CWG HOLDINGS BERHAD

KLSE (MYR): CWG (9423)

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Last Price

0.265

Today's Change

0.00 (0.00%)

Day's Change

0.265 - 0.265

Trading Volume

3,000


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586 comment(s). Last comment by Fznzm Abdullah 2024-01-10 15:26

nikicheong

2,430 posts

Posted by nikicheong > 2017-10-15 15:05 | Report Abuse

@Steve, no warrants.

nikicheong

2,430 posts

Posted by nikicheong > 2017-10-15 16:05 | Report Abuse

If you analyze the latest shareholdings, you observe the following:

Khor Wan Keong (director) either excess applied for or bought additional rights shares of around ~300,000 units. (allocation = ~635,000 units)

Ooi Chin Soon (director) likely bought additional rights shares, cause otherwise his excess application would be insufficient to get to his current shareholding. He applied successfully for over 9,000,000 excess shares. (allocation = 6,250,000 units)

Khor Say Beng(director)'s son applied excess or bought additional rights shares of ~750,000 units. (allocation = ~287,000)

Khor Say Beng(director)'s daughter applied excess or bought additional rights shares of ~15,000 units. (allocation = ~62,550 units)

Lee Eng Sheng (director) applied excess or bought additional rights shares of ~205,000 units. (allocation = 28,500 units)

Khor Say Beng (director) applied excess or bought additional rights shares of ~4,150,000 units via his private holding company. (allocation = ~1,050,000 units)

Every single director applied for excess shares or purchased additional rights shares far higher than their proportional shareholdings in the company. Unless you were certain about improvement in the company's financial performance, you would not do this.

I for one am glad I did the necessary research and put money where my mouth is. Now to let this go on autopilot and see how much can the company's market cap grow in 3-5 years time. Triple up? Maybe increase five times? Perhaps even ten times? Let's wait and see now...

NoEmo

1,167 posts

Posted by NoEmo > 2017-10-15 16:42 | Report Abuse

Niki, good input. Thanks. Attractive ROI by Feb18, the latest. Expecting consolidation for several months prior to price surge to new high.

FAIZUN77

116 posts

Posted by FAIZUN77 > 2017-10-17 16:28 | Report Abuse

@nikicheong, good input.

sapurakencana

1,144 posts

Posted by sapurakencana > 2017-10-31 12:56 | Report Abuse

NoEmo,what u mean by "Attractive ROI by Feb18",where is the sources of this info.

Posted by Stevecheahsw > 2017-11-09 00:19 | Report Abuse

Coming AGM who going ??

sapurakencana

1,144 posts

Posted by sapurakencana > 2017-11-09 18:11 | Report Abuse

this year no new progress,no need to attend

nikicheong

2,430 posts

Posted by nikicheong > 2017-11-10 19:30 | Report Abuse

If in KL I sure go. Penang...no need lah. This one die die will be a multi bagger already. Just buy buy buy!

lim1818

58 posts

Posted by lim1818 > 2017-11-10 21:18 | Report Abuse

seems their factories not spared from recent flood

nikicheong

2,430 posts

Posted by nikicheong > 2017-11-11 14:00 | Report Abuse

Nothing out of the ordinary. No special damage. Minor losses sure got lah, like lower productivity for a few days. Not an issue though.

nikicheong

2,430 posts

Posted by nikicheong > 2017-11-14 17:41 | Report Abuse

Topped up today @0.505. Now CWG on a cost basis makes up 53% of my portfolio.

If Q1 results disappoint I will take the opportunity to top up further in December 2017/January 2018.

nikicheong

2,430 posts

Posted by nikicheong > 2017-11-14 18:08 | Report Abuse

Results should be out on 23/11/17.

Jon Choivo

3,668 posts

Posted by Jon Choivo > 2017-11-20 12:24 | Report Abuse

How is this a good business or even one worth buying?

No economic moat, valuations is considered ok only EV/EBIT of 9 for a no growth company. Product have zero differentiation, only concern for customer is cost.

The only reason people seem to be buying is cause director is buying, which is really not a reason at all. Mokhzani bought so much SENERGY, look where he is now.

