Posted by RainT > 2020-01-22 15:53 | Report Abuse

if GKENT is so good due to LRT 3

why so many sellers at 0.85 sen and below

Posted by Jack Kee > 2020-01-22 16:31 | Report Abuse

all in

Posted by Philip (Can I advise you?) > 2020-01-22 16:45 | Report Abuse

Raint, why are you such an impatient young man? If gkent is that bad, why no private placement to increase funds? Why pay dividend? Why expand water meter production lines? Why do share buyback? Why hire big project management team? Why take up lrt3 if no profit?

If entire klse is down due to outside factor, why worry about the share price? If you bought ( or if you didn't buy any shares in gkent) the only thing that we as outside investors can do is to value the company based on its intrinsic value and the value of its earnings streams years from now.

Question is right now everyone is valuing gkent as if it can only generate 10 million in earnings every every quarter.

Do you truly believe that the earnings will not grow 1 to 3 years from now?

Or your style of investing is win big money every few weeks?

The question to ask is not if gkent will get lrt3. The question to ask is if paying 480 million for a company that is net cash of 200 million, and if 100 million of earnings every year 2 to 3 years from now, is worth paying for.

But if you think even at these more prices gkent is not worth investing in, then ask yourself how what kind of stocks do you invest in instead?

Right now I am glad to pay for GKENT as I know the progress of lrt3 will reflect on better earnings next year. If you doubt even that then might as well quit all equities. Doomsday is coming.

Posted by Begineer > 2020-01-22 16:56 | Report Abuse

Philip, couldn't agree more. It really depends on the investment style of each investor. I prefer to look at the intrinsic value.

Posted by SHQuah > 2020-01-22 17:47 | Report Abuse

Philip....can you help to compute the amount of dividend Gkent boss will be getting next month. He is holding between 35 to 40% of company shares. If he use the dividend money to buy back, how many shares could he buy ?

Posted by SHQuah > 2020-01-22 23:18 | Report Abuse

There are good value that we noticed but other don't. Gkent drop from above RM4 to 86 cents. Over sold. They keep talking about the past BN and ignore about the company strong fundamental. Even if company goes private, the actual worth is more than current price.

Posted by eesquare > 2020-01-23 11:08 | Report Abuse

Can someone semi-intelligently explain why Gkent is buying back so many shares? Will it be cancelled hence reducing the No. of Outstanding Shares (NOSH) or held as treasury shares or ESOS or ..

Posted by Black Snow > 2020-01-23 12:40 | Report Abuse

Buyback to reduce liquidity of stock to reduce volatility of stock price

Posted by SHQuah > 2020-01-23 18:22 | Report Abuse

SBB almost 5%. Meaning only 95% shares remain. Paid up capital less by 5%. Less shares holders. NTA should increase by 5%. Dividend % also also increase by 5%. Please correct me if I am wrong.

Posted by GrahamNewman > 2020-01-23 20:32 | Report Abuse

No use getting worked up for ignorant investors who only look at price and THEN judge the company. Real investor look at company and take advantage of price.

SHquah, it doesn’t work that way. The company used cash to buy back shares, net effect is to reduce total assets of the company, not increase. You may wonder why reduce the assets of the company? Actually Gkent should be valued through earnings and not assets, the hard assets are not worth anything, its the earnings that matter in this particular case. If gkent maintain same earnings, but outstanding shares reduce, EPS increase, ROE increase, ROA increase. That’s why Buffett says the best company have very little net tangible assets, or even negative tangible assets. Go look at Home Depot in the US. They have negative net worth. But that is exactly why it is good.

Posted by Choivo Capital > 2020-01-24 03:12 | Report Abuse

Everytime Phillip talks about gkent, he sounds like he both knows and don't know what he's talking about.

I honestly have no idea idea about this co, if they will make more than 6% or less.

Those who know, you buy lah.

Posted by Choivo Capital > 2020-01-24 03:18 | Report Abuse

Btw Phillip, you keep talking about this Singapore and hk tender.

