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Monday, 2 January 2017

Oceancash Pacific - Story That Many Have Overlooked

Company Profile
Oceancash is founded and led by Mr. Tan Siew Chin since year 1997 (Oceancash Felts Sdn Bhd) and listed on Bursa Mesdaq Market in year 2004. From 1997 to 2004, it is indeed a short 7 years to build a company from a Sdn Bhd to a Bhd.

What Oceancash do?

Extracted from Oceancash's Corporate Website:

Oceancash Felts Sdn. Bhd. (OFSB), a wholly owned subsidiary of Oceancash Pacific Berhad (OPB), is principally involved in the manufacturing of resinated felts and thermoplastic felts for heat insulation and sound insulation which include but not limited to; interior and exterior trims in automobiles, noise damper for compressors of split unit air conditioners as well as insulation in buildings including roofs, walls, partitions, and carpet underlay.


Oceancash Nonwoven Sdn. Bhd. (OCN), a wholly owned subsidiary of Oceancash Pacific Berhad (OPB), was incorporated on December 21, 1999 in Malaysia. The principal activities of OCN are in the manufacturing and trading of air-through bonded nonwoven, and thermal bonded nonwoven, which are widely used in the disposable hygienic products industry. Its application include top-sheets, second layer, acquisition distribution layer (ADL), and back-sheet for diapers, sanitary napkins, wet wipes, and surgical apparels including caps, masks, and gowns.
Why I like this company? She fulfilled the FA requirements that I am looking for and has a good growth story to tell. 

1st Growth Potential After Additional RM14m Spend on PPE 

She has spend RM12.56m in year 2015 for PPE purposes (Figure 1). Talking about improving their upcoming revenue for the group level. =)
Key word : According to the Chairman, the PPE will be contributing postively in 2nd half of 2016. To look at the info in details, the breakdown for the 2 more signifinact investments for PPE are as per below:

RM9.1m for Plant and Machinery
RM4.1m for Building Under Construction

Under Accounting Treatment for Cash Flow, the column for 'Investing Activities' is good if it is in negative value. It means the company is spending monies to increase the potential income in the near future for Investment Activites via PPE. Definately it is fair for us to expect the company to achieve higher revenue and profits for 2nd half of 2016 onwards after much monies spend. By the way, we are waiting for 4th QR Report for 2016 right? =)
Additional note, receivables has gone down from Rm3.1m to Rm1.6m.  

Figure 1




Figure 2:


2nd Financial Health Analysis

Figure 3:




Income Statement
Profit Margin = 8.57% - pass (<5% fail)
3.7% in year 2011 to 11% in year 2016 – It is in an increasing manner for the past 5 years (A job well done). From here i can see a good growth pattern.
CAGR of 19.9% from 2011 to 2016. (N =5, PV = 3.7, FV = 11)

Interest Cover = 8.7x - pass (<3x fail)

Profit for the past 5 years = Yes, steadily grow from RM2.15m in year 2011 to RM8.57m year LTM 12 months of 2016. Profits are compounded at 38.6% for the last 5 years. The profits are compunded at a slow and steady position. 

Balance Sheet
Current Ratio = 1.88x – pass (<1x fail)
Debts to Equity Ratio = 0.4x – pass (>3x fail)
Don't see the company is having liquidity problem for now.


Cash Flow
Positive at least 1 year = Pass


OCEANCASH PASSED ALL MY FINANCIAL HEALTH RATIOS !


3rd. Pricing Analysis (Acceptable low PE!)

Price to Earnings or PE Ratio for 2016 = 
Using the Rolling 4 Quarters EPS: 3.932 = 0.395/3.932 = PE 10x (affordable and acceptable)

Forecast Future PE by using EPS 3 Quarters for 2016 and annualized it =4.13  
Forecast Future P/E = 0.395/4.13 X 100 = 9.5x (slightly lower than rolling 4 QR PE)

Let's look at the potential plus point: 
The projection of increase of EPS for final Quarter 2016 is doable. Why I say so?

