future cash flows for the construction and security firm combined ?

My view is that future cash flow projections for this example should not be any different from a concessionaire that borrows money on behalf of the grantor. My reasoning is because the firms in both scenarios (my example vs concession example) should generate the same amount of construction profits and maintenance fees (security fees for my example).

Taking this example another step further, the construction company also borrowed money from another bank to pay for all its construction costs and other operating costs because we are assuming costs are paid in cash when they are due, but cash will only be received from my bank when respective milestones are achieved. So, how different would the valuation of its future cash flows be when compared with the scenario of 100% equity financing ?

The reason why I mentioned about which parties are entitled to a claim of the underlying asset was because the present value of the loan (aka the market price/cost of the asset) must be apportioned to the owner of the asset when projecting future cash flows, and not anyone else. If you were to allocate the future cash flows to the correct parties, you will find that it is the asset owner who is supposed to be entitled to the PV of the loan. It does not matter whether my mum services my housing loan, because if the house is solely under my name, whatever the market price is given to my house, 100% of it belongs to me, and not my mum. Anything else will need to be separately arranged with her. In fact, I could also be paying my mum so that she could help me pay my loans, but this does not give her the right to have a claim over the future value of my house.

My original intention when commenting here is that I did not agree with the inclusion of the PV of loans in TRIplc’s DCF calculation. As I had mentioned before, UiTM is the one that is servicing its delayed payments through TRIplc. To say that TRIplc is paying off its loans is half-true and half-false as well. Half false because TRIplc in a sense charged UiTM in “implicit fees” to pay off the latter’s loans, which could have been borrowed directly by UiTM, so by right UiTM is the one that is paying off the loans; half true because if TRIplc made a significant error in estimating its construction and operating costs, it is liable to pay off the loans outstanding, and not UiTM, who is only obligated to the periodic payments agreed with TRIplc.

The PV amount is also recorded in UiTM's books as a quasi-loan (financial liability), and because UiTM is the ultimate owner and borrower, and not TRIplc, this amount should be included in UiTM's DCF calculation. To assume that loan PV belongs to TRIplc would mean that TRIplc owns the project assets. However, since it does not, therefore loan PV should not be included in TRIplc’s DCF calculation.

Hi Jay. Since we are already commenting here, I guess I will just continue here since I will be commenting on the underlying fundamentals of the valuation method.

Using FCFE may not even be the appropriate valuation method if debt-equity structure changes significantly over time, which is exactly the case for TRIplc. I guess it really depends on how one presents their logic as long as the flaws are fully understood, since FCFF isn't without flaws itself.

Anyway, while I do agree with you that TRIplc has "access" to the loan amount, we still have to bear in mind that this is a concession agreement. TRIplc will only get to enjoy full access if the company eventually owns the assets that was originally funded by the debts.

However, this project is not about TRIplc and the debtholders. Instead, the main parties are TRIplc and UiTM, the grantor of the concession. So the debtholders are basically the third party here. TRIplc may be the direct borrower, but this is sort of on behalf of UiTM, because UiTM is the owner, hence the one that ultimately services the loan payments through TRIplc.

So this means that UiTM is the true beneficiary of the project assets, and not TRIplc. This also means that TRIplc is only reaping the benefits of the fair value of its contract assets, and it has no entitlement over the assets that it is managing on behalf of UiTM.

Truth is this is my first time valuing concessionaires, so I'm saying this based on what I understand at this point in time. So please correct me if I am wrong or something.

I never really apply the wide range of conventional valuation methods, in any dealmaking, I find it helpful if I always keep in mind to understand how the economic benefits of an asset "pie" is being divided among ALL capital providers and with whom the benefits are flowed most towards, that could possibly undermine the safety of the other capital providers. After all there really is no such thing as a free lunch.

Hi Jay. Alright then, I want to clarify on the DCF calculation in your articles. The figures displayed show that loans taken in are used to fund the construction costs, which are incurred over the course of the first 3 years.