I don't see any multibillion rail tender contract tbh. Just a 24m water meter contract. Is that the tender you mean ?

Posted by RainT > 2020-01-24 09:14 | Report Abuse

@philip

Thanks for sharing your insight

I am invested in GKENT
just the share price continue to go down hill make me thing is there anything wrong with GEKNT that i do not realise it ....

Posted by RainT > 2020-01-24 09:14 | Report Abuse

There is always queue sell at lower and lower more price

Continue averaging down until I also scared

Haha

Posted by RainT > 2020-01-24 09:24 | Report Abuse

At share price 85 sen now

If buy again now 45 % is cash

Or actual share price we paid Is around 46 sen only

Posted by RainT > 2020-01-24 09:25 | Report Abuse

Estimation only

Debts is low so not much effect

Posted by SHQuah > 2020-01-24 11:56 | Report Abuse

To all George Kent share holders......Wishing you all a very Happy and Prosperous new year.

Posted by Philip (Can I advise you?) > 2020-01-24 16:17 | Report Abuse

Dear rainT, I am also invested as you, in fact I have doubled my exposure at 87 cents. Why other people sell or buy I don't know not care, all I know I is the reasons why I buy and what the future prospects for gkent is. For me a small paper loss is ok as long as I know that I am buying the company at a low price relative to the earnings and existing debts of the company.

Dear choivo, I thought you are an expert in valuation. If you don't notice any earnings to complete in the next 4 years (1 billion rail control systems from mrt2 and lrt3 earnings), then I would have thought you are joking. If so then in the next 4 years where the earnings will be reflected how much do you think gkent will make a quarter?

Currently right now gkent is valued at 487 million with 200 million in cash. It is being valued today as if it can only make 40 million a year or 10 million a quarter. Do you think this valuation is accurate?

Do you expect the lrt3 contract to be loss making? I am expecting them to make between 80-100 million of earnings a year for the next 4 years from the earnings from lrt3+mrt2+water meter sales.

On top of that smart water meters the v110 sales will definitely pick up as gkent produces it cheaper than Honeywell USA, as they have an agreement to sell in Asia and other regions, gkent is estimating around 30-40 million of earnings to come from the additional and digital water meters to come online, as the pilot test of the Selangor water board has shown.

But then again you seem to not know the difference between PDP and direct contract ( turnkey main contractor) difference, I would advise you to consult an engineer or someone working at gkent or is competitors ( like gamuda) to understand the difference. Then maybe you can tell me I am wrong and you are right.

But if you do your assumption without properly analysing first, then you become another armchair analyst, and not someone who practises scuttlebutt and asks those in the industry.

All I can advise is for you to ask around, those companies and engineers who deal with george Kent. Check with them on what kind of paymasters are gkent, how trusted and reliable the company is, if it is a successful company or a company like binapuri or eversendai or Jake that is saddled with debt and unable to complete projects or heavy delays due to heavy debt.

Then when you look back at GKENT, you will realise what a joy it is to not worry about the long term capability of gkent to complete projects and it's history of technical team which keeps to its core capabilities in engineering.

Posted by qqq3 > 2020-01-24 16:35 | Report Abuse

2 kinds of people can succeed in stock market....The Philips kind and the my kind............

my kind.....quick to in and out, make money lari, I don't stick around, I very flexible.

the Philips ( and actually KYY too ) kind....they stick around.

last few years, I doing very well too. But, I probably can do better if I can stick around my winners ...to stick around needs conviction, belief, personality, attitude.........Like I say, stock market, its about attitude and information not about smart or intelligent only.

Posted by qqq3 > 2020-01-24 16:40 | Report Abuse

last 12 months....those who stick with Jaks, Armada, Dayang, Carimin, Vitrox, Penta and many more also can make a lot of money...


Those who stick with G Kent last 12 months no money to make but maybe next 12 months their turn.............



me? I don't stick around so long.....but I can also tell u , my portfolio is at year high.

