Posted by GCruey > 2011-10-29 14:57 | Report Abuse

Hi, i m a small shareholder of PTARAS since year ago. I was satisfied with it operation and dividend yield. But its lattest Quartery report make me shock because of making a RM million ++ loss with a handsome revenue. It has never happened before this. Anybody can tell me what is going on? Moreover, PTARAS invested a big sum of money in capital market. Who actually operating the investment? Directors? Employing profesional team? Outsourcing profesional investment company?

Posted by stonely > 2011-10-29 16:36 | Report Abuse

Hi GCruey,
Nice 2 meet u.
From what i saw, Pintaras is construction stock.It's one of the high dividen stock as well.
I'm not realy knowing what happen to the annual report & its losses... But, base on charting analysis, we should avoid take position & be caution to cut loss or sell this stock for profit protection since middle of July2011. Until now, there is no significant sign of entering point. Well, better sell 1st to protect yr capital + yr profit b4 a huge waterfall. :p

Posted by steve123 > 2011-10-29 16:57 | Report Abuse

Well, according to the quarterly report, the loss is mainly due to "unallocated cost of RM13m" and the lower profit is due to recognition of fair value loss on investment. For more info go to http://klse.com.my, announcement click current then company then choose P for pintaras and see the quarterly report. Watch for the attachment link then click it to see the more detailed account and the reason. Good luck

Posted by GCruey > 2011-10-30 18:56 | Report Abuse

Thanks, overlook the attachement.

Posted by Mohd Shuk > 2012-04-20 04:13 | Report Abuse

SUdah untung banyak ni....Kena berani!!!

Posted by horseykl > 2012-04-25 12:41 | Report Abuse

Time to masuk ker??

Posted by passerby > 2012-12-13 15:04 | Report Abuse

at least it is climbing, not going down hill

Posted by tomdickharry > 2012-12-16 20:07 | Report Abuse

@kcchongnz, could you perform the same calculation you did at Kfima here? I'm sure you got the details already since your are promoting this before. Thanks in advance

Posted by kcchongnz > 2012-12-17 09:13 | Report Abuse

tomdickharry, appended below was what I have done recently on the analysis of Pintaras Jaya. Please don't be mistaken, I am not promoting the stock. It is merely my interest in analysis. I like to share with others and hopefully obtain some constructive criticisms because I may be wrong in my analysis. Then I can review my investments. Yes, Pintaras also form a major portion of my portfolio.

Financials of Pintaras
Prior to last year, the annual turnover and net profit of Pintaras Jaya was steady at an average of 135m and 22m respectively. It has never recorded a year of losses as far as I know. For the last financial year 2012 ended 30/6/2012, its turnover surged to 185 m with net profit doubled to 42m. Earnings per share was spectacular at 53 sen. Net profit margin of 23% is easily double that of the industrial average. Cash flows from operations amount to a hefty 53m. Pintaras has no debt. In fact as at 30/9/2012, it has an excess cash of 135m, or 1.68 per share of cash or cash equivalent in its balance sheet. Return of equity is good at 18%. Disregarding the excess cash which can be distributed without affecting the ordinary business, a more appropriate measure of efficiency shows the return of capital of 32%. This exceeds the industrial average by many folds. Moreover, as mentioned above, its first quarter 2013 financial performance has further improved considerably. With these, one would expect Pintaras to be well sought after by investors. But, is it?

Valuation of Pintaras Jaya
Market valuation
With the close of the market at RM3.23, Pintaras was traded at the following market valuations.
PE ratio EV/EBIT Price/CF Dividend Yield
5.5 2.1 4.7 6.2%
The trailing twelve month PE ratio of just 5.5 is way below the average of other construction companies of more than 15. Besides, Pintaras has an excess cash per share of RM1.68. The low market valuation is more accurately reflected from its enterprise value of just 2.1 times earnings before interest and tax (EBIT). With 20 sen dividend per share last financial year, dividend yields amount to 6.2%, doubled that one can get from fixed deposit in banks. We would be more interested in what the intrinsic value of Pintaras is and how far the market price deviates from this intrinsic value and see if we can profit from this discrepancy.

