Sunday 2 December 2012

货币战争 (Currency Wars) - The Evolution of Money

Do you want to know about the origin of a bank? Do you want to know about the history of money? Are you willing to have more understanding & concept about money? If your answer is yes for the above questions, maybe you can have a look on this book : 货币战争 (Currency Wars).

Written by 宋鸿兵(Song Hong Bing), & 1st published in 2007, the book mostly talks about the history of money & finance. The writer believes that Europe & US financials are mainly controlled by a group of private banks, led by Rothschild family.

Well, it's always interesting to read about the story behind the money and finance. Anyway, if you have no interest on history & good knowledge on finance, maybe you will find it boring & hardly to digest the contents of the book. While the writer argues that most of the financial crisis are the conspiracies of private bankers, maybe you should know how to generate your own thinkings & views from the contents of the book.

Sunday 11 November 2012

MALINDO FEEDMILL - It's All About Chicken!

I think this is the first time I talk about foreign company in my blog. Malindo Feedmill is always my darling stock. This is an Indonesia's poultry company, which mainly produces chicken feed, day-old chicken (DOC) & chicken meat. Controlled by Malaysians, the Lau's family, Malindo Feedmill's major shareholder is Dragon Amity, which is under management of Leong Hup & Emivest, listed in Bursa once awhile & taken over by Emerging Glory 2 years ago, both are major poultry players in Malaysia.
Why Malindo Feedmill? Because of large potential market to be discovered! Just show you some funny fact. Statistics shows that Indonesia has the lowest chicken consumption per capita in the region.While Malaysian consumes 37.2kg/capita per year, Thailand 13.3kg, Philipine 8.4kg, Indonesian just consumes 5.0kg/capita 1 year. I don't think Indonesians will reach Malaysian's figure, but if we talk about 7.5kg/capita, it's 50% of increment!



Financial performance wise, Malindo Feedmill has been performing pretty strong this year. We can see their revenue has increased almost 30% & profit has surged over 40% compare to the same period last year. The ROE of Malindo Feedmill over 50% for the last 4 quarters. I believe that 40% of ROE shouldn't be a problem for them to achieve in FY13. Dividend wise, Malindo Feedmill is paying around 30% payout of their earnings as dividend.

The market capital of Malindo Feedmill is 3,051 billion IDR, which is around 4.7 times of its book value. I believe this is still reasonable because of its high ROE. The share price has surged to current price of IDR1,800, which is over 80% of increase compare to the price 1 year ago. Currently Malindo Feedmill is trading at PE of 9.5 times.



Note: The above content is just a blogging activity that purely share my investment thoughts & ideas and should not be used as recommendation to buy or sell any securities. I may already have position in the above securities. Any action that you take from the opinions or information of this blog is solely on your own responsibility. Please consult your investment advisor before you make any investment decision.

Friday 9 November 2012

WTK HOLDINGS - A Hopeful Quarter Result?

A lady asked my opinion on WTK Holdings Berhad few days ago, so I share my view on WTK here. WTK is controlled by Wong's family in Sarawak, i.e. Wong Kie Nai & Wong Kie Yik. The main business of WTK is manufacturing & trading timber logs and plywoods. Besides, WTK also manufactures & trades foils, tapes,electrostatic discharge products & develops palm oil plantation.

WTK was not doing well for the past 2 quarters in 2012, mainly due to the lower timber production, lower selling price on timber, and weak demand from its major importer, India. While its non-timber operation's performance is looking stable, its other operations suffer losses arising from an associate company. Its palm oil plantation is not generating significant revenue to the company as well. Currently it has 8,500 hectares of planted oil palm trees & is expected to contribute to the company significantly starting year 2014.

Anyway, we may expect the better up-coming quarter result from WTK, because of the increasing production of timber products as well as higher selling price of timber during the period. We can see the improving production from the data that have shown in Bursa, due to the better weather situation in Sarawak during July - September.

