Posted by yowtp > 2013-10-04 00:16 | Report Abuse

CT, good posting and thanks for sharing the good company PMCorp to us.
Tq.

Posted by cytew > 2013-10-04 05:47 | Report Abuse

Please do not worry about the fluctuation of cocoa bean price and US dollar, Guan Chong has HEDGED both in derivative market,that is why when JB foods and Petra foods making losses, Guan Chong still manage to make profit.

Posted by Nevets > 2013-10-04 15:23 | Report Abuse

Thanks for the message

Posted by cheeseburger > 2013-10-04 17:11 | Report Abuse

calvintaneng, thanks for the sharing. Yes will study on this PM...

Posted by cheeseburger > 2013-10-04 17:22 | Report Abuse

well, the first look on PMCORP (sorry to refer this in GCB forum) is there is zero dividen payout since 2005. Not even a single cents! I dun buy stock that dun pay out dividen...no matter how good is the earning, how excellent is the cash flow....

Posted by azlan88 > 2013-10-05 07:44 | Report Abuse

Hershey is opening their factory in Malaysia and will be operational from 2015 onwards. News says that cocoa production in this region will not be sufficient to support Hershey's needs. I thought that maybe gcb will benefit from this but only from 2015 onwards.

Posted by hornetsjet > 2013-10-09 17:38 | Report Abuse

Cocoa price has hits the two year high, same as the profitability of the company will revive!

Posted by kcchongnz > 2013-10-10 05:47 | Report Abuse

Posted by cytew > Oct 4, 2013 03:30 PM | Report Abuse
Guan Chong CEO and COO both are my kampong mates, they are very bright

Posted by cytew > Oct 4, 2013 05:47 AM | Report Abuse
Please do not worry about the fluctuation of cocoa bean price and US dollar, Guan Chong has HEDGED both in derivative market,that is why when JB foods and Petra foods making losses, Guan Chong still manage to make profit.

When I invest in a company, I prefer credible managers rather than bright managers. I always ponder this “bright” CEO and COO are clever in maximizing their own wealth or the profit of all shareholders. GCB is a classic example.

I have seen nothing good about the business performance of GCB. I doubt the accounting profit. It is not in sync with its financial health as shown in the balance sheet with growing debts. The cash flows of the company greatly diverges from what is reported earnings. It never has any free cash flows for years and yet it keeps on buying this and that investments and yield return of capitals, paying not-bad dividends and even buy back its own shares (?). It is warning signs all over.

Hedging should be a good practice by a company like GCB. But I really wonder are they doing the hedging of commodity price, or gambling with derivatives. I sense that they are doing the latter.

Posted by kcchongnz > 2013-10-10 19:16 | Report Abuse

cytew, I have explained in the same post about the performance of GCB; go study the performance of GCB for the past years in detail and tell me if you don't agree with me.

Posted by hornetsjet > 2013-10-11 10:41 | Report Abuse

The Cocoa price keep hiking now...I believe it will also raise the profit of GCB. Christmas is coming another 2 months, the Cocoa demand is really huge. So expected 4Q13 will be beautiful result!

Posted by nightrader > 2013-10-17 13:26 | Report Abuse

http://www.confectionerynews.com/Commodities/Chocolate-bar-prices-climb-25-in-past-year-as-cocoa-deficit-deepens-Mintec

Posted by Penang Ran > 2013-10-22 21:16 | Report Abuse

I still keep monitoring this counter. Q3 result will tell ,if the profit has improve accordingly with rise in cocoa price. Hopefully the profit is come from raising their selling price And not affected by US currency.

Posted by ksng0307 > 2013-11-18 15:09 | Report Abuse

calvintaneng, can i know your email address?

Posted by chickmonk > 2013-11-19 23:02 | Report Abuse

Cocoa price spikedto historical high to 2800. Watch out for GCB.

Posted by chickmonk > 2013-11-19 23:05 | Report Abuse

Quarterly result coming out anytime. Buy now or never$$$$$

Posted by Doremi 88 > 2013-11-19 23:36 | Report Abuse

not really perform... may be due to cocoa price

Posted by chickmonk > 2013-11-19 23:56 | Report Abuse

Coming soon...

Posted by hobson64 > 2013-11-20 00:09 | Report Abuse

Share price may remain stagnant now....perhaps early January 2014 will move.

Posted by nightrader > 2013-11-23 16:50 | Report Abuse

Did GCB took steps to improve marketing and costs this difficult year so we can see profits next quarter as chocolate prices go up

Posted by kcchongnz > 2013-11-25 17:59 | Report Abuse

When I try to find good companies to invest in, it is always not an easy task. First of all it is very hard to predict the future. Secondly past performance is just a guide to the future performance.

