Posted by Tiago Gt > 2013-08-12 02:11 | Report Abuse

because of rhb...malton suddenly become famous....someting big is happen....tmr...will b a good day......i prefer wb....more attrative!!!

Posted by Ooi Teik Bee > 2013-08-12 14:34 |

Post removed.Why?

Posted by Tiago Gt > 2013-08-12 14:36 | Report Abuse

how bout asuprem sir????

Posted by kcchongnz > 2013-08-13 10:58 | Report Abuse

Posted by Tiago Gt > Aug 12, 2013 02:36 PM | Report Abuse
how bout asuprem sir????


I just wonder why do people so interested in this Asupreme common share. It is a rubbish share with little turnover; losing money every year; and manipulated like hell by insiders. How are you going to win when you gamble with big timers?

Posted by Tiago Gt > 2013-08-13 11:05 | Report Abuse

sometime..not the data that manipulate the price...but the partern....

Posted by kcchongnz > 2013-08-13 11:19 | Report Abuse

Tien Wah: A nobody-cares old economy printing company

“It is impossible to produce superior performance unless you do something different from the majority” Sir John Templeton

Tien Wah Press Holdings Berhad is reputed to be one of the top 5 printers in the country. It is engaged in rotogravure printing, photo lithography printing, trading and printing of tipping paper. Its major clients are in the big electronic corporations, tobacco industry etc. It has a 7 year contract to supply printed carton requirements of BAT in several locations in Asia Pacific region. This business is durable and would last for a long time to come.

Cash flows
What strikes me most about Tien Wah is the huge amount of recurring cash flows from its business. This is what I value most in a business. It is the hard cash that it produces which enable Tien Wah to reinvest for growth, to pay dividend or buy back shares, reduces debts and invest in other businesses for maximizing shareholder value.

Tien Wah’s quality of earnings is very good. Its cash flow from operations (CFFO) averages 45m, or 170% of its net income for the last 6 years (See Table 1). The CFFO for the last two years is particularly high at an average of 75m, about 190% of its net income. After capital expenses, free cash flow averages 55m. This FCF amounts to 14% and 16% of revenue and invested capital. Any amount of FCF which is more than 10% of revenue and IC is considered fantastic for me. What did Tien Wah do with the FCF?

Last year, Tien Wah distributed 12.8 sen per share in dividend, or a dividend yield of 5.1% basing on its closing price today (12/8/13) at RM2.51, much higher than the FD rate. It has been paying down its debts which gradually reduced from 176m in 2009 to just 73m now, while excess cash has also increased. These are the best forms of allocation of its FCF.

Growth
Even if the cash flow is great, investors would still hope for some growth of the business of the company, without which there will be no growth of the cash flow. It is hard to predict what would be the growth of the company in the future. But looking at its past, Tien Wah’s revenue and net profit has been growing at a commendable CAGR of 26% and 21% respectively for the past 5 years as shown in Figure 1 below and Table 2 in the appendix. I would be very happy if the growth can be just half or even a third of those achieved.

Figure 1: Growth in revenue and net profit

Quality of business: Return of equity and invested capital
What is the point chasing growth when growth destroys shareholder value? This happens if the return of capitals is lower their costs.

Table 3 below shows that ROE and ROIC has been steadily improving from mid single digits just two years ago to 14% and 12.6% respectively in 2012. These figures meet my minimum requirements. More importantly, they are improving each year.

The good ROE of 14% was achieved with improved net profit margin to 12% last year with moderate financial leverage of 1.6 and an asset turnover of 0.9. All Tien Wah needs to do is to get more contract works to increase its asset turnover, it will be on the yellow brick road to higher ROE.

Market valuations
With the great cash flow, especially in FCF, and reasonable good ROE and ROIC, we would expect Tien Wah to be traded at reasonably market value. But is it?

At RM2.51, Tien Wah is trading at a fair PE ratio of 9 times, though I expect it to be higher. Its enterprise value is also reasonable at 7.3 times its earnings before interest and tax, or a earnings yield of 14%. The enterprise value is also low at only eight tenth (<2) of its revenue. However, as there is plenty of cash flow and FCF, it may be more appropriate to look at the EV/Ebitda. Its enterprise value is particularly cheap at only 4.6 (<8) times ebitda.

