Posted by Probability > 2016-01-10 17:25 | Report Abuse

again...another 'negative' persuader like Robertl!

You can say about any stocks you want...but don't mention FLBHD here.
As then u simply don't understand the business..

Posted by Probability > 2016-01-10 17:27 | Report Abuse

Isn't it ironic..people come with such blogs when USD - RM is exploding....

Posted by lmao > 2016-01-10 17:45 | Report Abuse

How about the 40% of stake from vietnam fully owned by chinwel and yet to show in Q result??

Posted by letitgoletitgo > 2016-01-10 17:59 | Report Abuse

Probability: Please read carefully my view. It not only applied to Chinwel, i also applied to alot of company such as geshen, sam, flbhd. Use your rationality to think about this.

Posted by letitgoletitgo > 2016-01-10 18:03 | Report Abuse

lmao: This quarter result already included the 40% of stake from vietnam. But the result profit still did not come

Posted by RosmahMansur > 2016-01-10 18:17 | Report Abuse

If u r that good, pls tell this to KYY and let him evaluate your stupidity.

Posted by YOLOOOO > 2016-01-10 18:36 | Report Abuse

So you are saying most of the export-oriented stocks that are benefited from the strengthening of USD against myr should not be bought as the FOREX GAIN of the stock should be excluded and should not be calculated as the profit margin. But we do know that US is starting to increase the interest rate since last year and I expect the trend of the strengthening of USD against myr to continue at least 2 years from now onward. So what is the problem with the forex gain?

Posted by Probability > 2016-01-10 18:40 | Report Abuse

For FLBHD , I suggest you evaluate the latest quarter ending 30-Sept with the average of 2 quarters ending 30 June and 31 March (due to the fact of accounting reporting resulting from shipment delay for qtr ending 31 March).

You will then see that the Gross Margin had indeed improved (from the way you evaluate minor changes in figures) and that the Revenue had improved by 40%. The EPS were also obtained with the ‘Other Income’ contribution reducing by 50% compared to the average other income reported on QTR 30 June & QTR 31 March.

To me …this then means……FLBHD had yet to fully reflect the gains from USD-RM exchange. If that happens…you certainly cannot get it for the current price. I think the Dividend paid is a good enough hint….

Posted by RosmahMansur > 2016-01-10 18:49 | Report Abuse

Pls dont talk with fools.

Posted by JT Yeo > 2016-01-10 18:49 | Report Abuse

I think it is a fact - anyone that are involve in export theme play is going to find themselves naked, especially the ones that came into the party late.

I own FLBHD. From my point of view, I bought it at $1.40. That price was deem undervalued purely because of the stability of the business and the cash pile. I never bought it for currency theme purpose. But indeed currency is the catalyst that pushes the price to current level. And no doubt when the tide goes out, FLBHD will get dragged along. But I am fully confident my buy price would not suffer any permanent loss of capital. And the dividend yield of 15%, too good for me until I find something better.

In saying that, I think people that enter at current price does not have margin of safety at all. The risk/return for current price level is starkly different from $1.40

Posted by letitgoletitgo > 2016-01-10 18:52 | Report Abuse

YOLOOOO: not all, but some of the export company. What I wan to inform is that please do not consider realised and unrealised gain in the next quarter result in the calculation of profit margin. U will be surprise when this amount gone from your total profit.

We are using average currency rate in calculating the revenue and cost of sales.

Realised and unrealised gain is only one off gain. Keep in mind that the operation in vietnam, profit margin will not improved. Why? All of the labour cost, rental, electricity, machine using Vietnam Dong to calculate.

So why is the increase in 40% stake will increase the profit for chinwel?

You can do analysis over the year. Chinwel's profit margin did not increased throughout the year. It remain stable even the profit from Vietnam calculated although the currency rate improved.

Posted by letitgoletitgo > 2016-01-10 18:54 | Report Abuse

Probability: For flbhd, I will do another analysis on it. For now please focus on chinwel.

RosmahMansur: Everyone can make mistake even KYY. This thread purely for discussion. If you dont agree please stated your point.

Posted by Koon Bee > 2016-01-10 18:57 | Report Abuse

Letitgoletitgo is paperplane sifu??

Posted by letitgoletitgo > 2016-01-10 18:57 | Report Abuse

Rosmahmansur: U know which company really benefit from currency gain? Best example is comcorp. Profit margin have improved and minimum amount of realised and unrealised gain

Posted by JT Yeo > 2016-01-10 18:59 | Report Abuse

In the truest sense of calculating the value of a business - Forex gain does not changes the value of a business. Yes forex gain does increase FCF which in turn affect the value, but in the long term, what ultimately counts are the competitive advantage of a business.

