Posted by cpng > 2016-05-24 19:55 | Report Abuse

这种就是大师级水平,不是那些Pasar Malam kakies可以匹配的。

Posted by YiStock > 2016-05-24 20:33 | Report Abuse

Q4 2015 result was solid. Still, expect the unexpected.

Posted by iamsoonoob > 2016-05-24 20:37 | Report Abuse

kc,what u say is low free float or public float means that counter can easily become one man show counter?that also mean one can easily jack up the price

Posted by prescott2006 > 2016-05-24 20:45 | Report Abuse

@cpng 完全同意。有些更好笑，看几本书，投资blog几个月就敢敢出来巡回给talk，还charge sipek 贵，每个去回来都说讲的东西好像幼稚园那样浅，跟买两本冷眼来看没有分别。

Posted by murali > 2016-05-24 20:48 | Report Abuse

They found it is easier to make money like that than investing in stock mkt..

Posted by cpng > 2016-05-24 20:54 | Report Abuse

我发现到马来西亚一堆这样的中文为主的投资Pasar Malam kakies。
而且没有一点投资正道的道德思维,是非不分,败坏市场。

Posted by soros228 > 2016-05-24 20:55 | Report Abuse

Good article. Thanks KC. Thumb up.

Posted by vinext > 2016-05-24 21:54 | Report Abuse

Kc u write so long for what? some ppl have to pay tuition fee to the mkt to learn. I appreaciate ur writing but a shorter 1 wil do la, best to use the time for other writing, haha

Posted by probability > 2016-05-24 22:01 | Report Abuse

man of truth & principles would be available to enlighten you at the time you need him the most...whether he needs you or not.

unlike that...ahemmmm...u all know..

Posted by kwang2209 > 2016-05-24 22:13 | Report Abuse

其实FLBHD还是值得关注投资的,毕竟是大马股市里净现金比率高的公司之一,大家现在关注的是profit margin和taxes影响净利的问题,简单一些。。我们把美金回跌到3.2的水平或profit margin剩下6%左右的情况,作为投资考量。。应该会安全一些

Posted by iamsoonoob > 2016-05-24 22:25 | Report Abuse

"Focus Lumber only has a total number of 103.2m shares outstanding with a total market capitalization of RM258m at that price of say RM2.50. The free float is even less. With just a capital of RM18m, you can buy and own 7% of its total market capitalization. If one uses 50% margin finance, he just needs RM9m in capital outlay. There are some players in the market who have that amount of money, and much more. Hence it is very easy to jack up the price, isn’t it?"

then we should avoid investing in low free float counter eventhough the fundemental is intact?

Posted by shareinvestor88 > 2016-05-24 23:00 | Report Abuse

Dear KC since USD has strengthen today 4.11-4 12 what is the impact on FLB ?

Posted by Invest1188 > 2016-05-24 23:48 | Report Abuse

Flb meets item 1 to 9 listed by kcchong

Posted by paperplane2016 > 2016-05-25 00:46 | Report Abuse

Why flbhd, liihen, pohuat, all going different direction. Is it now good time to judge who is better based on latest results?

Posted by Invest1188 > 2016-05-25 00:54 | Report Abuse

hi paperplane 2016, if you look at the free cash flow for flb, lihen, pohhuat .

Posted by Invest1188 > 2016-05-25 00:54 | Report Abuse

they are all equally good if look at the free cash flow,

Posted by Invest1188 > 2016-05-25 00:55 | Report Abuse

only the profit is difference due to how exchange rate loss is booked in or the accounting tricks

Posted by Foo Say Ngi > 2016-05-25 02:38 | Report Abuse

In the report it mentioned double tax deduction, what is that?

Posted by speakup > 2016-05-25 09:19 | Report Abuse

better sell before Ah Koon sell all.
Ah Koon will only tell u he sold after 2 months later.

Posted by tradminator > 2016-05-25 09:32 | Report Abuse

as i know double tax deduction is a promotion or benefit from government to some industry so that they pay less tax within that period of promotion. when it say double tax deduction removed the tax amount will back to what they suppose to pay previously

Posted by Mat Cendana > 2016-05-25 10:18 | Report Abuse

Another objective, unemotional post here. This is the best one on Focus Lumber that I've read so far. The mechanics and variables that affect "Share price" may be another matter but KC has addressed a lot of that too here. The number of shares and free float, for instance. But this can also be a good thing, provided the major shareholders don't sell.

My basic strategy with this kind of counter: I would trade it; buying at the support level. But with a stop-loss point decided upon. If it doesn't hold, then I'd take the loss there and then. No procastinating as with "Let's see how it goes tomorrow. Might rebound..."

Posted by stockmanmy > 2016-05-25 10:22 | Report Abuse

FLHB.....its a very small company doing about $ 40 to $ 50 m sales per quarter la.


sure got large fluctuations la.

