Posted by calvintaneng > 2018-04-09 17:27 | Report Abuse

The micro picture is too myopic and narrow lah.

BETTER SEE THE MACRO PICTURE.

LAST TIME IN IFCA FORUM ALL WERE TALKING ABOUT HOW MUCH IFCA WILL BE MAKING FROM GST IN MALAYSIA. HOW IT CONCURRED THE PROPERTY DEV. ALSO POSSIBLE PROFIT FROM GST SOFTWARE SALES IN CHINA?

ALL 95% OF HOPEFUL SORCHAI KENA WIPED OFF IN IFCA LATER.

SO THE MACRO PICTURE FOR HENGYUAN IS BLEAK.

BETTER SELL WHILE SELLING IS GOOD.

OR ELSE ALL WILL BE VICTIMS LIKE THOSE CHASING IFCA LAST ROUND.

Posted by stockmanmy > 2018-04-09 17:28 | Report Abuse

This one don't have the fake $ 400 million stuffs of the losers mentality.

Posted by John_Lee > 2018-04-09 17:32 | Report Abuse

calvintaneng,

Why are you talking like a crazy person? Ifca and Hengyuan got what similarity and connection?

Posted by paperplane > 2018-04-09 17:33 | Report Abuse

David, got take into account t of taxation nor? Also the previous quarters can't be used anymore. All margin and prices moved. Just extrapolate latest later to 12months will do for time being. Else the error might be huge

Posted by calvintaneng > 2018-04-09 17:34 | Report Abuse

This one?

I heard Insiders of hengyuan resigned just like Ifca insiders resigned!! Red flag!

Earning Rm1.00 but pay pittance 2 sen dividend like Transmile? A red flag again?

Hengyuan now in Chinaman hand? Will they cook the book like Xinquan? Another red flag?

SO CAVEAT EMPTOR!!!

Posted by John_Lee > 2018-04-09 17:36 | Report Abuse

calvintaneng,

If you want to spite KYY, that's between the 2 of you. You go take it personally on him ok. Leave hengyuan forum to hengyuan shareholders. Please go away. You are talking rubbish.

Posted by coffeecup > 2018-04-09 17:51 | Report Abuse

Calvin compare ifca vs hy is like compare langsat vs durian.
If you can write up proper hy valuation instead of stories, then it may have some weight.

Calvin, love your enemy and practice forgiveness.

Posted by lanjiolang > 2018-04-09 17:52 | Report Abuse

calvintaneng just want to give warning to all the newbies ma. what's wrong with his comment.

Posted by Fam Jenny > 2018-04-09 17:58 | Report Abuse

So that. he can buy cheap.

Posted by coffeecup > 2018-04-09 17:59 | Report Abuse

Is Calvin intention pure?
All the warning is based on rumours and his objective macro view but not fact.

I see him bad mouth other counter to promote his own. That is different from giving warning.
Calvin you are very good at choosing undervalue stock, stick to it and write good facts and story about it.

You sell property by saying how good your house quality , area, growth and etc is good but not telling people how bad the other property are, right?

Posted by uptrending > 2018-04-09 18:00 | Report Abuse

Wow! The timing of this article is just perfect, after the share price has recovered to above 9.

Posted by 3iii > 2018-04-09 18:25 | Report Abuse

David, have you written an article to explain the Q4 2017 results, since your projections were way out then?

Posted by david_tan > 2018-04-09 18:28 | Report Abuse

3iii,

You have gotten the wrong author. I did not post any article on Q4 2017.

Thanks.

Posted by feet > 2018-04-09 18:35 | Report Abuse

rubbish.

