Posted by commonsense > 2019-03-05 11:08 | Report Abuse

Hi AFMGT,

I think they are still negotiating with potential investors/ buyers of the asset. Negotiation has actually started since last year. From my understanding they have put an estimate 1 year as a deadline for the disposal. That being said any potential disposal can only be confirm when management decides to put OMIA as "Asset for sale" in their balance sheet. Once that is done they will have 1 year to do so.

Just to inform u that OMIA losses is actually not small. In Fy17 the total core losses (excluding impairment) was at rm30mil. My estimate is that in 2018 the losses was still around rm20mil. However all of this losses is already part of MBMR patami of RM165mil.

So basically, if managememt decides to disposed of OMIA, there will be an immediate jump in profit of between rm10mil to rm20mil.

My projected profit of rm200mil in fy19 does not take into account the disposal of OMIA.

Regards.

Posted by Sebastian Sted Power > 2019-03-05 16:47 | Report Abuse

RM2.60 here I come. I'm perodua lover

Posted by Vincent_Tan > 2019-03-07 22:15 | Report Abuse

07-Mar-2019 Insider EMPLOYEES PROVIDENT FUND BOARD (a substantial shareholder) disposed 636,700 shares on 04-Mar-2019.
06-Mar-2019 Insider EMPLOYEES PROVIDENT FUND BOARD (a substantial shareholder) disposed 121,100 shares on 01-Mar-2019.
05-Mar-2019 Forum 3 New Comments
05-Mar-2019 Insider EMPLOYEES PROVIDENT FUND BOARD (a substantial shareholder) disposed 500,000 shares on 28-Feb-2019.

Posted by Vincent_Tan > 2019-03-07 22:16 | Report Abuse

Those car lover buy BAuto. Cheaper.

Posted by commonsense > 2019-03-08 06:04 | Report Abuse

Hi vincent,

It's actually incorrect to say BAuto is cheaper than MBMR. When valuing a company, you need to compare the company's market capitalisation with the earnings that its generating. This can be done using the PE multiple (Share price /Earnings per share).

BAuto share price of RM2.19 is earning a total of 19.08 sens in the past 12 months. This translate to a PE multiple of 11.5x.

MBMR share price of rm2.63 is earning a total of 42.35 sens in the past 12 months. This translate to a PE of only 6.2x. As u can see MBMR is actually "cheaper" than BAuto by almost half.

Another metrics that u can use is the PB (price over Net Tangible Assets). For every Rm2.19 share of BAuto, it is being backed by an NTA of 44 sens. This equals to 4.9x PB.

For every Rm2.63 share of MBMR, it is being backed by an NTA of rm4.04 per share. This translate to a PB of less than 0.7x. Using the PB metrics, u can see that MBMR is still a lot "cheaper" than BAuto.

Regards.

Posted by Vincent_Tan > 2019-03-08 15:52 | Report Abuse

Disagree. Why BAuto can declare more dividend not MBM?

Posted by trapped > 2019-03-09 13:51 | Report Abuse

commonsense still promoting bec trap buying at RM 3?

Posted by commonsense > 2019-03-09 19:06 | Report Abuse

Hi Vincent,

When u want to analyse the dividend, u need to analyse the maximum payout a company can make. For a dividend to be recurring, it will need to come from the company's earnings. So in the case of Bauto, the max dividend it can pay from earnings would be 19.08sens (100% dividen payout) while MBMR max dividend the company can pay is 42.35 sens.

But all this will depends on managememt decision and strategy. You seldom will see a company make a 100% dividend payout as normally they would prefer to use the money elsewhere in order to create more value to its shareholder. Some prefer to do a share buybacks (decrease the share base which result in higher eps in future), pay debt (improve balance sheet strenght and reduce future interest payment which result in higher profit), invest in new assets ( which would increase future income) etc. Basically what u do with the money will depend on the management's strategy but in general the max recurring dividend that u can pay will still depend on the company's earnings.

In the case of Bauto the reason to why the dividend payout is high (in FY18 the payout ratio is more than 100%, the company is paying more div that it earns) relates mainly to the management acqusition of their controlling stake in Bauto from Vincent Tan back in 2016. They had to take a loan of around rm406mil to pay to Berjaya Corp for an additional effective interest of around 11.33% in Bauto (this increase management effective interest in Bauto from only 10% to 21.3%.). Basically Bauto management needs to pay back this loan to the bank hence why the very high dividend payment.