Figures used in DCF calculations are based on incremental earnings and incremental costs in order to make project/investment decisions. As we already know that the loans are used to pay for construction costs, this means that the loan amount is part of capital and not incremental earnings. However, in the DCF calculation, “Net Cashflow” column was used to discount for NPV. Although this column shows the actual movement of cash for the company, this does not paint the real picture of incremental cash flows. Using the “Net Cashflow” column to calculate NPV seems to suggest that in the first year of construction, the business earned a large sum of money, when in actual fact it does not. The resulting DCF figures presented in the tables also show very clearly where the bulk of the “value” comes from, i.e. the valuation of the project is being skewed towards the present value of the loan. Furthermore, because the loan was “earned” at the beginning of the period, the valuation becomes extremely heavily skewed towards the loan value.

From another perspective, this way of calculation does not make much sense either. Using your first example for Z1P3 valuation, if we assume that we make an outright purchase for this project's equity at the end of its 4th year at a “fair value” of RM143.49 mln (107.45*1.075^4), this project will only earn us an IRR of 3.74% p.a. on this future Net Cashflow. Earning such a rate would either be because there are no other alternative returns that can give much higher rates, or we are clearly overvaluing this project at current price of RM100 mln. The reality is that the project is supposed to be the earnings generator, whereas the loan is the opportunity cost of funding the project. Therefore, inflow of loans should not be used in calculating NPV, because its inclusion will result in the valuation of the loan amount instead of valuing the project only.

Also, as a reality check, assuming we are only able to collect the total RM284.33 mln net earnings attributable to equityholders at the end of the 25th year, its present value should be sitting it about RM46.62 mln. So by right, the project's worth should not deviate too far from this ballpark figure.

Hi Jay, I have read your articles on TRIplc. There is an issue I would like to discuss with you. How do I contact you ?

hahaha..okay. kc, if u don't mind, I would like to take back my usage of the word "perverse". It was the result of my brashness, especially when I purposely registered so that I could comment here. I've read enough comments in i3 to know that the majority of the responses are really irrational and shallow, other than being prone to incite anger. and I want no part of it. It would take a lot of discipline and self control in order not to fall into the trap of unnecessary arguments that go nowhere but cause heartburn (cuz there is no way anyone can "digest" them properly).

right after my first round of comment, I realised that my frustration wasn't supposed to be intended for u. just so u know, from the start, I don't hv any disagreement with ur methods or anyone else's for that matter, as long as the approach is sustainable, reliable and effective. no one will ever know whether all three are applicable without allowing time to run its course. Even if they do, the majority would hv forgotten about it and as a result will not truly learn anything from the experience. only those who observe the methods will only b able understand and take the most out of the learning process. so shallow minds who read anything without understanding (not just ur articles) will always just jump into conclusions and start talking trash because they can't wait until next month to revisit the problem, let alone next year or next three or five years.

I definitely don't hv the right to criticise just because my view and approach happened to be different. having said that, I was just merely explaining where I'm coming from, and in no way implying that mine is more superior or whatever, although my descriptive words may have been quite strong. As a matter of fact the approach that I'm using is basically to cover and minimise my own flaws. So it is one of the reasons why I take into heart the concept of margin of safety rather seriously, or probably too seriously..LOL

There is only the presence of margin of safety if the market price is actually below that of the investment value. So anything above is considered speculative, whereas anything below is considered safe. We can always pay at a premium above investment value and is still below the derived DCF valuation, but there is no margin of safety. The concept of investment value vs speculative value came from Security Analysis 6th edition (NOT 5TH EDITION – many people might say that they have read Security Analysis, which is most likely referring to the 5th edition, which I would say is not the “correct” version, so to speak). So my view is not original and this sort of shaped my understanding of margin of safety.

In the context of the article, I am assuming that market price of RM4.26 is the fair value. My version of a fair value is actually the investment value. This means that at the derived valuation of RM5.25, we are actually looking at a speculative element of about RM1.00.