Historical numbers:
9 months PAT for 2016 (Figure 4) = RM 6.932m
9 months PAT for 2015 (Figure 5) = RM 7.086m

A shortfall of RM0.154m for year 2016 compared to year 2015. 
THE BEST PART MOST OVERLOOK IS AT FIGURE 6, item B3: 

Figure 4:




Figure 5: 



Figure 6:




Look at what the Management Team said:

Baring unforeseen circunstances, performance for FY 2016 to be better than FY 2015.
Current 9 months of P&L, PAT for year 2016 is lower than 2015 at RM154k!

Assuming worst case scenario: If the Management guidance/projection is correct, the forecasted Final Quarter of 2016 should be AT LEAST to match the same earnings as 2016 (4th QR 2015) RM 1.836 + RM 0.154 (short fall of 9 months 2016 VS 2015)= RM1.99m 
BY RECORDING A PAT OF MINIMUM RM 1.99M FOR 4TH QR 2016: The 4th QR 2016 results will be better than 4th QR 2015.  

4. Catalysts for 2017:

There are 2 catalysts which catches my eyes for possible medium term investment. I have boxed it in black on Figure 7:

CATALYST 1: Potential good 4th QR 2016 Report

'Nonwoven division has ordered a spooling machine to upgrade its production capability'
'Expected increase in sales during the 2nd half of 2016'
From Figure 8: We can see that the QR Report for Q3 2016 is the highest Recorded which matches the statement given as per Figure 7. What do you think about the upcoming Q4 2016 Results? 

Figure 7:





Figure 8




Catalyst 2: Meeting the Profitability Test Record for Transfer to Main Market

Under Bursa Listing Requirement for Main Market, a company is qualified to be transferred to Main Board if the company is able to achieve an aggreagate of RM20m PAT from the lastest cumulative 3 years of annual report.

PAT 2014 = RM 4.91m (Figure 3)
PAT 2015 = RM 8.72m (Figure 3)
9 Months PAT 2016 = RM 6.932 (Figure 4 & 8)

Total PAT = RM 20.562m

The good part is, the RM20.562m has already being achieved without adding the final 4th QR 2016 report ! Any profits recorded in 4th QR 2016 Report will be a bonus.

Conclusion & Personal Opinion:

I like the solid fundamental numbers recorded since the year 2011 and having a continuous growth every year for the past 5 years. It has both Healthy Financial Ratios and Good Pricing. Involvement in overseas business has help her in increasing the forex gain in year 2016. The catalyst to be upgraded from ACE to Main Market entitles this company a chance to be a potential good stock to watch in 2017. It is a company suitable for low risk takers and medium investors. You can bank on the growth stories from her enlargement of PPE and Nonwoven business. Introduction of Bezza and Pesona in 2nd half of 2016 might potentially help this company too but I do not have the statistics of contribution to be added in to support this point. 

The bad side is the company is exposed to the currency risk. If RM is strengthening in 2017, then it will impact and reduce their P&L. The slow growth of vehicles sales in 2017 might dampen the growth for the Felts Division.
Another limitation is the forecast for 4th QR 2016 is based on personal opinion from the guidance from the Annual & Quarterly Report.


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Sincerely,

Humble Pie

Disclaimer and Declaration

The information is meant for the members of Bursa Blue Ocean (BBO). Disclosure and distribution of the message without the permission of BBO is prohibited. The full content of the article and write ups are for educational purposes only and should not be used as investment recommendations. We are not responsible for all investment activities conducted by the participants and cannot be held liable for any investment loss.








Thursday, 4 August 2016

OCK - Expanding to a Regional Footprint: Asean Player in The Making

Company Profile
OCK is founded and led by Mr. Ooi Chin Koon in year 2000 (OCK Setia Engineering Sdn Bhd) and listed on Bursa Ace Market in year 2012. I guess now you can see where the 'OCK' name come from. =)
From 2000 to 2012, it is not bad for a cool 12 years from 0 to a listed entity right? It took another 2 short years for OCK to upgrade herself from ACE to Main Market (20m PAT in 3-5 years with the latest financial year not less than RM6m PAT).

