Posted by sotsot1986 > 2013-10-03 22:29 | Report Abuse

This company is a good example for disregarding minority shareholder interest.

Amounts due from related parties are unsecured, non-interest bearing and repayable upon demand.Related parties refer to a substantial corporate shareholder, Sunright Limited, in which certain Directors have financial interests, and its subsidiaries.

Other loan represents an unsecured loan obtained from a substantial corporate shareholder, Sunright Limited. This loan bore interest at 8.5% per annum (2011: 8.5% per annum) during the financial year and is not expected to be repaid in the next 12 months.

And management fee charged by Sunright Limited, RM4,656m (about 10.8sen per share) per year, director fee RM1.241m (about 2.89sen per share) but dividend pay out only 3sen (RM1.290m) every year with RM113,756m cash at hand (equal to RM2.60 per share).

This company management really like vampire.

Posted by BroStockTrader > 2013-11-12 15:07 |

Post removed.Why?

Posted by davidkkw79 > 2014-03-10 17:51 | Report Abuse

wah, it look good today, must be good new happened on this company right?

Posted by qisser > 2014-03-20 22:10 | Report Abuse

curious to know why the lack of interest in this counter despite the strong fundamentals

Posted by L. C. Chong > 2014-07-04 00:31 | Report Abuse

KESM analysis - http://lcchong.wordpress.com/2014/07/04/kesm-fundamental-analysis-4-jul-2014/

Posted by tjhldg > 2014-07-17 22:35 | Report Abuse

kikikikiii

Posted by johnny cash > 2014-07-19 20:17 | Report Abuse

https://www.facebook.com/photo.php?fbid=822628474415097&set=np.88363422.100002496753938&type=1&theater

Will KESM (9334) retest RM2.68 support level ?

PLEASE LOGIN TO FACEBOOK FIRST

Posted by tlc780728 > 2014-09-07 22:06 | Report Abuse

i bought a lot last two months. i will keep buying kesmi in the following months because the company has cash of rm 2.80per share.

Posted by tlc780728 > 2014-09-07 22:08 | Report Abuse

i will buy below rm3.00

Posted by XXXvalue > 2014-10-01 14:37 | Report Abuse

Price < RM3, discount to NTA@RM5.7 (~50%!), and even below cash @ 3.20/share !. Counter is still gushing new cash, riding on rising demand for semiconductors (for today's electronic devises). This is an example of graham net-net counter! The only problem is the management is hording those cash....giving a miserable 3s dividend. They can afford to give 10x or give a special div....then u can see this counter will fly!

Posted by XXXvalue > 2014-10-05 15:55 | Report Abuse

Major shareholder can easily take this co private at no cost. They can easily pay the cost with 1/2 of the cash horde at it's current price!

Posted by XXXvalue > 2014-10-05 15:56 | Report Abuse

Why r they not doing it or giving higher div is a puzzle...

Posted by NOBY > 2015-02-16 10:28 | Report Abuse

The recent acquisition of the remaining 35 pct minority interest stake in KESM Test Industries Sdn Bhd appears to be a good use of its excess cash. KESM PE will go down from 9.6x to 6.2x with the acqusition based on latest TTM earnings. Although the acquisition was made from a related party at a price tag of RM 35 mil, with avg 3 years earnings from minority interests, the acquisition multiple works out to about PE of 6.3x which is a good deal.

With the likes of MMSV and ELSOFT trading at PE more than 10x, KESM with its solid balance sheet and improving earnings is at least valued at RM4.17 based on a PE of 10x.

Posted by XXXvalue > 2015-02-25 10:23 | Report Abuse

Agreed.

Posted by NOBY > 2015-02-26 14:09 | Report Abuse

Automotive Industry Drives Chip Demand

http://www.eetimes.com/document.asp?doc_id=1324718

Posted by miketyu > 2015-03-10 16:16 | Report Abuse

Noby what is your view on the survival of the business? Even though it holds lots of cash, but the PM ROIC and ROE all at single digit concerns me. ESP when economy is bad and more competitors come in.

Posted by NOBY > 2015-03-10 17:32 | Report Abuse

miketyu, I think the semiconductor bull cycle still have some way to go based on how I see some tech stocks are moving... as KESM is mainly involved in burn in testing of automotive chips, I believe there is potential growth in this area.

Yes, the ROE and ROIC is not great as KESM has a large amount of PPE but this is compensated by its cheap valuations. I bought KESM mainly due to the strong turn around on its earnings.

