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.

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.

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.

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.

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.

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.

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.

The Value of ASTRO IPO

Finally, the ASTRO IPO is open for subscription! The subscription is starting today until 1st of October 5.00pm. The indicative price of ASTRO IPO is RM3.00, which is much lower than the initial indicative price that has been set for MITI investors previously (RM3.60). ASTRO is expected to be listed on Bursa on 19th October 2012.

Although RM3.00 looks more attractive compare with RM3.60, it is still quite expensive in terms of valuation. ASTRO now is offered at PE of around 26 times & dividend yield of almost 3% (75% payout). Anyway, with debt of RM3.66 billion & decreasing profit for the quarter end of April 2012 amid the strict challenges to ASTRO in the future. Also, there is no more monopoly for ASTRO since TM is started to enter the pay-TV market as well via its Hypp TV. I think the growth of subscribers for ASTRO will be going slow or flat in the future.

People will still go for ASTRO IPO because of wishing to make some fast money on the listing date of ASTRO. Anyway, I don't think ASTRO will be trading at very high premium upon listing, RM3.20-3.30 should be reasonable, just sell if the price goes beyond 3.30. It's good if you are 1 of the lucky guys who successfully subscribe ASTRO IPO, otherwise, try not consider to buy ASTRO at high price on the listing day, it is just a bit too high!



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.

Real Estate Investment Trust (REIT) - An Interesting or Boring Investment?

How do you think when we are talking about REIT? Most of the people think that investing in REIT is slow and boring. It may be true, if you are those risk taker, impatient investor or wish to make some fast money in the market.

REIT is considered as defensive investment. The REITs price is actually very stable & its fluctuation is not much, no matter hos's the economy doing. Besides, REITs are generating very good distribution yield for this moment, ranging from 5%-7.5% per annual, which is quite encouraging if compare with FD. Performance wise, currently the REITs are performing very well, most of the prices shut up 10-20% year-to-date (YTD), compare to the KLCI Index which is just up about 7% YTD.

Why investing in REIT? REIT can be a flexible player in managing your portfolio structure. You may consider of buying REIT if you want to diversify your portfolio or lower the market risk exposure of your portfolio. Also, if you feel uncomfortable with the current market, eg. uncertainty of global economy, the up coming general election, you can park some of your money into REIT first, wait for good timing & prices, then you may cash out from REIT & buy back some good stocks.

On the other hand, if you wish to become a property owner & make some return by renting out your property, but you don't have enough money to buy a property, maybe you can consider of buying REIT, because both the concepts are almost the same. The main income of REIT is from rental collected from tenants. With the distribution policy of at least 90% payout, most of the rental goes into your pocket, and you don't need to bother of problems, like marketing to get tenants, renovation, etc.

I believe it is worth to hold some REITs due to its defensive nature & good distribution yield although REITs' performance is doing strong this year. AMFIRST, TWRREIT, ATRIUM, & ALAQAR are among the REITs that I like most.

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.

AirAsia & Malindo - Now Everyone Can "Buy"?

Currently AirAsia share price shrink dramatically below RM 3 because of the setting up of a new low cost carrier, the Malindo Airways, in Malaysia. I'm not going to talk about the fundamentals of AirAsia, but, the market reaction on the news.

I think the market is over reacted on the news. Firstly, there is nothing doing wrong with AirAsia. AirAsia is still doing business well as usual & they are still the best choice for those who wants to travel around. Maybe you say Malindo Airways will bring in fierce competition with AirAsia, I say yes, but it would only happen after 9 months from now. Also, I don't think Fernandes would do nothing, just wait & see the Malindo to compete with AirAsia.

Competition always bring benefit for consumers. Anyway, Malindo still has a long journey to pass through if they want to fight with AirAsia. I will see AirAsia share price remains volatile in short term & stand back to RM3 level soon.

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.

