Whistle blowing ---> Reviewed by the BOD ---> Reported the authorities (police) ---> Engaged KPMG MRC to do independent review in May 21---> Independent review report is ready in August 21 ---> Forensic audit has been carrying out from August 21 until now ---> Authority brings the case to the court later.
Forensic audit investigations may expose, or confirm, various kinds of illegal activities. Normally, instead of a normal audit, a forensic audit is used if there is a possibility that the evidence gathered would be used in court.
The forensic audit process is similar to a traditional financial audit — planning, gathering evidence, and writing a report — with the additional step of a possible appearance in court. The lawyers on both sides offer evidence that the crime is either discovered or disproved, which decides the harm sustained. They explain their conclusions to the defendant should the case go to trial before the judge.
Hmm, a bit disappointed with the 1 month extension. Already prepared myself emotionally to face it bad or good.
Do not too obsess with the outcome and miss out the fundamental which I believe is the driving force 4 share price 2 recovery. Alleged fraud already past tense.
When CMS traded around 1.1 in July 21 i ask myself ' wtf happens to this company?' The 1st thing I did was a quick fundamental screen before moving into news of the alleged issues.
I'm glad to share it to u today as below.
How strong is CMSB?
29th Oct 21, the government will introduce a ONE-OFF corporate tax of 33 percent for any income after RM100 million(profit be4 tax) for the year 2022.
- out of all KLSE components, 2 companies fail to make it which are Genting and GenM that had badly effected by pandemic.
How's other fares, I choose a few techs darling for comparison :
Where else 4 CMS : 265.7m(2018), 160.3m, 194.7m, 125.2m( until Q2)
*** pls take note that all figures are PAT ( After 24% tax deduction) and I choose tech cos it bullish outperform income due to shortage supply that enjoys it best valuation currently.
Conclusion : the above companies still need some catch up and our CMS already qualify in just 2 quarter. Alamak! Taxman coming 4 more. UWC 2021 admitted.
The new tax is call ' cukai makmur' in BM, which means CMS has been prosperous since many years back and many more to come. Lucky no back dated calculation, hahaha!
STRENGTH TO STRENGTH COMPARISON :
*** used 4 rolling qr eps and compare with on PAR companies across industry best. All are The edge BRC ( Billions Ringgit Club) as benchmark.
in order for Inari shareholders to equalize the efficiency of CMS annually eps ( the amount of net profit earn per single share), investor need to buy 26.61/8.96= 2.97 x (X amount of shares needed) to achieve same earning.
3.87 x 2.97 = 11.49 ( amount invested) 1.43/11.49 = 0.13 ( just fractional amount inari value at)
Same goes to 3,4,5 and very near to ABMB.
*** CMSB deserves the conglomerate title and didn't lose face at all if standing side by side with these best of the best. My TP 2.0 is not merely pluck from sky. Most important is futures results, PAT just more than 30m per qr. Why I say 30m, because give more market also fail to appreciate it, lol!
Legal investigation will only be 3rd after shock ( earthquake synology). Blast is when news of 'fraud' amplifier by SD where most investors in dark. 2nd wave was KPMG hints out the the possibles cause and estimated damage and calm market down.
That's why I say : BUYING CMS FUTURE!!
Q2 as (heart stabilize/comfort) pills had assured fundamental are intact. Q3 expecting soon (outperform results) more important than finding.
CMSB get most of the construction contracts in Sarawak through JV in SEDC & PPES which are the Sarawak government arms. Cements business is automatically dependent on the construction jobs progress in Sarawak.
Haha! Every good investors will use all means to search for best wealth generating assets. If extra 9% is too much to swallow, one can turn to companies ( gross profit less than 100m), unstable/fluctuating earning companies where there is room for tax deferral. Best still constantly lost making 1, no need pay tax. Want tips on these type of companies?
1st 100m profits is just general guideline. For sure there are Clauses like lost transfers among associations/subsidiaries, sudden purchase of luxury assets and etc. Marginal corporates can engage Tax Consultants for advices but biggest earning companies how to run?. Tax consultant can help reduce taxable amount on marginal companies but not 100% tax obligation relief on extra tax rate. Anything involve transactions involves loan, stamp duties, RPGT, contracts so other parties still pay taxes. Dun copy bad apple way in tempering accounts. Be patriotic and treat this as 1 time National Service for Malaysia.
*** according to Bloomberg data, there are only 125 companies qualify for it. ( CMS kena, best company mah). Should learned from Tan Sri Teh by asking serious question to FM :
" entra 1 OFF mo man Thai, but how can government assure tax payers the accountability, transparency, in distribution of funds among people and effected economy sectors. How it will benefits recovery rate and the growth projection in term of GDP on larger prospective. "
Factors determine the upward movement of CMS share price : 1) how well can cahaya produce profits. EPS, growth rate, sustainability are key measurements.
2) how serious BOD uphold the rule of law's in bringing those culprit to justice.
3) best practice of upholding best ESG codes to avoid reoccurrence.
4) way of sharing fruit of prosperity with minority shareholders.
I meant when corporate tax goes up so much next year, EPS of all companies will drop and companies will also try hard to lower the EPS by going into expansion, ie, buying land, build new production line, etc.