Small company, so easy for groups to goreng. That's it. I dont see how this can be a good investment unless you have a group ready to goreng for you and make you money.

nikicheong

2,430 posts

Posted by nikicheong > 2017-11-20 18:35 | Report Abuse

Jon you disappoint me man. Do your calculations again. Your EV/EBIT is off cause you are not taking into account the additional RM22mil cash raised from the rights issue (this will result in lower EV hence lower EV/EBIT).

Also, if you bother to read the financial statements, there were one off expenses amounting to RM1.1mil in FY2017.

That's just the basic stuff you seemed to have missed. Not to mention interest savings of RM0.65mil p.a. going forward since the loans will be pared down.

The directors buying is what made me go heavily into CWG. However, it was not what led me here in the first place. What led me here was fundamental research. A stock that is trading at 0.8X P/BV with ROE at 12%, and an imminent earnings explosion being highly likely.

You should go and take a look at Peter Lynch's criteria of a "perfect stock". CWG ticks many of the boxes.

I'm confident and it's not because I am blindly following the directors. I already took a big stake during the rights issue (when it was unknown how exactly all the directors would play it). I then bought a smaller stake last week as I had cash to spare.

We'll see soon enough whether my investment thesis was flawed or otherwise.

nikicheong

2,430 posts

Posted by nikicheong > 2017-11-20 20:24 | Report Abuse

Just as proof, and without making any adjustments to earnings to take into account one-off expenditure (for corporate exercise and write down bad receivables) nor taking into account interest savings since the loans will get pared down.

EV: 63.78 + 23.47 - 3.43 - 21.05 = 62.77
EBIT: 6.45 + 2.08 +1.40 = 9.93
EV/EBIT = 6.32

EBIT (adjusted for corporate exercise expense only): 9.93 + 0.79 = 10.72
EV/EBIT (adjusted) = 5.86

Beyond this you can adjust the EBIT to take into account the write down on receivables and the savings on interest expense of RM0.65mil per the Abridged Prospectus. Not to mention the balance sheet will be even better come Thursday.

That's just the basic stuff. There's so much more info to be gleaned about CWG (both quantitative and qualitative).

NoEmo

1,167 posts

Posted by NoEmo > 2017-11-20 20:55 | Report Abuse

Nicki, good points raised. Next to watch out for is timing to enter trade.

nikicheong

2,430 posts

Posted by nikicheong > 2017-11-23 11:43 | Report Abuse

The calm before the storm! Lets see how it goes.

nikicheong

2,430 posts

Posted by nikicheong > 2017-11-23 18:55 | Report Abuse

Based on the results per Sep 2017, the BV/Share is at RM0.633 (after taking into account the rights issue). At RM0.505 which was my entry cost in the Rights Issue and subsequent market purchase, this indicates a P/BV of 0.798x..which is a super bargain for a stock about to embark on a period of sustained growth (and the growth might be in the triple digits!).

The ROE is exactly at 10.0% for the trailing for quarters (once you adjust for the rights issues sharebase dilution). It's even higher once you take into account the one-off corporate exercise expenses accounted for in Q4 2017. And it will be even higher going forward.

Good luck to everyone who decides to buy tomorrow onwards. Make sure to hold for a long time, or at least until such a time till the fundamentals deteriorate.

Posted by Sebastian Sted Power > 2017-11-23 18:56 | Report Abuse

Niki, thanks for your sharing!!

Posted by Sebastian Sted Power > 2017-11-24 10:01 | Report Abuse

just added more at 515. Long term still positive, got 1.5sen DIV consider a bonus

nikicheong

2,430 posts

Posted by nikicheong > 2017-11-24 11:00 | Report Abuse

Sadly I can't add more now. Must wait till mid December. If it still is at around RM0.52, I will definitely add more.

Posted by Sebastian Sted Power > 2017-11-24 15:14 | Report Abuse

niki, kenapa need wait mid Dec??

Posted by Stevecheahsw > 2017-11-25 23:00 | Report Abuse

Keep on eps 3.3 x rolling 4 qtr x pe 10, = 1.30
If pe 5 = 0.65

Posted by Sebastian Sted Power > 2017-11-28 16:16 | Report Abuse

obviously undervalued! Good counter will up when other drop drop drop!

nikicheong

2,430 posts

Posted by nikicheong > 2017-12-05 10:18 | Report Abuse

Don't get so excited about yesterday. It might just have been rotational play (churning). Hold and keep till this goes to the RM0.80-RM1.00 region at least.