Discount Cash Flows Analysis (DCFA)
Financial theory postulated by John Burr Williams in his “The theory of investment value” says that the value of a stock is worth all of the future cash flows expected to be generated by the firm, discounted by an appropriate risk-adjusted rate. The followings are the major data and assumptions used for the computation of intrinsic value of Pintaras.
Trailing twelve month EBIT 55.71m
Excess cash 123m
Expected growth rate 4%
Discount rate 10%
Return of capital at stable growth 12%

The expected growth rate of 4% forever is considered conservative as it is the same rate of inflation. It is noted that for the last 5 years, the CAGR of earnings was much higher at 10%. The discount rate of 10%, with a risk premium of 6.5% over the MGS bond rate of about 3.5% is fairly conservative too. Besides Pintaras has a lower risk due to its good cash flows and healthy balance sheet.

Posted by kcchongnz > 2012-12-17 09:15 | Report Abuse

continue

The DCFA shows that the value of Pintaras ordinary business is worth RM537m, or RM6.70 per share. Adding the excess cash of RM1.68 gives the intrinsic value of RM8.38, 160% above its present share price. Putting it in other way, there is a huge margin of safety of 61% in investing in Pintaras.

Posted by tomdickharry > 2012-12-17 12:46 | Report Abuse

thanks kcchongnz , very informative. What is your opinions on the issues brought up in the blog

:http://malaysiafinance.blogspot.com/2012/04/anything-wrong-with-pintaras-jayas.html?

thanks in advance

Posted by kcchongnz > 2012-12-17 14:14 | Report Abuse

Tomdickharry, thanks for the link
Dali in his article question Pintaras use of its excess cash as below. My view is at the bottom:
A)EXPOSURE - You are a construction company. You are not into fund management. How are investors going to rate your company? As a construction play or a mix with a strong beta to stock market gyrations?
a.I don’t think there is an issue here. Pintaras is a construction company with excess cash in the form of cash and short-term securities, full stop.

B)CHOICE - If investors wanted a mixed exposure to good funds, they can do that with their own funds. Now they have to believe in your fund managers' picking skills (not stock picking skills) is as good as your construction operational skills.

At first I agree with what tohff7 said below:
“From a good management's point of view, any additional cash pile should be returned back to the investors. The investors can then choose to invest into funds (or other things else) by themselves if they wanted to.”
Later may be the view of Nighelangelo is also ok with me.
“you are looking at it from an investor's point of view. from the management's point of view, we have a cash pile, FD returns too low, where else to put it but in equities.... so, it could be the management thinks they should do what is best for their money, not what is best in the eyes of investors.”
I don’t think picking a good fund manager is an issue here,

C) CONVOLUTED INTERESTS - This is something I have always harped on about Public Bank Unit Trusts. Most of them have very very high significant exposure to Public Bank stocks. ….. Who is to say that there were no directive to increase buying in Public Bank shares whenever there is weakness?
a)Is this really a problem? I don’t think its fund manager buys Pintaras’s own shares. This is against the principle of investing. After all Pintaras is such an illiquid share too.

D) VALUATION - This is the most convincing argument against what Pintaras Jaya are doing. It’s NOT GOING TO MAKE AN IOTA OF DIFFERENCE to your valuation. It CAN ONLY WHACK YOUR VALUATION DOWN. If you make RM15m one year from fund management, the investors are not going to improve your forward PER (yes, can only improve your NTA). But if you lose RM15m one year, you betcha they will whack your shares down a few notches.
a.Why would investors react differently when the funds is up or down? Valuation of Pintaras should be based on its ordinary business. Excess cash is a separate issue. Anyway I think the comment by okl below is a good one:
“Many owners/Substantial shareholders of the Public listed companies are obsessed with the Share Price and valuation (P/E) of their companies .The owners of this company are obsessed with the creation of Shareholder value. Fundamental analysis is not about Share price nor valuation!
If one were to analyse this company for a period of say 10 or even 5 years ,it is obvious there has been a substantial creation of shareholder value over that period of time.”

b.The comments by Value Investor below is also very good.
“I am a shareholder of Pintaras Jaya since 2008 and decided to attend their AGM last year as I wanted to get a "feel" on the major shareholders and management. So far, I have no real issues with the way they have managed the so-called "excess cash". This is a conservatively run company, the Tan Chong/Oriental style of management who would only turn to borrowings as a last resort. As their core competencies are in piling work, there is a need to invest in machineries that cost millions and the management choose to invest using their cash reserves. As a mid-sized "family controlled" construction company, Pintaras has so far been quite fair to minority shareholders, declaring steady, increasing dividends, especially in the last 3 years. Also, there are minimal Related Party Transactions.”

