Posted by henry123 > 2014-05-03 15:11 | Report Abuse

Mr Koon, i heard you sold all your shares in Mudajaya. Is it true?

Posted by Koon Yew Yin > 2014-05-03 16:16 | Report Abuse

Henry123, you think I do not have any Q to say that I sold all my Mudajaya. I think that guy who told you that I sold all my Mudajaya does not have IQ, EQ, MQ or BQ.

I will wait for Mudajaya's completion of their Indian Power project because it will give additional profit for 25 years. The share price is being supported by many serious investors.

Posted by stockoperator > 2014-05-03 16:51 | Report Abuse

Stock analyst is Not equivalent to Business Enterpreneur i guess.

Posted by kk123 > 2014-05-03 18:54 | Report Abuse

Mr koon , can u comment on the recent limit down of the few penny stocks
What can the regulators do to restore confidence ?

Posted by kk123 > 2014-05-03 19:03 | Report Abuse

If u recall last year the same thing happen to better valued stocks such as : COASTAL,CBIP,BKAWAN,COASTAL,BJTOTO,TDM,HSPLANT ...
So it can cause quite a ruckus and confidence can be shattered , blood flow .. Retail blood ..
Strangely enough I made money from the "rebound" of itronic

Posted by sunztzhe > 2014-05-03 19:28 | Report Abuse

What goes up will come down especially stocks that had exceeded its fair value or the stock prices had moved way beyond its fundamentals. The retailers who lacked personal discipline and who had speculated heavily and who lacked the basic stock investment cum financial risk management skills were slaughtered. They cannot blame anyone except themselves and hopefully for some they will relearn new value investment skills and regain their capital. It had happened numerous times since the stock market was created.

On restoring confidence, the relevant question should be "To regain Confidence, What are the Investment and Risk Management skills that an investor need to learn , acquire before investing in the stock market?"

Posted by JYap > 2014-05-03 21:22 | Report Abuse

Mr Koon good comment about henry123 Q.

Posted by Lai Yin Keat > 2014-05-03 22:25 | Report Abuse

Mr. Koon,
Thinking fast and slow by prof. Kahneman is probably the best book on psychology and stock mkt i had come across.

Posted by yktay1 > 2014-05-04 00:55 | Report Abuse

Greetings Mr. Koon, I notice that you appeared on the 30 largest shareholders list for MFCB with 3,108,400 shares or 1.28% stake on the 2013 annual report published recently. You did not appear on the 2012 report meaning that you acquired a good quantity of the shares in 2013. From your postings, I have gathered that you mainly buy stocks that have tremendous growth potential (e.g. Jtiasa).

For MFCB, their power division via their 2 current PPA (China and Sabah) will not be growth drivers for the company as the tariffs are somewhat fixed with only FX fluctuations and raw material prices such as coal influencing the P&L. In addition, the Sabah PPA will be expiring soon.

MFCB's other divisions such as minerals division is growing albeit at a slow pace with its new plants only completing by q4 2014 with capacity coming online thereafter. Its properties division on the other hand is quite uninspiring, i.e., during my visit to the Malaysia Property Exhibition (Mapex) recently, I took the opportunity to ask some of their sales staff on new launches and the sales of existing developments.

Some of the key growth areas of the company I am able to identify are the Don Sahong Dam Projects in Laos which has received much opposition for its perceived threats to the Mekong River. I do take comfort though that the Lao Government have given the greenlight for the project. However, earnings contributions are expected to come in 2020 at earliest, seeing that the project is slated to complete in 2019.

The other key growth area is the concession for rubber estates in Cambodia of which the rubber trees will take 6 years to reach maturity.

Both projects are huge and entails large Capex spending over the next 6 years or so. One of the areas where MFCB which already has a healthy cash pile can tap into is its vast landbank in Sepang.

Dear Mr. Koon, as you said that you are willing to teach those who are willing to learn how to fish. I would greatly appreciate if you can share some of your insight into the company of which I and other readers can benefit from your perspective of analyzing a company.

Thank you.

Posted by splendid_ignorance > 2014-05-04 01:19 | Report Abuse

Dear Mr Koon,

Surprised I've only now stumbled upon your postings. Very good read and thank you for posting!