Posted by popo92 > 2016-05-25 10:24 | Report Abuse

Kc is always a fundamental investor who don't have a trade mindset strategy. Buy to sleep well tomorrow is what he always seek for at the first place.

Posted by kcchongnz > 2016-05-25 10:45 | Report Abuse

Posted by iamsoonoob > May 24, 2016 10:25 PM | Report Abuse
"Focus Lumber only has a total number of 103.2m shares outstanding with a total market capitalization of RM258m at that price of say RM2.50. The free float is even less. With just a capital of RM18m, you can buy and own 7% of its total market capitalization. If one uses 50% margin finance, he just needs RM9m in capital outlay. There are some players in the market who have that amount of money, and much more. Hence it is very easy to jack up the price, isn’t it?"
then we should avoid investing in low free float counter eventhough the fundemental is intact?

Yes, if you are a short-term trader.

If you are an investor, then you must be able to answer all the questions posed in the article and make an informed judgment.

Often, more opportunity for higher gain investing in a smaller company then a big one, which most probably is fully valued.

Posted by raitospk > 2016-05-25 11:10 | Report Abuse

so your opinion is woth for long term?

Posted by kcchongnz > 2016-05-25 11:52 | Report Abuse

Posted by iamsoonoob > May 24, 2016 08:37 PM | Report Abuse
kc,what u say is low free float or public float means that counter can easily become one man show counter?that also mean one can easily jack up the price

Yes, he just need to use say RM10 own money and another RM10m borrowed money to jack up the share price from RM2.00 to RM3.00.

But beware when share price falls heavily, margin calls will come and RM3.00 can fall to less than RM2.00 in a short time.

Posted by kcchongnz > 2016-05-25 12:58 | Report Abuse

Posted by shareinvestor88 > May 24, 2016 11:00 PM | Report Abuse
Dear KC since USD has strengthen today 4.11-4 12 what is the impact on FLB ?

If USD continue to strengthen until end of the next reporting period, I think its foreign exchange translation gain may be more than its loss in this quarter.

But seriously, focus on things you can control, and forget about what you can't control. Be conservative.

Posted by prescott2006 > 2016-05-25 13:08 | Report Abuse

I like this statement:

But seriously, focus on things you can control, and forget about what you can't control. Be conservative.

Posted by duitKWSPkita > 2016-05-25 13:10 | Report Abuse

several valid points have been discussed in this article. appreciate it Mr.Kc chong.

Posted by neville_83 > 2016-05-25 14:18 | Report Abuse

FLBHD 16Q1 net profit was flat yoy which caused many people to misunderstand that the company's profits are not growing, especially if one only considers its EPS blindly. However, if one would just examine the results closely, one would realize that this flat net profit was caused primarily by two factors: forex losses and higher tax rate since 1 Jan 2016 due to revocation of previous tax benefits. Let's examine each one in detail.

16Q1 accounts was reported on 31 March 2016, where the RM/USD was at approximately 3.92, which was near its multi-month low. This was unfortunate for its Q1 results, because 15Q4 was reported on 31 December 2015 where the exchange rate was at 4.30, near a multi-year high. This meant that when the company's USD-denominated receivables/payables/cash/loans were translated to RM, the company suffered a loss of 3.6m due to forex, offset by a small gain on derivatives of 123k (used precisely to hedge against these forex movements).

Posted by neville_83 > 2016-05-25 14:20 | Report Abuse

If you strip out this forex loss, then the company would actually have made a PBT of approx. 7.7m, instead of the reported 4.4m. This would compare to the PBT of 3.4m in the preceding year's corresponding quarter (adjusted down for 0.4m of forex/derivative gains). This means that the PBT actually jumped by ~120% yoy.

This would make sense if you take into consideration the fact that their gross profit increased from 7.8m to 14.9m, an increase of approximately 90%. Coupled with the higher profit margins due to higher average USD exchange rate, then the 120% increase in PBT makes sense.

Posted by neville_83 > 2016-05-25 14:20 | Report Abuse

However, PBT is still one step away from the bottom line, which is what interests us investors the most, along with FCF of course. Since there is no more tax break for the company effective 1 January, the tax rate is now approximately 23%. This means that moving forward, the net profit margin will be lower than prior years, and hence the net profit and FCF as well.

In short, Q1 results were actually good, since revenue, gross profit, and PBT all increased yoy, if you ignore the forex losses. However, due to increased tax rate, the company's fundamentals has deteriorated slightly compared to before.

Posted by popo92 > 2016-05-25 14:30 | Report Abuse

i think many panic who blindly follow EPS miss out this forex losses were "unrealised" losses.... these were only for accounting method since flbhd calculated on the end of quarter report day. yes, the fundamental of the company has deteriorated slightly than before but unfortunately it happens to every export company as well. there isn't much thing we can do about it.