So for a great business selling at a fair to low valuation, I have added its share as one of the major stocks (The seventh) in my portfolio.

Table 1: Cash Flow
Year ended 31/3/11 2012 2011 2010 2009 2008 2007 Av
CFFO 67900 80750 20190 57991 13683 30295 45135
Capex -8933 -31344 -21119 -22551 -4280 -3610 -15306
FCF 58967 49406 -929 35440 9403 26685 29829
FCF/Revenue 14% 13% 0% 11% 5% 21% 11%
FCF/IC 18% 14% 0% 11% 3% 20% 11%
CFFO/NI 168% 210% 107% 273% 70% 198% 171%

Table 2: Revenue and profit of Tien Wah
Year 2012 2011 2010 2009 2008 2007 CAGR
Revenue 408081 388575 354666 328610 186059 129663 25.8%
EBIT 46813 47626 26686 34164 26270 15526 24.7%
Net Income 40375 38374 18901 21256 19552 15296 21.4%

Table 3: ROE and ROIC
Year 2012 2011 2010 2009 2008 2007
ROE 14.0% 14.0% 8.7% 12.2% 13.5% 11.7%
ROIC 12.2% 11.6% 6.9% 7.6% 6.6% 10.9%

Posted by inwest88 > 2013-08-13 11:26 | Report Abuse

kc, you are indeed very sharp in identifying hidden gems as all these low liquidity counters are often ignored by investors. Is it possible you let us know the intrinsic value of Tien Wah

Posted by kcchongnz > 2013-08-13 11:49 | Report Abuse

Posted by inwest88 > Aug 13, 2013 11:26 AM | Report Abuse
kc, you are indeed very sharp in identifying hidden gems as all these low liquidity counters are often ignored by investors. Is it possible you let us know the intrinsic value of Tien Wah

inwest88, I would like to take this opportunity to clarify a few things here.

1) I scout for ideas from this forum from people like you. Somebody here told me about Tien Wah with some metrics and I found this company interesting. Hence I went to study more about it and the industry, it does sound interesting after all. I hope to get more ideas from here. Seriously I think ideas like this is better than those written by investment banks because IB have completely different agenda than us.

2) I can give my valuation of Tien Wah, no problem. I am pretty good at this as you know. The maths part is sup-sup-sui. But why didn't I first provide this intrinsic value? The answer lies in finding the intrinsic value of a company is a very subjective matter. It involves some assumptions, assumption about the future which is really hard to predict.

3) Because of (2) above, I prefer to look at the business of the company; whether the business is durable, is the quality of the business good? What is the quality of this business? Any growth? and most of all, is it selling at a reasonable price? Of course if the business is good and it is selling dirt cheap, then it is a no-brainier.

4) To gauge if the stock is selling at reasonable price, we can go about doing the valuation and see what the intrinsic value is, and so what is the margin of safety investing in this company. Or we look at how much it is sold compared with its earnings, sales, cash flow etc and how is the price compared with the industry etc.

Posted by inwest88 > 2013-08-13 11:59 | Report Abuse

kc, I can't agree with you more. In most cases (just my opinion, may be wrong) recommendations given by IBs are not well supported by facts and figures and more often than not, they have vested interest, directly or indirectly. Anyway looking forward to your computation of the intrinsic value to determine the margin of safety.

Posted by inwest88 > 2013-08-13 12:00 | Report Abuse

And looks like you have some followers. After your recommendation, someone sapu a few lots (1,000 shares per lot). The low liquidity makes it very difficult to buy.

Posted by houseofordos > 2013-08-13 23:06 | Report Abuse

inwest88, suggest that you go get the book from Dynaquest Malaysian stock performance guide to screen for these gems... The book is concise and it contains a 1 page summary of qualitateve and quantitative analysis for most stocks in bursa. It is published 6 months..
The other way is to use fundamental scanners available online that scans for criteria like P/E, ROE and dividend yield.. this one is quite good... I found a couple here
www.klsescreener.com/‎

Posted by inwest88 > 2013-08-14 11:01 | Report Abuse

Thanks for the advice, houseofordos !