Posted by Sslee > 2020-01-24 17:20 | Report Abuse

Hahahaha qqq3,
Quick to take profit. But slow or reluctant to cut lose.
Must learn from CPTeh how to cut loss.
Wishing all a Happy and Prosperous CNY 2020

Posted by qqq3 > 2020-01-24 21:26 | Report Abuse

people say traders got high risk ...but not my case......my portfolio is actually small beta with gradual improvements, I would not consider my portfolio high beta.

I sell a lot of shares with 1- 5% losses and major gains are make from selling shares with 10 - 20% profits..................

to make money, the idea is to have more shares in counters that works and less shares in counters that are mistakes..............

Posted by qqq3 > 2020-01-24 21:34 | Report Abuse

and my long term investment, TSMC doing very well.........

Posted by qqq3 > 2020-01-24 21:34 | Report Abuse

I don't stick around long.....but last 1-2 years a bit longer already....and certainly more focused .....

recently, my big money from Serba ( sold at the top ), Fronken, SCIB, WCE, solarvest and this week Supermax...........and no significant mistake...........

Posted by qqq3 > 2020-01-24 22:31 | Report Abuse

In forums, people have too much attention to results.......but that is unscientific......



A better approach is to examine the process not just the results...............

Posted by RainT > 2020-01-28 12:02 | Report Abuse

The market sentiment will be bad due to Wuhan virus

One after another bad news in world after trade war

Posted by oasischeah > 2020-01-28 17:59 | Report Abuse

Very unexpected to go below 85 sens. Now it may go to 81 sens or lower with so many world problems. Perhaps it is already in recession.

Posted by Choivo Capital > 2020-01-28 18:17 | Report Abuse

Phillip ah,

I only know how to value companies i understand, this one i don't.

But i'll give it a crack anyway.

When i talk to industry insider, for example one of the QS involved for LRT, he tells me, GKENT relied on "cable" for the job. The skill is not above Gamuda.

PDP vs Turnkey
PDP basically Cost Plus Contract. Turnkey, is make it happen within the agreed price. Given a choice, which one will a contractor choose, and which one will be more lucrative? Of course PDP lah, free money mah.

Now turnkey, unless you are telling, me they give them margins in excess of the PDP (in exchange for the risk being taken), ie make it more expensive, i don't see how the 6% can happen.

Water meter business, this one i have no idea. It makes profit of RM20m a year. How certain i am of GKENT water meter business to double/triple in profit, or maintain, i have no idea.

Now im going to be conservative, since i don't know much.

Water Meter: RM25m per year for now until eternity.
LRT2/3: RM60m split over 4 years, (6% of RM1bil).
Engineering: RM0 because i no idea how good it is.
Discounting: 10%.

Using these conservative estimates, its worth about RM300m. Add the cash of RM200m. Its now worth RM500m. Which is right about the current market cap.

Is it worth it?

Yes, only if your analysis of the water meter business is completely on the mark.

And their engineering business is as good as you say.

Now if you would be so kind, could you show proof of this wonderful ability for GKENT in engineering and construction that will allow them to keep winning contracts with nice margin? Better yet, show us who are the competitors, and how is gkent better than them.

Posted by Choivo Capital > 2020-01-28 18:19 | Report Abuse

RainT,

Perhaps you can illuminate me on the incredible engineering and execution ability of GKENT as a contractor?

I have no skin in game on this, but i also want to make money. Can educate me?

Posted by Philip (Can I advise you?) > 2020-01-28 18:20 | Report Abuse

What the bullshit is 6% of 1 billion over 4 years? What is that 1 billion?

Posted by SHQuah > 2020-01-28 23:30 | Report Abuse

Today SBB more than usual.

Posted by Philip (Can I advise you?) > 2020-01-29 00:10 | Report Abuse

Let me iterate one last time, as this is getting irritating.

