Posted by kcchongnz > 2013-08-04 15:52 | Report Abuse

apprentice, agree with you in many aspects. I also wonder why the analysts still recommending that stock (hope that is the one you refer to) you mentioned despite the recent Bank Negara ruling.

That membership fees you are talking about of Haio, 33k, still the same thing? and selling expensive but useless stuff through MLM? Or was it the case in 2009-2010 before the new rules of direct selling which adversely affected Haio's MLM and now it is not the case any more? You definitely know better than many people here since you have friends there. Could you verify and confirm that?

Your statement "Though I study financial statements of companies, its just a history, and not necessary of what things to come. I prefer the feeling on the ground, talking to people directly involved or affected and have some idea where the product or company is heading to."

Yeah, talking to people etc is what Philip Fisher called scuttle-butting. It is a must if you want to be a very successful investor. But few people have that kind of luxury, don't you think so? So for people who don't have that luxury, how should they invest? Or how would they know the company they are interested is worth investing?

Ok everybody on the street say this company is good. The company products are good but how do you know they make good profit? And how much are you willing to pay? How do you decide?

Yeah those financial statements are history but what else can we rely on to decide and answer those questions above? What do you think about this guy Joel Greenblatt's investing strategy of investing in good companies at reasonable and cheap price from the link below?

http://klse.i3investor.com/blogs/kianweiaritcles/34313.jsp

Posted by Abudance > 2013-08-04 16:06 | Report Abuse

Thanks for all good sharing. What about pwroot?

Posted by iafx > 2013-08-04 16:14 | Report Abuse

@apprentice, f.statement(multiple) must be combined then only the picture is complete for further assessment, say rolling 4 qtrs at least. another "risk" is all statement went thru some level of "massage", therefore regardless v can never trust it 100%, cannot invest 100% base on paper value.

Posted by iafx > 2013-08-04 16:25 | Report Abuse

the same go to analyst TP, often it has something to do with commercial relationship, counter in IB portfolio tend to get better rating, talk only the bright side, ignore dark side :)

Posted by apprentice > 2013-08-06 08:30 | Report Abuse

Thank you to those who contributed, kc, iafx, bsn, abundance. It good to throw a few spanners into the works and get good feedbacks.

Posted by ipomember > 2013-08-06 08:57 | Report Abuse

"Today's analysts (banks and IBs) just sits in front of their computer and after keying some numbers, comes out with their magical target price" Well said, thats why we do not simply put in the data to compute the fair value. otherwise its really misleading

Posted by kcchongnz > 2013-08-06 14:04 | Report Abuse

Tan KW, yeah I have read your posting on this. Thank you for the good article.

I wrote my piece on Haio just based on my own thought without reading any articles about Haio from any analysts. Reading the above posting by you, it appears that my thought was very similar to that analyst. I didn't have information about that part on potential higher dividend payout though.

Posted by FATT > 2013-08-06 14:20 | Report Abuse

at what price?

Posted by kcchongnz > 2013-09-20 09:35 | Report Abuse

Haio reported a poorer results for the first quarter 2014. Investors reacted strongly to this poorer performance, the price has already dropped by about 5% this morning.

That is why I always say valuation is an art. It depends a lot on your forecast in the future, and nobody can predict the future. He can only use the economic outlook and its recent past to try to have a good guess of its future. Hence in valuation I like to use conservative assumptions to get the intrinsic value, and buy the share when there is good margin of safety.

But does Haio warrants for a sell off just a poorer one quarter result? Is the poorer result due to seasonality?

To me, it depends on whether you are a trader or an investor.

Posted by ryanc > 2013-09-20 10:21 | Report Abuse

Good way to cover up a lousy stock pick. :)

Posted by iafx > 2013-09-20 10:22 | Report Abuse

:D

Posted by kcchongnz > 2013-09-20 10:35 | Report Abuse

Hey iafx, long time no see. Try making fun of me? Good, I am always ready for you.

Have you sworn that you did not change the "revenue" to profit in the Kfima thread? So long still haven't seen the response from you yet.