Posted by miketyu > 2015-03-12 10:24 | Report Abuse

Nice pick. Good run

Posted by NOBY > 2015-04-20 23:46 | Report Abuse

http://klse.i3investor.com/blogs/stockpick/75180.jsp

Posted by Snake > 2015-04-21 17:27 | Report Abuse

KESM TP@RM6.50

Posted by chinesetea > 2015-04-22 22:11 | Report Abuse

Thanks Noby. Quite a good potentioal :-)

Posted by JT Yeo > 2015-04-23 09:40 | Report Abuse

Is anyone thinking with the ROE in single digit for more than 5 years. The company is growing it's way to bankruptcy?

Posted by chinesetea > 2015-04-23 14:39 | Report Abuse

Based on noby analysis, after acquisition may see double digit roe.

Posted by chinesetea > 2015-04-23 14:51 | Report Abuse

Jt quite right about roe, other similar company like vitrox , Gtronic, elsoft, mmsv all good roe. That's why their price already rise so much. Can kesm become better after investment for new testers and acquisition, we have to wait and see , but at least we see some growth story here. Perhaps a good time to collect while it is still at its infancy?

Posted by NOBY > 2015-04-28 00:14 | Report Abuse

Posted by JT Yeo > Apr 23, 2015 09:40 AM | Report Abuse

Is anyone thinking with the ROE in single digit for more than 5 years. The company is growing it's way to bankruptcy?

I can see that you like good quality businesses that compound capital over time. Sadly, good quality businesses often dont come cheap. KESM is no such business. It is in a capex intensive and highly competitive industry. I am more of a deep value investor. I prefer buying beaten down stocks with strong balance sheet but not necessarily good efficiency. The point being is that mean reversion is a powerful thing and when earnings start improving from lousy to mediocre, there is chance to make profit. I am not looking to hold these type of stocks I forever.

I kind of disagree your assessment that its growing its way to bankruptcy. KESM has a very healthy balance sheet of RM1.25 per share, strong current ratio and it doesnt burn cash excessively (average FCF is positive over 3 years). The low ROE is due to its high cash holding in the balance sheet.

Posted by chonghai > 2015-04-30 09:52 | Report Abuse

Quality : KESM is not a company with good quality. ROIC is poor at 8% regardless of before or after taking over the Test Division. That means either the management over-invested in the past or they are in a competitive and capital intensive which is normally not a good place to allocate our capital.

Valuation : Valuation wise KESM is cheap. Enterprise Value is as low as 4-5. Investors only willing to give KESM a market cap of 120 million even though the net cash is already close to 60 million and assets are at 180 million.

Cash flow : KESM will definitely survive. 60 million of cash + positive Free Cash Flow.

Investing in KESM is investing in a lackluster company at a cheap price. The risk is that the turn around will never materialize and we suffer opportunity cost. Looking at the low risk associated, I am with NOBY. I will collect some today.

Posted by chinesetea > 2015-05-05 17:26 | Report Abuse

Potential is there especially the boss has the vision that more future car will be more complex with electronics. This will be a revolution.
Diam diam collect when no one notice. If turn around is materialized, no more this price. Investing always carries risk but it's a calculated risk.
:-)

Posted by FMHSTOCK > 2015-05-07 16:23 | Report Abuse

Due to the liability issue be difficult to determined, for the party to be answerable shall any accident happen; I doubt the unmanned vehicle with self driven system be allowed on the road, in the near future; however I expect more safety and manoeuver features to be added into the vehicles on the road for safety enhancement, so that the casualty caused from road accident be significantly reduced. I expected this is an area KSEM also involved too, I invested in KESM shares, of course I hope company is heading to right path for future growth where it could clinch a big chunk of these untapped market for being leading in this field as it has always been focusing on

Posted by matakuda > 2015-05-08 10:13 | Report Abuse

I recently spoke to a friend of mine who is working in Infeneon, the semiconductor company with automotive being one of their major pillar of businesses. Please find below the information concerning prospects for burn-in tests you may find it useful.

1. Reliability is utmost important. The Clients (Car Assemblers) require 100% semiconductors devices sent for burn-in tests prior to their assembling works. I previously thought such tests were done based on sampling (random samples).

2. Burn-in tests are not necessary to be performed by to independent testers. Such tests can also be done by their in house subject to approval from their respective Clients. For the in-house tests, the Client would regularly send their teams to check on the test conformities.