Posted by tomdickharry > 2012-12-17 23:12 | Report Abuse

thank you for your comments kcchongnz, appreciate your time & your efforts.

there are limited investment grade counters in KLSE, less than 10% of the total public listed companies i'll say. the rest are all falls under speculative category

i believe we will come across more similar counters of interest in the future

Posted by pbm8682 > 2012-12-22 11:12 | Report Abuse

hi kcchongnz... i did some study as well & totaly agree with you...i'm about the make pintaras as my major holding... what percentage, do you reckon?

Posted by kcchongnz > 2012-12-22 11:55 | Report Abuse

Hi pbm8682, glad to hear that you are also a value investor. It is really very difficult to find one in this i4punting (not i3investor certainly)forums here. Glad to hear that you think the same, though I also like people who think totally differently and can provide me with constructive criticisms. Then we can learn heaps from each other and hopefully improve our investing outcome. I would appreciate if you could furnish me your analysis of Pintaras on what do you think its valuation should be.
I am no great fan of Harry Markowitz and his modern portfolio theory. It would definitely hurt the overall return with too much diversification. I used to laugh (inside my heart) when a licensed investment adviser come to me and boosts about his portfolio optimizer software to advise you on buying a number of unit trusts, equity funds, bond funds, local funds or overseas funds combined to form a portfolio. Few or even none of them, professional and licensed adviser, knows what is the theory behind the optimization and its fantasy. For Christ sake, a unit trust itself is already consisted of numerous stocks itself! However I also think one shouldn't put all its eggs in the same basket. One will never know what can happen to a company and its specific risk, no matter how good it business and how well it is run. There is this called "black swan" phenomenon one must be aware of. I think one can find at least 10 damn good companies in Bursa with undemanding valuation; many of them could be even at high margins of safety as an investment. That 10 stocks would be a good guide as a portfolio. Don't you think so?

Posted by tptan45 > 2012-12-22 12:25 | Report Abuse

Everything about Pintaras looks good, until you look at the downward trend of the past 4 quarters.
I will pass.

Posted by kcchongnz > 2012-12-22 12:43 | Report Abuse

tptan45, are you looking at the same financial statements as I do, or you simply fire? Or are you looking at the price trend? Eh, are you looking at the chart from right to left?

Posted by pbm8682 > 2012-12-22 14:58 | Report Abuse

hi kcchongnz... to me, stock is just alike kids... only have with the number u can taking care of.... as for pintaras with 0 debt... it is just wonderfull since i can only find less than 5 companies with no debt in our bursa...

Posted by kcchongnz > 2012-12-22 15:26 | Report Abuse

"stock is just alike kids... only have with the number u can taking care of". Good one pbm8682.
But actually if you really do investing rather than trading, which I always advocate, do you really have to take care like caring for your kids?
As for debts, it is good a company is debt free. For Pintaras, it has so much excess cash. But as a shareholder, I wish they can distribute all this excess cash to its shareholders. It can even borrow some money and distribute it and assume some debts. With reasonable amount of debt, it is ok if its cash flows can meet the interest payment comfortably, because debt is cheap, whereas required return for equity holder is expensive.

Posted by tptan45 > 2012-12-22 15:34 | Report Abuse

Ok, maybe not exactly downward trend all the way, just the revenue. From 52 mil to 44mil for the quarter ending Sept 2012. There was a small rise along the way but generally down.
Income , eps is going upwards for the past 3 quarters though.

So they must be getting more and more efficient, less sales but more income. That is really good.
Of course there must be some good reason for the decreasing revenue and some good forecasts and proposals for the years ahead.

