AGM & results coming end of month. 4 sens per Q (16 sens p.a.) is attainable. At 2.20, the yield is 7.27% while waiting for the new expansion to elevate its earning to a much higher level.
old man, u r always showing off. sick of u trying so hard to be a sifu. yamkong.... i prefer Ooi Teik Bee. he is proven. u r rubbish and talk nonsense only.
This Company.. is one of the leanest company on the market. Despite being a manufacturing which typically has low margins and low return on assets, this Company has really been earning thick margins while constantly pouring out cash as dividends. It's ROA and ROE are seriously high.
I suspect that after the investment talk today by Icap, all the hungry uncles who need to throw their money somewhere may throw it into this counter.
I like dividend stocks, thus this Wellcall was one of my targets of research since May 2009 when it was traded less than RM1.00. Till today I still dare not to invest into it, even though I am always seduced by its high dividend yield. Worst still is that I know the industry quite well and I buy its competiveness. Up to date, time has proven that I were wrong for the last 4.5 years. So, why I dare not to buy Wellcall ?
Reasons : The owners are Taiwanese. The biz is in manufacturing. The scale is small.
About 20-30 years ago, there were many Taiwanese coming to M’sia setting up small and medium factories for Tax Incentive and cheap labor. They set up simple plants just good enough to run production and generating profit. They did not focus much on R&D and capital expenses to grow the plant. Upon the end of tax incentive by the government and about the end of life span of the machinery, they just run away to elsewhere, mainly to China in this case, left behind lot of unpaid employees and debts.
Wellcall has many similarities to the above but luckily so far is on good side of the story and is still running biz in M’sia. Due to the poor track record of its type, I refrain myself from buying into Wellcall.
Note: There are many good biz by Taiwanese in M’sia too. Few are not equal to all. You should make your own choice wisely.
Mr KC Chong: This is an another example leading me to put extra focus on owners of a biz and explain why I do not buy into your portfolio. Do you still remember my first comment why I do not touch Fibon in the early day and even till today? It is due to the same reason. Time has proven that I am wrong on Fibon beside Wellcall. Nevertheless I am still stubbornly holding on my criteria. I know you are supporting me on my choice, aren’t you?
bsngpg, previously I had the same thinking as you when it comes to Taiwanese stocks but actually they are definitely better managed and more transparent than Chinese counters, only thing is that they are only very thinly traded. The other two prominent stocks are Tong Herr and CSC Steel where the companies have abundant cash and reserves and consisitently paying dividends. KCChongnz, if you don't mind perhaps you can give us your views on these 2 stocks I mentioned and whether you would consider investing in them based on FA.
Inwest88: among the 3, I chose Welcall in term of industry prospect, competitiveness and my slight insight in the industry. However CSC has de strongest shares holder which is National steel of Taiwan(大佬) in other word it is the safest. But Steel industry is too competitive with thin margin and high volatility on raw mat and also the unpredicted dumping game by giant players from China. Whereas my last follow up on Tongherr was years back to when their plant in Thailand starting operation. Do not know much thus do not comment further but I do not have good impression that its screw biz is great else it would not fall out of my research radar. Hope to hear from our 大佬KCChong.
Well all has certainly created a lot of wealth for shareholders. One may be a little late now to invest in wellcall as I always think a great company may not be a good investment if the price is not right. have commented on csc before here, basically same opinion as bsngpg. Tong herr I don't know anything.
To me I don't stereotype nationality, race etc and make judgement of their credibility. But if you are not comfortable with the management, which to me is also very important, don't invest in the company. Move on.
On the management, I knew PIE the most among the four. PIE is run by professionals from ex-MNC- Intel and some from S’pore, US and Taiwan. I am conformable with their profile and competitiveness in the industry. The mother company is Hong Hai(Koek Tai Ming, one of the richest in Taiwan). Mr Koek earned good credit from his community, at least reported so by the media.
Dividend yield is great and consistent. It is in net cash position.
With the above, I judge PIE as relatively “safe” for investment.
On the other aspect, I dislike its biz(semi-con products/services) with just moderate net margin(~10%), inconsistent PAT and Rev( up and down), moderate numbers on Rev and PAT, inconsistent growth or even no growth sometimes. I think the product is in vigorous cyclical nature– not good. The products are not unique and facing stiff competition i.e. Red Ocean biz. Also OEM is not an attractive biz as it is bounded to be squeezed by buyers at their will.
Hope : The main OEM biz of the mother company(Hong Hai) in China is facing compressed margin due to escalating labor cost. Hong Hai is now moving the biz to inland (贵州) for lower labor and maybe one day out from China to Vietnam and Indonesia. Hopefully there will be some orders spill over to PIE which will increase its Rev and reduce volatility.
Hi Inwest88 : I do not know about ICap but I do not mind telling you that I have 9000 shares of PIE and enjoying high yield, else I cannot write so fast about PIE. When decision was made to invest in PIE, I mis-calculated its growth prospect. Consequently, thereafter while enjoying high yield, I missed growth opportunity, thus at last I callously (狠起心肠) sold all and changed to GTronic at 1.78 on 8 Mar 13. As at today, I considered myself lucky in making that fortune move. After this, I do not know if the fortune can go on. Investing is an art of hard work and luck.
Hi KC Loh : I am not following you, but somehow, most of the threads I visited, your old-happy-victory man icon is there. Thus I believe we have high similarity too. Please chat with us more frequently. Wow ! how did you achieve Financial Freedom(MCK=Men Chok Kang) at the age of 43 or earlier ? What type of lovely coconut for sale ?
New IPO: The onshore and offshore support services provider for the O&G industry, Steel Hawk Bhd aims to list on the Ace Market!
MQ Trader 3157 views | 3 d ago
0:17
New IPO: The largest mini-market player and a leading groceries retailer in Malaysia, 99 Speed Mart Retail Holdings Bhd aims to list on the Main Market!
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....
KC Loh
13,701 posts
Posted by KC Loh > 2013-01-12 15:19 | Report Abuse
Director & shareholder selling his stock... well well.... :)