Now this is where I’m coming from. It was mentioned that there is a 19% discount to the derived DCF valuation, and I disagreed because the so called undervaluation is actually referring to the speculative value. Similarly, establishing a buying price of RM3.39 equates to a 20% margin of safety, assuming RM4.26 really is an investment value, instead of 35%.

As I had mentioned as well, valuation is always expressed in a range between two reasonably pessimistic and optimistic scenarios. In my opinion, it is not a matter of being able to identify the weighted probabilities and settle upon a target price, because the value of a business actually encompasses the whole range. But we as human beings would feel somewhat safer if we are able to settle upon something concrete, even if it may not be entirely true. It is just like trying to establish whether someone is considered as selfish or generous. The truth is that everyone is both. It is the conditions that set the mood and sort of determines when is the “right time” to be overly selfish or partly-selfish, all the way to being partly-generous or overly generous.

I’m unable to definitively answer your question on the “how” part of establishing a maximum price paid, because this relates to my above explanation of why coming up with a target price is misleading. What I can say is that I always use the quoted prices as a guide to a company’s intrinsic value and compare with what a company is currently earning. Although I don’t do any forecasting, I do try to see how much the business could potentially earn assuming it is able to fully sweat its resources that are currently on hand. I also don’t establish any trigger price in the event of a substantial drop in prices because everything depends on the opportunities that is being identified in the market. So the valuation of the business is always relative to its next best alternative.

Hi KC. Point taken from your response. Perhaps I was a bit too hasty when I clicked on the comment button, without being clear about my stance or maybe even the tone of my comment. So I would like to apologise beforehand if I happened to be quite aggressive.

I’m neither a huge fan nor an equally huge critic of ttb, but I believe that anything written about anyone needs to be equally fair and, if I may use ttb’s favourite word, be objective. I’m not suggesting that you weren’t being objective, I’m actually referring to other people who do not seem to understand that icap’s ratings are NOT TARGET PRICES. So I merely tried to point this out so that anyone else who reads my comment will hopefully read it again. I’m pretty sure this is some tough luck on my part.

It was quite frustrating that it was not explicitly pointed out in this article because there really is a huge difference between a buying price and the conventional target price. Allocating less than 5% of the content to talk about “taking a closer look icap’s report”, in my opinion doesn’t cut it as being fair, because the majority of the content was spent on justifying your valuation for TGUAN and wondering why icap gave such a low buying price, without attempting to at least try to understand and tackle the “why” aspect. This article has sparked more unnecessary criticism on icap’s approach and this was the source of my frustration, and I would like to apologise again if I happen to be aggressive with my wordings.

With regard to the part on margin of safety, I might be having a different view about this concept. I can’t tell if it really is different because this is kind of my first time discussing my understanding of this subject with anyone. Anyway, valuation consists of two parts, i.e. speculative and investment value. Speculative value refers to expectations of the future and can be somewhat of an unknown because it probably has never happened before. On the other hand, investment value refers to what has already been accomplished, provided it is sustainable. As the saying goes, “a bird in hand is worth two in the bush”. The bird already in hand is the investment value, whereas the two birds in the bush represent the speculative counterpart.

When investing in a company, future growth is relatively uncertain because of the general long-term business cycle. It can probably be considered more uncertain especially if it is expected to reach a certain size or performance it has never achieved before. So such a growth admittedly involves a certain speculative element.

Let us assume that I somehow am able to justify that TGUAN is actually worth RM7.00 on a discounted basis based on its potential future growth. I might say that current price is 40% undervalued, which is huge. Unfortunately, such a quantitative undervaluation does not equate to margin of safety because RM7.00 takes into account the speculative amount. You might argue that margin of safety is already incorporated in the discount rate. My counter-argument is that with a slightly higher discount rate, whatever the amount may be, is likely to have cancelled off the speculative element, if not part of it, leaving behind the investment valuation.

haha..joekit, i think even if icap plans to buy tguan, with the 300mil cash it holds currently and assuming 10% is allocated for tguan, icap will have to buy super slowly. If not it might run the risk of pushing up the price given the current volume of shares traded.