What OCK do?

Extracted from OCK's Corporate Website:

OCK Group is principally involved in the provision of telecommunication services equipped with the ability to provide full turnkey services. Our service offering comprehensively covers services from all six segments of the telecommunication network services market: network planning, design and optimization, network deployment, network operations and maintenance, energy management, infrastructure management, and other professional services. As a Network Facilities Provider (NFP) Licensee, we are able to build, own and rent telecommunication towers and rooftop structures to the eight telecommunication operators in Malaysia.

Why I am looking at this company?
They are some info I would like to share for this stock.

1. 3x Cash Call in 4 Years 

In a short span of 4 years of listing (2012 to 2016), she already did 2x of cash call and now calling for the 3rd round. The 3rd and latest round of cash call was announced in June 2016. What actually happened?
For a listed company, the main reason for an IPO is to sell/place out min 25% of their enlarged shareholding to raise cash (to meet the minimum 25% public spread). The cash raised should be sufficient to cater for the next few years business expansion purposes.
Surprisingly;

i. 2 years post listing, RM74m was raised through 'Private Placement' on June 2014
ii.  The subsequent year, RM132m was raised though 'Right Issue' on Dec 2015
iii. The following year, they announced the 3rd round of fund raising exercise on June 2016

Extracted from Bursa Malaysia, 'Company Announcement' column;

PROPOSED PRIVATE PLACEMENT OF UP TO 105,632,181 ORDINARY SHARES OF RM0.10 EACH IN OCK REPRESENTING APPROXIMATELY TEN PERCENT (10%) OF THE ISSUED AND PAID-UP SHARE CAPITAL OF OCK ("PROPOSED PRIVATE PLACEMENT").

For a simplistic calculation, let's say I am taking the last closing price @ 5/8/2016 which is RM0.83 and multiply by 105.6m shares, the amount to be raised will be RM87m. (Generally, to do a Placement, PVWAP of 5 days will be used).

Raising so much of funds via Equity do dilute the shares and EPS, moreover it is barely 4 years old in Bursa. Many Investment Managers definitely will raise their eye browse on this. Let's map the chronology of the fund raising:

Fundraising i:

It was being done at the same time /year with the acquisition of PT Putra Telecommunications in Indonesia.
A new venture to overseas business. 

Fundraising ii:






The 2nd cash call  was being done at the same time /year with the acquisition of 920 telecommunications towers contract from Telenor Myanmar. Another new country she ventured in. 

Fundraising iii:






The 3rd cash call  was being done at the same time /year with the acquisition of SEATH (owned 1938 towers in Vietnam. Another new country she is venturing in.

Look at how the money flows as at 1st Quarter of 2016:

For 1st Cash Call:

There is a balance of 16.11% to be used. The mandate to utilize the money has expired on June 2016. I believe OCK has fully utilized the 100% of the 1st cash call for now.

For 2nd cash call:

There is a balance of 87.3% to be used for business expansion which I believe for Myanmar's Project.


What to look at for OCK?

1st Growth Catalyst: Potential Improvement of Earnings from Indonesia & Myanmar

Monies already spend but earnings only started to crystallized. This is to say, monies spend since year 2014 has starting to yield the positive numbers to the top and bottom line of the latest QR Report. For the funds raised in cash call 2 has yet being fully utilized. Believe it will give a further boast in their upcoming QR Reports. The overseas venture done is bearing fruits for her. During the Indonesia acquisition, it was 6000 sites, 2 years later it is 20000 sitess. Not bad at all.