Posted by Tom > 2018-04-09 19:22 | Report Abuse

这个就是manipulator的工作，专门骗新人把股价炒上去

Posted by Tom > 2018-04-09 19:23 | Report Abuse

新手还可以去holland多一次

Posted by Tom > 2018-04-09 19:25 | Report Abuse

现在重点已经不是FA了，而是manipulators们操控股价

Posted by Flintstones > 2018-04-09 19:32 | Report Abuse

造梦者来了！

Posted by Tom > 2018-04-09 19:47 | Report Abuse

历史重温，有好几位造梦者计划要帮散户们制造新一场美妙的梦（游）
还计划了有好几个月了

Posted by Ooi Teik Bee > Mar 8, 2018 04:06 PM | Report Abuse

Dear probability and Jelas Ulung,

Please note that there is another analyst named Dr David Lim who made appointment to meet me, he discussed the profit of Hengyuan with me in great details.
He also worked out the net profit for 2018.

I also work out my projected profit for 2018.

Projected profit from Dr David Lim, myself and David_Tan are quite closed.
However, I think David_Tan's one is the best forecast.

Please read the below write-up by David_Tan

Posted by nekosan > 2018-04-09 19:50 | Report Abuse

lol choose the best time to release ... haha

Posted by Tom > 2018-04-09 19:52 | Report Abuse

Manipulators们早就计划好了，行程表都有了，lol
你还那么天真

Posted by nekosan > Apr 9, 2018 07:50 PM | Report Abuse

lol choose the best time to release ... haha

Posted by Benjamin Poh > 2018-04-09 20:20 | Report Abuse

Business valuation is an art more than a science. It may be tempted to look at the historical balance sheets, P/Ls and cash flow statements for clues on the current valuation of a company. If you are accounting savvy, analysis of balance sheets, P/L and cash flow statements will likely help to you uncover some hidden value that may not be obvious to a lot of investors based on technical analysis or inferior analysts' reports to buy shares. But the limitations of accounting information is its historical in nature, some valuable assets not meeting accounting recognition criteria will not be reflected in accounts, good business model and management cannot be discovered through analysis of financial statements.

Nevertheless, financial statements analysis is the first starting point to check how healthy a company's financial position and performance currently and in the past.
As a value investor, I always start with objective analysis by checking the latest balance sheet for clue on company's cash and short term investment, liquidity, long-term debts position and any valuable assets e.g. real estates in prominent location not fully reflected in the balance sheets. Then, I look at the P/L position in the past to discern the normalized earnings of the company whether that normalized earnings consistent with the cash flow statements presented to ensure accounting earnings were actually translated into actual cash flow to the company concerned. Lastly, I will examine the subjective side of the business by evaluation the company's earning sources and business model to check whether the company can compete successfully within its industry. The subjective side of the business part is difficult to perform due to future uncertainties beyond our human ability to predict. That's why Warren Buffett always buy companies with simple business model within his circle of competence to understand so that he is more likely to know the future cash flow of a company to actually put a value on it.

Having said that, how to use the above value investing approach to value Hengyuan? First, the company latest quarterly report 31 Dec 2017, balance sheet showed cash in bank and FD holding about RM510 mil, current ratio is about 4, total current assets is RM2.8 bil more than cover its entire liabilities (both short and long term) of RM2 bil. Latest quarterly EPS was 61.18 cents (profit after taxation is about RM180 mil) with cash flow from operating activities after depreciation was about 311 mil. It does has a very healthy financial position and performance recently.

We can see its operating results started to improve in year 2015 till today with oil price hovers around USD60-70 today thanks to the OPEC production curb, the world commodities price is picking up with the growth in world economy but the likelihood of large fluctuation either move up or down substantially in oil price in the near future is dim as concerns over the volume of US shale oils supply, Federal Reserve tightening policy and US-China trade wars will cap its upward trends in future.

Hengyuan is a cyclical company which cash flows and earnings will be moving up during the times when commodities cycle is picking up, so one should expect its market price to go wild when the cycle is peak like the year 2008 and the recent year 2014. So it is hard to find normalized earnings and cash flow of Hengyuan in the past, it is about timing of buying the shares during commodities picking up time. Like what I said in the beginning, valuation is an art more than a science. I prefer to put a range of value on a company and see how much margin of safety I have if I were to buy a company's shares at market value today. Usually I require at least 30% margin of safety before I will invest in the shares.

