Posted by NOBY > 2014-05-27 12:04 | Report Abuse

I like the title.. almost fell of my chair when I saw the author name :)

Posted by stockoperator > 2014-05-27 12:14 | Report Abuse

Well This is KC that we know.

Posted by RickyC > 2014-05-27 12:14 | Report Abuse

hi kcchongz, can you paste some useful link on clear explanation of ROIC here? thank you

Posted by stockoperator > 2014-05-27 12:24 | Report Abuse

If everybody keeps throwing everything that they don't want, I really wonder if the market will go Bust one day. Well, market just keeps everything that everybody throws and keeps quiet.

Posted by miketyu > 2014-05-27 12:48 | Report Abuse

I hope ppl sell more so that i can collect at the price that i have missed few months ago.

Posted by Iching88 > 2014-05-27 12:58 | Report Abuse

i prefer it to drop though...as i want to enter. : )

Posted by yfchong > 2014-05-27 13:05 | Report Abuse

It won't drop teruk teruk., if it happens then load up......
Cheers.

Posted by Bs1688 > 2014-05-27 14:03 | Report Abuse

A misleading title , should be buy , buy , buy!

Posted by Tang Michael > 2014-05-27 14:53 | Report Abuse

Mr kcchong......two months ago I wrote that kum. Fima sales is sluggish.... you gsve me 10 years profit of past years......what for......we see the future and the price coming back to around two.......it is coming....no need for crsytal ball.....

Posted by kcchongnz > 2014-05-27 15:21 | Report Abuse

Posted by Tang Michael > May 27, 2014 02:53 PM | Report Abuse
Mr kcchong......two months ago I wrote that kum. Fima sales is sluggish.... you gsve me 10 years profit of past years......what for......we see the future and the price coming back to around two.......it is coming....no need for crsytal ball.....

Just copy and paste it here for record purpose.

"we see the future and the price coming back to around two"

Btw, I have never argued with you about its price movement in the future. I have no your kind of ability to see future share prices.

I welcome you to discuss about fundamentals, whether past or future of Kfima, not guessing about future share price of Kfima, or any other stock.

Posted by stockoperator > 2014-05-27 16:49 | Report Abuse

To be fair the result is over whether good or bad. Going forward we shall see if company has capability to turnaround for current year.

Posted by Kevin Tan > 2014-05-27 16:53 | Report Abuse

they are selling like this company is making lossess, but actually they make profit but just lower...

Posted by stockoperator > 2014-05-27 17:00 | Report Abuse

well we accept price drops if earning is not up to expectation. Moving forward the earning Base is low Now.

Posted by Intelligent Investor > 2014-05-27 20:41 | Report Abuse

Mr Chong, I like your blog title.

Please sell sell sell. I want to collect KFIMA too.

Posted by kcchongnz > 2014-05-28 06:09 | Report Abuse

“Here a confession is in order: In my early days I, too, rejoiced when the market rose. Then I read Chapter Eight of Ben Graham’s The Intelligent Investor, the chapter dealing with how investors should view fluctuations in stock prices. Immediately the scales fell from my eyes, and low prices became my friend. Picking up that book was one of the luckiest moments in my life.” Warren Buffet

Posted by stockoperator > 2014-05-28 13:34 | Report Abuse

Hi KC, i have the chance to look again your FCF model calculation on Kfima again based on above link.

1) It is noted that you use paid-up capital as your base and also included cash on hand of RM272m as your cash flow calculation but leaving out the retained earning whereas the retained earning and cash on hand is interlinked. If you leave out retained earning then your calculation is inflated, right?

2) IF you want to take in cash on hand then you have to take in the whole capital structure as your base that includes retained earnings right?

3) Probably we should leave out cash on hand and just take in share capital?

4) Retained Earning could be swapped for paid-up capital once Bonus declared and share price adjusted accordingly. But what we usually notice is that Share price will jump before and after the Bonus declared and issued to go back to prior level. Does it explain that we should take in the whole capital structure as our calculation that is shareholder funds?

Just want to clarify.

Posted by kcchongnz > 2014-05-28 13:51 | Report Abuse

stockoperator,
Sorry, not sure of your question.
The intrinsic value is derived from discounting all future expected FCF to the present. Add back non-operating cash, other investments, less minority interest, less debt, and what is left is for common shareholders. Then divide by the number of shares outstanding, and you get intrinsic value per share.

Posted by stockoperator > 2014-05-28 13:51 | Report Abuse

if i am right on the above then the undervaluation of Fima/Kfima is more towards liquidity issue, right? It is high time Now as Retained Earning especially on Fima is about 5x the issue capital. Do we have any accounting standards governing this issue?

Posted by Bateman > 2014-05-29 10:40 | Report Abuse

I think it is a mistake to invest on Kfima based on its supposedly attractive valuation. If you do study the long term financial performance of the company, you will notice that Kfima is a poorly managed one. First, the financial performance of Kfima is solely dependent on the performance of its plantation division. If you look further into the numbers behind, you will find that the company has constantly producing returns that are below the industrial average from its plantation division time to time. So, what does this tell me? It tells me that Kfima is a below average and inefficient plantation player among its industry peers.