The current weakening of RM against the US dollar is beneficial to her as well. What do you think for the upcoming 2nd, 3rd and 4th Quarter of 2016 numbers would be ? =)

Please refer below of the details highlighted in blue:



2nd Financial Health Analysis


Income Statement
Profit Margin = 7.84% - pass (<5% fail)

Interest Cover = 4.31x - pass (<3x fail)
Profit for the past 4 years = Yes, steadily grow from RM13.15m year listing year 2012 to RM24.75m in year 2015

Balance Sheet
Current Ratio = 3.32x – pass (<1x fail)
Debts to Equity Ratio = 0.59x – pass (>3x fail)

Cash Flow
Positive at least 1 year = Pass - Yes from RM12m (2012) to RM164m (2015)

OCK PASS ALL 6 FINANCIAL HEALTH RATIOS.



3rd. Pricing Analysis

Price to Earnings: 
Using the Rolling 4 Quarters EPS: 3.197 = 0.83/3.197 = 26x (not cheap at all)
Looking at continuous income from Indonesia and Myanmar, it should be better for the few upcoming quarters.

Price to Book Value – 1.95x (not cheap but acceptable)
Dividend Yield – 1.45% (for a company in high expansion mode, any dividends payout is a bonus)

Do look at her Compounded Annual Growth Rate (CAGR) for Revenue and PAT (extracted from Annual Report):









Net profit has tripled for the past 5 years. From a RM9.2m to Rm27.1m. Talking about consistent high growth for her!


4. Catalysts for 2016:

1.       The main catalyst which catches my eyes for possible long term investment:
The consolidation of income from Seath Vietnam. Assuming 2016 yield about the same like 2015: 60% of 2015 PAT of RM7.44m will be around RM4.5m added in to the bottom line.
The additional incoming revenue from Indonesia and Myanmar. Monies raised from the upcoming placement definitely will be a great usage to improve the following few 2016 Quarterly Report results.


Technical Chart Perspective:




She has touched the resistance level @ 0.84 for the 7th time! Talk about long consolidation. Look at the triangle (blue line) recording Higher Low for the last 6x support level. The latest few days closed with a high volume. Something to see for technical chartist?

For those who likes to see for a longer time frame, lets look at below, it might look interesting for you. It is trading at the new high, trying to break the old resistance set in July 2014 ! Wonder what would it be in the near future ? =)






Conclusion & Personal Opinion:

I like the strong management team lead by Mr. OCK and solid fundamental numbers recorded. As now the company has been in the overseas business for the 3rd year, I believe the numbers will be good for the near future. Let's hope that the name OCK also stands for Orang Cepat Kaya.

Potential risks involved are the slowdown in Malaysia economy as most of her revenue currently still in Malaysia and fluctuations on USD currency (Indonesia, Myanmar and Vietnam's Project). For those conservative FA followers, this stock might not be suitable for you as it has a high valuations. I am looking at 'Growth Investing' and not 'Value Investing'. Our perspective and risk tolerance might be different. 


Please like us at our facebook page - Bursa Blue Ocean and complete the survey form and join out telegram group chat room!

Sincerely,

Humble Pie

Disclaimer and Declaration

The information is meant for the members of Bursa Blue Ocean (BBO). Disclosure and distribution of the message without the permission of BBO is prohibited. The full content of the article and write ups are for educational purposes only and should not be used as investment recommendations. We are not responsible for all investment activities conducted by the participants and cannot be held liable for any investment loss.

Monday, 18 July 2016

GHL Systems Berhad - The Hidden Gem

Company Profile

GHL is led by Mr. Simon Loh (Executive Vice Chairman) who joined in 2010. He spend 2 years to revamp the company till it is profitable and is has been running well since.
There are some interesting info that I like about this company and believe it might be suitable for investors who can tolerate higher valuation stocks.

The GHL AGM was held at 29 June and I was contemplating to either go to Kuala Lumpur Country Club or HSS IPO Launching. Ended up I went to KL Country Club at Bukit Kiara to join her AGM. =)

What GHL System do? 