Posted by kcchongnz > 2013-08-16 15:10 | Report Abuse

Homeritz Corporation Berhad

Share price performance
Homeritz was listed in Bursa four to five years ago at an IPO price of 65 sen. Owing to a drop in its net profit by 50% from 20m to 11m for the year ended August 2011, its share price plummeted to a low of 22 sen at the end of year 2011. Since then it recovers slowly and steadily to a close of 48 sen on 15th August 2013. Figure 1 below shows the three years historical share price from 18 December 2008 to 2 August 2013.

Figure 1: Historical share price of Homeritz


The business
Homeritz Corporation Berhad is engaged in the design, manufacture and sale of upholstery furniture products and investment holding. Its products include sofas, dining chairs and bed frames where it undertakes original design manufacturing and original equipment manufacturing activities. It also has its own brand of lifestyle furniture under the brand name Eritz. Its products are mainly for the overseas market s covering 40 countries.

Quality and durability of business
Homeritz does have a durable business albeit a small one which derives its income mainly from the export market. Revenue averages to about 100m a year with net profit of about 16m. The quality of the business comes from its pricing power as shown by its high gross margin of 45%. Net profit margin is also high at 16% which result in a high ROE of 20% (>15%). ROIC is even much better at 25%, more than twice the cost of its capital.

Homeritz’s business provides very good cash flow each year. For the last 4 years, average cash flow from operations (CFFO) is about the same as net income, while there is abundant free cash flow (FCF). Last year, FCF of 19m is 18% (>>10%) of revenue and 32% (>>12%) of invested capital respectively. With its relatively enormous amount of FCF, Homeritz distributed 3 sen dividend last year which is equivalent to a good dividend yield of 6.8% at its present share price of 44 sen.

Market Valuation
As Homeritz has a business which is durable and of quality, one would expect it should be accorded with reasonable good valuation from the market, but does it?

At the price of 44 sen, the PE ratio is 6.0 and enterprise value four times its Ebit, or an earnings yield (ebit/EV) of 25% (>15%). This may be due to its small market capitalization of just 80m and hence not a liquid stock. There isn’t a single analyst covering this company. Besides that, one hardly has heard anything about this company. However, this could be a good opportunity to invest in a hidden gem at a cheap price. Hopefully when it is slowly discovered in the future, an ugly duckling may turn into a beautiful swan.

So Homeritz at 44 sen, is the eighth stock in my new portfolio.

Posted by lkloke > 2013-08-16 17:36 | Report Abuse

Ooi,
Thanks for sharing on Liihen, it is indeed a solid and profitable company with dedicated directors really taking care of its business. Have double checked its financial statements, I fully concur with you on its performance. I expect a bonus in the near future, can easily afford a 1 for 2 with their reserve. Its small paid up of 60m is indeed a good investment for medium to long term with a stable dividend policy.

All the best and expect more input from you.

I too have spotted one in the industrial product ie OKA, I think you got no problem in checking its financial status.

Posted by Ooi Teik Bee > 2013-08-22 19:00 |

Post removed.Why?

Posted by Ooi Teik Bee > 2013-08-22 19:03 | Report Abuse

Dear Mr Tan KW,

I will email you the technical chart and Intrinsic value calculation. Please check your email.

Thank you.
Ooi

Posted by shirley1 > 2013-08-22 19:26 | Report Abuse

Hafiz, can i ask what has been abused ? .. fair i ask first ..

Posted by shirley1 > 2013-08-22 19:28 | Report Abuse

what nonsense ? you talk more nonsense ..

Posted by shirley1 > 2013-08-22 19:32 | Report Abuse

you serious or not .. at this market conditions.. you keep shouting ppl to buy.. i think only for medium risk or high risk type la

Posted by FreeThink > 2013-08-22 19:46 | Report Abuse

shirley, can you tell me why u keep biting hafiz? so funny

Posted by dextronium > 2013-08-22 20:04 | Report Abuse

Dear Mr Ooi
With the current situation of the market, what is your opinion? Entering or wait until there is more positive sign first? Thanks in advance for any input.

Posted by FreeThink > 2013-08-22 20:13 | Report Abuse

Dear Mr Dextronium,
Please be considerate and dont throw the million dollars question to anyone

Posted by dextronium > 2013-08-22 21:38 | Report Abuse

Sorry for inconvenience caused.
Please forgive me for my innocence and stupidity.
Question withdrawn
Sorry mr freethink and all for wasting your precious time.