3. Infeneon has their own in-house burn-in test department. But many semiconductors companies would prefer for outsourcing such tests to independent testers.

4. Why independent testers are preferred? The semiconductor business is notorious for its “Boom-Bust” cycles. Further, the testing equipment becomes fast obsolete, requires frequent upgrades/periodical calibrations, incur high maintenance costs, etc. The return for investing into such equipment is not attractive at all. Not because they cannot afford to own testing equipment, but they would rather invest their resources in expanding factory productions

5. The only motivations for doing own testings are as follows: (i) Manufacturers have secured long term orders from their Clients; and (ii) Manufacturers would like to have more flexibility for the delivery.

6. Automotive semiconductors are well-positioned for growth. Total market for this sector in 2014 was US$27.5bil. No sign of slowing down, at least for the next few years.
https://www.infineon.com/dgdl?fileId=5546d4614d01431c014d1fdb8a7d02cb

I will try to dig more info regarding the burn-in tests, and will post here next week.

Posted by NOBY > 2015-05-08 21:44 | Report Abuse

matakuda, thanks for the additional info, Yes, Infineon is also one of the big players in semiconductors. I ve used their products in my product design as well

Posted by hpcp > 2015-05-08 21:55 | Report Abuse

Acquisition of KESM Test goes through!

Posted by chinesetea > 2015-05-10 02:24 | Report Abuse

Thanks for matakuda for sharing. Kuda hitam, mari mari :-) . Acquisition goes through and we can see it will first achieve Noby's target. Then wait for TA securities to upgrade their TP ! Huat

Posted by chinesetea > 2015-05-11 18:00 | Report Abuse

Great news!! Thanks to Nody who spotted this gem

Posted by Alpha Trader > 2015-05-14 11:00 | Report Abuse

This looks like next SAM engineering for me, TP 4.50 reachable

Posted by samWTR > 2015-05-14 11:06 | Report Abuse

Hi everyone, am new here.... any good counter to buy now?

Posted by samWTR > 2015-05-14 11:07 | Report Abuse

Hi Alpha Trader, I saw your comment in other counter... I hv sold the IFCA in the price 1.55... Check the price after saw your comment.. 1.75.. heart pain

Posted by Alpha Trader > 2015-05-14 12:00 | Report Abuse

Try this counter then, breakout more to come

Posted by samWTR > 2015-05-14 12:03 | Report Abuse

Ok. Tks.......

Posted by speakup > 2015-05-14 12:26 | Report Abuse

MELETUP!

Posted by Alpha Trader > 2015-05-14 16:02 | Report Abuse

The company will consolidate the earnings for its subsidiary 100pc soon, assuming growth of 10pc, the stock is only trading at 8x now, where most of the semi cons are trading above 12x, way long long to go, buy now before you miss this gen like owg

Posted by pang72 > 2015-05-14 17:59 | Report Abuse

4.50...
haha....

Good la..

Tech stock...wakewake up la

Posted by pang72 > 2015-05-14 19:14 | Report Abuse

Nta 5.87....please note down this number..
you will see in future one of the stock will reaching this number...kesm

Posted by soojinhou > 2015-05-14 20:28 | Report Abuse

Take a look at Global Testing Corp listed in SGX, trading at near per 20. It does almost the same thing as KESM, difference is their focus is consumer electronics, and counts TSMC as their customer, whereas KESM focuses on the automotive sector. Valuation wise, KESM is cheap in comparison.

Posted by Alpha Trader > 2015-05-14 23:40 | Report Abuse

Fully agreed with you guys, nta 5.87 will fly to 6.20 soon, dont miss it, look around where got semiconductor players trade at discount nta 40pc? More to come

Posted by limchewi67 > 2015-05-15 05:54 | Report Abuse

Alpha Trader, this counter yesterday up so much, today still can buy?

Posted by chonghai > 2015-05-15 08:56 | Report Abuse

Do not follow nta lah, follow earning power. Eps will increase by 40%, so stock price probably 40%.
3 × 1.4 = 4.2
Beyond 4.2 definitely not a good buy.

Posted by yiqqre > 2015-05-15 09:41 | Report Abuse

Here we go again.

Posted by matrix6050 > 2015-05-15 09:42 | Report Abuse

;)

Posted by XXXvalue > 2015-05-15 09:46 | Report Abuse

accumulation by insiders

Posted by yiqqre > 2015-05-15 10:11 | Report Abuse

http://www.bursamarketplace.com/index.php?ch=ch_content&pg=pg_cont_news&ac=21815