Posted by kcchongnz > 2012-12-22 16:59 | Report Abuse

tptan45, now you got the correct observation. Just another comment here. I think a lot of people pay too much attention to quarterly results. They got panic when revenue drop for a single quarter and excited when there is a sudden jump in a single quarter. To me this is just noise. Business turnover simply won't follow a smooth consistent upward curve. It will bounce between quarters, or even years. Important thing is its future business prospect, and its long-term upward trend. Take for example, construction revenue of a profit follows an S curve, slow progress initially because of mobilization, steep in the middle when things got smooth, and revenue tappers off at the end of the project. Actually for Pintaras, revenue is secondary because they just don't simply grab any project with risky and difficult ground conditions and low margin. They have the clout, being a specialist foundation contractor and the industrial connection and able to get good jobs at good margins, and manage them properly to yield the expected return. That is what is interesting about Pintaras.
Yes like you said they have some good forecast, knowing an Apek engineer like Dr Chiu won't simply project rosy pictures. And yes the impending huge increase in their paid up capital may provide a catalyst for a re-rating, I hope.

Posted by pbm8682 > 2012-12-22 21:22 | Report Abuse

hi kcchongnz... i do investing rather than trading....just like u.... the thing is, i always prefer a debt free company in my portfolio... especially when it come as a major holding in my portfolio... still advocate buffetologist.... always buying good company with no debt & well below instrinsic value....

Posted by tptan45 > 2012-12-23 01:02 | Report Abuse

Maybe as a conservative GARP investor I should have a detailed look at the counter. I tend to shun construction company as I did not have a very good experience with another one. Tend to invest in companies with business I can see like padini & Aeon credit.

Posted by kcchongnz > 2012-12-23 04:15 | Report Abuse

pbm8682, agree with you. It is hard to go wrong if one follows Warren Buffet. It is not that we are hero worshiping him blindly. Buffet really have many fine principles in investing; debt free companies, good management, business moat,good companies with reasonable price, margin of safety etc.

Posted by kcchongnz > 2012-12-23 04:43 | Report Abuse

tptan45, being involved in the industry for 20+ years, i don't like construction companies as investments too. Construction industry especially in Malaysia is fill with problems. You must have political connection to get jobs and do all kind of fishy stuff to survive. Contractors besides having to face job execution problems are also often subject to problems of construction disputes, bad debt etc. Some big boys went overseas and many of them got their pants burnt badly, very few prospered. It's highly affected by the economic cycle. In the down cycle, hard to get job; if get jobs in the boom cycle, you face materials and labour problems. Many construction lost huge amount of money during bad time; WCT, Muhibah, Zelan, Ranhill, etc during the last sublime crisis. Many construction companies just vanished during each cycle of bust.
However if you look at Pintaras's last 5 years financial below:
Year 2012 2011 2010 2009 2008 2007
Revenue, m 185.2 125.9 105.7 130.3 165.4 147.4
Net profit, m 42.1 25.7 20.7 16.1 26.3 20.4
Net profit margin 23% 20% 20% 12% 16% 14%
EPS 53 32 26 20 33 25
Dividend per share 20.0 19.0 15.0 10.0 12.0 10.0
Do you see any real problem, even during the crisis?
That is why I have been saying the management of Pintaras has been prudent in its operations; not hungry and simply grabbed jobs at all costs and increased its leverage. Its profit margin has been in the double digit which I think is because of its niche in the market, something hard to find in other construction company.
I also like the kind of business carried out by Padini and Aeon like you too. Padini is also a excellent company and also good investment too. I haven't looked at Aeon though. In the end, I like to see what is the present value of its expected future cash flows, and how much margin of safety I have investing in this company. In Pintaras, the margin of safety is huge.

Posted by tonylim > 2012-12-23 15:00 | Report Abuse

Kcchong, I thought they were the first few to have the silent piling system or whatever you call it. No?

Merry xmas to you mate.

Posted by kcchongnz > 2012-12-23 15:55 | Report Abuse

tonylim. Pilecon invented the triple system, a precast concrete pile with the triangular shape about 30 years ago. But that is just a publicity stunt, cannot cari makan one. The real cari makan one is bored piling.
Merry Christmas to you too.