Posted by Koon Yew Yin > 2014-05-04 08:43 | Report Abuse

yktay1, I must say you that you have all the required Qs to succeed. Your comment on MFCB shows that you have done your homework and you have a very good analytical mine. The reasons for my buying and owning MFCB are:

1. It is very well managed with 4 main profit centres. It has a very good cash flow and cash rich. It has profit growth prospect which is the strongest catalyst for moving share price.

2. I have written to the CEO for their Board to consider giving out free convertible warrants to improve its share price and benefit all shareholders. I strongly believe my suggestion will be approved in due course because it is selling below its NTA and at single digit P/E ratio for so long.

3. I also believe that the CEO and other directors know their duty. The most important is to make profit to benefit the shareholders who are actually the owners who pay their salary and directs fees. When investors buy a share, they will benefit from the dividend and the share price appreciation. Of course, giving out free warrants is like putting cash into the shareholders' pockets. because the warrants are marketable.

4 Remember the CEO will benefit the most because he is the largest shareholder.

Posted by lohman > 2014-05-04 10:53 | Report Abuse

The 4Qs jive with what a wealthy business friend disclosed. With no tertiary education or inheritance, but possessed of tremendous drive, energy and street smarts, he built an enormous business fortune from scratch. I must add that his MQ is somewhat variable; he is not above stacking the cards in his favor in business deals to get the upper hand. The ends justify the means, he says, and it is the ending that people remember, not the journey you take. It is most important to end well.

Posted by terrylim > 2014-05-04 12:55 | Report Abuse

Every one of us born with 7 intelligence. We are born with visual, verbal, logical, kinetic body, interpersonal and intrapersonal. What this author suggested is very misleading. EQ is combination of interpersonal and intrapersonal intelligence useful for our daily interactions and BQ is useful for selection of athletic an our bodily normal function. IQ is basically help us function in our daily routine or problem solving.

Posted by yktay1 > 2014-05-04 12:56 | Report Abuse

Thank you Mr. Koon for your generous sharing. I really do hope I get the chance to meet you. Perhaps at MFCB's upcoming AGM.

Posted by johnny cash > 2014-05-04 13:04 |

Post removed.Why?

Posted by emperor > 2014-05-04 13:16 | Report Abuse

Mr koon, thanks for your patient for describing iq,eq,bq,mq in such a long essay. Why not summarise it all that all Qs are important to be success. However, I think use Tan sri lim and Yeoh as example are not adequate as nowadays generation need at least some basic education as a gateway to success.

Posted by lmenwe > 2014-05-04 15:15 | Report Abuse

If free warrants are so beneficial and so powerful to the genuine shareholders why none of the activist investors request for it? I can only found them request for cash dividend and share buy back. Warren also mentions that share buy back and cash dividend is beneficial for shareholders. In this case since they are so cash rich why don't they just give special dividend or repurchase their shares since it is deeply discount!

Posted by kcchongnz > 2014-05-04 16:30 | Report Abuse

If MFCB is undervalued, share buyback is the best capital allocation for the management. MFCB's management has been doing it all this while.

Bonus issue, "free" warrants, share split etc have no shareholder value enhancing effect, absolutely none theoretically. Just like that day when I was in an Italian restaurant and somebody ordered a pizza.

Customer: Give me a Wood-fired pizza please.
Waiter: How to you like to cut it, 6 or 12 pieces?
Customer: 20 pieces please, I am hungry.

However, do not forget about psychology of investing. In this aspect, I think it is good for existing shareholders, if you know how to play the game. The mentality is that when "free" warrants are declared to be given, punters will bid up the stock price. When the whole exercise are completed, existing major shareholders will pump up the price of the "free" warrants further. However, they will throw their "free" warrants like nobody's business shortly after that. Because it is give "free", they will gain big time.

This type of thingy there must always winners and losers. You should know who will be the losers. Hence you must utilize behavioral finance to win this speculative endeavor, not an investing endeavor though.

Posted by sunztzhe > 2014-05-04 17:05 | Report Abuse

The sole objective of the controlling shareholders must be to increase the EPS thereby increasing the enterprise value over the future years. Better still, they set themselves KPI on increasing the EPS n announced it to All the shareholders.