Extracted from the corporate website:

Provides integrated end-to-end payment solutions encompassing physical and virtual payments on sale and rental basis, including Electronic Data Capture (EDC) terminals compliant to the Europay-Mastercard-Visa (EMV) platform, contactless readers, network access routers, and online payment gateways.

Why I like this company? She fulfilled 3 requirements that I am looking for and has a good growth story. She only failed one of my 4 personal investment requirement.  
1st Growth Potential

She has successfully penetrated the Philippines market in May 2016 for Transaction Payment Acquisition TPA with Rizal Commercial Banking Corp Philippines and targeting to acquire 3000 merchants for 2016. May and June alone, she has successfully acquired 1000 merchants! The new earnings are yet to be captured in the latest QR and the FY End 2016.


2nd Financial Health Analysis


Income Statement
Profit Margin = 5.28% - pass (<5% fail)
4% in year 2014 to 5.28% in year 2015 – increasing for the past 3 years

Interest Cover = 3.55x - pass (<3x fail)

Profit for the past 5 years = Yes, steadily grow from RM4.37m year 2012 to RM11.33m year 2016
(it has made rights and bonus in year 2013 and 2014, so EPS was diluted) 

Balance Sheet
Current Ratio = 1.73x – pass (<1x fail)
Debts to Equity Ratio = 0.55x – pass (>3x fail)

Cash Flow
Positive at least 1 year = Pass - Yes from RM45m to RM59m

The Trade receivables has declined from RM34m to Rm12m which is a positive note. Bank Borrowings dropped from RM26m to Rm 8.8m. A good effort to par down debts and saving the interests cost. The good thing is the cash flow is being managed well. It is at a increasing manner! Please refer below:






GHL PASSED ALL FINANCIAL HEALTH RATIOS



3rd. Pricing Analysis (Failed the Pricing Analysis - High Forward PE)

Price to Earnings 
Using the Rolling 4 Quarters EPS: 1.737 = 0.96/1.737 = 55x (not cheap at all)
Forecast Future PE by using 1st Quarter 2016 and annualized it by X4 = 1.737x4 = 2.68
Forecast Future P/E = 0.96/2.68 X 100 = 35.8x (still very expensive)
Looking at TPA secured in Philippines, it is possible for her to repeat the 1st Quarter 2016 result and might be better.

Price to Book Value – 2.46x (not cheap but acceptable)
Dividend Yield – 0 (don't expect to get anything from her)


4. Catalysts for 2016:

1.       The main catalyst which really catches my eyes for possible long term investment is the penetration into new countries and capturing new TPA market. She is also potentially to embrace to technological change, participating mainly in Fintech technology according to Simon. 

2.       Creador has remained as the major shareholder since Oct 2014 at the entry price of 42 cents. His initial block was at 20 cents and latest filing as at 2015 annual report was 28.42%. Guess what, during the latest AGM, the representative from Creador Ms. Lim Sze Mei (ED for Creador) was sitting with the GHL board. I get some feeling of comfort from this situation knowing most likely Creador will be there for some time in the near future. 





Technical 

From the technical perspective, it has touched the resistance level of 0.96 which is also the wave C. May take a look if you are a keen TA practitioner.



Conclusion & Personal Opinion:

I like the strong management team lead by Mr. Simon and Mr. Kanagaraj. The solid fundamental numbers recorded since Simon took over on year 2010 and revamp the company till it is profitable. With the potential Fintech technology to be explored for e payment, I believe it is a good stock to watch for 2016. Creador stays definitely makes her a sexy stock to watch out.

But mind you, the potential risks involved are the high valuations she has for now. The P/E is at staggering 55x which does not make sensible Pricing Analysis entry. It only has Healthy Financial Ratios but Poor Pricing Analysis. Involvement in overseas business also exposing her to the currency risk. For the rich valuations she has, it is not a company that suitable for low risk takers. You can only rely on the growth stories from her ventures in overseas to offset the rich valuations in the near future.  For those who follow FA Rules strictly, this is not the stock for you. 