If one is to review the balance sheet of the company, its NTA is RM5.9 per share, if using earnings base to value I will conservatively use the latest quarterly EPS 61.18 cents (EPS RM2.4 per year) as a guide for the year 2018 and using PE ratio 6 (due to small capital company), one can come to a value of RM14.40. IF one would to put a weighting of 20% on book value and 80% on earnings based value, then one can come to a valuation of Hengyuan at about RM12.70. Market price today is about RM9.2, margin of safety is about 40%. So it does provide a good margin of safety for the value investor to buy at the current market price.

The above is my personal impartial opinion, please check with your financial advisers before you invest in the shares.

Posted by Jeffbkt > 2018-04-09 20:37 | Report Abuse

David Tan
In Q4 2017, the manufacturing expenses is 20M more than Q3 and the admin expenses is 10M more than Q3. Can you explain why? If you can't then on what basis that this high expenses will not continue in 2018

Posted by lanjiolang > 2018-04-09 20:47 | Report Abuse

David Tan, may i know why you chose today to publish this article?

Posted by CharlesT > 2018-04-09 20:49 | Report Abuse

Are u one of the koon bee team as well?

Posted by probability > 2018-04-09 20:51 | Report Abuse

so far the best analysis was done by David_Tan, KC already say....

It is indeed the most professional analysis so far.

82 cents x 4 = RM 3.70 per annum...

with this kinda support from i3 members, and Koon and his wife who used to serve curry puff to KC.....

why fear

we have a big community helping all to be succesfull investor

Posted by probability > 2018-04-09 20:54 | Report Abuse

Look at the amount of numbers being crunched here....

Look at the amount of energy and time spent researching the fine details...

Now, if this is not what you trust - what else can u?

Posted by CharlesT > 2018-04-09 20:56 | Report Abuse

Full time analyst n also full timr promoter for syndicate

Posted by davidkkw79 > 2018-04-09 20:58 | Report Abuse

If just merely based on investment performance no doubts uncle KYY is much more better than Calvintan

Posted by CharlesT > 2018-04-09 21:02 | Report Abuse

Cant compare lah..

One owns few hundred millions while another owns mayb few millions

Posted by nekosan > 2018-04-09 21:33 | Report Abuse

will log case to SC to investigate potential pump and dump

Posted by Ricky Yeo > 2018-04-09 21:34 | Report Abuse

Effort is always admirable. But the question always goes to - does accuracy of quarterly EPS estimation dictate high long-term return?

Posted by paperplane > 2018-04-09 21:41 | Report Abuse

SC wKnt take action unless Limit up few days??

Posted by david_tan > 2018-04-09 21:49 | Report Abuse

Jeffbkt,

Based on accounts made available to public, we will not know the breakdowns of manufacturing and administrative expenses. This makes profit forecasts challenging. For instance, the higher administrative expenses incurred in Q4 2017 could be for bonuses paid at the end of the year. Or there could be other one off expenses. But we will not know for sure.

As such, as I have explained in my article, I use the average of the past 8 most recent quarters. And to remove the effects of any outliers, the quarter with the lowest and highest numbers are removed in determining the average expense.

—————

Posted by Jeffbkt > Apr 9, 2018 08:37 PM | Report Abuse

David Tan
In Q4 2017, the manufacturing expenses is 20M more than Q3 and the admin expenses is 10M more than Q3. Can you explain why? If you can't then on what basis that this high expenses will not continue in 2018

Posted by stockmanmy > 2018-04-09 21:49 | Report Abuse

would this article constitute pump and dump under SC regulations?

I think so.......

Posted by stockmanmy > 2018-04-09 21:50 | Report Abuse

remember the other guy got into trouble with the SC, get his blogs taken down is some thing very similar to this sort of stuffs.