And also remember forex changes has a multiplier effect on everything on income statement from revenue to gross profit margin to profit and profit margin. So FLBHD can be selling the exact volume of woods to US compare to previous several quarters, but revenue, profit and margins can all improved because of currency effect.

Posted by boy33 > 2016-01-10 19:02 | Report Abuse

Letitgo, how about Luxchem?

Luxchem net profit margin is getting higher with lower oil price and forex gain.

2015-09-30
Revenue=169M
Net profit=12.8M
Net profit margin= 7.5%

2014-09-30
Revenue=159M
Net profit=5.9M
Net profit margin= 3.7%

Significant increase in net profit margin from 3.7% to 7.5%
( 100% increase)

Posted by yktay1 > 2016-01-10 19:02 | Report Abuse

letitgo's observation is right on chinwel. No arguing that.

Posted by letitgoletitgo > 2016-01-10 19:08 | Report Abuse

yktay1: thank you for your understanding. Hope i bring some info to the i3vestor

Posted by ckwan11d > 2016-01-10 19:08 | Report Abuse

I always have this in my mind. Is there or are there any qualified accountants who could explain to the investors, in general, the very basic accounting book entries regarding to 'realized gain/loss' and 'unrealized gain/loss' on foreign exchange.

We just can't concentrate on 'revenue' only. We should be mindful about 'interest-bearing loans and borrowings', where they are denominated in foreign currencies, and 'capital expenditure' where PPE are acquired from overseas.

Who would be kind enough to write a blog regarding these topics.

Many would have a better understanding then.

Thank you.

Posted by lzz88 > 2016-01-10 19:10 | Report Abuse

One more written similar to robertl

Posted by letitgoletitgo > 2016-01-10 19:10 | Report Abuse

ckwan11d: Kindly refer to my article. I explained it already

Posted by Probability > 2016-01-10 19:12 | Report Abuse

Wait a minute...if the USD-RM effects are permanent...and that the consumer are all Americans...and that the raw material are all produced by Malaysians...the business quality no change meh?

And...how if the other way round....company incurring big losses due to exchange rate...still good to hold?

On what basis? Because the exchange rate will reverse? Or the consumer's buying power will change?

Posted by letitgoletitgo > 2016-01-10 19:16 | Report Abuse

Probability: If your analysis the past trend for chinwel, you will know that chinwel priced their product based on certain percentage of profit margin. This applied for certain company only. They do like that due to:

1) High competition from others competitors. If they priced their product lower, they are able to compete with others as they maintain their quantity or even increase their quantity.

2) Cost of sales denominated in USD. If most of their cost calculated in USD, how can their profit margin increased?

Posted by ckwan11d > 2016-01-10 19:17 | Report Abuse

Thank you letitgoletitgo. I need time to go through it, again.

Posted by Probability > 2016-01-10 19:19 | Report Abuse

letitgo...sorry I am not talking about Chinwell - did not study them.

Posted by lmao > 2016-01-10 19:23 | Report Abuse

Got ppl look good also got ppl look bad...time will tell..

Posted by letitgoletitgo > 2016-01-10 19:23 | Report Abuse

Probability: I will discuss with you in the next article. I need time to find all research on it.

For your information, forex exchange gain effect differences from company to company. Some company will have huge benefit from gain on forex. Some company just a temporary gain. Best example for temporary gain is Chinwel.

Posted by YOLOOOO > 2016-01-10 19:28 | Report Abuse

letitgoletitgo, I am still dont understand, based on what I read in the 2015 annual report (page 84) which is a table that showing the sensitivity analysis for foreign currency risk. It is showing that the profit of the company will be increased when there is a strengthening of USD against myr. It clearly shows that chinwel will be benefited

Posted by alone > 2016-01-10 19:29 | Report Abuse

我觉得公司的篱芭会成为畅销品～难民潮在西欧国家，以后在边界可能需要大量的篱芭～

Posted by letitgoletitgo > 2016-01-10 19:41 | Report Abuse

Alone: 你可以看得出chinwel的销量增加数量，但是利润没有增加。有什么用？股价会起吗？

Posted by letitgoletitgo > 2016-01-10 19:44 | Report Abuse

YOLOOOO: You know how is the figure come out?

USD net exposure : RM20.5mil
Eur net exposure : RM19.9mil
AUD net exposure : RM246.44mil
SGD met exposure : RM23,379mil

Total : RM40.758 million

MYR 10% changes (USD) : RM2.05mil
MYR 10% changes (Eur) : RM1.99mil
MYR 10% changes (AUD) : RM0.2464mil
MYR 10% changes (SGD) : RM0.2638mil

Total : RM4.0758 million

The calculation count like this.