No doubt Kfima is producing good cash flow year by year, especially from its stable printing division. I feel the management has not done enough to reward its shareholders with its cash hoard. Hence, you see the low valuation in its market value. The share price of Kfima will track the long term performance of CPO prices. As long as we see increased liquidity into the plantation sector from the broader market, Kfima share price will go up. In my opinion, Kfima will most likely realized its intrinsic value through privatization.

Posted by stockraider > 2014-05-29 10:46 | Report Abuse

That's the reason why kfima value at Pe 11x compare to bluechips like KLK at pe 22x loh.....!!

When u invest....u must buy....below intrinsic value & u sell it is above intrinsic value mah....!!
Kfima....is now at undervalue category loh...!!

Posted by kcchongnz > 2014-05-29 13:54 | Report Abuse

I would like to discuss about this post here. My response is in capital letters to differentiate that of the commentator.

Posted by Bateman > May 29, 2014 10:40 AM | Report Abuse

I think it is a mistake to invest on Kfima based on its supposedly attractive valuation. If you do study the long term financial performance of the company, you will notice that Kfima is a poorly managed one. First, the financial performance of Kfima is solely dependent on the performance of its plantation division. If you look further into the numbers behind, you will find that the company has constantly producing returns that are below the industrial average from its plantation division time to time. So, what does this tell me? It tells me that Kfima is a below average and inefficient plantation player among its industry peers.

ARE YOU SURE THE FINANCIAL PERFORMANCE OF KFIMA IS "SOLELY" DEPENDENT ON PLANTATION?

1) HOW MUCH IS THE REVENUE AND PROFIT OF PLANTATION MADE UP OF?
2) CAN YOU SUBSTANTIATE "THAT THE COMPANY HAS CONSTANTLY PRODUCING RETURNS THAT ARE BELOW THE INDUSTRY AVERAGE"?
3) WHAT IS YOUR COMPUTATION OF THE RETURN OF EQUITY OR RETURN OF INVESTED CAPITAL TO WARRANT YOUR STATEMENT THAT KFIMA IS A POORLY MANAGED COMPANY?
4)WHAT IS YOUR BENCHMARK OF A POORLY MANAGED COMPANY? WHY DO YOU CONSIDER A COMPANY, AT AN ADJUSTED PRICE OF 66 SEN 5 YEARS AGO, HAS PRODUCED A TOTAL GROWTH IN SHAREHOLDER VALUE OF RM1.38, 36 SEN IN DIVIDEND, AND RM1.02 IN GROWTH IN BOOK VALUE, A POORLY MANAGED COMPANY?

No doubt Kfima is producing good cash flow year by year, especially from its stable printing division. I feel the management has not done enough to reward its shareholders with its cash hoard. Hence, you see the low valuation in its market value. The share price of Kfima will track the long term performance of CPO prices. As long as we see increased liquidity into the plantation sector from the broader market, Kfima share price will go up. In my opinion, Kfima will most likely realized its intrinsic value through privatization

NOTE THE "CASH HOARD" YOU ARE TALKING ABOUT IS NOT WITH KFIMA BUT WITH FIMA CORP. IT IS ONLY FIMA CORP'S FINANCIAL STATEMENT CONSOLIDATED IN KFIMA.

BUT A CONSISTENT 8 SEN DIVIDEND VERY POOR FOR THE LAST THREE YEARS?

CONSISTENTLY GROWING IN BOOK VALUE IS SUCH A MANNER NOT DOING ANYTHING FOR THE SHAREHOLDERS? THEN WHAT IS?

IF YOU THINK OF RIDING ON KFIMA ON CPO PRICE, I THINK YOU ARE NOT RIDING ON THE RIGHT HORSE. PLANTATION ONLY MADE UP ABOUT 30% OF REVENUE AND PROFIT OF KFIMA.

I DON'T KNOW WHAT IS YOUR HORIZON OF INVESTMENT? ONE WEEK? ONE MONTH? ONE YEAR? IF YOU HAVE BOUGHT KFIMA 5 YEARS AGO LE A LONG-TERM INVESTOR AT AN ADJUSTED PRICE OF 66 SEN THEN, AT RM2.17 AT THIS MORNING CLOSE, YOUR TOTAL RETURN IS 230%, OR A COMPOUNDED ANNUAL GROWTH RATE OF 27% FOR 5 YEARS. WHAT IS THE KLSE RETURN? 15%? SO WHAT IS THE FUSS?

Posted by stockoperator > 2014-05-29 15:30 | Report Abuse

Isolated case of Fiji food division is still manageable.

Posted by stockoperator > 2014-05-29 15:31 | Report Abuse

Look at Thailand flood years ago. Vietnam Riot Now. It happens.

Posted by stockoperator > 2014-05-29 16:06 | Report Abuse

Management cant manage the panic selling, nobody can control the crowd behavior. Management can only manage damage control over lost-making division, probably then you can take advantage of crowd behavior.

IN fact, Fima share price as at Now drop more than Kfima while its Qtr earning is about 20% better yoy, so should i keep reasoning myself for that...?

Posted by stockoperator > 2014-05-29 16:21 | Report Abuse

As at price Now Kfima is having about 10% positive return for this year, OR annualized 20%.

If we are Not happy Just take profit and walk away.