Posted by iafx > 2013-09-20 10:38 | Report Abuse

@ryanc, chill! :D

Posted by kcchongnz > 2013-09-20 10:42 | Report Abuse

iafx, remember also that Pintaras you criticizing like mad on my analysis. You even asked people to sell at 2.70, just less than a year ago? It is RM6.08 now, not including 19 sen dividends received.

What say you?

But actually the worst part of you is to change that word "revenue" to "profit" and then came back and accuse me of changing. That is the worst from of cheating and accusing.

How do you aspect people to respect you?

Posted by kcchongnz > 2013-09-20 11:05 | Report Abuse

As to the statement below. Let me just say I don't have to cover up anything and no need to be defensive also. Not until if he starts to attack personally.

Posted by ryanc > Sep 20, 2013 10:21 AM | Report Abuse
Good way to cover up a lousy stock pick. :)

I am more interested to know why this iafx fellow can change something in the Kfima thread, and then kept on accusing me altering it, and then kept on and on to attack me personally.

But how ah? Every time he appears to make a jab at me, then when I ask him something about the credibility of him as a person, he just disappears?

Posted by bsngpg > 2013-09-20 15:12 | Report Abuse

Hi : I am very please to inform that I am now officially one of the member of Hai-O after buying in at 2.62 just now. I started a very close following process since Aug13. Today the opportunity appeared, so I just grabbed it. I plan to keep it for very long term as long as its fundamental does not deteriorated. If it drops further later, I will accumulate more. Thank you.

Posted by kcchongnz > 2013-09-20 15:39 | Report Abuse

bsngpg, how come you also buy Haio? I think Zhulian is a better stock in this business. Yeah I know you already been holding Zhulian for long time. I would think it is still good to hold.

But on the other hand, good to diversify a little bit. I do believe in diversification, theoretically as well as practically.

Posted by bsngpg > 2013-09-20 19:37 | Report Abuse

Why I bought Hai-O :
i) Use hard money to show support while people said you cover up.
ii) You said “good to hold Zhulian” while buy on Hai-O. So listen to you lol.

Actual reasons are “Buy when others sell” and diversification. Furthermore Hai-O will not pull down my grand div yield.

At the moment I still have faith that Hai-O has good growth trend in long term. The best opportunity is that when I have confident on long term earning of a company and others sold due to short term jerk on earning.

I want to share that I can wait patiently since 4 Aug till today to buy in the targeted counter.

Thks
Thks

Posted by lwalk > 2013-09-20 20:09 | Report Abuse

bsngpg, is there a reason to buy at this current price? today it looks as it might be a one day drop for consolidation or falling knife...price is still high from all the climbing up few days before. you seem like a very experienced investor.. so i do value your input.

Posted by ipomember > 2013-09-20 21:00 | Report Abuse

@bsngpg
"At the moment I still have faith that Hai-O has good growth trend in long term. The best opportunity is that when I have confident on long term earning of a company and others sold due to short term jerk on earning. "


Well, would likely to hear from you about MLM business. As we know, MLM business always selling their "premium" products in "premium" price, ANWAY is a real good example. We can see retail shop for this MLM business as well (Well i do not know much on it, do they have retail shop for long time ago?) Anyway i am not familiar with it and hopefully you can share me with your insights. Thanks first.

Posted by faberlicious > 2013-09-21 18:27 | Report Abuse

I'm also now a shareholder of Hai-O,just bought @2.61.My

collection is now complete.I've all 3- Amway,Zhulian and Hai-O.Nice !

Posted by kcchongnz > 2013-09-21 18:38 | Report Abuse

Faberlicious, good on you. In my opinion, they are all good companies. Why good companies?

When a company has high margins, high roe, ROIC and great cash flows consistently, how not to be good companies?

Best still if they are selling at reasonable or even cheap price.

How do we know their business model is good? Isn't it all shown in those consistent metrics? What other proof do you need?