The impact only for the Dec 2014 balance sheet figure, it does not explained the impact on revenue and cost of sales.

Posted by Desa20201956 > 2016-01-10 19:54 | Report Abuse

"27,000,000 ordinary shares of RM0.50 each (“Chin Well Shares”) were issued pursuant to
the general mandate granted at the last AGM of the Company and the aforesaid shares was issued in conjunction
with the acquisition of the entire equity interest in Asia Angel Holdings Limited for a total purchase consideration of
RM47.46 million, fully satisfied via a combination of issuance and allotment of 27.0 million Chin Well Shares and the
balance via cash amounting to RM8.31 million."


I also a shareholder. But I am very positive with the acquisition of Asia Angel, not negative like you.

"Firstly, the Group successfully acquired the balance of 40%
interest in Chin Well Fasteners (Vietnam) Co. Ltd (CW Vietnam) by purchasing the entire share capital of Asia Angel Holdings
Limited (Asia Angel), which owns the 40% stake. This move enables the Group to fully-consolidate the earnings from the
high-growth CW Vietnam, which serves the Do-It-Yourself (DIY) fastener segment.
Secondly, the Group made a strategic decision to venture into the production of downstream wire products so as to expand
its product range and target new local and foreign customers.
We believe that these developments have not only benefitted the Group in the financial year under review, but have also
set us on a positive path going forward."

Lets look at the Minority Interest figure in the P&L about $18 million.
27 million new CW shares for $18 million....an earnings per new share at 67sen....where to find?
If 2015, we have Geshen,: 2016, we have Chinwell.......enough said.

Posted by Icon8888 > 2016-01-10 19:58 | Report Abuse

Dear Desa the wise man. So u r a shareholder of Chin Well. I am very familiar with Chin Well, having written 3 articles so far. I can easily jump in now to deliver some nasty comments (based on solid arguments). But I wouldn't want to do that. Unlike you, I want to be objective and professional

Posted by Desa20201956 > 2016-01-10 19:58 | Report Abuse

hi, anyone expanding into Vietnam, the fastest growing economy in the world will be greatly rewarded, mark my words.

Vietnam wages at one third of China's.............and does anyone know that average wages in Quangzhou is already far above that of Malaysia. ( thanks to the depreciation of the ringgit)..............gentlemen...go to Vietnam.

Posted by letitgoletitgo > 2016-01-10 20:01 | Report Abuse

Desa: keep in mind that the new shares of RM27mil will diluted the earning per shares for Chinwel.

Also, where is the minority interest in P&L of 18mil? Please show me. Thanks.

Posted by Desa20201956 > 2016-01-10 20:02 | Report Abuse

for forex issues................I like to refer readers to this that I wrote a few days ago..............

"
Tell you what.

All export counters had a good run based on earnings growth of Sept Q. A look at the US$ to ringgit chart will tell you that Sept Q only got one month above 4 ringgit, however, the December quarter got all 3 months above 4 ringgit.

You see, revenue in ringgit terms is based on the average of the 3 month sales. With a full 3 months of of ringgit above 4, the earnings of December ending quarter of the exporters is going to explode upwards compared to the Sept ending quarter .

The next quarter results ending Dec is going to put the Sept ending earnings to shame.

You want to miss the fun just because of world news ?

so, run away or stick around?

big winners make big decisions. "

aim to win big....you should want to be a big winner, not an ikan bilis winner

Posted by Desa20201956 > 2016-01-10 20:04 | Report Abuse

can refer to this :

http://klse.i3investor.com/servlets/forum/902425637.jsp

Posted by letitgoletitgo > 2016-01-10 20:06 | Report Abuse

Desa: One more thing.

http://www.vietnam-briefing.com/news/vietnam-minimum-wages-increase.html/

Kindly refer to the news below. The minimum wages for Vietnam have been increased by 12.4percent during 2016. Why u still believe that the profit of Chinwel will improved?

Posted by letitgoletitgo > 2016-01-10 20:09 | Report Abuse

Desa20201956: I understand what you talking about. But do you understand what is unrealised and realised gain on forex?

Appreciation in ringgit does not help the factory in Vietnam earn more money. Unless it's full operation in Malaysia. Currently vietnam having increase in 12.4percent in minimum wages. Plus the profit margin did not improved for Chinwel. Unless the price goes up. But will Chinwel do this?

Last thing. Please show me the 18mil minority interest that you mention just now. Thanks

Posted by fayeTan > 2016-01-10 20:10 | Report Abuse

Letitgo, in such case one should look at core net profit... Which means exclude out all forex gain or loss... And all other one off items..

