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Sunday, 25 January 2015

Sharing by a friend: Marco @ 0.17 - TA Analysis


Based on the MCD indicator at the bottom half, percentage of retail players (green bar) is shrinking. Institutional play (red play) is increasing. With the good prospect of dividend to be announced together with the quarterly results next month, price is more likely to move up. Trade at own risk.
Happy Trading


Banking on Small Cap - Marco @ 0.17 - Hugh Cash Balance Sitting Idle

P/E :  10.64
Forward P/E : 8.7 (0.17/0.0195) - PASS
[(Q1 2014~ 0.47 + Q2 2014~ 0.37 + Q3 2014 ~ 0.62)/3] X 4 = 1.95
P/BV : 1.17 - Acceptable
Dividend per share : 0.008 (2013)
Dividend Yield : 4.7% - PASS - Estimate for 2014 around 0.008 as well
Current Ratio : 5.72 – PASS
Quick Ratio : 4.94 – PASS
Debt/Equity Ratio : 0.17 - PASS

Looking at the numbers above, Marco is a good company in good health. A quick check in their latest P&L, it is stated they have a cash balance of RM77m (2014) vs RM39m (2013). This is mainly due to the monies received from exercising the warrants. With not much of Business Expansion activities, we believe Marco might declare a good dividend for 2015. At price 0.17, we made an entry.

The old saying 'Cash is King' may holds well for Marco.

Happy Trading !

Regards,

Humble Pie  



  

SKPETRO @ 2.80 - How's my trade fair?

How's things? I have just returned from 2 weeks of Business Trip. Let's see how is my SKPetro fairs now:

1st Purchase   3.08
2nd Purchase  2.87
3rd Purchase   2.55
4th Purchase   2.23
5th Purchase   1.91 (not done - lowest 2.02)

Average:                                      2.6825 (assume 2.70 - with brokerage)
Closing Price @ 23/1/2015          2.80 (3.7% return for 2 months ++) 

I am still keeping due to:
1.  SKPETRO is set to return to Shariah Compliance List in May 2016 - Announced on 16/1/2015
2. stabilizing oil price and RM - Prices of RM is fluctuating around 3.55 to 3.65 for the near term. 
                                                  Same goes to Oil : around USD 45 to USD 55 
3. Continuous accumulation by EPF and Amanah Raya (started to join the shopping party from 13/1/2015)

If you see Amanah Raya started to collect an Non Syariah counter, perhaps you may some idea that SKPetro has most likely settle their dust. Some might be quick enough to spot the announcement dated 16/1/2015 and bought at 19/1/2015 @ 2.63 (still gives a decent 6.46% for a short span of a week).

Not a bad deal ya using Value Investing?



Disclaimer and Declaration
The full content of the article is 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. Examples of specific shares may be citied for
illustration purposes.
Regards,
Humble Pie, 

Sunday, 4 January 2015

P/E Valuations for IPO - Why Promoters Want the Best

As we are touching about IPO, would like to share on the reason why Promoters (owner) always ask for the highest possible P/E for their IPO. This IPO job is being done by the Corporate Finance Dept of the appointed Broker/Investment Bank.

Eg.

Year 2013 = Company A made RM10m Net Profit
Year 2014 = IPO @ P/E 10, Market Capitalization = RM100m
                   
If the Principle Adviser (Investment Bank) able to place out the Placement of Shares at a higher P/E assuming P/E 12:

Net Profit Year 2013 RM10m X P/E 12 = RM 120m Market Cap post IPO

Promoter (owner) is selling/placing 30% of his shares out:

If P/E 10 = RM 30m raised for Owner's 30% stake
If P/E 12 = RM 36m raised for Owner's 30% stake

Same amount of 30% of shares being placed out but EXTRA RM 6m just because the Principle Adviser able to get the clearance from SC and getting the Institutional Buyer to take up the shares.
When the Promoters really push the IPO P/E too high, there is limited upside for investors like us.
That is when we say NO for the placement.

FYI, currently market practice are:

Ace Market: P/E 8 to P/E 10 : Anything above, the Bankers are really pushing it.

- During year 2008, 2009, as long as you made around RM1m net profit, you can apply for IPO but since 2013, you do not see it anymore. Reason being is SC has tightened the listing requirement.
Although you can't see this ruling in any SC guidelines, it has been made as a market practice. Basically SC is looking at minimum RM3m net profit and Ace Market is just a temporary place for you. You must be able to transfer to Main Board in 2 to 3 years time.

Main Board - Small Cap (RM500m and below market cap)
P/E 10 to P/E 12

Main Board - Mid and Large Cap (RM500m and above)
P/E 13 to P/E 18 (Depending on your sector and business model)

If it differs, then we should sit down and drill their Prospectus to look for more info, do not easily accept the reports/news/rumors out there.

 Disclaimer and Declaration

The full content of the article is 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. Examples of specific shares may be citied for illustration purposes.

