Posted by Icon8888 > 2015-01-19 18:54 | Report Abuse

Like

I have this stock

Posted by Alvinkua > 2015-01-19 19:12 | Report Abuse

I have this stock too

Posted by Steve Ong Wei Siang > 2015-01-19 19:18 | Report Abuse

cipapo, why u say tipu? I am new to writing research, if you spotted any area of my research is wrong, over or under estimate, bias or anything else. Feel free to comment. It's not the best, just hope my research can be better and better.

Posted by Ooi Teik Bee > 2015-01-19 19:28 | Report Abuse

A very good report. Good work done !
Thank you.

Posted by paperplane > 2015-01-19 19:28 | Report Abuse

What is your TP it can goes?

Posted by Ven Felix > 2015-01-19 19:40 | Report Abuse

Wont go too far from $1.50-1.60 , except there are corporate action that can lead to revaluation of current price or new catalyst exploited.

Posted by CCCL > 2015-01-19 20:07 | Report Abuse

Fantastic!!!

Posted by CCCL > 2015-01-19 20:21 | Report Abuse

Have bought since 3Q 2012. 1 share split & 1 bonus issue. What next coming...Huat aar...

Posted by ctrl0alt0del > 2015-01-19 20:30 | Report Abuse

Steve, thx for sharing the infos & will keep in my radar screen.

Posted by chonghai > 2015-01-19 20:48 | Report Abuse

Steve, nice work. If you pay attention to recent announcement from Prolexus, Prolexus could be on expansion mode again.

http://www.bursamalaysia.com/market/listed-companies/company-announcements/1792373
http://www.bursamalaysia.com/market/listed-companies/company-announcements/1842557
If these are really signs of expansion, we can expect bountiful harvest three years from now!

Posted by kaonryou > 2015-01-19 20:53 | Report Abuse

A very detailed analysis - maybe you can discuss the impact of TPPA? ESOS and low dividend yield are issues for me. Its closest peer Magni-Tech also trades at similar TTM PER with 4.6% yield, although the management was not investor friendly. Prefer Luen Thai (311 HK) for its 3-4x forward PER and ~8% yield.

Posted by klsetitan > 2015-01-20 00:58 | Report Abuse

Well done!

Posted by oopstikus > 2015-01-20 01:01 | Report Abuse

thank u for sharing, what's next ?

Posted by JT Yeo > 2015-01-20 06:41 | Report Abuse

Just my opinion, Ive gone through Magni and Prlexus last January but end up giving both a miss. From quantitative point of view, both companies would be "B+". When it comes to corporate governance and disclosure, Prlexus would be a "D" and Magni an "E". Prlexus fair better in management discussion and analysis but most information are general numbers like how much revenue/earnings changes, nothing about the business. Magni even worse, statement seems to be copy and paste every year which is less than 3 sentences.

As for the TP, I think assigning the optimistic scenario PE of 10 is abit too optimistic given that historical record has shown that Prlexus has always been valued at PE6-7 level, a PE of 8 in one year would be realistic, a 10 would require a huge shift in investors' expectation towards the company. Although in saying that, doesn't mean it is not undervalued.

If consider PE of 10 as the fair price to pay for it's NTA. And consider that the ROE of 20-22% is sustainable, NTA 0.86 x ROE 20-22 = RM1.70-1.90 would be a fair price. Returns come from = PE Expansion + Assets/Earning appreciation + Dividend increase. The hardest of all 3 to estimate is PE expansion, although earnings estimate are already a challenge, thats why even analysts misses their estimates, and consider that we human is always over confident in our judgement, a 15% discount to your own TP make sense. Last thing, considering that during the bullish cycle of 2009-2013, Prlexus PE barely changed considered it's solid growth record over the years, so what is the probability that the PE will notch up by 3 in 2015, and if your 50% growth estimate is accurate?

Lastly, the reason i gave both a miss because I have no idea about their competitive advantage, although ROE number does indicate there is one. How does Nike choose manufacturers, how long are their contracts, how/who are the competitions/tors? Is it on price, quality? etc. And of course because I dont have these information, my margin of safety has to increase to offset those unknown risk. Thus I give them a pass.

Posted by Steve Ong Wei Siang > 2015-01-20 10:34 | Report Abuse

JT Yeo, salute, appreciate your comment. You are right, PE estimation is more like a guestwork, especially smallcap company with a more short-term investor than institution investor, PE can fluctuate in a large range. Perhaps i should not put a fixed PE to the stock (and put myself on the chopping table), maybe a range of possible PE or just stay away from setting a TP. I think Prolexus is a good investment though not informative, but one should not overweight too much in their portfolio as their 2 major customers contributed to over 80% of sales, which can be very dangerous if anything happen from this 2 customers.

Posted by Steve Ong Wei Siang > 2015-01-21 09:56 | Report Abuse

Ven Felix: 10x times forward P/E is quite high considering the stock hardly touched 10x TTM P/E before. Will relook into the historical P/E and find any catalyst to review my valuation.

CCCL: The next quarter report should be explosive. With 10% USD/MYR appreciation, there could possibly be a RM2-3m of forex gain with their USD asset exposure. Gross Margin could possibly gained over 5%. Is an overall big pushed to the PAT. But trader have to be careful, Smart Money may take this opportunity to push the price high before the earning announcement to stimulate retail trader's buying. Then they can sell-on-news after the good news that lead even more retail buying.

Chonghai: thanks for bringing out. Maybe it's still on seed-stage, but will look into it.

kaonryou: TPPA? A new perspective for me, will review. The company like to keep cash. They prefer invest in vacant land rather than give it to the shareholders. Are they very ambitious because they think the cash can be invested more efficiently with them? Or are they simply another chinaman company who like to hoard all the wealth?

Posted by CCCL > 2015-01-21 10:18 | Report Abuse

Hi Steve, Thanks alot. :).

Posted by kklow77 > 2015-02-24 00:23 | Report Abuse

1st time visit here n very good comment n sharing... Thx steve

Posted by kklow77 > 2015-02-24 00:24 | Report Abuse

Hi Steve, do u have any opinion or analysis for carepls group

Posted by Steve Ong Wei Siang > 2015-03-01 23:59 | Report Abuse

kklow77. You are welcome. Carepls seems interesting due to its capacity building story. But there are a lot of capacity coming from the big competitors as well. The industry is very competitive now with price war happening, Supermax is doing badly. But the recent financial seems doing well for Carepls. But to gauge the future better, a deep analysis is still necessary. I haven't done that, so can't comment too much. It's in a situation of either very good (if margin & market share can sustain) or bad (if Avg Selling Price is low like Q3 happen again).

Posted by GenghisHoe > 2015-03-18 23:59 | Report Abuse

Hi JT Yeo and Steve Ong Wei Siang,

May I make friend with you guys? If you're willing to, please kindly drop me an email at bosx8989@gmail.com for further connection.

Nice to meet you all.