Posted by anbz > 2013-09-21 18:40 | Report Abuse

hey kcchong look into malton room..what i've wrote and solved for u!!!

Posted by kcchongnz > 2013-09-21 18:45 | Report Abuse

Nabs, remember you said I were bingo? You are wrong here again, impartiality knows quite some stuff though he talks rough.

Posted by kcchongnz > 2013-09-21 18:47 | Report Abuse

Anbz, not nabs. This iPad simply changed what I write

Posted by xyzsim > 2013-09-21 18:52 | Report Abuse

any similar counter like pintaras ?

Posted by bsngpg > 2013-09-22 15:22 | Report Abuse

Iwalk : I am a bit perplexed and seduced by the hot market. In normal case I should not buy Hai-O at the current valuation. Thank you for your timely reminder. I will pull hand brake here on. Thousand thanks.

Posted by bsngpg > 2013-09-22 16:07 | Report Abuse

Why I bought Hai-O on 20Sep2013 at RM2.62 :

1. People(most important factor): I trust Mr Tan Kai Hee as I follow his backgrounds on either corporate, social or politic arenas. I read a lot to establish the confident level. It is very personal. On company perspective, I trust the integrity and capability of him and his management team in stewarding the company.

2. Profit : The company is making profit each year from 07 to current. The net profit was growing from 2007 to 2010 then hitting wall and tumbled significantly. The growth trend on PAT has resumed since 12 to current. Is the drop in Q114 signals the down trend again? Does it has consistency issue as before? Maybe I were too nervous judging thing based on result of single quarter. The past good growth in the last few quarters was pushed by special promotion and once the promotion ceased, the profit tumbled along. This indicates the profitability is not healthy and raises question on its long term sustainability. I have concern on these as I am a small fish who have no luxury to take risk. Furthermore it has poor record in 2011.

3. Growth : About the same as the above mentioned on profit.

4. Healthy financial status : net cash

5. Products : has good demand and very elastic. Evolve along with market trend.

6. Dividend : Minimum DPO 50%. Current yield is about 5% which is higher than FD.

Thks and looking forward for your comments.

Posted by kcchongnz > 2013-09-22 16:15 | Report Abuse

Posted by xyzsim > Sep 21, 2013 06:52 PM | Report Abuse
any similar counter like pintaras ?

What do you mean similar counter? Do you mean construction companies with the same operating efficiencies as Pintaras, or same compounded annual return like Pintaras as below?

As for the former, I doubt so as Pintaras operating metrics, cash flows, balance sheet, hard to find one construction company to match. Even at its enterprise value now it is also hard to find one so cheap. So it may not mean Pintaras won't be able to continue to provide excess return in the future.

As for the later, I think it is also very difficult to find many matching the kind of return. For example the one year return of 103%, and 5 year compounded annual return of 37.5%, >3 times the return of the market. Of course there are because there are so many companies in the Bursa. But it is really difficult to find many with consistent CAR of about 50% each period for up to five years.

Year 1 2 3 4 5
CAR Pintaras 103.0% 59.3% 51.0% 44.2% 37.5%
CAR KLSE 10.9% 14.8% 7.1% 10.2% 11.9%

Anymore of this type of return? Sure there should be. But one has to scout among the small capitalized stocks with good business, great operating metrics and cash flows.

In my portfolio, I am hoping Kumpulan Fima can follow the footsteps of Pintaras.

One thing you must know, for fundamental stocks, it takes time for investors to discover, months, years, unlike technical, which traders can make 50% or 100% within days basing on trading on momentum. But definitely not for FA.

Posted by bsngpg > 2013-09-22 16:23 | Report Abuse

Why I bought Hai-O on 20Sep13 at RM2.62 ?

Last year eps was 24 sens. Assuming growth rate is 20%(2012=17%, 2013=40%), eps of FY14 is 29 sens. At PE 10x, price of next year is RM2.90. At the current hot market, PE can be >10X easily. Every 1x ups, price will up by RM0.29 sens. If PE 12X, price is RM3.48 next year with dividend 14.5sens=5.5% yield. So, why not to buy Hai-O at RM2.62 ?