Regards,
Humble Pie




Only World Group (OWG) - IPO - Pricing Analysis on The Valuations (Good Buy?)

Dear All,

We would like to share another IPO of late for your perusal:

The Broking House says:
(Extracted from research report published)

Fair Value (FV) for CYE 2015 = RM 1.09

Fair or not Fair?

Humble Pie view:

Look at OWG Prospectus Page 18:
Item: 3.6(i) says:

For Year End 30 June 2014 (FYE 201), enlarged issue and paid up capital of 185m shares which translates to a P/E 11.

Their latest Audited Report was 2014. Basically they are selling to you the company VALUE PEG at P/E 11 . As posted in my article prior before this:



Would you buy if I am telling you I am selling my company to you at 11x VS Fixed Deposits guaranteed by PIDM at P/E 18?

From this scenario, OWG is selling to you his company AT THE MARKET RATE. Not expensive and not cheap either. It's FULLY VALUED,

Closing Price @ 0.9 on 2/1/2015
= P/E 11.25



Another point to take no is:

Utilization of Proceeds:

Komtar Project             60.5%
Business Expansion   26.2%
Working Capital             4.2%
Listing Expenses             9.17%

Money Raised for Business Purposes 86.7%
Means for every RM 1 raised, about RM 0.87 is for Business Purposes!
See the difference between OWG and EA?





BTW do you notice, Dato' Richard Koh still holding a stake of 69% post IPO?
He has much control on the company so to say.




Personally I will not buy at 0.90 as the price of P/E is Fully Valued. There is not much upside for the share price. You may look at it another 1 to 2 Quarters results posted as the Genting Outdoor Theme Park and Komtar Project near for opening and will produce the Required Income by 2016.

 Disclaimer and Declaration

The full content of the article is 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. Examples of specific shares may be citied for illustration purposes.

Regards,

Humble Pie

Saturday, 3 January 2015

EA Technique (M) Berhad - IPO - Pricing Analysis on The Valuations (Good Buy or Good Bye?)

Dear All,

Off late, I do constantly hear that people do get burned from the IPO that being launched recently a\in Bursa. They are complaining/whining the current situation for IPO are all bad!

We would like to share some info for all future guidance and perusal:
The Different View between us and Analyst.

The Broking House says:
(Extracted from research report published)

Fair Value (FV)                                           = RM 0.715

How to get this FV of 0.715?
*Forecast for Calender Year 2015 (CY)     = P/E 11.5
*Forecast for CY2015 EPS                         = 6.5 cents
*Means forecasting IPO Price/EPS 2015    = 0.65/0.065 =  P/E 10

Analysts peg the P/E not 10 but P/E 11 = 0.065 X 11 = 0.715 (2015 FV)








Humble Pie view:

Look at EA Technique Prospectus PAGE 18:
Item: 3.6.1 (iii) says:

For Year End 2013 (FYE 2013), enlarged issue and paid up capital of 504m shares which translates to a P/E 16.7 !

Their latest Audited Report was 2013. Basically they are selling to you the company VALUE PEG at P/E a staggering 16.7x . As posted in my article prior before this:

Why Analysts do not write P/E 16.7 for FYE13 = BUY?
Why Analysts write P/E 10 for FYE15 and posted a Fair Value of P/E 11 for FYE15 = 71.5?

Would you buy if I am telling you I am selling my company to you at 16.7x VS Fixed Deposits guaranteed by PIDM at P/E 18?

Confirmed FYE 2013 EPS = 3.9 cents (Value that you pay for the company)
Estimate FYE 2015 EPS    = 6.5 cents (Future value that being estimated for you to pay for the company)

When market is choppy, rarely people will buy the concept of 2 years down the road your earnings shall be VERY GOOD.
Market will just PEG YOU AT MARKET AVERAGE and BUY your shares base on the CURRENT VALUE and NOT FUTURE VALUE.

Closing Price @ 0.475 on 2/1/2015
= P/E 12++ (0.475/0.039)  



Let's drill further:

EA Technique Market Cap post IPO = RM327m
Look at average Oil and Gas Companies around RM500m market cap:

Company        Market Cap     P/E 2013   P/E 2014
ALAM            573m               6.3            7.8
Barakah          621m               12             6.8
Pantech          446m                8               7.5
Perisai            554m                8.9            48 (take it out as it will distort the average numbers)
UZMA           433m               12              11

AVERAGE                            9.44            8.275
*EA Technique  327m         16.7             26 (stated in the research report)




Another point to take no is:

Utilization of Proceeds:

Repayment to bank   40.5%
Working Capital       13.4%
Listing Expenses        6.7%

Money Raised for Business Expansion 39%
Means for every RM 1 raised, about RM 0.39 is for business expansion.
At the time of writing, OIL PRICES STILL NOT STABILIZE. I will avoid.
 