After you have found a good company, the price may not be right. Or even after you have done a thorough analysis and find that there is huge margin of safety to invest in the stock, ie the intrinsic value is way above the market price, you buy it but find that the price never moves up, or even goes down. You may be wrong in your assessment or the market simply does not agree with you. That is the peril of trying to find a company to invest in.

However, after I have analysed and find that a company is a lemon and not worthy of investing. It normally, with very high probability that I am right.

I think Guan Chong has proven my point, and many other counters do.


Posted by kcchongnz > Oct 10, 2013 05:47 AM | Report Abuse X

Posted by cytew > Oct 4, 2013 03:30 PM | Report Abuse
Guan Chong CEO and COO both are my kampong mates, they are very bright

Posted by cytew > Oct 4, 2013 05:47 AM | Report Abuse
Please do not worry about the fluctuation of cocoa bean price and US dollar, Guan Chong has HEDGED both in derivative market,that is why when JB foods and Petra foods making losses, Guan Chong still manage to make profit.

When I invest in a company, I prefer credible managers rather than bright managers. I always ponder this “bright” CEO and COO are clever in maximizing their own wealth or the profit of all shareholders. GCB is a classic example.

I have seen nothing good about the business performance of GCB. I doubt the accounting profit. It is not in sync with its financial health as shown in the balance sheet with growing debts. The cash flows of the company greatly diverges from what is reported earnings. It never has any free cash flows for years and yet it keeps on buying this and that investments and yield return of capitals, paying not-bad dividends and even buy back its own shares (?). It is warning signs all over.

Hedging should be a good practice by a company like GCB. But I really wonder are they doing the hedging of commodity price, or gambling with derivatives. I sense that they are doing the latter.

Posted by nightrader > 2013-11-25 22:43 | Report Abuse

http://www.theedgemalaysia.com/business-news/264633-guan-chong-reports-3q-loss.html

Posted by cpng > 2013-11-25 23:02 | Report Abuse

Cocoa futures loss about $23millions,forex loss another $7 millions.I also from their klampung Parit Jawa,Muar..

They are gambling with company money!!!

Should abandon the ship fast...or you will sink together ..

Posted by cytew > 2013-11-26 11:07 | Report Abuse

Buy more , when every body is leaving the ship

Posted by hornetsjet > 2013-11-26 13:33 | Report Abuse

Cocoa price is raising now...is time to grab in low price.

Posted by cpng > 2013-11-26 13:59 | Report Abuse

Cocoa is hovering 2 years high USD 2800...GuanChong losses widen
Are they betting the wrong side.???

Posted by cytew > 2013-11-26 20:08 | Report Abuse

If Guan Chong is betting on the wrong side, what about JB foods and Petra foods ? they were betting on the wrong wrong side ........... haha!!!

Posted by cpng > 2013-11-26 20:34 | Report Abuse

I don't care even JB cocoa or Petra gambling on the Moon side..cos,they are private company .

GCB is a public listed company ...Big holders cannot simply use,public fund gambling

Posted by Penang Ran > 2013-11-26 20:54 | Report Abuse

Special thanks to kcchongnz that you pointed out the intrinsic value and doubt about their cash flow. Otherwise, I will jump in already by just base on their business word raking as quoted in news paper. Once again, thanks for your hard work put in to come out such a good analysis report.

Posted by Penang Ran > 2013-11-26 20:59 | Report Abuse

To kcchongnz, have you study uchitech ( 7100 ). I just bought some and reason to buy is cash rich company with good dividend pay out. Please to hear from you if you have so.

Posted by cytew > 2013-11-26 23:06 | Report Abuse

Who told you that JB Foods and Petra Foods are private companies ? both are listed at SGX !!! check out first !before you make any comments please !

Posted by cpng > 2013-11-27 00:07 | Report Abuse

Sorry for my mistake on JB Cocoa & petra..

But once again I just want point out with such lousy management of GCB..
You can accumulate as much as you can...

But not for me...I am here just share infos..

Posted by kcchongnz > 2013-11-27 04:56 | Report Abuse

The use of hedging in commodity prices and foreign exchange rate is a good practice used by companies to smooth out the volatility of the price of commodity used for their business and combat the volatility of exchange rate, such as cocoa for GCB.

But hedging is financial risk management tool, using the right hedge ratio and appropriate rolling contracts in commodity and currency forward contracts or options. If properly done, there will be no big swing in earnings of the company whatever happen to commodity price or exchange rate.
So if the business of GCB is good as it appeared to be, there should not be big swing in earnings. There should be reasonable cash flows

Looking at the financial statements of GCB for the last few years, the company reported high earnings every year and pay good dividends too. However many things did not appear right. Cash flows are extremely poor. Every year there is no free cash flow, flow resulting companies keeps on borrowing more and more money and its debts level keeps on ballooning.

