Posted by stockraider > 2019-04-12 12:50 | Report Abuse

Chivo,

U r totally wrongloh....!!

If something happen to credit culture certainly will impact RCE mah...!!

But i not seeing cc lending at 11% pa...that is a gimmick or mkt teaser to get people interested loh....!!


Posted by Choivo Capital > Apr 12, 2019 12:45 PM | Report Abuse

Phillip,

You are right on the rates by credit culture and the margins for credit culture.

What i see is RCECAP covering their backside properly as a bondholder.

They are getting a 10% SGD bond, secured against the loan portfolio, in a market where FD is 1.5 to 2%, secured term loans 2.9-3%, unsecured about 6-7% and SG SME Loan rates of 10.88%. Personal loan in sg is about 7-9%.

If with impairments in, they can get around 6%, which is what RCE is getting from their loans now, except in SGD, which is way better.

Im pretty ok. I don't really care about what happens to CC, just what happens to the bonds.

Now on chasing money, i can tell you now, every credit co in msia and sg, use a third party to chase, unless the amount is damn big, in the event any chasing is needed.

As for whether CC will turn out to be good, we'll see. At some point, personal loans etc will be alot easier to get.

Having said that, i'm talking with management on CC, we'll see.

Posted by qqq3 > 2019-04-12 12:53 | Report Abuse

Choivo Capital > Apr 12, 2019 12:47 PM | Report Abuse

Every sen in the fund is mine, or guaranteed by me.
=======

do whatever u want....before the authorities catch up with u.

still, I consider Philips writing very educational.

Posted by Choivo Capital > 2019-04-12 12:54 | Report Abuse

Phillip,

You are right on the rates by credit culture and the margins for credit culture.

What i see is RCECAP covering their backside properly as a bondholder.

They are getting a 10% SGD bond, secured against the loan portfolio, in a market where FD is 1.5 to 2%, secured term loans 2.9-3%, unsecured about 6-7% and SG SME Loan rates of 10.88%. Personal loan in sg is about 7-9%.

If with impairments in, they can get around 6%, which is what RCE is getting from their loans now, except in SGD, which is way better.

I'm pretty ok. I don't really care about what happens to CC, just what happens to the bonds.

And if CC does well, they get to convert it to equity.

A pretty decent convertible bond to me.



As for whether CC will turn out to be good, lets see.

1) Can only borrow up to 6X salary, capped at 50k SGD.
2) Upload singpass and Credit Bureau Singapore Report(which determines your rate and loan amount),
3) Meet loan office for final verification.

Sounds similar to how every bank give out personal loans, except less overhead as most things are done online.

At some point, loans, personal etc will be a lot easier to get.

The current model of borrowing money, that requires me to go to the bank etc etc, does not make sense, as you can submit everything online, and meet officer afterwards to settle.

Now on chasing money, i can tell you now, every credit co in msia and sg, use a third party to chase, unless the amount is damn big, in the event any chasing is needed.

Having said that, i'm talking with management on CC, we'll see.

Posted by Choivo Capital > 2019-04-12 12:58 | Report Abuse

raider, maximum CC charge is 1% per month>

So they need to keep the quality up to that of your typical bank, and save on overhead.

Posted by qqq3 > 2019-04-12 13:02 | Report Abuse

The first instinct of young accountants is arbitraging.....maybe, one day RCE can go crazy and u make money on RCE.....from fairly valued to over speculated.

As for me, I consider RCE as a play thing of Tan Sri. Its not some thing for u and me to invest.

Posted by chshzhd > 2019-04-12 18:45 | Report Abuse

rce so bad:)

Posted by Heavenly PUNTER > 2019-04-12 22:18 | Report Abuse

wahhh so much drama here ahhh today

Posted by antoniomc27 > 2019-04-19 07:43 | Report Abuse

Questions: since when has RCE been doing the strategy of buying back a very small number of shares almost every day? I only started following the counter 3 months ago. Is it to inspire confidence and support the price?

What do you think they will end up doing with the shares, since it does not seem total volume will ever be big enough to do a bonus issue: will this just be kept as treasure shares? Or even worse, will this just be given away via ESOS?

Thanks.

Posted by leekh5555 > 2019-04-19 13:39 | Report Abuse

if look at the high profit margin,very tempted to buy BUT why only traded at PER 6.27(current price RM1.65)? are there any hidden risks that we omitted?

Posted by chshzhd > 2019-04-25 19:52 | Report Abuse

OTHERS RCE CAPITAL BERHAD ("RCE") - PROPOSED INVESTMENT IN PRIVATE DEBT SECURITIES OF CREDIT CULTURE PTE. LTD. BY RCE CREDIT PTE. LTD. ("RCE CREDIT"), A WHOLLY-OWNED SUBSIDIARY OF RCE
We refer to our announcements made on 22 January 2019 and 29 March 2019 (“Earlier Announcements”). Unless otherwise stated, the definitions used throughout this announcement shall have the same meaning as defined in the Earlier Announcements.



Further to the Earlier Announcements, the Board of Directors of RCE wishes to announce that RCE Credit, a wholly-owned subsidiary of RCE, has terminated the Subscription Agreement due to non-fulfilment of the conditions precedent provided therein.