Posted by Bala8977 > 2013-08-22 22:06 | Report Abuse

Hi Mr Ooi just a question on L&g is it worthwhile to go for the rights issue at this price. Appreciate your reply.tq

Posted by Ooi Teik Bee > 2013-08-22 22:10 |

Post removed.Why?

Posted by Ooi Teik Bee > 2013-08-22 22:14 | Report Abuse

Dear Mr Ooi
With the current situation of the market, what is your opinion? Entering or wait until there is more positive sign first? Thanks in advance for any input.

Ans : I expected this correction, I am buying back my darling stocks which I sold. I sold all my Puncak-WB at 2.18, I am buying it back today at 1.91. I am also waiting to buy my LBS-WA. Final decision is yours. Thank you.

Posted by heeroo > 2013-08-22 22:15 | Report Abuse

Fund will come back to Asia??

Posted by Salmah Samsuri > 2013-08-22 22:29 | Report Abuse

dear mr Ooi, how to attend your training? where and when?

Posted by Ooi Teik Bee > 2013-08-22 22:43 | Report Abuse

Venue : GTower, 199 Jalan Tun Razak, KL.Level 18, Suite 18-14
[Next to Tabung Haji building]
Should you need further clarification, feel free to contact our KL office by phone at 012-2751 258 (Miss Niko)
Thank you.
Ooi

Posted by dextronium > 2013-08-22 23:59 | Report Abuse

Thanks Mr Ooi for your prompt reply.

Posted by kakashi > 2013-08-23 00:10 | Report Abuse

Mr ooi. What do you think of ytl Corp? Good cash flow n sitting on cash piles...thanks

Posted by kcchongnz > 2013-09-30 18:18 | Report Abuse

Two months have passed since we first started our portfolio. In this two months, KLCI has dropped marginally from 1773 to 1769, or -0.23%. but how have our portfolios performed?

kcchongnz's portfolio has gained an average of 8.04% in the last two months. That means the portfolio has returned an alpha of 8.27% using the KLCI as a benchmark. 7 out of the 11 stocks made positive return with 3 of them in double digit percentage. They are Datasonic (40.3%), Fibon (24.2%), and Pintaras (17.4%). The biggest loser is Willoglen at just -4.7%. Details of the return of the portfolio is appended below.

What about Ooi Teik Bee's portfolio return? Ooi's portfolio returned at a higher rate of 9.3%. Its big gainers are all warrants, some leveraged instruments. They are LBS W (63.3%), Punchak warrant (38.8%)and Hap Seng warrant (36.5%). It has some double digit losers though in Lii Hen (-21.6%), Triple (16.6%) and Pantech warrant (11.3%).

So from the results so far in two months, nobody can ridicule us of tipu pusing, bullshit, can people, bluffing, cheating etc, at least for this short-term. Can he?

Ref date Now
New 1/08/2013 30/09/2013
Pintaras 4.99 5.86 0.000 0.870 17.4%
Kfima 2.060 2.000 0.000 -0.060 -2.9%
MFCB 1.700 1.800 0.030 0.130 7.6%
Haio 2.670 2.680 0.000 0.010 0.4%
Fibon 0.330 0.410 0.000 0.080 24.2%
CBIP 2.830 2.750 0.000 -0.080 -2.8%
Tien Wah 2.510 2.410 0.077 -0.023 -0.9%
Homeritz 0.430 0.430 0.010 0.010 2.3%
Willow 0.530 0.505 0.000 -0.025 -4.7%
Daiman 2.530 2.720 0.000 0.190 7.5%
Datasonic 3.350 4.700 0.000 1.350 40.3%

Average xxxx xxxx xxxx xxxx 8.04%
KLSE 1773 1769 xxxx -4.000 -0.23%
Alpha xxxx xxxx xxxx xxxx 8.3%

Posted by inwest88 > 2013-09-30 19:58 | Report Abuse

Can't agree with you more. Even if there is a negative return, so what. For those who want to run you down, I would suggest they come out with their own portfolio !

Posted by Ooi Teik Bee > 2013-09-30 20:32 | Report Abuse

I try my best to ensure we have a positive return so that everyone made money here. I cannot guarantee all positive returns, there is no 100% winning formula in stock market.
Thank you.