The difference between PDP and fixed price contract is simply this. In PDP, the risk is borne by the government, as the project delivery partner works to make sure the project is done within costs, and he gets a portion from the contract size ( in this case 6%). In the fixed price contract, the tenderer has to bear the risk, and source out financing to complete the project ( hence the mrcb lawyer discussion). With regards to this issue of added risk, the contractor will then have to charge a higher fee to complete the financing and project costs. The usual fees gathered as a main contractor usually run between 10-12%, more if it is a design and build project.
Now, the lrt3 project has been redesigned, reduced in size and number of cars and stations. It has been awarded here:

https://www.thestar.com.my/business/business-news/2018/11/05/mrcb-gkent-accepts-lrt3-contract-award-for-revised-sum/

So now, here are some facts and figures and where I look at the earnings of gkent in the next 4 years:

1. Light Rail Transit 3 (LRT3) completion 2024 - 11.4 billion ( assume 5.5 billion to gkent).
Conservatively, 5% of 5.5 billion is 275 million to split in the next 4 years, or 68 million a year earnings from this project. Guaranteed orderbook confirmed by LGE in Nov. I personally am expecting gkent to do 10% with the revision of new contractors ( bye bye IJM), new redesign and new package, meaning I think they can do around 500 million over the 4 year period.

2. C) MRT Sungai Buloh-Serdang-Putrajaya (SSP) Line - Work Package SSP-SY-2014
This is going to complete in July 2022, and is 41% complete. Gkent is in charge of the rail systems control ( the M&E portion always at the end, civil work comes first), and their contract of 1 billion is expected to give them 25% earnings, or 250 million which will kick in in 2020-2022. So the next 3 years will see them earning 250 million or roughly 70 million in earnings in the next few years.

3. press release george kent forms agreement with honeywell
www.georgekent.net › wp-content › uploads › 2019/07 › GK_July-2019

Technology transfer and water meter manufacturing with Honeywell. They are now going to produce the v100 and v110 water meters which will be exclusively sold under GKM brand in 26 new territories internationally and in Asia. The non digital water meters are doing 25 million in earnings a year. As they resell these back to elater at cheaper prices than Honeywell produces it in Europe, a complete meter solution reduces manufacturing costs and increases margins. I believe with this technology transfer they can boost earnings to 40 million a year in the next 5 years post teething problems in upgrading the factory. But don't take it from me, gkent management expects the business to double ( 50 million) in the mid term next few years. I remain conservative.

As for the digital water meters, from edge - While it is still at the pilot stage, as they are working with mobile operators in testing the transmission of data, we believe that should it take off, it would be a strong growth factor for its metering division. We anticipate the smart meters could potentially grow its metering revenue by a minimum of 50%, should GKENT is able to package its smart meters together with its existing products. FYI, e Selangor water board pilot tests are complete and showing very good responses, especially as the internet and national fiberization plans on the way. Roll out is already imminent with gkent the only local manufacturer of these smart water meters in the market ( no competition locally). If this takes off, we can look forward to 10 million in earnings yearly in the mid term.

4. Water treatment plants/ hospitals. As they have a successfully completed and handed over projects and are bidding for the new tenders under kklw/ JBALB, I wouldn't be surprised if they picked up a few more projects here and there in the mid term. But this is currently in backbench as their main concern now is to simply complete and handover lrt3 project successfully instead of hunting down more projects which they cannot complete.

>>>>>>>

PDP vs Turnkey
PDP basically Cost Plus Contract. Turnkey, is make it happen within the agreed price. Given a choice, which one will a contractor choose, and which one will be more lucrative? Of course PDP lah, free money mah.

Posted by Philip (Can I advise you?) > 2020-01-29 00:39 | Report Abuse

So to simplify my intrinsic valuation of the business, I expect them to do:
2020-2024.

Revenue estimation:

Water meter: 40 million earnings a year
LRT3: 385 million earnings over 5 years (7% of 5.5 billion), 70 million a year
MRT2: 150 million earnings over 3 years (15% of 1 billion), 50 million a year.
Engineering:? If I told you they submitted a bid for NFCP package 1 with Ericsson would you be impressed? I can't confirm this, but if march comes round and this comes true I would be the first person to be happy, unlikely as it may sound. In any case, any company that goes from treatment plant contractor to sole water meter manufacturer in Malaysia to hospital contractor to wtp concession to rail contractor has to have a strong technical team. They will have a fighting chance unlike many contractors out there.
Discounting= 20%

Yearly earnings 128 million for the next 4 years, or 5 year outlook of 500 million in earnings from which I only need to pay 273 million today ( with 200 million in cash).