Posted by Koon Yew Yin > 2014-05-04 17:18 | Report Abuse

kcchongnz, you may be surprised to know that the general investors do not think like you. Recently Symphony Life gave 1 free warrant for every 4 shares held with a conversion price of Rm 1.10. When the warrants were issued, they were traded between 25-30 sen and the mother shares were traded around Rm 1.10.

I know many serious investors sold one mother share to buy 4 warrants and now they are only holding warrants. I can appreciate their logic for doing so especially the company has good profitable businesses.

Posted by Optimus15 > 2014-05-04 17:36 |

Post removed.Why?

Posted by fortunebullllz > 2014-05-04 17:37 |

Post removed.Why?

Posted by Optimus15 > 2014-05-04 17:37 |

Post removed.Why?

Posted by fortunebullllz > 2014-05-04 17:39 |

Post removed.Why?

Posted by fortunebullllz > 2014-05-04 17:40 |

Post removed.Why?

Posted by sunztzhe > 2014-05-04 17:42 | Report Abuse

It will be a fantastic opportunity for the controlling shareholders of MFCB to set KPI on EPS growth n targetted EPS value for the future years as they r in control n know the business very well. With this transparent objective MFCB will stand way above the rest in BURSA. Do u support this recommendation Mr Koon?

Posted by optimus115 > 2014-05-04 17:58 |

Post removed.Why?

Posted by kcchongnz > 2014-05-04 18:15 | Report Abuse

Mr Koon,
What I mean is there is no difference whether a pizza is cut in 6, 12 or 20 pieces.

What I mean by using behavioral finance for investing is like this.
Let's imagine that we have advanced information that MFCB is going to propose to give a "free" warrant for every share held. Let's further assume that RM2.30 is the true value (not price) of MFCB.

We will buy MFCB say at RM2.40 knowing that punters will chase the price up when this "free" warrants is announced, say up to RM3.00. Let say when the warrants is listed, and say it is traded at 50 sen, while mother share dropped to RM2.80. The combined price is RM3.30. We will sell them all at those prices and make a profit of 90 sen.

Do you think those price of MFCB at RM2.80 and warrant at 50 sen can sustain, knowing that the "true" value of the company is only worth RM2.30 per share? Of course unless MFCB is actually way undervalued in the first place when it was trading at RM2.30 last time.

What happened to XDL, Instacom etc with those freebies after the completion of the exercises?

Posted by kk123 > 2014-05-04 19:01 | Report Abuse

Giving warrant is a bad move as it potentially is dilutive upon exercise ..it will help temporarily to move share price up a little ... But it doesn't change the fundamentals of the company.
Mfcb I don't think is a good company
U can check back in the past this company nearly went insolvent and have huge debt
It's asset mostly are in 3rd world country which makes it a risk
If this company is good - it would have acquired assets in UK, HK , US, SG , etc
Those who still want to buy mfcb can do so at their own risk

Posted by kcchongnz > 2014-05-04 19:34 | Report Abuse

Posted by kk123 > May 4, 2014 07:01 PM | Report Abuse

Mfcb I don't think is a good company
U can check back in the past this company nearly went insolvent and have huge debt
It's asset mostly are in 3rd world country which makes it a risk
If this company is good - it would have acquired assets in UK, HK , US, SG , etc
Those who still want to buy mfcb can do so at their own risk


Yeah kah? Whether MFCB is a good company or not is subjective. You are entitled to your own opinion. But, but

1) When was MFCB having huge net debt and nearly went insolvent?
2) When did MFCB ever made a loss in the last 10 years?
3) When did MFCB ever has negative cash flow, or even free cash flow in the last 10 years?
4) Only having asset in US, UK considered good companies, why?

Posted by sunztzhe > 2014-05-04 19:39 | Report Abuse

Mr Koon,
Will giving free warrants result in improving Earnings per Share of MFCB? It may possibly provide short term benefits/euphoria for some warrant shareholders but the consequent effect of free warrants will dilute the EPS. If that is so, will giving out the free warrants really enhance the share value and can the free warrants really drive up and sustain the rise in the share price of MFCB?