MBMR on the other hand prefer to use the cash that it generated to pay off its outstanding debt in order to reduce the interest payment in the future which will increase the future profit further. Debt has fallen from RM375mil in Fy 16 to only RM145mil (however most of the remaining debts are actually trading debt which is backed by the company's inventories and receivables). That being said, investors should expect higher div payment in the future since now the company has more free cash flow it can used to reward investors. The potential disposal of OMIA will increase the free cash flow even further as MBMR will need less working capital to allocate to its business in the future.

Regards

Posted by EPF_sell > 2019-03-10 13:15 | Report Abuse

We don't see MBM debts reduce. We only 3 sen dividend is maintained even QR(Profit, sales) quite good. 6/2.61=2.3% DY worse than FD or Bauto DY.

Posted by sheep > 2019-03-10 15:03 | Report Abuse

went up from 2.00 to 2.70.. still promoting at every counter that is losing money. forumers there not happy lah. Including me...
wakakakaka

Posted by Richard Lee > 2019-03-11 08:12 | Report Abuse

why so susah analyse? Just ask yourself now and coming 2-3years which car brand most found on the road

Posted by Crash44 > 2019-03-11 15:19 | Report Abuse

Good to have people think commonsense a nuisance.

Posted by Alex GunaSeelan > 2019-03-11 16:44 | Report Abuse

Its good to have commonsense to comment here. :)

Posted by pharker > 2019-03-12 23:51 | Report Abuse

Actually, I have read through tons of recommendations and analysis in this forum. But COMMONSENSE one is one of the most rational and supported by facts, void of emotions and nuisanse jargon.

Though his recommendations may not 100% guarantee profitable trade, at least his analysis is logical and supported by numbers

Anyway, thank you for the good work and sharing. I made some profitable trade in this counter based on his analysis here

Posted by Icon8888 > 2019-03-13 14:22 | Report Abuse

what happened ?

: 0

Posted by Sebastian Sted Power > 2019-03-13 14:33 | Report Abuse

dont later UMW suka suka offer RM3 again. Golden egg

Posted by Sebastian Sted Power > 2019-03-13 14:35 | Report Abuse

Top 3 gainer counter of the day. Hahahah!!

Posted by Icon8888 > 2019-03-13 14:36 | Report Abuse

maybe got corporate development ?

Posted by Sebastian Sted Power > 2019-03-13 14:36 | Report Abuse

Rm2.68 disapu bersih bersih. Slow and steady. I scare limit up

Posted by cchin > 2019-03-13 15:20 | Report Abuse

Wow ..... PE less than 6

Posted by GLNT > 2019-03-13 15:24 | Report Abuse

MBMR so cheap. Sooner or later it will surge lah. U use PBV, PER, PEG to value, all cheap cheap. Scare off all the little guys first lah, then surge.

Posted by Richard Lee > 2019-03-13 15:27 | Report Abuse

getting hotter here

Posted by cchin > 2019-03-13 15:28 | Report Abuse

Most likely to hit 3.00 this week

Posted by cchin > 2019-03-13 16:42 | Report Abuse

Investors looking for lower PE stocks. Mbmr is one of them. PE below 6

Posted by Sebastian Sted Power > 2019-03-13 17:26 | Report Abuse

good is EPF keep selling but the price still keep naik-ing

Posted by commonsense > 2019-03-14 11:32 | Report Abuse

Hi guys,

Please find a summary of MBMR for the benefit of those that just got to know company as a potential investment. Apologise in advance to some as this might sound a bit of a repetition to my earlier posts.

MBMR is an automotive company that has 2 core business. The first being the manufacturing of auto components (air bags, seat belt, alloy and steel wheels, steering wheels and noise, vibration & harness products). They are currently the largest manufacturer for these products in Malaysia. The second main business is the auto trading business (Perodua, Volvo, Volkswagen, Hino and Daihatsu).

However, the main profit contributors to the group bottom line is actually from Perodua via its 22.6% interest in the company. Out of the RM200mil PBT recorded in FY18, more than 80% actually comes from Perodua. Hence why when analysing this company, one should actually analyse Perodua outlook first.

In FY18 the company managed to deliver a PAT of RM189mil and a profit to shareholder (PATAMI) of RM165.6mil (excluding impairments it would have actually been RM173mil). At the current share price, the company is only being valued at a PE of 6.7x which is way below the industry average of 15x PE. As a reference, UMW (another company with exposure to Perodua via its 38% holdings) is currently trading at a PE multiple of almost 20x.

Catalysts for the company are:

1) Still high demand for the new Myvi

2) Sales of SUV Aruz. As of February, the sales is already at 3,400 units with bookings of more than 14,000 unit. The best part is that 85% of the sales and bookings are for the higher end version which commands better profit margin for Perodua.