Posted by kcchongnz > 2012-12-23 16:46 | Report Abuse

aiyah, why i talked about pilecon lei when the company here is pintaras! tonylim, the conventional type of precast piles are very noisy when they bang them into the soil. the bored piles are bored, or drilled, and then concrete cast in-situ. Hence there is less noise. but the noise of the machines boring can still be noisy and with a lot of vibration too. The "silent" type of piling came latter. There are jacked-in precast concrete piles. Hence not much noise.

Posted by iafx > 2012-12-23 16:55 | Report Abuse

counter has no liquitity.

Posted by kcchongnz > 2012-12-23 17:12 | Report Abuse

iafx, you are absolutely right. But again are you more interesting in trading or investing?

Posted by unknown > 2012-12-26 09:50 | Report Abuse

kia ora kcchongnz :)

kekekekek, explaining so much triple system to the ham sak cinapek. later he'll imagine the precast piles as something else as what he have imagined before - coconuts & 2 mountains at Ipoh to .....

some under research investments grade counters for you :-

1) KAF - rating 7.5*
2) PIE - rating 8.0*
3) LPI - rating 9.5*

Posted by kcchongnz > 2012-12-26 12:01 | Report Abuse

kia ora tada nama. Thanks for your counters. I will certainly look at them. Of hand, I thought they are good counters. Good cash flows and dividends but probably established and many people have recognized them already and hence unlikely to be highly undervalued.

Posted by unknown > 2012-12-26 12:07 | Report Abuse

kikiki kcchongnz , takda raya x-mas ka ? nampak sibuk ngan kaunter-kaunter bawah 40sen 2 hari lepas. you bukan kristian loh wa teka-teka :)

Posted by unknown > 2012-12-26 12:13 | Report Abuse

lu punya kira-kira intrinsic value bagi itu budak tomdickharry minggu lepas ada link bagi empirical formula ?

bolih kasi link kat sini, wa mau semak-semak sama ada wah punya persamaan ada serupa sama you punya

Posted by kcchongnz > 2012-12-26 12:24 | Report Abuse

takda nama. The calsulation of intrinsic value using discount cash flows is actually straight forward, if you know finance. Maths won't lie (in contrast to chart won't lie, hehe). The important thing is the assumptions, especially discount rate and growth expectations. If we are using these same assumptions, the intrinsic value won't differ a lot. If not, the difference macam dari Malaysia ke New Zealand. I use my own spread sheet to do it. It is not user friendly and the calculations are all over the place. Takta link, takda empirical formula. Why not you do the same and compare with mine with the assumptions posted before and see?

Posted by unknown > 2012-12-26 12:26 | Report Abuse

kua buat malam ni nanti bila lapang, kikikikiki

Posted by unknown > 2012-12-26 12:29 | Report Abuse

tapi jangan pandang remeh olang baca chart lo.... dia olang baca kebarangkalian keputusan yang akan diambik pelabur/penikam :)

Posted by kcchongnz > 2012-12-26 12:40 | Report Abuse

oh ku tak berani dan tak berqualified pandang remeh (?) olang baca chart. Aku tak fehem langsong chart2 itu. Dia olang dashatnya.

Posted by unknown > 2012-12-26 12:59 | Report Abuse

itu gangster dari liang san baca chart lo, jangan main-main lo

lu pernah fikir untuk join force sama dia untuk bikin satu "dream team" sama dia ? lu join force sama dia, kita semua warga forum ini pun senang lo. kita kasi tendang buntut itu semua "anal-shit"

tengok tengok, lu manyak aktif macam u punya abang-adik yang lagi satu - KC

dulu itu KC yang lagi satu juga banyak bagi tunjuk kira-kira intrinsic & fair value, tapi kebelakang ini nampak macam segan ja