P/S : Maybe I should consider to start a KAMBING GRED A business.
To buy a KAMBING now and to sell the idea to you 25 KAMBING in 2 years time.  
(Start counting my 25 KAMBING happily now)

Disclaimer and Declaration

The full content of the article is 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. Examples of specific shares may be citied for illustration purposes.

Regards,

Humble Pie

KLSE Boom/Bust Market Cycle, How to Use Value Investing Approach In An Effective Way! (1st Jan 2015)



As we are in 2015, where are we now? Let’s start the sharing of the Boom/Bust market:
1. Bear Market/Recession/Depression:
Prices of stocks drop more than 50% and some up to 70%/80%. Consecutive 2 Quarters of GDP in NEGATIVE – The Media will announce to the world, yes we are in bad shape – RECESSION! Words of fear and pessimistic everywhere, stocks are selling below intrinsic value/below NTA or book value.
2. Recovering Period
Blue Chips/Good FA companies from their trading P/E 20++ to 30++ being whacked to single digit P/E and early teens P/E. This is where the Value Investors and Value Oriented Fund Managers (VOFM) started to do their cherry pick. Companies with strong balance sheet and sustainable business model will be their top choice. You will notice when Bank Negara started to DROP INTEREST RATES and GOVERNMENT INCREASING THEIR EXPENDITURES/REDUCING TAXES (In Malay, we called this Dasar Fiskal dan Dasar Kewangan)
In Malaysia, currently the ICapital boss Mr. Tan Teng Boo is an expert in this.
3. Bull Market
Constant stimulates from the Government and lowering of Interest Rates created a lot of cheap funding and excess money to the economy and market. This will jump start the market and increases the stock prices. From here, Momentum Investors/Momentum Fund Managers/Traders will join the crowd. The stocks will rise above their Fair Value/Intrinsic Value. The return from Momentum Fund Managers will be superior to the Value Oriented Fund Managers.
Why?
Stocks are trading in their teens P/E and some already in the twenties. VOFM find it difficult to look for the next good and valuable buy. If VOFM can sell to you their stocks at P/E twenties and thirties, THEY WOULD SELL TO YOU AND KEEP THE CASH. The next thing you can see is VOFM are leaving the stock market because they could not produce spectacular returns compare to Momentum Fund Managers (MFM). From here, you can see a lot of Unit Trust Funds, Fund Managers creating new funds and posting higher returns to entice more investors to invest.
4. Top of The Bull
An overly Goreng Economy will create inflation. Bank Negara will start to increase rates to cool it down (sounds familiar?). When stock prices already in their P/E twenties and thirties, guess what? The analysts will tell you:
This A stock P/E is lower than the B stock P/E, still have room to grow! BUY CALL!
This A stock historical P/E is 25, based on valuations, we are forecasting a FORWARD P/E 18 of 2016 due to increase of revenue and a further FORWARD P/E 12 of 2017 due to further increase of revenue.
Why analysts do not tell you base on 2015 P/E 25 = BUY?
Why says 2017 FORWARD P/E 12 = BUY?
It is because, no one will buy if you are selling your company to me pegging it at P/E 25x of my current year earnings (while FD P/E is 18).
5. Bursting of the Stock Market
When market do not talk about the value of their business and keeps on blowing the trumpet for ‘WANG AKAN DATANG’, and Bank Negara started to be cautious, personally you should take note on this. VOFM already left the market.
Talking/Forecasting about the Future is okay. But if you use it as a main selling point to push your shares, it becomes unhealthy. No one talk about value anymore. All talk about ‘WANG AKAN DATANG’. Let me share a story:
WONG has a KAMBING (Kambing Kampung Gred A - normally sells for RM1000 per KAMBING). During Farm Market recession, WONG is willing to sell to TAN his KAMBING. WONG worrying that the market will be worsened; he is willing to sell at RM500. TAN look at the deal and started to consider. Then the Ketua Kampung YAP said ‘TAN, do not worry, buy the KAMBING, I will lend to you money and charge you LOWER RATES. I can lend to you the RM500 with BLR -3. TAN without hesitation, bought the KAMBING from WONG. Fast forward a year, the Farm Market recovers and KAMBING is now worth RM1000. Due to Ketua Kampung has been lending money to his villagers due to GOOD INTENTION to help them to overcome the glut; the cash in the village is in surplus now. The villagers started to hunt for more KAMBING. When RM1000 can’t buy a KAMBING, the villagers raise it to RM1500 and then RM2000. To entice the buying and selling of KAMBING activities, the KAMPUNG STORY TELLER started to tell FUTURE DREAMS OF OWNING KAMBING!
Story Teller says:
This KAMBING is Gred A. Gred A KAMBING is different. Look at the future: This KAMBING Gred A can give birth to another 5 ANAK KAMBING and at the same time you get the SUSU KAMBING! RM2000 cost you spend now at 2015 is equivalent to cost RM1000 rearing a KAMBING one year down the road (selling price of KAMBING STILL RM1000). If you keep the KAMBING for another year till 2017, it will multiply from 5 to 25 KAMBING thus bring down your cost rearing a KAMBING RM500 (KAMBING still sells for RM1000).
Looking into this scenario, more people resort to borrow from KETUA KAMPUNG YAP to buy RM2000 a KAMBING that values RM1000. Yap started worrying on this trend and raises his interests on loan on the GOOD FAITH’ that it will softens the KAMBING MARKET. TAN gets an offer RM1500 for his KAMBING, he sold it.
Pay RM500 back to YAP and keep his cool RM1000.
TAN’s thinking was: I am selling a KAMBING worth RM1000 at the price of RM1500. A good deal indeed. About the promise on 1 KAMBING becomes 5 KAMBING in 2016, TAN says, I do not see the 5 KAMBINGS yet how to count it as owning it? My KAMBING next year might be stolen or poisoned before it produces 5 KAMBING. Now villagers are buying KAMBING with my cost of fund RM500 with RM1500. I SELL TO YOU one KAMBING with my cost of RM500 and enjoy my RM1000 after paying YAP RM500. Regarding the OPPORTUNITY of selling price of RM2000 per KAMBING if TAN waits longer, TAN says, I’m happy with RM1500, let other people make the extra RM500.
TAN (VOFM) – I am buying a business at the price I think selling below intrinsic value and availability of cheap funding. I will sell and walk away if the market no longer buying/selling the business of what it is valued of INSTEAD MARKET IS BUYING/SELLING about THE FUTURE INCOME THAT YET TO BE PRODUCED.
Do you notice TAN's cash are increasing year after year?
(please refer to the attached file).
Market Cap RM326m VS CASH on Hand RM240m.
Personally I think when TAN is keeping his cash aside, I will INVEST CAUTIOUSLY to avoid becoming like WONG!
Happy Trading!
Humble Pie