3) Future uplift in sales from the newly revamp Alza sometime in 2H19.

4) Sales to UMW Toyota Motor. Please take note that the Toyota Rush is actually being manufacture by Perodua. The engine of the new Vios is also currently being manufacture by Perodua as well.

5) Improvement in sales of automotive component divisions. As mentioned MBMR is the biggest manufacturer of locally assemble automotive component in Malaysia. Given the new SST structure, a lot of brands have decided to start sourcing their automotive parts components locally in order to reduce the cost from higher SST and import duty.

6) The potential disposal of OMI Alloy Sdn Bhd (the alloy wheel business) which will immediately increase the company’s profit, strengthen its balance sheet and free up MBMR’s cash flow. In FY17 OMIA recorded a core net loss of around RM30mil. I would assume the losses in FY18 was still in the RM20mil level. As an example, MBMR core profit to shareholder would have been around RM180mil in FY18 if we were to exclude OMIA result.

I think the company would be able to achieve the RM200mil profit to shareholder target in FY19. Even if profit only reaches RM185 mil in FY19, at the current share price, the company would still be valued at a mere 6x PE, the lowest in the industry even though it has a direct exposure to Perodua. Most of the time, market leaders normally commands a premium vs the industry average. In MBMR case, they are actually trading at a discount of 60% (based on industry average of 15x PE) which is weird.

Regards,

Posted by Icon8888 > 2019-03-15 10:36 | Report Abuse

no RM4 no sell

Posted by Icon8888 > 2019-03-15 10:41 | Report Abuse

as a matter of fact, why would I want to sell this stock at all ? it has moat, can hold long long term

Posted by Richard Lee > 2019-03-17 21:14 | Report Abuse

icon sifu, last Qr EPS 15 liao (belum add the Aruz taiko sales); at least coming 4QR the aruz sales will be bombard. Be conservative a bit, let say we apply back last QR EPS15 (but for sure will be higher); EPS15x4= 60.

P/E 10, should be no RM6 no sell

Posted by Icon8888 > 2019-03-18 09:24 | Report Abuse

30% of my stock pick competition portfolio is in MBM

the biggest

Posted by Sebastian Sted Power > 2019-03-18 09:50 | Report Abuse

look strong momentum

Posted by Ricky Kiat > 2019-03-19 21:17 | Report Abuse

https://car.cari.com.my/portal.php?mod=view&aid=130216
Perodua Aruz订单突破逾万张 原厂放眼在东马市场成为主流SUV

Posted by Icon8888 > 2019-03-19 21:26 | Report Abuse

Wow

Posted by Ricky Kiat > 2019-03-19 21:32 | Report Abuse

dumb dumb hold...(^-^)

Posted by Icon8888 > 2019-03-20 03:10 | Report Abuse

30,000 this year ? Three months into the year already sold 14,000 !!!


Icon8888 They target to sell 30,000 Aruz this year , right ?

Now after one month launch already 8,000
09/02/2019 16:48

Posted by cchin > 2019-03-20 09:32 | Report Abuse

investors yet to realize that profit for 1 aruz ~ 1.7-2.0x of 1 myvi. The coming Q result will see profit increase significantly

Posted by Richard Lee > 2019-03-20 18:19 | Report Abuse

epf everyday dumping but the price still steady.

why? because foreign funds more pandai and makan all

Posted by calvintaneng > 2019-03-21 14:28 | Report Abuse

commonsense Hi calvin,

I actually agree with you that the best time to enter into an investment is when people are most pessimistic on the asset/ shares. This is especially true for cyclical type of companies like those that are in the business of commodities (like steel, oil and gas players etc) or business that is highly correlated with the economic cycle of a country (property and banking companies for example). At the bottom of the cycle,

However, I am just not sure that Talam Transform falls under this category.

Some people would think that with a lot of lands under its books, the company can always try to sell them in order to raise cash. But given the current market condition, it might be a challenge for the company to do so rapidly and at a favorable valuation. The recent Serendah lands disposal exercise that was announce last month for example. Based on the details of the deal, Talam’s total cash payments would still be dependent on the take-up rate and the progress billings of the projects on those lands

Based on the company’s 3Q19 result, there is a total of RM33mil of short-term debts (mostly terms and bridging loans that have interest rates ranging from 9-12%) that needs to be paid in the next 12 months. However, I believe the short-term debt amount should have been higher given that the Al-Bai Bithaman Ajil Islamic debt securities (Baids) is expected to mature in June 2019 of which Talam needs to pay a total of RM52mil to the securities holders (profit rate of Baids is 9%). So, I would actually assume that the near-term debt to be paid is around RM80mil instead of the reported RM33mil. With only a cash reserves of RM6.5mil, the company will need to raise capital fast or risk of being in default later.