ASTRO IPO - Another A-K's Company Re-Lists

Astro Malaysia Holdings Berhad, once awhile listed in Bursa Malaysia, is going to enter the Bursa again, 2 years after privatised by Ananda Krishnan (AK). Not like the Astro All Asia Network last time, the new ASTRO listing just includes the operation in Malaysia. This would be the 3rd AK's company to relist in Bursa in 3 years, after MAXIS & ARMADA. With the offer price of RM 3.60 per share, ASTRO is valued at market cap of RM 18.7 billion upon listing.

Is ASTRO IPO good enough to be subscribed? ASTRO is offered at historical PE of 30x with the net earnings of RM 629.6 million last year. The borrowings of RM 3.66 billion is very high for ASTRO since the total asset of ASTRO is just standing around 5 billion as per 30 April 2012. Even ASTRO brands itself as a dividend yield player by promising to pay out at least 75% of the earnings as dividend to their shareholders, the dividend yield is around 2.5% (base on 75% payout ratio).

However, the market cap of RM 18.7 billion upon listing sounds a bit controversial since AK privatised Astro All Asia Network at RM 8.1 billion in 2010. Even the number of subscribers for ASTRO is still increasing, I believe the number will be growing slower in the next few years. The market share of ASTRO may be affected as well since TM is starting their paid TV business Hypp TV. While we can see the success of Unifi, I believe TM will become a strong challenger to ASTRO in the future.

I think the offer price of RM 3.60 for ASTRO is really, fully, valued already, I believe the fair value shouldn't be higher than RM 3.60 for this moment. Anyway, institutional & retail investors will still go for ASTRO because of its big name & the company size. AK's companies are always trading at premium, like MAXIS & ARMADA which traded over 10% of the IPO price upon listing. You still can try your luck to apply for ASTRO IPO on speculation that the price will trade at 10% premium on the 1st days ASTRO lists in the market. Why luck is important? Because they are going to offer 5% or 260 million shares to retail investors only.



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.

APOLLO FOOD HOLDINGS - Memories Of Our Childhood

Do you still remember the snacks above? I used to eat lots of these snacks since I was a 4-year-old child. They were so crispy & tasty, yummy... Even now, sometimes I still could not resist to have them when I see them in mini market, lol...

Anyway, I am not here to promote these snacks, but to talk about the company which make them, Apollo Food Holdings. APOLLO is 1 of the most attractive company among the consumer industry in terms of PE and dividend yield. APOLLO is trading at 12x of historical PE compare to most of its peers of over 16x. Dividend yield wise, APOLLO paid out quite pleasant dividend of RM0.20  per share last December, equivalent to 6.1% of yield to its current price.

APOLLO's business is divided into 2 segments: local market & export market, i.e. India & China. Foreign business is important to APOLLO because their export business counts for almost 50% of their total revenue recently, with the revenue growth of 15% for the past 2 years. Besides, the profit margin of 20% for foreign market is higher compare with local market which is about 5%. I see their export business will be their main focus to generate more income for the next few years.

On the other hand, the balance sheet of APOLLO is pretty strong, with net cash of RM56.59 million, which is equivalent to RM0.70 per share, without any outstanding borrowing. 

I think APOLLO is going to announce the dividend payment in the near term. Refer back to their payout history & their cash position, it should not be less than RM0.20 per share. Due to the rise of consumer stocks, M&A activities between F&B companies recently, and good dividend payout, I believe the stock price is still undervalued. Should the company be able to achieve RM0.35 earnings per share next year, I see  the price will be worth RM3.50 & above. Anyway, the liquidity of APOLLO is low, this is due to its low balance float of 17.8%.

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.

IGB REIT - The Next REIT Giant In The Making

How many times on average do you visit Mid Valley or The Gardens per month? If you do often visit Mid Valley & think that Mid Valley is hot and always full of crowd, well, now you have the option to enjoy their income directly by subscribing IGB REIT units. Anyway, don't think that Mid Valley will give you any shopping voucher if you hold their REIT units. ^_^

IGB REIT is a retail property REIT, its portfolio comprises of Mid Valley Megamall and The Gardens Mall. With market cap of RM4.25 billion, IGB REIT will become the largest REIT in Malaysia upon listing. Just like other REITs in the market, IGB REIT is a dividend yield player, which will generate 5.15 - 5.5% of dividend per annual if you subscribe their units at IPO price of RM1.25.