If the answer is no, then what will drive up the future value of MFCB EPS? The EPS of MFCB is 28.2 cents/share in 2009 and 33.2 cents/share in 2013. Over 5 years it had risen 17.73 %. Is this a fantastic performance over 5 years? If one compare MFCB with MBSB, MBSB EPS performance over the past 5 years is far more superior relative to MFCB.

You had stated that MFCB is very well managed with 4 main profit centres. It has a very good cash flow and cash rich. It has profit growth prospect which is the strongest catalyst for moving share price.
I am not a shareholder of MFCB and so I do not know the shareholders nor the company management.

As you are a shareholder of MFCB and had been in contact with them, would you concur with the prevailing perception that despite all the positives, MFCB controlling shareholders and management can certainly deliver much more than what it had delivered over the past 5 years? Somehow one do really question whether the controlling shareholders who are drivers of the company do really possess the hungry mind-set to drive up the EPS value of MFCB over the next 5 years or would the future EPS be just around current EPS figures?

Posted by neversaydie > 2014-05-04 21:10 | Report Abuse

a very interesting read indeed. I didn't even know that MQ and BQ exists. will take note on improving in these areas

Posted by yktay1 > 2014-05-04 21:16 | Report Abuse

I think what Mr Koon is trying to point out is that a corporate exercise such as giving out free warrants can do wonders for a company like MFCB despite the dilutive effects in EPS.

Not only will it improve the investing/trading participants of the shares through a higher leveraged proxy, i.e. the warrant, it will also provide a boost to the company's mother shares through some much needed attention as it is currently trading below NTA and single digit P/E.

Yes, no real value created for shareholders in the immediate term. However, with a higher share price, the company will be able to raise more funds in the future through rights issuance or private placement should the company require the funds.

Further down the road, the conversion of the warrants, if in the money, will provide the company with some extra cash for Capex.

Share buy-backs, special dividends and share splits are alternative options for rewarding shareholders which also do not create any real value for the company. But in the case of MFCB, something like a free warrant might just do the trick to give it the boost it needs for the shares to trade closer to its intrinsic value (depending how you value the company).

To compare MFCB which has diversified businesses that are mainly defensive in nature with MBSB which is very cyclical during boom and bust periods is absurd.

Posted by sense maker > 2014-05-04 21:39 | Report Abuse

The share price of the mother will be lower after warrant issuance, not higher.

I suppose the fair thing to do is for the CEO to pay down or off its debt using its big cash pile to save interest expense.

Then, the next wise thing to do is to compare earning yields (Profit after tax/market capitalisation) against required rate of return on equity of say 10%. If the former is higher than the latter, no shareholder will complain too much for not receiving good dividend or share buyback because the company is generating a higher return than the shareholders expect. In that case, shareholders should buy more of the shares till earnings yield equal the average required rate of return on equity, thereby pushing up the share price to its fair value.

Posted by sunztzhe > 2014-05-04 22:16 | Report Abuse

There is no absurdity in comparing two different companies in different business industries. All listed companies must report Revenue, EBIT, Net Profit, Cashflow etc. It all boils down to numbers. Each company has its own reported numbers.

The issue at hand is to scan the business environment to identify listed companies in different biz industries that can possibly deliver good investment returns over one's investment capital.

Having identified the companies, the investor will eventually decide on which company to invest in now that will deliver higher EPS growth, growing EPS value and consequently deliver higher share price value in the future.

That is the key decision for any investor to make as if one makes a not so good decision on any specific company to invest in there will be a real opportunity cost on ones invested capital over time.

So the bottom line for any investor is "What will be the return on my invested capital? What is the riskiness of my investment in a particular company?"

Posted by Tommylim > 2014-05-04 22:21 | Report Abuse

Feedback from my friends anomalously suggested , MFCB should instead entice investors using special dividend. Appreciate your views on this. Thank you.