Posted by iafx > 2013-09-30 21:43 | Report Abuse

depends on number of units hold, too few unit expensive counters typically juz to cover high holding cheap counters loses. try it out n get a taste u know what is this mean :D

Posted by Jameslee > 2013-09-30 21:45 | Report Abuse

mr Ooi......WTK still bad....how? I am still holding

Posted by Ooi Teik Bee > 2013-09-30 21:55 |

Post removed.Why?

Posted by kcchongnz > 2013-10-01 05:19 | Report Abuse

Taking another swipe at me again? You are welcomed.

Posted by iafx > Sep 30, 2013 09:43 PM | Report Abuse
depends on number of units hold, too few unit expensive counters typically juz to cover high holding cheap counters loses. try it out n get a taste u know what is this mean :D

But I don’t know what exactly you are trying to say. What is “expensive counters”? What is “cheap counters”? By their prices? Any reference to values? “get a taste”? What taste? Chocolate, vanilla, ginger, or what taste?

“Depend on number of units hold”? So can you elaborate or not with some examples. For example you may manipulate my portfolio, say put 70% of my money in Willow, the biggest loser at a negative of 4.7% (only 4.7%), 10% each in Kfima, CBIP and Tien Wah. These are the only 4 stocks which are in negative returns in the period. And for the rest of the stocks which has made gain, 0% weight assuming that I never bought any winning stock. That way you sure can bash me with poor stock pick.

Or alternately you can based on my suggested portfolio which I have mentioned when asked as below and find out what is the weighted return of my portfolio. I am sure you know how to do.

Want to take the real challenge here to calculate the weighted return of the portfolio? It is actually very simple. Mathematics standard 1, 2, 3.

I am sure this is more fruitful instead of every time accusing me of copy and paste, tipu pusing, roti canai, cheating, bullshitting, macham macham without getting a single evidence after so many months of research in i3?


Posted by kcchongnz > Sep 2, 2013 03:21 PM | Report Abuse X
inwest88, this is my suggested proportion. Just a suggestion. I am actually heavy on Kfima and Pintaras which I think is not so balanced.

Company Industry % holding
Pintaras Construction 15%
Kfima Trading/Services 20%
MFCB Trading/Services 5%
Haio Consumer 10%
Fibon Industrial 5%
CBIP Industrial 5%
Tien Wah Industrial 10%
Homeritz Consumer 5%
Willow Technology 5%
Daiman Property 10%
Datasonic Technology 10%
100%

Posted by inwest88 > 2013-10-01 07:11 | Report Abuse

kcchongnz, figures don't lie !

Posted by kcchongnz > 2013-10-01 09:32 | Report Abuse

Tan KW, you are great. I did the computation a little differently and I got approximately the same figure as you do. My is slightly lower at 8.09% compared to you computation of 8.37% as appended below. I used the original prices when the portfolio was first put up and the allocation as suggested later when inwest88 asked me to do so.

8.1% return in 2 months. Not bad yah? This is way beyond my original expectation. No lah, part of it is due to luck also. As you know I only started to talk about the return of my portfolio when a couple of characters kept on attacking me of bullshitting, copy and paste, long story like roti canai, conning people etc. Sometimes I have to their mouths, don't you think so? No intention of bragging or whatever.

But seriously when one invest based on some sound principles, I believe the return would be ok.


Company Industry % holding Return Wt return
Pintaras Construction 15% 17.4% 2.62%
Kfima Trading/Services 20% -2.9% -0.58%
MFCB Trading/Services 5% 7.6% 0.38%
Haio Consumer 10% 0.4% 0.04%
Fibon Industrial 5% 24.2% 1.21%
CBIP Industrial 5% -2.8% -0.14%
Tien Wah Industrial 10% -0.9% -0.09%
Homeritz Consumer 5% 2.3% 0.12%
Willow Technology 5% -4.7% -0.24%
Daiman Property 10% 7.5% 0.75%
Datasonic Technology 10% 40.3% 4.03%
100% 8.09%

Posted by inwest88 > 2013-10-01 09:36 | Report Abuse

As I mentioned, the figures speak for themselves. From the list, I made some money on Fibon and still keeping KFima (which is definitely for long term). Thanks kc ! The others I am considering are MFCB and Daiman.