Posted by fattycat > 2016-01-10 20:10 | Report Abuse

I m a bit lucky bought chinwell at price rm1.58 after its released last quarter result n i bought for the reason of their 40% div payout policy :)
Thanks for ur sharing letitgoletitgo ^^

Posted by Icon8888 > 2016-01-10 20:10 | Report Abuse

Dear Desa, it is good that you bring up this issue agin. I am actually waiting for this opportunity to query you - I thought you were critical about Comcorp's margin expansion from the weak Ringgit ? You said that the benefit will disappear once the contracts are renegotiated every few months (and they will go bankrupt) ?

In my opinion, that is utterly BS, as in real life, the gain will be shared between the manufacturers and the buyers, not entirely taken away from the manufacturers.

But that is beyond the point, what upset me was the inconsistency - your export companies will be rewarded by margin expansion while my exporters will be stripped of that benefit the next contract period. Which is which ?

Please don't preach to me about balanced view. Looked to me more like playing politics and malicious attack.

I look forward to your response

Posted by Desa20201956 > Jan 10, 2016 08:02 PM | Report Abuse

for forex issues................I like to refer readers to this that I wrote a few days ago..............

"
Tell you what.

All export counters had a good run based on earnings growth of Sept Q. A look at the US$ to ringgit chart will tell you that Sept Q only got one month above 4 ringgit, however, the December quarter got all 3 months above 4 ringgit.

You see, revenue in ringgit terms is based on the average of the 3 month sales. With a full 3 months of of ringgit above 4, the earnings of December ending quarter of the exporters is going to explode upwards compared to the Sept ending quarter .

The next quarter results ending Dec is going to put the Sept ending earnings to shame.

You want to miss the fun just because of world news ?

so, run away or stick around?

big winners make big decisions. "

aim to win big....you should want to be a big winner, not an ikan bilis winner

Posted by Desa20201956 > 2016-01-10 20:12 | Report Abuse

mr let itgo.....

forex gains and losses arises from booking difference. The rates assets and liabilities were fist booked and the realised values.

That is not the real story.....
The real story is in margin expansions of exporters as Ringgit suddenly plunged and as the become more competitive.

and PL for Dec Quarter will put the Sept Quarter to shame.

Posted by Icon8888 > 2016-01-10 20:14 | Report Abuse

Mr Desa, margin expansion ? I thought you said the benefit will disappear the next quarter ?

So your chin well and scientex can benefit indefinitely, while my Comcorp can only benefit one quarter ?

Posted by letitgoletitgo > 2016-01-10 20:15 | Report Abuse

fayetan: For chinwel case, yes please excluded the forex gain. You look at the past trend. From RM3.3 to RM3.7. Does the core profit improved for Chinwel? The answer is NO.

Why the profit improved significantly for Chinwel for current quarter? Because when the payment made by client, exchange rate suddenly increase. Hence it bring more profit to the company.

The pricing method determine by Chinwel is based on certain percentage of profit margin. Hence i predicted this will be a bad quarter for Chinwel as unrealised and realised loss on forex exchange will incurred for Chinwel for the quarter 31 Dec 2015. U will be surprise on it. (Closing rate for Sep 30 :RM4.40. closing rate for Dec 31: RM4.28)

Posted by letitgoletitgo > 2016-01-10 20:20 | Report Abuse

Icon8888：I agreed with your shares, comcorp. In my opinion, comcorp's profit margin will not only lasted for one quarter as most of the profit did not derivatives from realised and unrealised gain. It come from core profit

Posted by fayeTan > 2016-01-10 20:22 | Report Abuse

To clear once and for all... Need to reconcile the reported net profit and core net profit for the past eight quarters or 2 years. Then publish again with yoy comparison for the core net profit... Then we can see the trend

Posted by Desa20201956 > 2016-01-10 20:29 | Report Abuse

look at the income statement.
when I was working, they call it Minority Interest. Nowadays, they call it Non controlling interest.

<Also, where is the minority interest in P&L of 18mil? Please show me. Thanks.>

Posted by Desa20201956 > 2016-01-10 20:34 | Report Abuse

I would not be shareholder if KYY had not alerted me to read CW Report. .....my gratitude to KYY.

Posted by Desa20201956 > 2016-01-10 20:37 | Report Abuse

In business schools, they call it pricing power. Lets see who got the Power and may the force be with them.


<Mr Desa, margin expansion ? I thought you said the benefit will disappear the next quarter ?

So your chin well and scientex can benefit indefinitely, while my Comcorp can only benefit one quarter ?>