Please like us at our facebook page - Bursa Blue Ocean and complete the survey form and join out telegram group chat room!

Sincerely,

Humble Pie

Disclaimer and Declaration

The information is meant for the members of Bursa Blue Ocean (BBO). Disclosure and distribution of the message without the permission of BBO is prohibited. The full content of the article and write ups are for educational purposes only and should not be used as investment recommendations. We are not responsible for all investment activities conducted by the participants and cannot be held liable for any investment loss.

Friday, 29 January 2016

Humblepie Watchlist for Value Investing as at 29 JAN 2016:


The week has been quite volatile with the last trading day of the month ended with 33 points / 2% up to mark a good window dressing. Net buy from Foreign 706m on 29 Jan. As mentioned earlier yesterday  that the issue from Wan Emdibee is over, money already 'return', RM strengthen and if oil price rebounds, everything will goes back to normal.




For my portfolio, I have sold Inari and Unisem and effectively Reduced my return for Crystalized Profits for an Average of 1.9% per stock from the initial 4.2% per stock. It is equivalent to Money Market interests for 6 months which if you annualized it will be 3.8% (FD Ratefor 1 year). The Paper Gain for Stocks on Hand has dropped from 17.8% to 15.9%. I was not spared from the market volatality.

Selling out Inari & Unisem:
This is a good stock and looking forward for another round of good QR Report (at least for 4Q 2015). A cross check at Bursa announcement, the Director has been selling aggresively since Mid Jan till end Jan 2016 (DS Thong Kok Khee) with no sign of slowing down. Apple as well has issued early warning on first sales decline in a decade earlier last week. Samsung Electronics follow suit and issued a warning on gloomy 2016. I think the Value has changed and I decided to take the hit.
For Unisem, although the Directors is accumulating the shares but it is in a small block. I believe the next 4th QR should be ok looking at our RM/USD FX but I would rather step a side temporary.






What's next?

DOW closed up 396 points on last Friday but Malaysia is celebrating her Federal Day which is a Public Holiday. As the air has been cleared up a bit in Bolehland, I stand neutral on the market and currently analyzing some beaten down stocks with good FA. With the revised Budget announced, there are not much impact to the investors for stocks. I will post up another write up soon! Till then I am looking forward for a rebound on Tuesday for the balance 9 stocks on hand.

Happy Trading

Humblepie

Tuesday, 5 January 2016

MIKRO MSC BERHAD: THE NEXT BIG THING

Company Profile

MIKROB is a listed small cap led and founded by Mr. Yim Yuen Wah in 1997. I found some of the criteria I like in this company and believe it will be her next catalyst.  

What Mikrob do?

Extracted from Annual Report:
Manufacture and sale of analogue, digital, and computer controlled electronic devices for the purpose of protection, monitoring, and programming in electrical systems. Its products include protective relays, such as overcurrent (OC), earth fault (EF), earth leakage, combined OC and EF, voltage and current control, and reverse power relays; digital meters, including ammeters and voltmeters; current transformers; and power factor regulators. Mikro MSC Berhad also provides related technical support and maintenance services.

Why I like this company?

She has fulfill all 4 requirements that I am looking for and has a good growth story.

1st Theme Play
Needless to say, 2nd half 2015 is Export Play and I believe it will be carried forward to 2016 at least for another few months. For year 2015, she has been able to increase the export sales to Vietnam, India, Indonesia and Australia by 67%. The export done is bearing fruits for her. The current weakening of RM against the US dollar is beneficial to the Group because she derived 37% of the revenue of the company in export.