How To Know If The Market is Overvalued or Undervalued? (The story KLSE Index VS Interest Rates - 1st Jan 2015)

Happy new 2015! Year 2014 is a tough year indeed. KLSE in red and most counters ended up RED for 2014. Before we start posting counters to watch for 2015, let’s us get back to basics. Familiarize with the reasons why we invest into stocks:
A lot of people do not know that FD or Interest Rates also have their own P/E and EPS. If you are good with the bank and able to get a good deal from them, most likely you will be given 4% of FD per annum. Using the ‘Rule of Thumb 72’ (capital gain/interests received reinvested):
Rule of Thumb 72/FD Rates 4% = 72/4
Interest Rates P/E = 18
How about KLSE P/E?
On 11 November 2014, we did mention that KLSE was trading at P/E 17++ and it was quite pricey and one of the highest at South East Asia. We are not comfortable to add position to our Virtual Portfolio. Why we said that?
If you put all your monies in the Bank you will receive 4% per annum (P/E 18) – PIDM guaranteed.
If you put your monies in KLSE (P/E 17++), you will be having EXTRA RISKS INVOLVED IN THE STOCKS MARKET VOLATALITY. Why are we still putting monies in KLSE? Logically speaking, if any investments that trading around P/E 17 and above, would not it be better off for us to put it in the bank? Indeed.
That is why most of the Analysts are putting their recommendations/buy call USING FUTURE P/E and FUTURE EPS and NOT CURRENT P/E and EPS or HISTORICAL P/E AND EPS. Rarely analysts use 5 years HISTORICAL P/E to FORECAST FUTURE P/E. In the near future, if the market direction changes, the analysts will keep revising the Target Price ups and downs.
AS A MINORITY INVESTOR, WHAT AM I GOING TO DO?
1. 2015 will be a choppy year – to study the last 5 years trend/historical performance of our targeted companies to be invested. Normally when it rains, it pours, those companies who are able to perform most likely able to sail through the storm and REPEAT THEIR SUCCESS STORIES.
2. To AVOID investing in companies those are selling at HIGH P/E and LOW EPS and not having a consistent return over the past few years.
3. Avoid the companies with LITTLE CASH ON HANDS.
4. DO NOT CHASE THE GORENG STOCKS, year 2014 window dressing is done. You have got your year-end KLSE ANG PAU (if any). Buying into penny stocks in 2015 with no strong fundamental value will increase your trading risks.
5. Selectively and slowly choose your stock – please do share with us some stocks that you think are good in FA so that we may explore it together.
P/S, as at 31/12/2014, KLSE P/E is 15.78 (bloomberg).
Till then Happy NEW YEAR!
Regards,
Humble Pie




An Annotated History Of Oil Prices Since 1861 - Business Insider

An Annotated History Of Oil Prices Since 1861 - Business Insider



Simple graph says it all! (24 Dec 2014)

We receive a question regarding SKPETRO. 'Is it worth to invest for long term?' (16 Dec 2014)