The share price of WTK has dropped 30% from its peak of RM1.50 level 7 months ago. The current price range of WTK is around RM1.00-1.05 while the book value per share is around RM2.81. The Wong's family started accumulating WTK's shares 6 months ago & they have purchased more than 2% of shares year-to-date. However, the country risk for WTK is high. More than 80% of their production are exported to India & Japan, that's why we see lower profit dropped significantly for the past 2 quarters when the India has lower demand on timber.



Note: The above content is just a blogging activity that purely share my investment thoughts & ideas and should not be used as recommendation to buy or sell any securities. I may already have position in the above securities. Any action that you take from the opinions or information of this blog is solely on your own responsibility. Please consult your investment advisor before you make any investment decision.

Thursday 18 October 2012

ASIA MEDIA - Reaching The Bottom?

Asia Media (AMEDIA) currently is 1 of the most active counter in the stock market. It start moved up sharply from 30 cent range in June this year and reach its peak of RM1.15 at the end of September. Right after the announcement of proposed bonus issue & free warrant, the stock price starting to drop dramatically from RM0.90 to around RM0.35, lose about 70% of market cap from its peak.

While I believe the shrink of the stock price is mainly because of the speculative activities, there are some fundamentals in the company actually. AMEDIA, a out-of-home transit TV company, mainly offering broadcasting services & facilities on public transport. Currently its presence covers buses in Klang Valley as well as Johor Bahru.

Look back on the past few quarter result, we can find that the revenue & profit of AMEDIA is actually improving significantly. The current PE of AMEDIA stands at around 5.5 times. I believe their revenue & profit will continue growing in the next few quarters, following the launch of Digital Terrestrial Television Broadcasting (DTTB) services & their intention of expanding their business in other states, i.e. P. Pinang.

Anyway, I think the current price of AMEDIA will still remain volatile due to speculative activities. Since AMEDIA is still a startup company & it doesn't pay even single sen of dividend, I believe this is quite reasonable to enter AMEDIA if the price hits below 5 times of PE.



Note: The above content is just a blogging activity that purely share my investment thoughts & ideas and should not be used as recommendation to buy or sell any securities. I may already have position in the above securities. Any action that you take from the opinions or information of this blog is solely on your own responsibility. Please consult your investment advisor before you make any investment decision.

Friday 12 October 2012

GW PLASTICS - Opportunity To Grab Some Profit?

Recently Scientex announced acquisition of 2 subsidiaries of GW Plastics for total consideration of RM 283 million. Upon the completion of the acquisition, GW Plastics will pay out distribution from the proceed of sales of RM 1.19 per share and delist from the stock market.

Well, we can see the current price of GW Plastics is ranging around RM1.08-1.10, it provides some opportunities to lock off some profit. Let say if you buy GW Plastics at RM1.09, you will get back RM1.19 per share, which is RM0.10 or 9% (exclude brokerage fee & other charges) return, at the end of the acquisition. I believe the acquisition will be completed in 3 - 5 months, it means that you may get the 9% profit in 5 months time.

Anyway, this is not a riskless investment. The disposal is conditional upon the approval from relevant authorities and shareholders of GW Plastics. The disposal may be burst if those authorities & shareholders do not approve on the about mentioned disposal, however, I think the chance of not getting approval is relatively low since the price of RM1.20 or historical PE of 12.7 times seems quite reasonable & the share price of GW Plastics was trading below RM0.75 most of the time.



Note: The above content is just a blogging activity that purely share my investment thoughts & ideas and should not be used as recommendation to buy or sell any securities. I may already have position in the above securities. Any action that you take from the opinions or information of this blog is solely on your own responsibility. Please consult your investment advisor before you make any investment decision.

Tuesday 2 October 2012

Plantation Sector - The Nightmare Is Not End Yet

Currently most of the plantation companies' stock prices slump critically. The main business of these plantation companies, is mostly on palm oil operation. The weak stock prices' movement is believed to be caused by the bad performance of palm oil price recently.