Am I buying it below intrinsic value today? Definitely. Do I think this investment better than PPHB? Definitely

But I suppose you already have a clever remark ready. Just recall that my 1 year investment proposals in QL, STONECO, TOPGLOV, PPHB, YINSON is already doing very well. And the results of PCHEM ( which is awaiting results from PIC contribution) and GKENT ( awaiting LRT3 contribution)
Is just a waiting game over the next few years.

But I digress, maybe your 5K thesis into rcecap is probably worth the analytical knowledge compared to my free and simple investment thesis that span decade.

If you don't know how to value companies that you don't understand, why are you even trying in the first place?

My advise, if you don't know how to value a company, start away from them and stick to what you know instead of buying everything...

>>>>>>>>>>
I only know how to value companies i understand, this one i don't.

But i'll give it a crack anyway.

Posted by K-Den > 2020-01-29 07:28 | Report Abuse

day day record low, sigh

Posted by SHQuah > 2020-01-29 10:01 | Report Abuse

The benefit of Share buy back could to reduce the number of weak shareholders.
Hopefully after sometime the remaining will be all strong shareholders.

Posted by SHQuah > 2020-01-29 11:14 | Report Abuse

Very disappointed why keep on selling down when you know there will be a share buy back end of the day.

Posted by Baby Shark > 2020-01-29 14:10 | Report Abuse

Lucky I jual habis 1.03.. rugi 70 ringgit/biji.. if not, now kena rugi besar !

Posted by Baby Shark > 2020-01-29 15:19 | Report Abuse

Will come back here forum when 0.60.. Gong Xi Fa Cai

Posted by SHQuah > 2020-01-29 17:44 | Report Abuse

Another big share buy back today.

Posted by malpac63 > 2020-01-29 18:47 | Report Abuse

This is more like it. Show the public via SBB the downside is limited.

Posted by K-Den > 2020-01-29 19:56 | Report Abuse

got lower low? nvm, we support again

Posted by enigmatic ¯\_(ツ)_/¯ > 2020-01-29 23:07 | Report Abuse

I actually think that GKENT is undervalued now.
Technicals show that it is oversold.
Price is near 5 year low.
Past 5 consecutive years show profit in EVERY quarter.
DY is higher than FD.
PE<10, ROE>10.
Or ala calvintan investing style, price<NTA.
How many companies on Bursa can provide you these criteria?

Posted by TillyLovers > 2020-01-29 23:17 | Report Abuse

Hihi, do you think that the price will recover above RM3 within 3 three years?

Posted by KassimBaba7 > 2020-01-29 23:28 | Report Abuse

Gkent ceiling price for now would not me more than 1.70 based on their performance. the days of RM2-3-4 is gone unless they really recover their income/projects.

But at <RM1 its a damn good deal still.

Posted by SHQuah > 2020-01-30 08:52 | Report Abuse

Below RM1 is a good buy.
Based on the revenue, profit, PE, dividend and NTA. the fair price should be around RM1.20 to 1.30.

Posted by RainT > 2020-01-30 09:52 | Report Abuse

so when will up to FV 1.2 ????

when when

Posted by RainT > 2020-01-30 09:53 | Report Abuse

no more big projects frm government

howto back to rm3?

Posted by RainT > 2020-01-30 09:54 | Report Abuse

past 5 years show profit (quarter)

but do u notice that the profit is on downtrend on each quarter?

revenue also on downtrend

Posted by RainT > 2020-01-30 10:07 | Report Abuse

@Philip

as usual thanks for sharing insight

but hopefully GKENT really is that good in comimg years

Posted by apolloang > 2020-01-30 10:42 | Report Abuse

no jibby no power golf buddy