Posted by kk123 > 2014-05-04 22:47 | Report Abuse

Do u think mfcb have enough capital to give special dividend ?
You shld probably check longer back in history for those newbies
Or ask those old birds to share with u what they think of mfcb
During last crisis mfcb nearly folded
They still trying to repay their debts now
Now all a sudden some ppl who is "new" label it as a gem
The reason why the share did not go up is a perception thing
Last time many retailers get caught by this counter - till now they don't want to touch it
Already the construction sector is slowing down
Buying into mfcb big is asking for trouble :)
Unless u plan to play contra - once it goes up quickly throw , that's the strategy for this type of risky counter

Posted by Tommylim > 2014-05-04 23:02 | Report Abuse

Unfortunately CKInvest, not many parents are aware what career they children should pursue. I am fortunate enough as my father knew oil and gas will guarantee me promising future. Unlike most of my peers, I already enjoy high salary upon completion of my studies. Parents play central role in shaping the future of their children. Thank you.

Posted by Koon Yew Yin > 2014-05-04 23:43 | Report Abuse

Why are you all discussing about MFCB which is not mentioned in my original article? Just because someone said that he saw my name on the 30 largest shareholders list, you all are interested in MFCB. I have my reasons for buying it and I am not asking you to buy it.

Posted by lmenwe > 2014-05-05 00:08 | Report Abuse

Because you are recommending something good for the punters not for long term genuine shareholders that's why so many posts criticizing your recommendation!

Posted by Money156 > 2014-05-05 00:17 | Report Abuse

U mean mfcb can contra? :)

Posted by lmenwe > 2014-05-05 00:25 | Report Abuse

The article was written to teach others how to be successful. However his recommendation on MFCB management only serve to punt the share price rather than unlocking the value of the company or bring any genuine benefit for the shareholders. If free warrant can unlock a company's value why don't the activist shareholders e.g. Carl Icahn fight for it? Instead of free warrants they are always fighting for higher dividend and force the company to repurchase their shares! No comment on the future prospect on this counter.

Posted by sunztzhe > 2014-05-05 07:58 | Report Abuse

kcchongnz: As you are an investor with MFCB, would you concur with the prevailing perception that despite all the positives, MFCB controlling shareholders and management can certainly deliver much more than what it had delivered over the past 5 years?

Do the controlling shareholders who are drivers of the company do really possess the achievement oriented and value creation mind-set to drive up the EPS value of MFCB over the next 5 years?

Posted by jennylim > 2014-05-05 08:08 | Report Abuse

Stock mkt is a beauty contest, anything that can make it look better in the eyes of public, is good. No nid so many academic arguement.

Posted by Fung Chee Fui > 2014-05-05 09:07 | Report Abuse

Mr Koon, thank you for your kind sharing. Your article is simple but yet not everyone could do it on absolute basis (me included).

To add on, despite that many successful tycoons don't possess any tertiary education, their IQ is still -- by far -- better than many PhD graduates (see Li Ka-Shing). Willingness to learn AFTER graduated from school is crucial to anyone to wanted to succeed.

Having said that, we don't need to know everything in order to be successful. Warren Buffett once said "If you are in the investment business and have an IQ of 150, sell 30 points to someone else. You do have to have an emotional stability and an inner peace about your decisions." The Long Term Capital Management LP's fall was a great story on "EQ is far more important than IQ".

MQ and BQ are something new to me. Thanks again Mr Koon, I've learned new things today. :)

Posted by fusing79 > 2014-05-05 11:35 | Report Abuse

there are so many fundamental points discuss on MFCB, any technical chart expert here can share your opinion on MFCB? Hope to learn more about this couter. TQ !

Posted by mmtalents > 2014-05-05 11:49 | Report Abuse

if you are good.. you can make big bucks in any field or industry, if you are no good, even you are appointed as a CEO for a best co. in the world, you will crashed it.. leaders are to be self-made and not appointed like our country's scenario

Posted by mmtalents > 2014-05-05 11:52 | Report Abuse

I see my friend made his 1st million few years after taking over his parents' grocery store business by venture it in to distribution for essential items...

Posted by sunztzhe > 2014-05-05 12:02 | Report Abuse

Capitalism in its true sense requires an intensive ,free, competitive business environment to harness the best and fittest to surface and to provide leadership, provide value goods and services for the benefit of the consumers at large. Does capitalism truly exist in today's globalized business environment?

Posted by mmtalents > 2014-05-05 12:11 | Report Abuse

depends if you see it from American or Malaysian perspective. .LOL