Posted by Mat Cendana > 2016-05-25 15:36 | Report Abuse

@ks55 This is why I'm now forcing myself to think through the possible downside before buying anything. Especially with the counters that I think "are good, with potential". But time and again, the market has shown it doesn't care whether about these. That's where the stop loss comes in. Normally I'd set it at minus 5%, or just a bit below a supposed support level. Sometimes a counter would rebound after I had cut loss (and making me feel like a wimpy idiot). But more often, it did help prevent bigger losses.

Have to take risks in order to try make profits. But must always have an exit plan early on should things not go our way. Preservation of capital is the number one priority. Can't be stubborn and risk seeing it decimated.

Posted by Ricky Yeo > 2016-05-25 16:27 | Report Abuse

I believe preservation of capital comes from knowing what you are buying and the price you are buy, not cut loss, unless your investment thesis has changed.

Posted by TAH > 2016-05-25 16:50 | Report Abuse

Mr Kcchongnz,can u please calculate for us the intrinsic value for Focus Lumber?

Posted by kcchongnz > 2016-05-25 16:52 | Report Abuse

Posted by popo92 > May 25, 2016 10:24 AM | Report Abuse
Kc is always a fundamental investor who don't have a trade mindset strategy. Buy to sleep well tomorrow is what he always seek for at the first place.


what is your price tag for peace of mind?

Posted by kcchongnz > 2016-05-25 17:14 | Report Abuse

Posted by vinext > May 24, 2016 09:54 PM | Report Abuse
Kc u write so long for what? some ppl have to pay tuition fee to the mkt to learn. I appreaciate ur writing but a shorter 1 wil do la, best to use the time for other writing, haha

The tuition fee they paid to learn through following rumours, hot tips, hypes and fads in the stock market is very costly. Why not learn with a small fraction of what they pay through a well structured course and well equipped themselves such that they can consistently build long-term wealth slowly but surely?

Posted by popo92 > 2016-05-25 17:43 | Report Abuse

Kc, so far my fundamental philosophy on flbhd has not changed yet. Current price 2.04-2.07 already provide me enough margin of safety to sleep well. Mind sharing your price tag for peace of mind too? :)

Posted by leekh5555 > 2016-05-25 18:17 | Report Abuse

Mr.KC, would appreciate if you could spend some time to analyze on SAM. TQ

Posted by RonnieKimLondon > 2016-05-25 19:13 | Report Abuse

Dear Mr Chong,

You are right as usual. Focus Lumber's share price is waiting to implode.

The business model cannot sustain a consistent earnings growth. We may see earnings grow one or two quarters. But that is about it.

Posted by meridian33 > 2016-05-25 22:24 | Report Abuse

Good article. Thanks for sharing your knowledge here.

Posted by Maxireturn > 2016-05-25 22:36 | Report Abuse

Good article.

Posted by chl1989 > 2016-05-26 08:22 | Report Abuse

Ronnie, i believe u got kc wrong. He nvr mention about how the share price will go. He always emphasize on fundamental of the company/business like those questions in this article. Exclude forex gain in 2015, this company is still in a very good position. I will still rate it 5 star especially its cash flow and cash lvl.

Posted by tianjin > 2016-05-26 08:32 | Report Abuse

Dear KC , your time, efforts and detailed analyzation are well appreciated . Possible for to have a study on Elsoft ? Thanks.

Posted by fengtzekai > 2016-05-26 09:40 | Report Abuse

Dear KC, a lot of commentators in this forum just shoot from the hip and commenting without doing proper analysis, even though their are plenty of info which are presented in the quarterly results.

Posted by kcchongnz > 2016-05-26 11:39 | Report Abuse

Posted by shareinvestor88 > May 24, 2016 11:00 PM | Report Abuse
Dear KC since USD has strengthen today 4.11-4 12 what is the impact on FLB ?


If USD stays at this 4.12 level, or strengthen further, Focus would likely to have a lot of foreign exchange translation gain at the end of this period.

But if it weakens to say 3.50, there will be substantial foreign exchange translation loss.

But why worry it so much in your investing decision as foreign exchange rate can go up and down and no one has any control over it?

Posted by kcchongnz > 2016-05-26 13:25 | Report Abuse

Posted by raitospk > May 25, 2016 11:10 AM | Report Abuse
so your opinion is woth for long term?

Have you ever wonder most, 90% of retail investor under-performed, or lost money in the stock market?

That is because of the get-rich-quick mentality trying to make big money in the shortest time possible. They become the victims of syndicates, big time speculators and manipulators.

There is only one way which can consistently provide you with better return from the stock market; play at your own field, invest rather than speculate, and know yourself how to invest smartly to build long term wealth.

Posted by mudwyx > 2016-05-26 14:25 | Report Abuse

where is the evidence that stated 90% of retail investors lose money. Or is just based on popular saying?

Posted by SejukSam > 2016-05-26 14:29 | Report Abuse

90 90 90

this is a well known rule in the US to refer to retail investors/traders

90% of the time, 90% of the investors lose 90 % of their money

go figure it out. and we dun need evidence. its up to u to believe or not.

this is wall street talk