Posted by connie7i3 > 2014-05-03 11:42 | Report Abuse

KCchongnz, Thank you for sharing with us. I appreciate your effort and generosity.

Posted by stockoperator > 2014-05-03 12:55 | Report Abuse

Congratulating KC for opening class.

Posted by bsngpg > 2014-05-03 14:31 | Report Abuse

KC Chong : Thank you for the very detail and explanatory essay.

Posted by ktan > 2014-05-03 14:44 | Report Abuse

tq kcchong,it is very educational.

Posted by bsngpg > 2014-05-03 17:25 | Report Abuse

Hi KC Chong: may I ask what is the different between ROA and ROIC ? Thank you.

Posted by Alphabeta > 2014-05-03 17:36 | Report Abuse

This is a consistent performer with steady growth in both revenue and profit margin over the years. Zero gearing with rising free cash flow. PEG only at 0.61 at current price. Potential for better dividend payout.

Good stuff, KC, thanks for sharing.

Posted by kcchongnz > 2014-05-03 17:47 | Report Abuse

bsngpg,

ROA is return of asset = Net Income/Total assets

ROIC is return of invested capital = NOPAT/IC
IC invested capital = fixed asset + net working capital
NOPAT = Ebit*(1-tax rate)

They are totally different

Posted by bsngpg > 2014-05-03 18:30 | Report Abuse

Hi KC : thanks first. I will go to investopedia again to understand the meaning of both further.

Posted by calvintaneng > 2014-05-03 20:45 | Report Abuse

I first noticed Magni Tech when I was doing research on chocolates. The packaging for "Vochelle" brand of chocolates is done by Magni Tech (Just as Daibochi does packaging for Nestle's milo and maggi mee).

Vochelle sells very well due to 2 reasons

1) It has the best colour presentation among all choco products.
2) Its prices are below Nestle & Cadbury

And I saw Insider buy back between RM1.20 to RM1.30. So I wanted to buy some Magni shares at around RM1.20 to RM1.30. But I had one problem. I fully invested in PM Corp at 9 cts then and I don't have any spare cash.

As of now Magni has performed slightly better than PM Corp in % growth.

Magni is a great growth stock while PM Corp remains an asset play.

Posted by aunloke > 2014-05-03 20:46 | Report Abuse

Thanks KC I hope the write up will draw more investors into this stock.

Posted by Alphabeta > 2014-05-03 21:04 | Report Abuse

Hi KC, after crunching some number on my own. Magni should be able to provide a solid, reliable and compounding return.

Posted by CCCL > 2014-05-03 21:11 | Report Abuse

Hi KC, can you help to look into prolexus growth.

Posted by RonnieKimLondon > 2014-05-03 21:56 | Report Abuse

Mr. Chong. An excellent analysis. Thank you.

Posted by ivan7 > 2014-05-03 22:02 | Report Abuse

Thanks KC. Really enjoy reading your analysis.

Posted by jj888 > 2014-05-03 22:59 | Report Abuse

Thanks KC. Can I echo CCCL's request on looking into Prlexus. I thought in most valuation yardsticks above, Prlexus is as good as Magni, except that Magni's growth has been more steady.

Posted by AyamTua > 2014-05-04 03:16 | Report Abuse

kcchongnz: to buy 2.69 stock how ah? say if i dont have enough money.. buy 2.69 @ 100lots = $20,690 if buy less than 100lots not much leh have to think of brokerage fee etc ... interested but i only have less than that ....

Posted by AyamTua > 2014-05-04 03:19 | Report Abuse

thanks - normally ayamtua buy 100lot complete .. if buy little little seems susah.. let say got rm10,000 than how many lots is good for magni $2.69? thank you kcchongnz

Posted by kcchongnz > 2014-05-04 03:21 | Report Abuse

"In investing money, the amount of interest you want should depend on whether you want to eat well or sleep well."
J. Kenfield Morley, Some Things I Believe.

Posted by jj888 > May 3, 2014 10:59 PM | Report Abuse
Thanks KC. Can I echo CCCL's request on looking into Prlexus. I thought in most valuation yardsticks above, Prlexus is as good as Magni, except that Magni's growth has been more steady.

jj888, I agree with you that Prolexus is good. You can say it is even better than Magni in terms of operational performance. It is even cheaper than Magni in term of valuation.

Again, you are right to the point. Prolexus has not shown it's consistent operational performance. I don't care much of growth, especially what growth you are talking about is the past. In the future, I don't buy any rosy forecast too.

The type of company I like is it should do well in the good time, but not losing money in the bad.

However, this post written by me is not for recommendation of buying Magni. The main purpose it was written is for educational if you read and digest it again.

Posted by Ben Gan > 2014-05-04 12:49 | Report Abuse

KC, Thank you for your excellent article on Magni-Tech.

One other thing that I like about this company is that the executive chairman of the board of directors, Tan Sri Dato' Tan Kok Ping is not an ordinary person.

He is the President of Penang Chinese Chamber of Commerce, Chairman of Penang Joint Chambers of Commerce, Deputy President of The Associated Chinese Chambers of Commerce and Industry of Malaysia and Director of Institut Intergriti Negeri Pulau Pinang.

Posted by kcchongnz > 2014-05-04 13:12 | Report Abuse

Thanks Ben. Ever go back to Bentong?

I didn't know this Dato Tan Kok Ping at all. Is he related to Vincent Tan as BJtoto seems to be a major shareholder of magni?

Posted by inwest88 > 2014-05-04 14:59 | Report Abuse

kc - congrats on unearthing another hidden gem.

Posted by jj888 > 2014-05-04 16:12 | Report Abuse

Thanks KC for replying. Yes I have been silent reader of many of your postings educating i3investors on value investing, and have definitely benefited from them, thanks again for sharing your valuable knowledge.

Posted by Ben Gan > 2014-05-04 16:28 | Report Abuse

KC, Seldom go back to Bentong. I am now staying in Bandar Puter, Puchong. Do you know me personally?

Dato'Tan Kok Ping was the former Managing Director and Deputy Chairman of Berjaya Sports Toto Berhad. I have no idea whether he is related to Vincent Tan or not.

Posted by kcchongnz > 2014-05-04 18:19 | Report Abuse

Ben,

I know you through your blog and you told me you were from Bentong there.

Posted by tealeaf > 2014-05-11 21:37 | Report Abuse

Hi KC, i'm tried interpret yr table 3 DCF analysis...would u mind to share how did u get the PV of FCFF @ 321,000? Thanks.

Posted by kcchongnz > 2014-05-12 18:35 | Report Abuse

Posted by tealeaf > May 11, 2014 09:37 PM | Report Abuse
Hi KC, i'm tried interpret yr table 3 DCF analysis...would u mind to share how did u get the PV of FCFF @ 321,000? Thanks.

This is what I did as written in the article:

[In Magni’s case, I start off with a normalized FCF of 16.6m being the average FCF of the last 5 years, a growth rate of 8% for the next 5 years, 5% for the subsequent 5 years and a perpetual terminal growth rate of 3% after that, in accordance to the rate of growth of GDP and inflation.]

You get the cash flows for each year from the above assumptions. Then discount all the cash flows at a discount rate of 10% to the present value.

Posted by stockoperator > 2014-05-13 15:40 | Report Abuse

I really like DCF model. But one has to better understand why DCF model works and its assumption. I also like KC approach of using multiple models to assess a company. Each has its merits. Fundamental analysis is such a powerful tool if one can understands them.