Posted by Sebastian Sted Power > 2017-12-05 15:02 | Report Abuse

1.5cents Div soon. Not bad la

nikicheong

2,430 posts

Posted by nikicheong > 2017-12-14 10:15 | Report Abuse

Dividend is OK. Now to play the waiting game and to let the story unfold.

Posted by Yoon Yeap Lower > 2017-12-18 14:40 | Report Abuse

Hi guys, new to this stock. Anyone able to name me their competitors? And what is the dividend yield at current price, right issue made me confuse.

Posted by Sebastian Sted Power > 2018-01-03 12:04 | Report Abuse

Niki, RM strengthen liao. Any new thought on this counter?

nikicheong

2,430 posts

Posted by nikicheong > 2018-01-07 13:09 | Report Abuse

Sebastian, not a big issue. CWG has substantial costs denominated in USD for imports. Also 30% of sales are in MYR. This is unlike furniture manufacturers where costs are fully in MYR and sales in MYR is at less than 10%.

So yeah, no big deal. Continue holding. Growth in export sales will beat any impact from strengthening Ringgit, plus costs will be lowered.

Read latest annual report for confirmation of what I am saying.

nikicheong

2,430 posts

Posted by nikicheong > 2018-01-07 13:21 | Report Abuse

"Cost of sales increased by 10.6% which was not in line with the inrease in revenue of 9.1% for FY2017. The higher cost of sales was due to the increase in cost of raw materials as the result of weakening of RM. The RM traded between RM3.95 and RM4.50 in FY2017 as compared to RM3.75 and RM4.46 in FY2016. Besides, cost of raw materials increased also due to higher in the price of paper in the global market."

Revenue for Malaysia was at ~25% for FY2017.

So long story short, CWG will indeed be impacted adversely by the strengthening Ringgit given that it is a net exporter, but I presume there are some elements of natural hedging at play here given that some costs are Dollar denominated. Plus, CWG's selling point is increasing sales of the Arto range of products and moving on to higher-margin products. This should lead to an increase in profitability no matter the Ringgit's level vis-a-vis the Dollar.

Regardless I expect profits to be up by at least 50% in FY18, if not more than 100% increase in net profits.

Posted by chuatuanboo > 2018-01-08 21:00 | Report Abuse

How much will be the EPS for the coming Q result ?

sapurakencana

1,144 posts

Posted by sapurakencana > 2018-01-08 22:53 | Report Abuse

Substantial Shareholder's Particular:
Name MR KHOR SAY BENG
Details of Changes:
Currency -
Date of Change Type Number of Shares
05-Jan-2018 Acquired 4,000,000
Registered Name Say Beng Holdings Sdn. Bhd.
Nature of Interest Deemed Interest
Nature of Interest Deemed Interest
Shares Ordinary shares
Reason Acquisition of shares by Say Beng Holdings Sdn. Bhd. via off market.
Total no of securities after change
Direct (units) 0
Direct (%) 0.00
Indirect (units) 11,310,126
Indirect (%) 8.96
Total (units) 11,310,126
Total (%) 8.96
Date of Notice 08-Jan-2018


See Director Khor keep on accumulated it own company share.

Posted by Sebastian Sted Power > 2018-01-09 15:34 | Report Abuse

@niki, your explanation is clear! Are you an accountant?

nikicheong

2,430 posts

Posted by nikicheong > 2018-01-29 10:15 | Report Abuse

Been buying up more CWG shares at 0.51-0.52 over the past week. I think I stop here for now as my CWG position is rather large. Only holding TCHONG and MHB aside from CWG for the moment. Time to hunt for something else.

Posted by Sebastian Sted Power > 2018-02-06 15:53 | Report Abuse

Niki, seem like you bough as much as MR KHOR SAY BENG

nikicheong

2,430 posts

Posted by nikicheong > 2018-02-07 08:44 | Report Abuse

Steady lor. A bit sad that the market got weak this week....why couldn't it have been last week!?!?

Haha, anyways this is a long-term thing...doesn't really matter but at 0.485 or 0.515 if in the longer run you expect the stock to easily go past RM1.00.