Posted by bsngpg > 2013-09-22 16:40 | Report Abuse

Why I chicken out from Hai-O on 22Sep13 at RM2.62 ?

The stupid Q1 with eps 4.46 sens woke me up. Q1 at 4.46 sens is one off poor earning only or reflecting the true earning capability? Nobody knows the answer. So I have to take risk on this.

If the eps at 4.46 sens repeats for the next few qtrs, the eps of FY14 is 17.8 sens with div at 8.9sen=yield 3.4% @RM2.62. At PE 10X, price in 2014 is RM1.78 and yield 3.4%. Why should I buy it at this level of valuation at the current hot market?

So I chicken out.

Posted by bsngpg > 2013-09-22 16:50 | Report Abuse

Hi ipomember : Sorry I do not have insight on MLM business. I have decided to chicken out from Hai-O.

If I have time next weekend, I may write some. Now I am at home for holiday.
Thks.

Posted by ipomember > 2013-09-22 17:03 | Report Abuse

@bsngpg

No worry. take your time and thanks

Posted by bsngpg > 2013-09-23 11:07 | Report Abuse

Ipomember: I do not have special insight on MLM. Since you talked about MLM, I would like to share with you some tips on personal health which are related to MLM.

As many friends especially those frequent travelers, we frequently have sore throat-flu-cough. At once about 10 years ago, a friend recommended to take 4 tablets of vit-c from Amway per day. It was very effective and gained my confident immediately. Since then, I took vit-c from Amway regularly and can say that till now I have almost no more severe flu-cough-sore throat. Touch wood and thanks god.

Wherever my kids showed early symptom of flu-cough, I gave them vit-c from Amway, most of the time(not all the time), we managed to get thru without doctor.

One of the friend(old biz man) at 75 but looks as strong and active as 60 year old. He took multiple kind of supplements from Amway daily. We guess, his youngness is attributed to his good genetic, but likely Amway help too. He drinks red wine daily too.

Besides Amway, my house has Aloe-Vera and Bee Propolis from Forever Living(MLM). One of my sister in law recovered from the incurable SLE by drinking Aloe-Vera(REAL LIFE SAVING CASE).

I used facial cleaner from Forever Living for the last 20 years, no pimples on my face. Touch wood.

I like homemade bread so I have a bread maker from Amway after disappointed by the RM300-400 bread maker from Sen Heng.

Water filter in my kitchen is from Forever Living.

I used fuel booster from Cosway.

Many people complaint that products from MLM are expensive, but they deliver value to my family, at least.

Blue chips such as Maybank are expensive but its value is always there especially during the troublesome market time. To me, one high price MBB is better than few low price second or third liners.

I used to try many low price vit-c from pharmacy, it never works well. Wasting small money is fine to me, but suffering from sickness and antibiotics harm me.

Disclaimer : the above are all real experience and sharing, none of the example is fiction. I am not a member of any MLM but a small shareholders of Zhulian and Hai-O.

What is your thought?

Thks.

Posted by freecooper > 2014-02-18 21:47 | Report Abuse

hi kcchongnz, i have been reading your explanation to Tan KW on working capital. It is stated that working capital is obtained from LAST YEAR... Do this mean financial year end 2012 or year 2013 as your calculation is based on financial year end 2013. Hope you can clarify on this. TQVM

Posted by kcchongnz > 2014-02-18 21:56 | Report Abuse

Posted by freecooper > Feb 18, 2014 09:47 PM | Report Abuse
hi kcchongnz, i have been reading your explanation to Tan KW on working capital. It is stated that working capital is obtained from LAST YEAR... Do this mean financial year end 2012 or year 2013 as your calculation is based on financial year end 2013. Hope you can clarify on this. TQVM

Working capital is computed from the balance sheet. So there is no difficulty to use the latest quarterly report.

When I talk about "Last year", I probably use the latest annual balance sheet ended 31st March 2013.