(Sorry for the late reply - Was on holidays)
- Tan Sri Mokhzani buying
- EPF buying
- Tan Sri Shahril Shamsudin buying (latest 15/12 Bursa filing)
Regardless of they are in the opinion of the share price are too 'cheap' / 'believe in their company' / 'support the share price', at least they are doing positive things, sending the right message out there. As currently SKPETRO is facing :
1.weakening RM
2.falling oil price.
3. Non Syariah compliant
at PE 7+ (near lowest post 2012 merger), it should not be that bad even if it goes further south. Personally I will buy.
For yourself, you may add in the conditions below:
(to control your risk)
1. 1 month grace period to dispose SKPETRO for Syariah purpose
ends. (by end of December 2014)
2. stabilizing oil price and RM - (you will be able to see when prices
trading in a range and more positive news being posted out.)
3. Continuous accumulation by both TS Mokhzani and TS Shahril.
(personally, if they do heavy accumulation and SKPETRO still
goes to Holland, I rest my case, no regret).
P/S: If you have an investment plan and personal risk tolerance level, you shall stick to it. Not necessary to follow the crowd out there. Most of the time, the crowd is wrong, the market is correct.
Disclaimer and Declaration
The full content of the article is 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. Examples of specific shares may be citied for illustration purposes.
Regards,
Humble Pie,


Recap Posting from 11/11/2014: (16 Dec 2014)

KLSE Composite Index as at 11/11 is about PE 17++. With PE 17, market is not cheap; in fact we have one of the highest PE in SEA. One of the reasons our ‘Virtual Tracking Portfolio’ has not been buying/accumulating shares around 1 month (stopped at 30% shares / 70% cash). Market is choppy and our crystal ball is not working to tell us where the bottom of oil price is!
On 21/11/2014: 
-We made an exception to buy CIMB @ 5.90 due to the RM7.25 high fair value calculated post merger. But market is always correct, it went south.
Current 16/11/2014:
During market correction, all good counters are not spared be it in good Fundamentals or having sound business. KLCI has lost 10.3% since July 2014 but most stocks has lost about 30% to 50%.
So what to do next?
When there is nothing to do, do nothing.
1. Keep in view:
Monitor the OIL PRICE and RM fluctuations – price will stabilize at one point of time. You may see the price trading in range with no further drops and good news starts being reported. From there only starts to deploy your funds in if your bullets is not much.
2. Do our homework, most stocks corrected around 30% to 50% - To do analysis on their fair value and we shall deliberate further for upcoming purchase/trading.
(all are welcome to post questions and counters to watch for us to do a group study)
3. As we are doing both value investing (mid to long term) and portfolio management (37% shares, 63% cash), we still have room to accumulate once the dust has settled.
P/S: When it rains, it pours. Do not catch the falling knife. Enjoy your holidays and Christmas!
Regards,

Humble Pie 



Perisai @ 0.505 (8 Dec 2014)

Info sharing for educational purpose. Epf disposing Perisai shares while Skpetro major shareholders are collecting (epf and tan sri mokhzani). Both are from oil and gas industry but different treatment by their parents (epf). Who knows the better accounting numbers if not their major shareholders?





Perisai: Can collect at RM0.45 ~ RM0.55? (Question from our community member - 6 Dec 2014)