Accordingly, the Call Option Agreements shall cease to be in force.



The termination of the Subscription Agreement and Call Option Agreements are not expected to have any material effect on the earnings per share and net assets per share of RCE for the financial year ending 31 March 2020.



This announcement is dated 25 April 2019.

Posted by Outliar > 2019-05-13 15:29 | Report Abuse

https://www.theedgemarkets.com/article/frankly-speaking-why-rce-still-buying-back-its-shares

Posted by Choivo Capital > 2019-05-13 18:31 | Report Abuse

Malaysia is abit different, in other countries, giving out dividend is less tax efficient, compared to buying back shares, so, for us, its interchangeable with no real cost. but dividend is naturally preferred for most.

I think RCE shares is worth about 2.3-2.7 per share. So i'm perfectly fine with them buying back shares. Nothing wrong with dividends though.

If the share was 2.2 and they are buying it back, well, id much prefer dividends then.

====
Outliar https://www.theedgemarkets.com/article/frankly-speaking-why-rce-still-...
13/05/2019 3:29 PM

Posted by Choivo Capital > 2019-05-13 18:34 | Report Abuse

chshzhd,

Not surprised. 10% convertible bond, is just unbelievably amazing deal. You must be stupid or unbelievably desperate to take it. Its basically giving them the company for free if you don't do incredibly well.

I'm quite happy that they wanted such a rich concession from the other party though, considering the risks. Shows me they got brain.

Posted by Wadafuq > 2019-05-28 19:51 | Report Abuse

NPL 4.2%? o.o

Posted by GLNT > 2019-05-29 21:38 | Report Abuse

If NAV keeps increasing at 7cents per quarter, a year will be 28cents or 17percent of current price.

Posted by Duncan Invest > 2019-06-01 02:15 | Report Abuse

My review about RCECAP> http://evassmat.com/21735737/duncaninvest

Posted by DaitoRyu > 2019-06-07 11:02 | Report Abuse

^The above link leads to Adware and potential Malware installation.

Posted by hng33 > 2019-07-15 17:03 | Report Abuse

Today, bought RCE at 1.60

Posted by VSLSB > 2019-07-26 00:35 | Report Abuse

hng33 : Personally I think this is a damn good stock with continuous revenue and profit growth with relatively low PE and relatively OK ROE. I'm not so sure why market isn't valuing this the similarly to Aeon Credit and Elk Desa. Anything to do with default rates?

Posted by joekit > 2019-07-26 13:52 | Report Abuse

wah...cun oh....5sen dividend! ALL IN ALSO GOT BIG FISH EAT LOR TIS TIME

Posted by joekit > 2019-07-26 13:53 | Report Abuse

EAT BIG BIG HOLD LONG LONG

Posted by Hew Kiong Peng George > 2019-07-26 22:33 | Report Abuse

cold eye got 2000 lots

Posted by Whey Whey > 2019-07-28 01:31 | Report Abuse

Is 20000lot bro! Cold eyes is holding 2 million share and top 11 shareholder.

Posted by hng33 > 2019-08-01 16:58 | Report Abuse

Today also sold back RCE at 1.63

Posted by Beast > 2019-08-09 20:20 | Report Abuse

Keep essos , dun like essos

Posted by antoniomc27 > 2019-08-15 10:42 | Report Abuse

Guys, why do you think market is paying PE 15 and a PB ratio 1.2 for ELK-DESA (1.66 RM at the time of writing, 50% increase YTD)
and RCECAP is still stuck at PE 6 and PB ratio of 1 ?

Elk-desa does motor and furniture financing, RCE does civil servant financing. Both have been growing steadily and so on. I do not understand why RCE has not taken off yet.

Posted by VSLSB > 2019-08-17 18:21 | Report Abuse

antoniomc27: Could possibly due to ELK-Desa does second hand car financing which is expected to be boom during times of economic uncertainty. In comparison to personal loans, you at least have the car to act as a "collateral" (albeit a lousy one but better than nothing). Also, anyone with a decent credit score could take a loan from them.

In comparison, RCECAP does personal financing which in theory is riskier because it is not backed by any collateral. However, mode of repayment of the loans is through monthly salary deduction which, again in theory, should negate the previous risk as I have not known GoM to default on salary payments to civil servants. Secondly, they only make loans to civil servants which limits their customer base. The larger the customer base, the more loans you can give. I think PH government may limit uptake of new civil servants to save money which could also explain why the lack of interest in RCECAP.

Posted by antoniomc27 > 2019-08-19 13:23 | Report Abuse

VSLSB, thanks for your comments

Posted by Jhl23 > 2019-08-21 19:54 | Report Abuse

Good QR

Posted by Beast > 2019-08-21 20:17 | Report Abuse

Ok la stable profit, growth little . Good for dividen stock

Posted by (HK1997 again) Philip > 2019-08-22 10:33 | Report Abuse

Stock investment is about managing risk and buying common stocks is already intrinsically risky. People are willing to pay higher multiples for safe, rich and growing businesses.