The reported debt of the company as of Oct 18 is around RM90mil but investors need also to take into account the RM212mil amount due to IJM Group (under “other payable”) which carries an interest rate of 6.5%-8.0%. This would bring the adjusted debt amount to RM300mil which translate to a net gearing of more than 80% of equity.


If you are looking to diversify your portfolio outside of Talam (due to its weak earnings outlook and liquidity issues), I would recommend you to look at MBMR.

MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.



Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.

Good luck.
10/02/2019 10:15 AM


commonsense

Calvin very busy making monies from Oil & Gas bull run so did not have time to reply

Now that O&G stocks taking a short rest I have checked up on TALAM & MBMR prospects

WHILE MBM R Share Price Has Already Gone Up TALAM Shares still very very cheap

NOW I THINK THE REVERSAL IS COMING

FROM NOW TILL APRIL 2019 TALAM WILL COME BACK INTO FOCUS AS ECRL WILL UNLOCK THE VALUE OF TALAM 2 ASSETS IN SERENDAH & GOMBAK (BOTH ARE HIDDEN GOLD MINES)

YOUR UNWARRANTED FEAR OF TALAM HAVING RM300 MIL DEBT IS A SMALL PROBLEM AS JUST THE DISPOSAL OF GOMBAK 100 ACRES LAND WILL BRING IN MORE THAN RM400 MILLIONS (MORE THAN ENOUGH TO SETTLE ALL TALAM DEBTS PLUS RM100 MILLIONS EXTRA CASH & ALL THE RICH LANDS IN SERENDAH, DENGKIL & OTHERS & 3 MALLS)

SO FROM 4 SEN TALAM CAN EASILY GO UP TO12 SEN

SINCE MBMR PRICE HAS GONE UP TO RM2.70 I DON'T THINK IT CAN GO UP ANOTHER 200% TO RM6.80? BUT TALAM GOING UP FROM 4 SEN TO 12 SEN FOR A 200% GAIN IS VERY POSSIBLE

ON FEB 2019 CAR SALES DROPPED BY 20%. I THINK BETTER SELL BEFORE MAY RESULT SHOWS A DROP IN MBMR RESULT THEN TOO LATE TO SELL

AND IT WILL BE TOO LATE TO BUY TALAM CHEAP BY NEXT MONTH NEWS OF ECRL IS ON

SO THE VERY BEST OPPORTUNITY IS NOW. SELL MBMR BEFORE IT CRASHES BY MAY.

BUT TALAM BEFORE IT RISES UP BY APRIL

SO NOW IS THE BEST TIME TO SELL MBM R & SWITCH TO TALAM!!

Posted by calvintaneng > 2019-03-21 14:31 |

Post removed.Why?

Posted by commonsense > 2019-03-22 07:02 | Report Abuse

Hi calvin,

Thanks for the recommendation on Talam.

Based on the 2 postings above, your thesis on Talam are based mainly on it shares trading below its NTA with a potential value to be unlock when the ECRL returns.

However, my concern on its high adjusted debt made back in Feb still remain. Given that a big chunk of the adjusted debt is actually with IJM, Talam might be able to still renegotiate with IJM for a delay or a new schedule payment. But the "other payable" with IJM still carries a high interest rate of 6.5%-8.0% per annum.

Even if you take out IJM's "other payable", you will still be left with the remaining RM80mil immediate debt obligation which consist of RM33mil reported current debt (9-12% interest) and the Al-Bai Bithaman Ajil Islamic debt securities of RM52mil (9% interest) that is expected to mature in June 2019.

Yes, your are right to highlight that Talam can always raise the cash from sales of some of its land.

But based on the company's announcement to Bursa, the last land deal that they had entered was back in January for a disposal of 3 blocks of vacant lands in Serendah for a total value of RM31.7mil (vs carrying value of RM23mil). However, if you look at the terms of the SPA for all the 3 blocks of land, the immediate payment received by Talam was only RM10mil while the remaining amounts are set to be paid based on progressive development of properties launched on the lands. Basically, the amount is still not enough to pay the immediate obligations/ debt mentioned above. The company needs to somehow raised the cash quickly at least before the maturity of the RM52mil Islamic debt securities in June (or if possible, they should try to renegotiate the payment schedule). Anyway, we will know of Talam’s balance sheet strength later this month when the announce their January 2019 result.

Hopefully they can settle the issue with the high debt soon so it will be more appealing to some investors.