I have been doubtful about it for a long time already; why is that you are making money year in year out but the balance sheet is getting from bad to worse? Where is the beef?

Now that GCB suddenly reported a very bad quarter with heavy losses. I think "the paper just can't wrap the fire any more". I suspect that for the last few years, derivatives have been used to mask the true picture of the company performance.

Anyway, this is just a suspicion. I do not have any evidence. I could be wrong in my assessment.

Posted by cytew > 2013-11-27 07:27 | Report Abuse

Actually I am trying to point out that GCB, JB Foods and Petra Foods all are doing the same type of business, and both JB and Petra were making losses over last few quarters, and finally Petra had decided to dispose its cocoa grinding factory in Indonesia, then only is able to make profit through its branded business, and GCB had ONLY making loss in current quarter, if GCB management is considered lousy, what about Petra and JB ? I think we should give fair comments on them instead of SINGLE OUT GCB.

Posted by Sapphire > 2013-11-27 18:20 | Report Abuse

i wunt do a business with a litle profit margin. if sales down,u can imagine that..

Posted by nightrader > 2013-11-27 20:38 | Report Abuse

kc if a company hv no free cash flow does that mean they are selling their product at loss ? I m no expert in cocoa but I read that cocoa grinders suffer from high cost of cocoa beans and low prices for cocoa powder even tho they may make profit for cocoa butter Could b this reason for losses at GCB? Appreciate you insight

Posted by mikashearer > 2013-11-28 03:47 | Report Abuse

GCB is a good stock.... buy in this few day.... january 2014 will be GCB day...

Posted by kcchongnz > 2013-11-28 06:12 | Report Abuse

Posted by nightrader > Nov 27, 2013 08:38 PM | Report Abuse
kc if a company hv no free cash flow does that mean they are selling their product at loss ?

No, this statement is more or less correct, but it is not a good statement to talk about FCF. Go goggle and read about cash flow from operations and free cash flows. Or if you wish, you could read what I talk about this in the title article in this thread what they are and what are their significance.

http://klse.i3investor.com/blogs/5_rules_cold_eye_kcchongnz/34595.jsp

For me to invest in a business (not talking about stock trading here), the least I expect the company's core business must have a net cash inflow each year (CFFO). Not only that, the inflow of cash must be at least equal to the net profit (NP) the company says it makes. Show me the cash. It is alright once a while the CFFO is not as much as NP, because maybe due to big increase in revenue and hence the requirement of increased working capital.

The company also need to spend money to maintain its business, or even expands to make more money in the future. This is what we called capital expenses (capex). So after spending for capex, the company would have some money left behind to pay dividend, share buyback, invest in another business, pay down its debts. It is alright if the company spend money with capex even higher than CFFO, and hence having negative FCF. The money spent must produce future benefits with return of capital higher than the cost.

But eventually the company must mature and start to have positive FCF. Otherwise it has to continue borrow more and more money and it becomes more risky when there is a severe downturn. Worse still, the company doesn't seem to reap any benefits spending on the capex.

I have talked too much about GCB and have shown figures and numbers. So much so the lovers of GCB will hate me more for talking about it. No, I don't like to talk bad other people's favorite counters and be a party spoiler. Do your homework to find out the following:

1) How is GCB's CFFO for the last say 5 years? Or is the quality of its earnings good?
2) What is the percentage of this CFFO to NP? Is it close to 100% on average?
3) Is there even negative CFFO, bear in mind what I said about the disastrous effect of negative CFFO?
4) How much is its FCF? Or is there any FCF at all for GCB for the last few years?
5) If there is no FCF, where does the company get money to carry on its business? Hint, check its balance sheets for the last few years.

Posted by calvintaneng > 2013-12-03 11:04 |

Post removed.Why?

Posted by hornetsjet > 2013-12-04 10:30 | Report Abuse

Calvin, i dont really get you on the crash of Cocoa bean price. As what i know is the Cocoa price has already gone up to new high last week. And they foresee the 4Q13 result could be better.

Posted by calvintaneng > 2013-12-04 10:39 | Report Abuse

Hornetsjet

Yes. It has rebounded. But look at 5 year chart to see a clearer picture. It is still down a lot. You must be very careful that Balance Sheet can be manipulated.