Posted by unknown > 2012-12-27 01:19 | Report Abuse

kia ora kcchongnz

i'm worked out my own version of intrinsic value calculation

by extracting following data from Dynaquest Sep 2012 :-

a) 10-Y growth rate of EPS ( column 3a) = 18.7%
b) 10-Y DPS growth rate (cloumn 4a) = 24.5%
c) 10-Y DY range : 6.9~4.3 = 5.6% (average of high & low )
d) 10-Y PER range : 6.4~10.1 = 8.25 (average of high & low )

assuming the desire return, r = 15% per annum

the intrinsic value, a = RM 5.94 ( disregarding the net cash of RM 1.53/share )

slightly deviated from yours :), lazy people like me always like to copy paste & modified ppl template. i'm using the approach from the following template link - Warning ! make sure your device is protected with antivirus - http://andrewchia.com/intrinsic

the template is prepared by someone else & it is showing 3 examples of intrinsic value calculation, i just re-use the template

kikikikiki ,despite the differences, we are getting to same conclusion for Ptaras

a matter of time before i get use to your method :)

Posted by kcchongnz > 2012-12-27 05:36 | Report Abuse

takda nama, great to see you have actually done an intrinsic value calculation. So far you are the second person I have encountered doing this "nonsense", like what I was implied to be doing all this while by many people. Great to hear that we basically got the same intrinsic value for Pintaras though we are using a completely different method, and completely opposite assumptions. I can only say the same intrinsic value obtained is nothing but by coincident, not so much of a confirmation. By the way, the appended link does not have the calculation for Pintaras. Could you re-post the Pintaras one? There are a number of things in the spreadsheet posted (for other stocks) which are fundamentally incorrect, in my opinion, in terms of assumptions and the finance calculations used. I will comment further once you post the right spreadsheet for Pintaras.

Posted by unknown > 2012-12-28 11:23 | Report Abuse

not of my capacity to update the link, i'm not the rightful owner of the spreadsheet & the webpage

it was uploaded by this guy name Andrew Chia, not sure if the originality of the file belong to the other owner name Goh as stated by your brother - kcloh

i could only highlight which cells i replaced the values when i have access to file later.

see if there will be a discussion on the flaws mentioned can be corrected to benefit the other readers.

Posted by unknown > 2013-01-01 23:17 | Report Abuse

happy new year i3 folks

@kcchongnz
@kcloh (hopes 40+ posts doesn't stop you from commenting or replying)
@i3 folks

referring to the spread sheet uploaded by Andrew to calculate the intrinsic value for Ptaras, the following values were replaced in the earlier discussion last year :-

taking 3A calculation spread sheet:-

delete all the value in cells (E12:O24)

replace the following cell values:-

1) Cell C24 : 2012
2) Cell E24 : RM 2.11
3) Cell F24 : RM 3.10
4) Cell I24 : 20 sen
5) Cell K24 : RM 0.507
6) Cell N26 : 6.9%
7) Cell O26 : 4.3%
8) Cell P26 : 6.40
9) Cell Q26 : 10.10
10) Cell I28 : 24.5%
11) Cell M28 : 18.7%
12) Cell O28 : (N26+O26)/2
13) Cell Q28 : (P26+Q26)/2
14) Cell K31 : 2012
15) Cell K33 : RM 3.18

if you could notice, i didn't calculate the EPS growth rate & DPS growth rate using the spread sheet uploaded by Andrew.

instead, i make use of the figures published by Dynaquest issue Sep 2012. All the figures from item 1) to 15) are actually extracted from Dynaquest 10-Y data for Ptaras - unless if i extracted it wrongly, kindly correct me.