Perisai background : As at 6/12/2014
P/E 2013 : 7.3 (Price 0.53 /Basic EPS 7.29) – Price closing as at 5/12/2014
Rolling 4Q P/E : 815 (Price 0.53/Basic EPS 0.065)
0.05 Q4 2013 + (0.28) Q1 2014 + 0.08 Q2
2014 + 0.19 Q3 2014
= 0.065
Forward P/E : [(Q1 2014 + Q2 2014 + Q3 2014)/3] X 4
: [(-0.28 + 0.08 + 0.19)/3] X 4
= 0 (VALUE IS NEGATIVE)
(To estimate full year 2014)
P/BV : 0.59 - PASS
NTA : 0.757 - PASS
Dividend yield : 0 - FAIL
Current Ratio : 1.55 - PASS
Quick Ratio : 0.7 – FAIL
Debts/Equity Ratio : 0.5 – PASS
From the numbers above, it fails Dividend Yield and Quick Ratio and passes other 4 Ratios for Health Analysis. It is even trading around 30% below NTA. Should we call it a buy? NO.
There are few ways to read the P/E. Historically 2013 P/E looks good @ 7.3x. When you fast forward to rolling 4 quarters, the P/E is 815! Means you need 815 years to recoup your investment! Let’s look further on my simple estimation on 2014 FULL YEAR result. The P/E is NEGATIVE! It means the profit is not there for 2014! How about 2015?
During the good times (Q1 and Q2 2014), Perisai NOT ABLE TO DELIVER A GOOD EPS hence it brought down the share price. Before you buy, the main condition to be met is the Company must be in GOOD HEALTH!
Secondly, the OPPORTUNITY TO GROW THE BUSINESS. A quick glance on Perisai details, they have a SGD700m MTN Facility issued on 19 Aug 2013. SGD102m has been issued (drawdown) at 6.875% around July 2014.
There are 4 problems here:
1. Total Receivables has balloon from 60m (2013) to 274m (2014)
=poor in collecting money
2. Short term borrowing has balloon from 9.5m (2013) to 100m (2014)
Long term debts has balloon from 273m (2013) to 1b (2014)
-Total borrowings around RM1.1b, hence IF THE
EARNINGS DOES NOT COMES IN FAST, PERISAI
WILL BE HAVING A TOUGH TIME TO SERVICE THEIR
INTERESTS.
3. Do you notice the MTN (Medium Term Note) is denominated in SGD @ 6.875%?
- In a layman term, borrow in SGD, repayment also in SGD. When Perisai did drawdown the facility on July 2014, the forex for MYR/SGD is around 2.5. Now is around 2.65. Most analysts anticipating a further drops in RM. Now you know why Perisai prices never recovers.
4. EPF disposal of Perisai.
- As a minority, normally I would follow our Institutional Funds. If EPF disposing the shares consistently (with all their market intelligence), I would not dare to touch yet.
AS A MINORITY, WHAT AM I GOING TO DO?
‘Base on info, value and react!’
1. Oil Price not yet stabilize, RM most likely to weaken further, EPF is disposing, High Debts.
2. Their Jack up rigs is god to use but market foresee a soften charter rates (no one can guess what will be the future rates are but the cost is fixed while future income is not confirmed).
Assuming RM1.1b debts at interest rate of 6.875% = RM74m, further impacted by currency 2.5 to 2.65 (different of 0.15. Another 6% variance – I am not sure how much are from SGD denominated, just a forecast). Fundamentally wise, I WILL NOT BUY until I get clarification on:
1. Oil Price and RM Stabilization
2. EPF stops selling
3. Able to service their Interests for the next few quarters
P/S: If you really love the stock and not wishes to ‘RUN CHICKEN’, perhaps you may use TECHNICAL CHART to plot your entry and buy in staggered basis. Sept 2011 low is 0.45 while another low is Mac 2010 @ 0.42.
Personally I will not buy. It the price goes up, well it is just not my luck to own Perisai
Good luck.
Regards,
Humble Pie, 


THHEAVY, UMWOG, DAYANG, SKPETRO? Which one to BUY? (15 Nov 2014)

Dear Alex,
SKPETRO DAYANG UMWOG THHEAVY
PE 16.4 15.5 26.7 56
Forward PE 9.8 12.9 29.2 0
P/BV 1.74 3.28 2.46 1.21
Dividend 0.75% 2.5% 0 0
Current Ratio 1.15 1.44 3.26 1.36
Quick Ratio 1.15 1.43 3.1 1.33
D/E Ratio 1.61 0.48 0.37 1.2
Market Cap 18.5b 2.5b 6.96b 0.5b
Do not rely so much on historical P/E as it is just a guidance. Put more emphasis on Forward P/E as it should reflect the current full year result. Among the four stocks, SKPetro fair the best. P/BV for SKPETRO also selling at the cheapest. Current Ratio and Quick Ratio should not be a big issue for SKPETRO, DAYANG and UMWOG. The one that likely has a problem is THHEAVY. Out of 5 calender years, 2 in RED. with the Forward PE is Negative! (expecting a bad 2014 full year result).
When evaluating this 4 stocks at one go, you should take THHeavy out to have a more meaningful study. SKPETRO, DAYANG and UMWOG are belong to the big cap boys (command higher Forward PE. Average should be 15+- while THHeavy is a mid cap boy, looking at 10 to 13 forward PE. Keep in mind, the chairman's statement / CEO or MD's speech plays a very important role on determining the future flow of the company:
Be alert on the wordings like:
We see tough times ahead.
We are expecting a challenging time
Performance is not up to the expectation etc etc.
They are telling you what will happen to the company for the current calender year. Able to deliver or likely not to deliver.
At the point of writing, OIL PRICE IS STILL DROPPING. If you insist to put THHeavy as one of your consideration, let's see more details that I am sharing with you:
(The info is extracted from their filing with Bursa)
THHeavy
Supporting share price : NIL Tabung Haji owns 30.06%