Posted by kcchongnz > 2013-10-01 09:59 | Report Abuse

inwest88, I always appreciate your good words though often I don't respond because I don't want others to think that I am showing off or whatever. Thank you.

Glad you make some money in Fibon. But again fundamental investing is about investing in good companies at a reasonable price. It is very seldom that price shoots up in short time. It is a long-term endeavor.

“You can't produce a baby in one month by getting nine women pregnant.”
― Warren Buffett

Posted by inwest88 > 2013-10-01 10:05 | Report Abuse

Fully understand kc. If you to run through my postings, althoughI am rather conservative but I still like to trade for fun. My portfolio includes stocks that have been for years, some for medium term, some short term and some even intra-day or 2 /3 days. I respect and admire your thorough analysis of the stock picks which even fund managers fdo nor provide in such great details! Thanks again.

Posted by kcchongnz > 2013-11-01 17:46 | Report Abuse

Exactly three months have passed since we first started our portfolios. May be we should review the performance of our portfolios now.

In this two months, KLCI has risen from 1773 to 1810, or 2.1%. but how have our portfolios performed?

kcchongnz's portfolio has gained an average of 26.3% in the last three months. That means the portfolio has returned an alpha of 24.2% using the KLCI as a benchmark. Ten of the eleven stocks made positive return with more than half of them in double digit percentage. They are Datasonic (92.2%), Fibon (81.8%), Pintaras (27.9%), Homeritz (26.7%), Willowglen (21.7%) and Daiman (16.2%). There is no loser with the worst performer, Kumpulan Fima which breaks even. Details of the return of the portfolio is shown in the link appended below.
http://klse.i3investor.com/servlets/pfs/19386.jsp

What about Ooi Teik Bee's portfolio return?

Ooi Teik Bee's portfolio returned a respectable 14.4%, or an alpha of 12.3%. There are 7 winners and 3 losers. Its big gainers are all warrants, some leveraged instruments. They are Hap Seng warrant (63.5%), LBS W (62.2%), Punchak warrant (42.4%). It has some double digit losers through Lii Hen and Triple, both at a loss of 18.9% .

The performance of both the portfolios exceeds the return of the broad market by a wide double digit margin in the last three months. The performance of each portfolio may not be comparable as one portfolio was constructed using fundamental analysis for long term investing, whereas the other used technical analysis and may involve frequent trading.

Appendix: kcchongnz portfolio
xxxx Ref date Now xxxx xxxx xxxx
New 1/08/2013 1/11/2013 xxxx xxxx xxxx
Pintaras 4.990 6.380 0.000 1.390 27.9%
Kfima 2.060 1.980 0.080 0.000 0.00%
MFCB 1.700 1.830 0.030 0.160 9.41%
Haio 2.670 2.780 0.000 0.110 4.12%
Fibon 0.330 0.600 0.000 0.270 81.8%
CBIP 2.830 2.950 0.000 0.120 4.24%
Tien Wah 2.510 2.550 0.077 0.117 4.68%
Homeritz 0.430 0.535 0.010 0.115 26.7%
Willow 0.530 0.645 0.000 0.115 21.7%
Daiman 2.530 2.940 0.000 0.410 16.2%
Datasonic 3.350 6.440 0.000 3.090 92.2%

Average xxxx xxxx xxxx xxxx 26.3%
KLSE 1773 1810 xxxx 37.0 2.09%
Alpha xxxx xxxx xxxx xxxx 24.2%

Posted by coolio > 2013-11-01 17:58 | Report Abuse

you are the best!

Posted by waiming > 2013-11-01 18:05 | Report Abuse

TQ kcchongnz. Any more recommendations? Really appreciate your generosity in sharing.

Posted by waiming > 2013-11-01 18:07 | Report Abuse

TQ to OTB too!

Posted by bsngpg > 2013-11-01 19:14 | Report Abuse

你是最好的你知道嗎？（少林足球）

Posted by Ooi Teik Bee > 2013-11-01 19:21 | Report Abuse

Thank you Kcchongnz, you are great. I am a bit disappointed with my selection.
Thank you.

Posted by bsngpg > 2013-11-01 19:54 | Report Abuse

14.4% in 3 months, "beh hiam liao lah", if you claim as number #3, who dare to claim number#2. Congratulation!!!!你也是最好的你知道嗎？（少林足球）