Rcecap basically borrows money to poor people ( b40 civil servants etc) using a riskier model than elk-desa. Not only can you buy vehicles like motorcycles ( which aeon and elk is doing) which can be auctioned or resold, but rcecap also borrows for riskier ventures like personal loans for renovation, vacation, expenditure which cannot be recouped. On top of that, none of the loans are secured or collateralised unlike a regular loan from public bank, Maybank etc. More importantly, to get their margins, they find less financially adept individuals, and reduce their loan approval criteria.

For a simple explanation: to get their yearly profit of 100 million, rcecap has a loan book of 1.4 billion ( treat this as the production material banks use to make money, more money). The production material comes at a big cost, non performing loans ( basically ppl who didn't play back loans) of between 11% (2011) and 4%(2018).

How safe and secure is that 1.4 billion of loans? That is the 2008 subprime l million dollar question everyone would love to know.

Which is safer: a rich businessman getting a housing loan or buying a new Mercedes?
Or a b40 civil servant earning 1500, getting a 15000 loan to renovate his house?

That is why rcecap is still stuck at pe6.

Banks and money lenders, just like any other business can and will go bankrupt if they are not disciplined.

>>>>>>>

antoniomc27 Guys, why do you think market is paying PE 15 and a PB ratio 1.2 for ELK-DESA (1.66 RM at the time of writing, 50% increase YTD)
and RCECAP is still stuck at PE 6 and PB ratio of 1 ?

Posted by Beast > 2019-08-22 16:15 | Report Abuse

well said philip

Posted by antoniomc27 > 2019-08-22 20:54 | Report Abuse

Thanks for your comments Philip, always a pleasure to read you.

Posted by VSLSB > 2019-08-24 11:06 | Report Abuse

Agreed with Philip. If RCECAP wants to improve their value, they should consider venturing into collatarised loans business (i.e. housing loan, car loans etc.) and diversifying their customer bases to include GLC employees as well.

Posted by calvintaneng > 2019-09-01 22:25 |

Post removed.Why?

Posted by RainT > 2019-09-10 15:21 | Report Abuse

good insight from Philip

Posted by Jonathan Choi > 2019-09-20 10:42 | Report Abuse

As always phillip, your analysis fails to take into account Expected Value.

Posted by Jason Toshi Ho > 2019-09-21 18:40 | Report Abuse

As always choivo your analysis doesn't take into account making a profit of make much sense at all. How is your rcecap investment doing?

Posted by Jonathan Choi > 2019-09-24 11:43 | Report Abuse

I sold at 1.65 due to better opportunities. Thinking of buying again.

Posted by VSLSB > 2019-09-25 13:07 | Report Abuse

@Johnathan Choi: Didn't you write an article about a potential black swan behind RCECAP from Angkasa loans being dished out indescriminately? Despite the fact, why would you still go into RCECAP?

Posted by reloy > 2019-09-25 13:23 | Report Abuse

can anyone chip in on Orion will affect the loan market now that they have a 15 tie-up with angasa thru MyAzZahra portal? a direct competitor to rcecap?

Posted by TakeProfits > 2019-09-28 16:57 | Report Abuse

Hello, where is MR CHOIVO CAPITAL..MISS YOU MAN!!

Posted by Jonathan Choi > 2019-09-28 18:21 | Report Abuse

The problem is not the loan being dished out indiscriminately, they do well in their credit assessment etc.

Its in the potential of the ANGKASA codes being given to banks, instead of just Co-ops. This is my main worry.

I'm still thinking about buying some back, not as large as my previous position, but some. Once i get a little more clarity on the political sentiment regarding government servant loans.

Having said that, the market now does show quite a few interesting opportunities, that do not any political risk. Which is nice.


Hello TakeProfits,

How are you enjoying your BIMB WA profits? Haha. Despite thinking so much about BIMB warrants and the company, i didnt buy a single warrant. Shame.

====
VSLSB @Johnathan Choi: Didn't you write an article about a potential black swan behind RCECAP from Angkasa loans being dished out indescriminately? Despite the fact, why would you still go into RCECAP?
25/09/2019 1:07 PM

Posted by TakeProfits > 2019-10-04 21:20 | Report Abuse

Jon Choi, to tell you truth, I did not hang onto bimb warrants. Was a shit decision. Is a a hard market. If we buy now which seems pretty now now. But the question is when will life return.to.Bursa?? Patience I guess

Posted by Choivo Capital > 2019-11-01 16:43 | Report Abuse

Id rather Bursa stay dead tbh.

Posted by Outliar > 2019-11-11 17:35 | Report Abuse

Results just keeps getting better

Posted by Choivo Capital > 2019-11-11 18:18 | Report Abuse

I'm only worried about the gov giving out angkasa codes to retail banks.

Decisions decisions decisions.

Posted by Choivo Capital > 2019-11-11 20:42 | Report Abuse

Yeah, no shit sherlock, but with NIM of around 6% net, if you can do direct deduction, which banks now cant, it becomes quite lucrative.

Posted by Pc Tan > 2019-11-11 20:43 | Report Abuse

good profit and dividend,but share price wanna to move up!

Posted by GLNT > 2019-11-11 21:29 | Report Abuse

Awesome results!