UMWOG
Acquired Disposed Closed
27/10/2014 539100 ASB 3.41
27/10/2014 (1000000) EPF
28/10/2014 1500000 ASB 3.26
29/10/2014 800000 ASB 3.28
*14/11/2014 3.08
Note: ASB is Amanah Saham Bumiputera
EPF: Employees Provided Fund
Dayang
Acquired Disposed Close
20/10/2014 (409400) KWAP 2.92
21/10/2014 (84000) KWAP 2.89
23/10/2014 142300 (13410) KWAP 2.95
31/10/2014 (45500) KWAP 2.94
3/11/2014 (14600) KWAP 2.94
4/11/2014 515000 (603500) KWAP 2.85
5/11/2014 500000 (662550) KWAP 2.8
6/11/2014 1500000 (98200) KWAP 2.84
14/11/2014 2.8
Total : 2657300 (2051850)
Note: KWAP is Kumpulan Wang Persaraan
SKPetro
Acquired Disposed Closed
3/11/2014 4000500 (848300) EPF 3.39
4/11/2014 1500000 ASB 3.27
4/11/2014 6803100 EPF
5/11/2014 75000 ASB 3.14
5/11/2014 350000 (3060200) EPF
6/11/2014 1430000 (2536700) EPF 3.14
6/11/2014 750000 ASB
7/11/2014 4532500 EPF 3.08
10/11/2014 1655700 EPF 3.14
11/11/2014 7001000 EPF 3.09 HUMBLE PIE Buy@3.08
12/11/2014 ? 3.09
13/11/2014 ? 3.10
14/11/2014 ? 3.12
Total 28772800 (6445200)

Conclusion:
THHeavy drops so much, Lembaga Tabung Haji owns 30% have not come out to support their shares By looking at the company's value, do you want to start the ball rolling?
UMWOG is tightly gripped by UMW with 55%. The trading pattern is a bit difficult to read. Plus the stock is pricey with forward PE 29. I will give it a pass.
Dayang is acceptable but more expensive than SKPetro. Difficult to gauge what KWAP is doing. If you like the stock, buy at dip.
SKPETRO:
When the price dipped at 7/11/2014, that is where EPF go all out to collect a whoppy 4.5m shares closed at 3.08. In Bolehland, this INVISIBLE HAND does comes in handy.

Do you see EPF patterns? EPF and ASB has been a net buyer for the past 2 weeks.
On 11/11, Humble Pie made his first buy @ 3.08. True enough 10/11 and 11/11 EPF has been nett buyer again supporting the price to close at 3.09. Regardless of EPF purely want to support the price (not to break below 3) or seeing the value in SKPETRO, EPF has been working hard on SKPETRO shares price.
Can you read EPF pattern much easier than the other 3 stocks? Now you know why I go in @ 3.08, 2 days after it touched 3.08 lowest?
BTW, both of us do not have Crystal Ball, but do you want to
guess on 12/11, 13/11 and 14/11 why the price of OIL DIPS FROM 80++ to 70++ but SKPETRO CLOSED GREEN? We may wait for a few days for the filing with Bursa to gauge your guessing. But my sixth sense telling me, my answer is the same with you.
Good night 



SKPETRO: How likely it will drop to 2.87, 2.55, 2.23, and 1.91? (12 Nov 2014)

Today I received this question from 1 of our group members. ^-^.
Back to my key points as below:
1. Keep in view:
Monitor the OIL PRICE – price will stabilize at one point of time. You may see the price trading few dollars in range with no further drops and good news starts being reported. From there only starts to deploy your funds in if your bullets is not much.
As at the time of writing, oil price keeps sliding with no sign of recovering. OPEC has made it clear they are not going to reduce the production for the next meeting. Simple macroeconomics:
Supply > Demand – Price will not crash but will be weaken further. Back to 2008 when market crashed, oil price was trading around USD 40++. Fast forward to 2014, factored in the inflation, it should be USD50 ++ if the market crashed. If the market not crashing, it should be above USD60++ and above at least. For the market to crash, generally you need to see a BIG BLACK SWAN swimming over.
1997 – Asian Financial Crisis – Currency collapsed, 1 by 1 the countries lost control of their
currencies.
2001 – Dotcom bubble – 1 by 1 Big Dot Com companies went bust.
2008 – Global Financial Crisis/Subprime crises – 1 by 1 big financial institutions went bust.
2014 – Banks are here, currencies is dropping but still okay, no big bankruptcies recorded.
Financial Report Card so far still acceptable, with the BIG BLACK SWAN not yet sighted.
The reason why we put the numbers; 2.87, 2.55, 2.23, and 1.91 is because we are downward
bias to the oil price and the Non-Syariah Compliant issue. As I do not
know where