Look at the Cash USD in deposits for year 2014 @ RM 1.6m vs 2015 @ RM5.9m. A jumped of RM4.3m. Bear in mind, the 2015 Annual Report was published for Year End June 2015. The USD sharp spiked up was from July 2015 onwards and started to contribute to 1st Quarter 2016 results.  What do you think for 2nd, 3rd and 4th Quarter of 2016? =)





2nd Financial Health Analysis

 

Income Statement
Profit Margin = 21% - pass (<5% fail)
14% for year 2011 to 21% year 2015 – increasing every year without fail

 
Interest Cover = 127x - pass (<3x fail)
Profit for the past 5 years = Yes, steadily grow from RM3.4m year 2011 to RM8.26m year 2015

Balance Sheet
Current Ratio = 5.4x – pass (<1x fail)
Debts to Equity Ratio = 0.17x – pass (>3x fail)

Cash Flow
Positive at least 1 year = Pass - Yes from RM3.9m to RM8.4m

MIKROB PASS ALL 6 FINANCIAL HEALTH RATIOS!




3rd. Pricing Analysis
Price to Earnings –
Using the Rolling 4 Quarters EPS: 3.084 = 0.415/3.084 = 13.4x (not cheap but acceptable)
Forecast Future PE by using 1st Quarter 2016 and annualized it by X4 = 1.01x4 = 4.04
Forecast Future P/E = 0.415/4.04 X 100 = 10.3x
Looking at current USD/MYR exchange rate, possible for her to repeat the 1st Quarter 2016 result.

Price to Book Value – 2.88x (not cheap but acceptable)
Dividend Yield – 2.67% (for Ace market this is consider good, she has been paying good dividends since 2011 which most Ace could not make it)
Do look at her Compounded Annual Growth Rate (CAGR) for Revenue.  10.6% average for the past 5 years. It looks very good for an Ace counter like her. Most of the main board companies also cannot maintain their CAGR in double digit growth. What makes me even like her more? Look at her CAGR for Profit After Tax (PAT). It is at a staggering 19.4% for the last 5 years! Talking about consistent high growth for her! (extracted from Annual Report)






4. 3 Catalysts for 2016:

1.       The main catalyst which really catches my eyes for possible long term investment is the adoption of M2M (Machine 2 Machine) connectivity and IoT (Internet of Things). MIKROMB is embracing this technological change, not only because it is inevitable but also because it promises new frontiers and rewards.

2.       She just bought a piece of freehold industrial land together with a single storey warehouse, for a total cash consideration of RM11,720,000 for business expansion earlier this month. This was following through with the Private Placement done on 22 Dec 2015 with RM10m raised for their business war chest. Monies raised from the placement definitely will be a great usage to operate the new warehouse in 2016 and improve the following few 2016 Quarterly Report results.   

3.       Potential to be upgraded to Main Board. (this is what I like)
PAT for 2014 = RM 5.6m
PAT for 2015 = RM 8.2m
1st QR 2016 = RM 2.8m (annualized for 4 Quarters will be RM11m)

Under Bursa Main Board listing requirement, latest 3 years PAT must be minimum RM 20m with the latest Financial Year not less than RM6m. Looking at this scenario, she just need another 2 quarters to make it. Theoretically she already strong and fit to join the bigger boys in Main Board.  


Conclusion & Personal Opinion:

I like the strong management team and solid fundamental numbers recorded. As now the market is focusing on export play, I believe with the 3 catalysts she has, it is a good stock to watch for 2016. The potential of upgrading to Main Board and export theme play definitely makes her a sexy stock to watch out.

Potential risks involved are the slowdown in Malaysia economy as she derived about half of her revenue in Malaysia and fluctuations on USD currency.  


Please like us at our facebook page - Bursa Blue Ocean and complete the survey form and join out telegram group chat room!

Sincerely,
Humble Pie
Disclaimer and Declaration
The information is meant for the members of Bursa Blue Ocean (BBO). Disclosure and distribution of the message without the permission of BBO is prohibited. The full content of the article and write ups are for educational purposes only and should not be used as investment recommendations. We are not responsible for all investment activities conducted by the participants and cannot be held liable for any investment loss.