Posted by stockmanmy > 2018-04-09 21:52 | Report Abuse

enticing people to buy shares based on fake forecasts is a big No No.

Posted by david_tan > 2018-04-09 21:57 | Report Abuse

lanjiolang,

My analysis required data from 1 January 2018 to 31 March 2018. This is a time consuming exercise. I guess you will ask me the same question even if I managed to get this article out last Thursday or Friday. Truth is I can only work on this article after 31 March 2018, and today is only 9 April 2018.

—————

lanjiolang David Tan, may i know why you chose today to publish this article?
09/04/2018 20:47

Posted by david_tan > 2018-04-09 21:59 | Report Abuse

CharlesT,

If you are referring to Koon Yew Yin and Ooi Teik Bee, no I am not related or connected to them.

—————

CharlesT Are u one of the koon bee team as well?
09/04/2018 20:49

Posted by david_tan > 2018-04-09 22:03 | Report Abuse

probability,

At no time did I say that HRC’s EPS will be RM3.70 per annum. This analysis is for Q1 2018, and not for FY2018. There is no way you can extrapolate the results of one quarter into a full year.

Please do not put words in my mouth.

—————

probability so far the best analysis was done by David_Tan, KC already say....

It is indeed the most professional analysis so far.

82 cents x 4 = RM 3.70 per annum...

with this kinda support from i3 members, and Koon and his wife who used to serve curry puff to KC.....

why fear

we have a big community helping all to be succesfull investor
09/04/2018 20:51

Posted by david_tan > 2018-04-09 22:05 | Report Abuse

CharlesT,

I am neither but I am a shareholder of HRC.

—————

CharlesT Full time analyst n also full timr promoter for syndicate
09/04/2018 20:56

Posted by nekosan > 2018-04-09 22:09 | Report Abuse

nvm, SC will invite you go drink kopi if tomorrow hengyuan gap up and then close red

Posted by nekosan > 2018-04-09 22:19 | Report Abuse

last time the david lim already hiding after give a wrong EPS forecast of 120 cent vs 66 cent the real result. now come out another david. and the david lim also release the article after hengyuan strong rebound of 2 dollars to 14.3 ... u all know what happen next

Posted by qqq3 > 2018-04-09 23:52 | Report Abuse

I hope SC take action against fake profit forecasts....very damaging to Bursa.

Posted by qqq3 > 2018-04-10 00:40 | Report Abuse

don't be funny David....How did you get your sales price?

and your stock valuations? accounting policy should be lower of cost and net realisable values....not market prices....

profits are to be recognised in the period of sales, not in the period of manufacture......


I would not be surprised if you get into trouble with the SC

Posted by qqq3 > 2018-04-10 00:42 | Report Abuse

it is just not about the accuracy or not....

fake forecasts are sensitive and a big No No....


Do you know IB have very strict guidelines while this forum is free for all......this is very damaging to Bursa.

IB also got reputations to protect.....not here.....

Posted by qqq3 > 2018-04-10 00:49 | Report Abuse

go and do back testing first or that down your blog before SC comes after you......

nowadays, fake news is 5 years jail.

Posted by david_tan > 2018-04-10 01:33 | Report Abuse

qqq3,

Sales price - please read Note 1(a). It is clearly explained there.

Stock valuation - stocks are stated at cost. There is no profit element in my stocks. Please read and understand Note 2(c).

————-

qqq3 don't be funny David....How did you get your sales price?

and your stock valuations? accounting policy should be lower of cost and net realisable values....not market prices....

profits are to be recognised in the period of sales, not in the period of manufacture......

Posted by chang0509 > 2018-04-10 02:20 | Report Abuse

Hengyuan just begins its strong uptrend engine. It is support by good TA and strong fundamental. At the current price of 9.06, it is still very undervalue. Strong hand will make sure the uptrend mode is consistent this time because weak holders have been flushed out.

Posted by Investor48 > 2018-04-10 05:45 | Report Abuse

Excellent analysis David
Thanks for sharing your hard work.