Yesterday was an amazing day to bargain hunt, but sadly I used up most of my available funds last week. Anyways, these things happen. Can't time the market, as they say!

Posted by Sebastian Sted Power > 2018-02-07 22:27 | Report Abuse

See Ah Beng everyday buy back I also BO SONG. I also keh poh bought and add a bit

nikicheong

2,430 posts

Posted by nikicheong > 2018-02-20 08:36 | Report Abuse

Hmmm, 5 days in a row there is zero trading. No sellers at all. Sell queue is also thin. All we can do now is wait for the Q report that should be out within the next week. If we can get a net profit of ~RM3mil to RM4mil, this should fly towards RM0.60. If it is above RM5mil, can expect RM0.65.

All the best folks!

Posted by Sebastian Sted Power > 2018-02-20 16:04 | Report Abuse

Niki, happy CNY. Seem like you are very confiedent on the good QR

nikicheong

2,430 posts

Posted by nikicheong > 2018-02-21 11:21 | Report Abuse

Well, let's just say I'm "cautiously optimistic". A bad QR will simply be a buying opportunity, and this might especially be good with a pending bonus payment :)

Posted by Sebastian Sted Power > 2018-02-21 21:01 | Report Abuse

Ah Beng keep buying. GOOD SIGN!

Posted by Sebastian Sted Power > 2018-02-22 16:27 | Report Abuse

later after 5pm, eat popcorn and see good QR. Tomorrow will have firework!

nikicheong

2,430 posts

Posted by nikicheong > 2018-02-22 18:39 | Report Abuse

Hmm...quarter result a bit below my expectations. Cost increased greatly but revenue haven't risen in tandem. However, we shall only see the full impact of the rights issue from Q3 FY 18 onwards (i.e. period of Jan - Mar 2018). The additional working capital should pay off somewhat in this quarter, coupled with great interest expense savings.

Q3 will be a worse quarter (seasonally Q3 has lower revenue according to the qtr report). But I'll still expect net profit of >RM1.0mil despite that.

Anyway escalating costs + stronger Ringgit means we will need to wait a while more before we can enjoy super profits.

Hard to tell what will happen to the share price but I will not be surprised we go down to RM0.45 after this.

nikicheong

2,430 posts

Posted by nikicheong > 2018-02-22 19:39 | Report Abuse

But on the bright side the balance sheet is extremely healthy and beautiful looking now after the completion of the rights issue. No matter what I’m keeping my shares in CWG and will continue topping up should the price fall lower in the coming weeks and months!

Posted by Lincorn Matthieu Seven > 2018-02-22 20:25 | Report Abuse

two continuous QR >2mil. Back to track again. I am still holding which bought 80cents!

Niki, when you think will gain back to my cost?

Posted by Sebastian Sted Power > 2018-02-22 21:24 | Report Abuse

Hold la.. RM1 only sell

nikicheong

2,430 posts

Posted by nikicheong > 2018-02-23 08:54 | Report Abuse

@Lincorn, hard to say man. I mean its a healthy company, low risk of buying in at these prices. But as to when it can "break out"...I think there will need to be a strong earnings breakout. Maybe if Q3 earnings can be above RM1mil (previously Q3 always weakest) then it might be supportive of this.

Also, I realize in recent months the insiders and a lot of very long term investors (me included!) have been mopping up CWG shares on the market. The selling volume may simply evaporate, and sometimes the lack of selling will lead to a jump in prices due to scarcity etc.

Or we may be subject to a pump and dump as well given the relative illiquidity of the counter and may jump 10-20 sen over a short period of time.

It's really hard to tell. For me, this is an "lock and keep away" stock. I will monitor company news on a weekly basis or so going forward. Lest there be a fire breakout I think the capital should be secured at the very least for those buying at RM0.50 levels and dividend should be decent as well going forward (I expect 3 sen dividend minimum for FY 2018).

Posted by Sebastian Sted Power > 2018-02-23 09:06 | Report Abuse

niki, you see AH Beng sapu again early early morning 50cents clear

FAIZUN77

116 posts

Posted by FAIZUN77 > 2018-02-27 15:17 | Report Abuse

just follow ah beng collecting

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