I’m saying I THINK I UNDERSTAND where they are coming from. I’m not saying this to be true for icap, since I’m not TTB. For me, I don’t do DCF, and I don’t calculate WACC. I don’t do financial modelling. Neither do I come up with a target price and see if the future market price will hit my “target”, which I think is rather foolish. In fact business valuation is ALWAYS expressed as a range, so there really is no point in establishing a target. Instead, it really is more helpful to focus more on understanding exactly what the company is really trying to do and then assess the management based on what is understood about the business and the environment it is operating in to-date. Subsequently, the maximum price that should be paid would need to be established so that at least over the long-term, the investment return can still be reasonable.

I think the wide difference in opinion on the valuation, i.e. valuation that is ranging from icap’s RM2.50 to current market price of RM4.26, lies in the different perception of the rate of return that icap wants vs what the market wants. While RM2.50 to RM4.26 is a rather substantial gap, I think it sort of makes sense as well given that TGUAN’s history of low adjusted operating margins ranging between 3% and 10% and averaging at about 6% (based on my own calculations and 15 years of past financial records).

Long-term historic earnings have really been fluctuating quite substantially and I think to a certain extent this can still continue to be a useful guide given that TGUAN’s operating business didn’t change much. If history is of any guidance, I would suppose it would be that history had shown that it is very difficult to sustain net margins even at moderate levels, even though the sales were able to grow quite substantially. Its focus on selling products that are of higher margin is basically a response to its deteriorating fundamentals and perhaps a timely one.

I don’t have any predictions for TGUAN’s future, but my question is, technical expertise and possible future innovations aside, how long can their so-called premium products sustain overall margins amidst the obvious competition that it is already facing? I don’t know the answer to this question, but at current market price of RM4.26, I would think that the long-term investor would probably be facing moderate investment returns from TGUAN in the next 10 to 20 years. Bear in mind that I’m NOT referring to stock market returns, and I’m fully aware that earnings for the next 2 to 3 years might paint an entirely different picture of the future.

My point is that to pay at current price, we are expecting TGUAN to grow earnings at a decent pace over the next 5 years, and sustain whatever the future earnings level might be. So I actually don’t see there being a margin of safety incorporated in this price. So I actually don’t agree with the comment on 19% margin of safety. I can’t really point out the exact reason, but somehow I see this as a rather perverse way of explaining the concept of margin of safety.

I have read icap’s newsletters before and so far I have not seen the word target price. I don’t really read every single article or every single word, but as far as I know, icap has never given a target price or even mention that term. Kindly point out if I happen to be wrong about this. Still, from what I would understand, at least from my own point of view, is that RM2.50 is the price in which icap is willing to pay because this is the price that will yield at least a decent return over the long-term – hence the advise to BUY BELOW RM2.50 FOR THE LONGER-TERM. I don’t see any hint of a prediction that the price WILL go below RM2.50. From what I interpret is that if price doesn’t come down anywhere close to RM2.50, walk away and look for something else that will yield better long-term returns. I would also admit that if I know nothing and bought TGUAN and I see this advise, I would probably not know whether to sell or continue holding. My opinion is that the market is valuing TGUAN at close to perfection.

However, if you were to look at this from another perspective, if someone actually bought TGUAN at RM2.50 and below, and assuming that current market price is considered fair, and given that there is a change going on for the business, whether sustainable or not, there is a CLEARLY ESTABLISHED MARGIN OF SAFETY going on here.

Also bear in mind that icap has a section called the Ratings Table, which keeps track of all the companies that they had featured in their newsletter for subscribers to keep track of. Icap changed its advice from buy below RM1.70 to current advice on 08/04/2016. With the market price shooting to above RM4.00 pretty much means that the advice no longer matters for those who are seeing this advice NOW, which ultimately means that this advice is for the benefit of anyone who had bought TGUAN prior to the revision of the buying price. You will also need to take note that the current advice in the Rating Table also has a HOLD, which means that icap is NOT TELLING ANYONE SELL. At least not yet I guess. So the title of this article, “Thong Guan target price RM2.50. Sell?” becomes entirely irrelevant.