*** bad news turn superb good news cos knowingly price at deep bottom. (hardly scratched)
2) more than 30m<200m, price adjust back lower. 3rd wave wouldn't be as serious as before cos investors can quantify the actual lost. Many buyers willing to support if cheap lelong again. (full of bruises)
3) serious damage of >200m, even though CFO is key management personnel, his authority is limited and subjected constant scrutinised by BOD plus feedback by fellow colleagues. Very unlikely happen. (
Investments in investment securities (Money Market Funds Level 1 ) RM 154 million as at 30 Jun 21 Level 1 - Quoted prices in active markets for identical assets or liabilities.
Investments in investment securities (Income Debt securities Level 2 )RM 255 million as at 30 Jun 21 Annual Audited Accounts 2020 (Note 43 v): At the end of the reporting date, the Group’s investment securities portfolio mainly invested in government bonds and AAA rated bonds. The maximum exposure to credit risk is represented by the carrying amounts in the statement of financial position.
There is no history of default on these bonds and there is no indication that these bonds may default. The Group is of the view that the loss allowance is not material and hence, it is not provided for.
Investments in Derivative Assets ( Sacofa warrants ) RM 97 million as at 30 Jun 21 Purchase Costs in 2015 - RM 35 million Fair value now - RM 97 million
Annual Audited Accounts 2020 (Note 30): The determination of the fair value of derivative financial assets that are linked to and must be settled by delivery of unquoted equity instruments is subjective and involves significant judgement and uncertainties due to the use of assumptions and certain unobservable inputs. The Group’s and the Company’s investment in warrants were valued using the Binomial approach and is sensitive to data inputs including stock price, strike price, risk-free rate and volatility.
On 23 October 2015, the Group and the Company acquired 18,444,697 warrants of SACOFA Sdn. Bhd. (“SACOFA”) for a purchase consideration of RM35,413,818 representing a warrant price of RM1.92 each. The original expiry date of the warrants was 25 January 2020 but was extended to 25January 2022. Each warrant entitles its holder to subscribe for one new SACOFA ordinary share at an exercise price of RM1.50 at any time during the exercise period.
I used to presume that the Investment in Securities carried high risks due to lacking of sufficient information. In fact, it's actually not that complicated after finding out the information from the Annual Audited Accounts.
why ppl still optimistic let me tell u when mondaaay market open u btr stay in front of ur PC anything imediately sell,because its gonna drop 10% or MORE...for sure just no limit down or BIG WWATERFALL but FOr sure GAP DOWN
sorry pls excuse my amateur knowledge, if the price of cement hike, does it mean that company will show better profit? Considering that cost of production also hike (raw material)
Every time when there is price hike in raw material like sugar, tea power, coffee power, kopitiam will increase prices for drinks they offer.
Eg sugar increase 50 cents per kg, but every drink kopitiam charge 20 cents more. Can u recall back what was the price of a cup of teh ping 5 years ago?? Now many charge rm2. 6. Price stays when raw material adjust lower.
Cement is a control item. It's std across Malaysia but normally east Malaysia distributors are allow to charge extra to cover logistic cost. This ceiling price increase is inevitable cos local producer eg Mcement, Hume industry already operating under extremely challenging environment. 1 reason is raw materials price catching up fast.
*** this isn't the case for CMS as it bundled it products in projects. High margins in government is an open secret, just compare net margin for CMS with Mcement or others.
*** Next increase will not be 10%, rather few % but this will serve a big lifeline for industry players. Its bonus 4 CMS.
Luckyboy88. I don't know the pricing structure of cements in Sarawak. Cement is a control item in Malaysia but CMSB managed to fetch 18% (2ndQtr 21) Net profit margins before tax whereas the players in West Malaysia are suffering losses or break-even.
Latest statistics showed cements, concretes and steels take up 23 to 30% of total building cost or projects.
For those interested, there are many more modelling, softwares(tools) to help civil engineers or surveyors to calculate construction cost. DOSH (statistics Dept) or CIDB (Construction Industry Development Board) have all the comprehensive numbers.
1) Sarawak is the biggest state in Malaysia. Its also the richest in term of natural resources. 2) smallest population per land size. 3) few of the least or under develop states. 4) last bastion or fixed deposit for current ruling govn.
*** CMS is actually a private and state government initiative. Initially aimed setup is to Spearhead, explore and develop Sarawak. - see the number of quarries licences it hold. This put cahaya in advantage in access to raw materials. Close collaboration enables CMS access to 1st hand information and always got the upper hand on its competitors.
Direct access of 2-3B out of 12B (2022 state's development budget) will make CMS buzy for few years. It still got hands on other successful bidders in supplying construction materials. Remember too the lucrative net margin, like what I had highlighted in Tower tenders.
IF U THINK CMSB JUST RM1. 5 COUNTER, STOP WASTING UR TIME, ENERGY AND CAPITAL HERE. SELL AND LOOK FOR BETTER OPTIONS.
*** take example Mmccorp, when price traded around 0.8 to 1.0, not many knows its a gems until Syed Mokhtar privatised at 2.2. He is very happy for minorities to walk away, hahaha!
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
treasurehunt
1,884 posts
Posted by treasurehunt > 2021-10-29 22:46 | Report Abuse
Police and forensic auditors are now gathering evidences to charge people to the court. That's why it takes longer time.
Extracted announcement in April 21:
* Dato Sri Mahmud has agreed to the Board’s request and we have informed the authorities accordingly. *