For MBMR, I am still projecting a profit growth in FY19 vs the RM165mil achieve in FY18. The catalysts for the growths are:
1) Still high demand for the new Myvi

2) Sales of SUV Aruz. As of February, the sales is already at 3,400 units with bookings of more than 14,000 unit. The best part is that 85% of the sales and bookings are for the higher end version which commands better profit margin for Perodua.

3) Future uplift in sales from the newly revamp Alza sometime in 2H19.

4) Sales to UMW Toyota Motor. Please take note that the Toyota Rush is actually being manufacture by Perodua. The engine of the new Vios is also currently being manufacture by Perodua as well.

5) Improvement in sales of automotive component divisions. As mentioned MBMR is the biggest manufacturer of locally assemble automotive component in Malaysia. Given the new SST structure, a lot of brands have decided to start sourcing their automotive parts components locally in order to reduce the cost from higher SST and import duty.

6) The potential disposal of OMI Alloy Sdn Bhd (the alloy wheel business) which will immediately increase the company’s profit, strengthen its balance sheet and free up MBMR’s cash flow. In FY17 OMIA recorded a core net loss of around RM30mil. I would assume the losses in FY18 was still in the RM20mil level. As an example, MBMR core profit to shareholder would have been around RM180mil in FY18 if we were to exclude OMIA result.

I think MBMR would be able to achieve the RM200mil profit to shareholder target in FY19. Even if profit only reaches RM185 mil in FY19, at the current share price, the company would still be valued at a mere 5.8x PE, the lowest in the industry even though it has a direct exposure to Perodua. Most of the time, market leaders normally commands a premium vs the industry average. In MBMR case, they are actually trading at a discount of 60% (based on industry average of 15x PE) which is weird.

Regards and good luck on your investment in Talam

Posted by calvintaneng > 2019-03-22 11:12 |

Post removed.Why?

Posted by calvintaneng > 2019-03-22 17:54 | Report Abuse

Hello commonsense

See this

WAHAHA!!

FANTASTIC NEWS AN REVELATION FROM TALAM

1) TALAM WILL GIVE OUT 10% PRIVATE PLACEMENT AT PREMIUM (4.5 SEN)

USUALLY PP IS GIVEN AT A DISCOUNT (MEANS LESS THAN LISTED SHARE PRICE)

BUT TALAM IS OFFERING PP AT PREMIUM (More expensive than buying from open market)

2) NA (NET ASSET) OF TALAM IS 9 SEN (SO EVEN INVESTOR BUY AT 4.5 SEN) THERE IS A NICE MARGIN OF SAFETY BY 50%


3) TALAM TOTAL DEBT NOW ONLY RM109 MILLIONS

EXCELLENT

EXCELLENT

KUDOS TO TALAM BOSS & MANAGEMENT TEAM!!!

ON MONDAY STILL GOT TALAM SHARES AT 4 SEN JUST HANTAM KUAT KUAT!!!

READ UP ON THIS TO "SEE"

http://www.bursamalaysia.com/market/listed-companies/company-announcements/6102745


COMMONSENCE BETTER SELL MBMR AND SWITCH ALL TO TALAM FIRST THING MONDAY MORNING

Posted by cchin > 2019-03-24 10:50 | Report Abuse

calvintaneng, it is good time for you to sailang talam

Posted by GLNT > 2019-03-26 15:11 | Report Abuse

EPF can't wait to sell I guess

Posted by calvintaneng > 2019-03-29 11:48 | Report Abuse

Another good stock is T7 global

ECRL will benefit T7 global

Posted by apolloang > 2019-03-29 12:12 | Report Abuse

mana ada conman,BUTALAND 100 share at 49cts also no money to buy ar? hahaha

Posted by dompeilee > 2019-03-29 15:38 | Report Abuse

apolloang too SORHAI to make $ from any counter la! Famously bought Huaan @ 20.5c & SOLD @ 21c in Sep '17...so happy like struck jackpot like that...WAHAHAHAH!!!

Posted by apolloang > 2019-03-29 15:51 | Report Abuse

donkeylee everyday tot he kena 4d only,what a big liar.everyday say he bought at low.....if really u must be richer than uncle koon already.play stocks until kena pergi tg rambutan

Posted by calvintaneng > 2019-04-01 08:07 |

Post removed.Why?

Posted by moneykj > 2019-04-01 08:22 | Report Abuse

This time I agreed with Calvin. Commonsense think he has the best market sense. Go every counter to talk down others including Orion. Orion YTD 100%. Her son 227%. How good is Mbmr leh?

My new counter is Redtone. Give you another chance, see Mbmr can beat my new counter Redtone or not since Orion too good for Mbmr.