This was how Guan Chong did. Report many lousy quarters with mediocre or negative results while insiders are buying up all the time on bad news. Then SUDDENLY Declared A HUGE PROFIT OUT OF NO WHERE & PUSHED PRICES UP INTO THE STRATOSPHERE!

All Because of COCOA BEANS' PRICE RISE. Now Cocoa Prices Have Been Trending Down For Years. Prices Still Maintained by artificial support. I have Benefited from Guan Chong before and I should not say negative things. I think I will refrain from now. Please do your own study

Posted by hornetsjet > 2013-12-04 11:13 | Report Abuse

The 0.30 price tag during 2009 is really low! No wonder the PE that time is 4~5 only. The Cocoa price is reach its peak during early 2011 and started to slip afterward. Guanchong Price is just lagging in following the Cocoa Price by reaching its peak at the end 2011. When Cocoa price falls, Guan chong price is still maintained. This is because everybody are trusting that the Cocoa price will raise again due to higher demand from China and India and child slavery issue in Africa to be resolved.

Posted by Nevets > 2014-01-10 10:30 | Report Abuse

Published: Friday January 10, 2014 MYT 12:00:00 AM
Updated: Friday January 10, 2014 MYT 7:52:36 AM
Chocolate hub is Johor's sweet ambition

BY ZAZALI MUSA


GELANG PATAH: Johor wants to become the “chocolate capital” of the region by developing and positioning itself as the key chocola­te hub in Malaysia and beyond.

Mentri Besar Datuk Mohamed Khaled Nordin said it was possible to achieve the status based on the cocoa industry in the state, which he described as dynamic and vibrant.

“As the key chocolate hub in the region, Johor will play a bigger role in the cocoa and the chocolate-making downstream activities,” he said at a press conference at the opening of Guan Chong Bhd’s RM55mil industrial chocolate facility, GCB Specialty Chocalates Sdn Bhd, at the Port of Tanjung Pelepas industrial zone here yesterday.

He said presently, Malaysia had a cocoa grinding capacity of 300,000 tonnes annually, of which about 85% was based in Johor.

Mohamed Khaled said the RM816mil investment from US-based global chocolate giant Hershey to set up a plant in Senai, Johor Baru, was the start of achieving the chocolate hub status.

“The company’s investment in Johor is the single largest in Asia to date, and its Johor plant will be the distribution centre for the Asian region,” he said.

Mohamed Khaled said the Hershey factory in Johor was expected to be completed in 2015, and the investment would create more than 400 job opportunities for locals.

He said that apart from Hershey, there would be another international chocolate company setting up a plant in the state this year but did not disclose further details.

“Don’t worry, we will reveal to you (the media) when the time is right,” he said.

Mohamed Khaled added that it was becoming more challenging to attract investments as Johor continues to face competition from other states and countries in the region.

http://www.thestar.com.my/News/Nation/2014/01/10/Chocolate-hub-is-Johors-sweet-ambition-RM816mil-investment-from-Hershey-is-a-start-says-Khaled/

Posted by aiman168 > 2014-01-10 15:39 | Report Abuse

TAK PAYAH CERITA PANJANG LA.. BELI AJE SEMUA TENGAH CARI DUIT MAU RAYA NI..

Posted by thumxj > 2014-02-06 17:32 | Report Abuse

for this counter, buy warrant or buy mother share better?

Posted by Alex Lim > 2014-02-28 18:40 | Report Abuse

2 consecutive Quarters loss money..........

Posted by cpng > 2014-03-01 17:49 | Report Abuse

Cocoa price hit 3 years high ..near USD3000 mark..
This company still in red....they are gambling the futures not doing the business
Are you still want to onboard with this kind wolf??

Posted by 13132323 > 2014-03-03 18:05 | Report Abuse

why suddenly go down so much ?

Posted by Up_down > 2014-03-03 19:14 | Report Abuse

This stock is almost on the way to Holland soon.

Inventory value RM 508 million as at 30 June 2013. Let say the average price was RM 6,900/mt ( US 2300/ton). There was 73,000mt of cocoa in its warehouse. They supposed to make at least RM 73 million (73,000 x RM 1,000) from the average cocoa price increased to US 2700/mt for the past 6 months if they really trade cocoa.

It inventory hit a record high 850 million or almost 94,000 mt of cocoa as at 31 Dec 13. Amazing!

Posted by 13132323 > 2014-03-03 22:51 | Report Abuse

With this market will go to Holland sooner lo ? Still got lots in hand. Waiting to die together with the company this time ! Si liao

Posted by Up_down > 2014-03-03 23:18 | Report Abuse

With huge inventory, It can't even make money during the cocoa prices flying. Be prepared to tapao when the prices of cocoa depressing.