is the bottom, I’ll break my entry price into 5 pieces.
Assuming:
Price touches 2.87: I can deploy additional 20% of my funds in. If price stabilizes and reverse up,
I have balance 60% to average up. Perhaps to deploy another 20% again at 2.90 and to deploy
another 20% at 3.
(Refer to my first posting on SK Petro- If SK Petro is not being designated
as Non Syariah Compliant and OIL Price recovers, I can always do average up and do my ‘Portfolio
Restructuring’.
Price touches 2.55: 60% funds in and if price stabilizes and reverse up, I have 40% to average up.
Price touches 2.23: 80% funds in and if price stabilized, I have 20% to average up.
Price touches 1.91: 100% went in with my cost dollar averaging @ 2++, I can still sleep well.
I believe the Institutional Fund Managers are more likely not able to sleep.
The issue is not the price can touches 1.91, the issue is if you ALL IN maybe 50% at 3 and balance 50% at 2.90. All your funds are locked, if this OIL ISSUE prolong/further dropped, you are out of the game. No more average down and no more bullets. If the BLACK SWAN comes at 2015, what is your plan B? No more cash. Cut loss or borrow money to buy more? GAMEOVER. But if the oil starts recover without the Black Swan, I can always average up again. If you’re trading right, price touches lowest let’s say around 2.90 +-, stabilizes then bounces up, your money will goes up fast, but who says I can’t average up at 3 or 3.10 while the Target Price (TP) is 6 given by Research House? You have forgotten I am keeping 60% balance cash on hand? Value Investing is about mid and long term – It makes no difference if your entry price is 2.90 and my ‘new average up price of 3’ given the TP of 6.
P/S: If price recovers, as mentioned I shall do my own ‘Portfolio Restructuring’. Then you may see I post new entry price base on higher prices. After all, value investing is part of PORTFOLIO MANAGEMENT.

Disclaimer and Declaration
The full content of the article is 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. Examples of specific shares may be citied for
illustration purposes.
Regards,
Humble Pie, 



QL VS LAYHONG: (11 Nov 2014)

Was browsing news and came to this article:
^-^ , not suprising QL came out and advise shareholders to sell to them.
As QL ownership of Layhong hits 38%:
QL has noticed the acceptance/surrendering of Layhong shares to them is not likely to be good/drying up.
Advising 'shareholders' not yet surrendering Layhong shares to sell at open market, due to the reason if the MGO fails, the price most likely will drop.
QL needs 50% plus 1 share in order for this deal to go through.
What can QL do if not by: Telling you to sell to them and if you don't and and the MGO fails, all minority sharesholders lose except for those selling at open markat @ 3.45.
As a minority, must look at their point of view. Under the 'MALAYSIAN CODE ON TAKE-OVERS AND MERGERS', an Offeror (QL) is not allowed to buy from open market with the PRICE HIGHER THAN THE OFFER PRICE (if they are buying higher from open market, QL has to revise the price - which QL not intended to). The max QL can sapu the shares from open market is 3.45. Price has been stagnant for quite awhile and QL know the seller is drying up.
If QL do not come out to tell you what will happen if MGO fails, some investors still will think they will get 3.50 apiece (already surrendered).
To sell or not, your call. QL has done their part to inform you:

http://www.theedgemarkets.com/my/article/ql-resources-return-%E2%80%98accepted%E2%80%99-shares-if-deal#.VGGkgzhV9to.facebook


Disclaimer and Declaration
The full content of the article is 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. Examples of specific shares may be citied for
illustration purposes.
Regards,
Humble Pie, 

SK Petro @ 3.08! (11 Nov 2014)

This morning I was having a morning coffee chat session with a Senior Management staff of an upcoming IPO company (might or might not be listed). One of the topics we talked about is the Oil Price and surely SKPETRO, our retailers’ hot stock.
As per our posting on 7/11, first entry price was 3.08 (yes it touched and 3.08 hit the seller price). Conclusion: 1st 20% deployed @ 3.08. 
Yesterday I heard rumors out there/minority investors like us saying price of Oil is rock bottom and rebounding due to reason A, reason B and reason C. Providing all the studies and news stated why is has bottomed. KLSE Composite Index as at 11/11 is about PE 17++. With PE 17, market is not cheap; in fact we have one of the highest PE in SEA. One of the reasons our ‘Virtual Tracking Portfolio’ has not been buying/accumulating shares around 1 month (stopped at 30% shares / 70% cash). Market is choppy and our crystal ball is not working to tell us where the bottom of oil price is!
What are we going to do next for SKPETRO?
Stick to our investment plan:
To deploy another 20% at PE 9 +- : Price around 2.87
To deploy another 20% at PE 8 +- : Price around 2.55
To deploy another 20% at PE 7 +-: Price around 2.23
To deploy my last 20% at PE 6 +- : Price around 1.91 (near to lowest post IPO on 2012)
I might consider taking profit on SKPETRO if it hits 10% above my purchase price (if it happens and market is still choppy). To be updated in our FB page if any action taken.
Back to my friend who works in a company going for IPO. Guess what, the management is delaying the IPO date! One of the many reasons; Outlook for 2015 1st half is expected to be challenging. If the potential IPO Company is delaying their BIG IPO PLAN, as a small IKAN BILIS, perhaps I should sit down and drink some coffee, take my own sweet time to accumulate SKPETRO.
P/S: Historical PE 16 is not cheap. Forwards PE 9.66 is base on my own simple forecast. What if SKPetro might not be able to deliver 2nd half 2014 results as good as 1st half of 2014? PE should go higher than PE 9.66. Sit tight and watch the show.  . Our crystal ball still not working btw.
Disclaimer and Declaration
The full content of the article is 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. Examples of specific shares may be citied for
illustration purposes.
Regards,
Humble Pie,