that is how i arrived at the intrinsic value RM 5.94 at cell E96

any flaws you notice, feel free to comments. Tx in advance

Posted by kcchongnz > 2013-01-02 05:55 | Report Abuse

Unknown, well done. You must have spend quite some time doing it. I don't have your actual spreadsheet on Pintaras. so I just comment on the spreadsheet provided which is for other companies. Here is what I think:
Your spreadsheet seems to project the earnings per share (EPS) after 10 years, using the average growth rate of the past 10 years. You then add the total expected dividends for the 10 years to the 11th year to the EPS. From that EPS, you give a PE ratio which is the average of its past 10 years PE ratio and obtain an expected price. Then you discount this price with a discount rate (what is stated in the spreadsheet r as growth rate is wrong, it is the discount rate or required return) of 15%. From there you get the intrinsic value or the present value of the stock price. What followed is just the personal preference of the spreadsheet creator on when to buy and when to sell basing on the intrinsic value obtained.
Each individual has his own way of evaluating the intrinsic value. However, there are a few things in the spreadsheet which are done quite differently from the conventional finance method of discount cash flows (DCF) to obtain the intrinsic value. First of all, this method doesn’t seem to be a DCF as it is trying to discount the expected price of the share to present value, not the yearly cash flows in terms of dividends and terminal cash flows. Secondly although projection of future growth is an art, using the average growth rate for the past 10 years is clearly not the logical way to project the future growth. The growth rate use should be the compounded annual growth rate, not the average rate over the years which seems to be used by your spread sheet. This is clearly incorrect as explained clearly in a link below:
http://moneyterms.co.uk/cagr/
Hence your projected growth rate for the future may be flawed.
Thirdly can you explain why do you use 15% as the discount rate which I think is a bit too high for Pintaras as looking at its financial statements, my opinion is that it is a low risk investment and hence doesn’t warrant such a high discount rate. Again this is not the matter of right or wrong, but just a matter of personal preference though.

Posted by iafx > 2013-01-02 08:51 | Report Abuse

counter has no liquitity.

Posted by kcchongnz > 2013-01-02 09:23 | Report Abuse

Posted by kcchongnz > Dec 23, 2012 05:12 PM | Report Abuse X

iafx, you are absolutely right. But again are you more interesting in trading or investing?

Posted by iafx > 2013-01-02 09:50 | Report Abuse

ptaras is poor in liquitity, regardless of trading or investing, it's a classic family controlled business, little to no transparency, this is one point to remember when buy into this counter

ptaras placed large amount of $$$ into fund/asset management. cash is preserved for their own good.

there is question if ptaras can maintain a 20c div, while 10c should be norm.

Posted by kcchongnz > 2013-01-02 10:50 | Report Abuse

iafx, very good to be skeptical when investing. But let's try to see if your skepticism is founded. Let's look at the 6-year financial performance and cash flows of Pintaras as below:
Year 2012 2011 2010 2009 2008 2007
Revenue, m 185.2 125.9 105.7 130.3 165.4 147.4
Net profit, m 42.1 25.7 20.7 16.1 26.3 20.4
Net profit margin 23% 20% 20% 12% 16% 14%
EPS, sen 53 32 26 20 33 25
Dividend per share 20.0 19.0 15.0 10.0 12.0 10.0
Cash flows per share 66.0 28.4 14.5 39.7 24.6 21.5
Why do you say ptaras cannot maintain its 20 sen dividend and that 10 sen should be the norm?
Pintaras has an excess cash of 1.68 per share. Excess cash is cash which is not needed for the ordinary operations and can be distributed to shareholders without affecting its operations. How I wish they distribute all of them. Its six years EPS has been consistently above 20 sen, with a average of 25 sen. The most recent one being 32 sen. Its average cash flows from operations is 26 sen, with the most recent one being 66 sen per share! So is your concern that whether the 20 sen dividend is sustainable founded?
Regarding investing in managed funds, why do you say that "cash is preserved for their own good"? No transparency? Why do you say that? do you find any evidence or even any suspicious transaction? Below is the comments by an investor called himself Value Investor.
“I am a shareholder of Pintaras Jaya since 2008 and decided to attend their AGM last year as I wanted to get a "feel" on the major shareholders and management. So far, I have no real issues with the way they have managed the so-called "excess cash". This is a conservatively run company, the Tan Chong/Oriental style of management who would only turn to borrowings as a last resort. As their core competencies are in piling work, there is a need to invest in machineries that cost millions and the management choose to invest using their cash reserves. As a mid-sized "family controlled" construction company, Pintaras has so far been quite fair to minority shareholders, declaring steady, increasing dividends, especially in the last 3 years. Also, there are minimal Related Party Transactions.”

Posted by iafx > 2013-01-02 10:55 | Report Abuse

good to have faith

Posted by kcchongnz > 2013-01-02 11:01 | Report Abuse

If one has faith, there is nothing to lose, everything to gain. However we are not talking about faith here, not blind in believing in something. Are we? We are talking about facts, not faith. You are just the reverse of my friend who try to convince me about certain religion. When they can't answer my question with fact, they just tell me to just take it, it is faith, must have faith. But you are the reverse, no fact but ask me to have faith that it is not true, despite mountains of facts.