Well, I think the IPO price is not impressive, however, reasonable. Let's compare IGB REIT with Pavilion REIT. The IGB REIT IPO is selling at premium in term of book value. IGB price is about 1.25 time of its book value of RM0.996 compare with PAV REIT IPO of 0.936 time. Dividend yield wise, IGB REIT offers lower dividend yield of 5.15 - 5.5% compare with PAV REIT of 6.5% at IPO price.

Anyway, I still see some upsides for IGB REIT price. Well, 5.15 - 5.5% of distribution income is still higher compare to FD rate & current yield of its peers PAV REIT & CMMT which generating around 4.7% & 4.9% of  dividend respectively. On the other hand, P/BV (price per book value) of IGB REIT is around 1.25x which is lower compare with PAV REIT & CMMT around 1.41x & 1.42x respectively.

All in all, I see IGB REIT trades at target price range of 1.40 -1.45 in the short term after listing. It's still worth to be subscribed to have some capital gain as well as dividend payments. For REIT, I prefer AmFirst, Atrium, & Tower REIT, which generating 8.3%, 6.9% & 7.5% yield respectively.



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.

CYPARK - Building The Better Future

Cypark Resources Berhad (CYPARK) is 1 the of big players of environmental remediation and renewable energy in Malaysia. They had announced its 2nd quarter result end of April 2012. The revenue for 1H increased to 85.87 mil compare to 83.28 mil last year, while the net profit increased by 10.43% to 14.11 mil compare to 12.77 mil last year, mainly because of better cost control and the start of contribution from renewable energy. Renewable energy segment has generated RM 935,876 of revenue to the company, and is expected to generate more income to the company in the upcoming quarters since the solar plant is just launched in March 2012.

CYPARK has no major issue in securing more projects for their environmental remediation business as they have good reputation in the industry and there are no strong competitors in Malaysia. While the environmental engineering and the landscaping & infrastructure segments are the main contributors to the company's income, however, the most interesting part of CYPARK is actually came from its renewable energy business. Currently CYPARK has the largest integrated renewable energy plant of the Southeast Asia, which including solar and biogas power generations, in Pajam, Negeri Sembilan. The current capacity of the power plant is around 8 MW of power generated by the solar plant, the management aims 25 MW at the end of this year and expects the capacity will achieve 60 MW of power at the end of FY13.

Cypark's solar farm - Image by The Edge Malaysia

Why renewable energy? It is because the promotion on green electricity is encouraging at the moment in Malaysia. Revenue is secured by Power Purchase Agreement (PPA) - CYPARK has inked 2 long-term contract with Tenaga - 21-year 8 MW solar PPA (worth RM 11 mil)  and 16-year 2 MW biogas PPA. Besides,  renewable energy might be a good option to substitute the current power-generating materials, i.e. coal, fuel, natural gas, etc. and more environmental friendly - lower carbon emission compare to coal and fuel.

Anyway, there are concerns that may take into consideration: Renewable energy is costly compare to current energy sources while Malaysians are still enjoying one of the lowest electric tariff in the region. Besides that, the efficiency of turning solar energy into electricity is still very low, which is just about 20% - 30%. And, the supply of solar energy might be affected by monsoon seasons in Malaysia, which is, there will be no sunlight if the rainfall is heavy, especially during the year end.

Currently CYPARK is trading at historical P/E of around 12x. All in all, I believe that their earnings will grow 10% in FY12 compare to FY11 mainly of higher profit margin, stable earnings from environmental remediation and the upcoming contribution from renewable energy division.

From technical charting, CYPARK closes above the support level of 1.70. A downward-trend triangle is formed and the selling pressure is testing the support line of 1.70. Should CYPARK close below 1.70, the immediate strong support is expected to be 1.64 and 1.55. The chart would only show upward trend if the price violates and closes above 1.84 & the resistance will be 1.98. Anyway, look for it to trade sideways between 1.70-1.84 in short term.

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.