Palm oil, the world's most used cooking oil, has been dropping dramatically from the peak of RM3,620 per metric tonne in the early April 2012 to RM2,255 as of today closing price*, which is around 37% drop in half year time. Dorab Mistry, who has traded palm oil for more than 30 years, has lower his forecast of CPO price to RM2,600-2,700 by year end. Most investors are pessimistic on CPO's future as CPO is haunted by numbers negative factors currently.


The recent critical drop of CPO is mainly caused by higher supply of palm oil while the demand on palm oil is slower. The increase of inventory of CPO in Malaysia & Indonesia, the 2 largest palm oil producer in the world, amid weak global demand & faster growth of production in these 2 countries. Meanwhile, the better harvest of soy bean in South America increases the supply of soybean oil causes the slump of soybean oil price as well.

Anyway, currently palm oil is trading at discount of USD373.46 per tonne to soybean oil, the largest discount since October 2008. I think the CPO price is trading at very low price currently. The price may still go down & the trading would be extremely volatile in near term. Though I believe the CPO price may rebound back to RM2,600-2,700 as predicted by Dorab Mistry, I don't see any outstanding result will be announced by plantation companies for the 2nd half of 2012.

*Palm oil price here refers to CPO 3-month forward futures price



Note: The above content is just a blogging activity that purely share my investment thoughts & ideas and should not be used as recommendation to buy or sell any securities. I may already have position in the above securities. Any action that you take from the opinions or information of this blog is solely on your own responsibility. Please consult your investment advisor before you make any investment decision.

Monday 24 September 2012

JAYA TIASA - From Timber To Oil Palm Tree

Recently a friend of mine asked me how do I look on Jaya Tiasa Holdings Berhad since its share price slumps over 25% from its peak of around RM10 (price before Ex-bonus issue) in April, so let me share my opinion about JAYA TIASA (JTIASA) here.

JTIASA is believed to be sister company with Rimbunan Sawit. Both of the companies are controlled by Sarawak tycoon, Tiong's family. Different from Rimbunan Sawit, besides of oil palm operation, the main revenue of JTIASA comes from timber. JTIASA has forest concessions of 713,211 hectares, 83,480 hectares of oil palm plantation (55,766 hectares planted) as per 2011.



While the timber business counts for around 3/4 of the total revenue of JTIASA, most of the profit is actually came from oil palm plantation. Based on the financial report end 30th June 2012, it shows that around 65% of the total profit comes from oil palm. Monthly production reports wise, recently the production of timber is stagnant while the production of oil palm is actually improving. Besides, the oil palm plantation of JTIASA is still very young (the average tree age is around 4 - 6 years old), we can say that oil palm will become the main growth engine for JTIASA in the future.




Anyway, currently the oil palm price is really not doing well at the moment. The CPO (crude palm oil) price shrinks dramatically from the peak of RM 3,600 level per metric tonne in April to RM 2,700 level recently. Too many bad news are haunting the CPO price currently, e.g. the increase of inventory level amid the growth of production is faster than export, Indonesia's export tax cut on CPO from 15% to 13.5%, and the prediction of better soy oil production due to better weather in America.

I don't think JTIASA will come out an exciting result for the next coming quarter due to weak CPO & timber price. Currently the company is doing shares buy back at price range of RM2.40-2.45 to support the price of JTIASA. I will only see bright future on JTIASA should the CPO price can stand at RM 3,000 level or above in the future.


Technical wise, from the chart above, currently JTIASA is trending downward. It may have some chances to get a technical rebound to 2.75. The immediate support level is 2.40. Should the price closes 3 bids below 2.40, the support level will be violated & the down trend will dominate the price movement. The next support level will be 2.00.



Note: The above content is just a blogging activity that purely share my investment thoughts & ideas and should not be used as recommendation to buy or sell any securities. I may already have position in the above securities. Any action that you take from the opinions or information of this blog is solely on your own responsibility. Please consult your investment advisor before you make any investment decision.