Remember the LORD for it is he who gives you the ability to produce wealth and so confirms his covenant... Deut. 8:18

Wednesday, March 31, 2010

In the News: Supermax, Maybank, MRCB, POS, MPHB

Supermax Corp, a Malaysian rubber glove maker, said it raised its internal after-tax profit target to RM168 million for 2010 from RM136 million, to reflect higher demand for its products, following US healthcare reforms.

Malayan Banking Bhd's (Maybank) dividend re-investment plan, expected to be effective in 2Q 2010, is a better option compared with the rights issue in strengthening its share capital base and capital position, said its chief executive officer, Datuk Seri Abdul Wahid Omar. He said Maybank’s policy was to pay between 40 and -60 per cent of its profit after tax and minority interest as dividend.

Chief executive officer Mohamed Razeek Hussain Mericar said Malaysian Resources Corp (MRCB) wants to participate in a plan by the government and the Employees Provident Fund to form a venture to promote the development of 3,000 acres of government land in Sungai Buloh, outside Kuala Lumpur.
The comment comes after Prime Minister Datuk Seri Najib Razak said yesterday that the government and the Employees Provident Fund, the biggest shareholder of Malaysian Resources, will form a joint venture to promote the development of the land.

The government's investment arm, Khazanah Nasional Bhd, hopes to conclude the divestment of a 32.2 per cent stake in Pos Malaysia Bhd within this year. It was reported that the 32 per cent Pos Malaysia stake is worth about RM390 million.

Shares of Multi-Purpose Holdings Bhd, a Malaysian betting and financial services group, are worth as much as RM3.24 each to reflect its plan to roll out property projects this year, CIMB Investment Bank Bhd said. -- Bloomberg

The Web is Killing Polar Bears

The 'cloud' of data that is becoming the heart of the Internet is creating an all-too-real cloud of pollution as Facebook, Apple and others build data centers powered by coal, Greenpeace said in a new report to be released on Tuesday.

A Facebook facility being built in Oregon will rely on a utility whose main fuel is coal, while Apple is building a data warehouse in a North Carolina region that relies mostly on coal, the environmental organization said in the study.
"The last thing we need is for more cloud infrastructure to be built in places where it increases demand for dirty coal-fired power,'' said Greenpeace, which argues that Web companies should be more careful about where they build and should lobby more in Washington for clean energy.

The growing mass of business data, home movies and pictures has ballooned beyond the capabilities of many corporate data centers and personal computers, spurring the creation of massive server farms that make up a "cloud,'' an emerging phenomenon known as cloud computing.

Data center energy use already is huge, Greenpeace said.
If considered as a country, global telecommunications and data centers behind cloud computing would have ranked fifth in the world for energy use in 2007, behind the United States, China, Russia and Japan, it concluded.

Tuesday, March 30, 2010

Axiata: XL stake sale to pay for dividend

Axiata Group Bhd, Malaysia’s second-best performing index stock this year, may use proceeds from selling a 20 per cent stake in Indonesia’s PT XL Axiata to pay a dividend and repay debt, Chief Executive Officer Datuk Jamaludin Ibrahim said in an interview in Kuala Lumpur today.

It may also sell between RM1 billion and RM1.5 billion in Islamic bonds to refinance debt, he said. - Bloomberg

I'm buying in more of Axiata (for near future maiden dvd, regional telco play, analyst re-rating) and TM (potential future growth earnings, dvd of 11 sen soon..?). Both are fairly valued and not really expensive considering DiGi and Maxis are priced at PER 17 and PER 20 respectively. Buy only for the really long term if you're cash loaded.

Why I like mobile telco..?
1)- not almost anyone has a house or can buy a house, but almost everyone has a mobile cellphone in their pocket or can afford to buy one. 2)- cellphones are becoming indispensible for social communication or as a communication tool: you wouldn't think of leaving home without it.
Why I like TM...?
1)- it's pure monopoly in the ground/fixed line business. 2)- it's irreplaceable in business communication as most businesses still carry a ground line for voice/fax transmission. 3)- I think it's still cheaper to chat using ground line than mobile line (apart from VOIP, Skype etc) so many aunties/ grandmas are still keeping their TM phone at home. 4)- Future growth earnings albeit slowly as an alternative to pay-TV Astro etc as HSBB becomes reality.

Thursday, March 25, 2010

Steel-Making Co. Q eps. Fair value

Some of the steel-making companies quarterly earnings.

Lion Ind (Q eps 11.7 sen, nta RM 3.97). Fv = 11 x 4 x 10 = RM 4.68
At RM 1.75, it's very attractively priced at 38 % of fair value or annualised PER 3.8

Lion Div (Q eps 5.7 sen, nta RM 1.78) . Fv = RM 2.28, today's price RM 0.44 PER 1.9
Southern Steel (Q eps 14.2 sen, nta RM 1.80). Fv = RM 5.68, today's price RM 2.46 PER 4.5
CSC Steel (Q eps 9.9 sen, nta RM 2.09). Fv = RM 3.96, today's price at RM 1.76 PER 4.4
MaSteel (Qeps 5.4 sen, nta RM 2.14), Fv = RM 2.16, today's price RM 1.09 PER 5
Kinsteel (Q eps 4.4 sen, nta RM 0.85). Fv = RM 1.76, today's price RM 1.02 PER 5.8
Ann Joo Reso (Q eps 4.5 sen, nta RM 1.80). Fv = RM 1.80, today's price RM 2.70 PER 15

So guess which counter offers the best value..?

Monday, March 22, 2010

UEM Land RI @ 80 sen. ASM unitholders get 6.3 sen

UEM Land Holdings Bhd, a Malaysian developer, priced its proposed rights issue shares at 80 sen each, which is a 44.1 per cent discount to the stock’s recent average price, the company said in a statement to the Kuala Lumpur stock exchange.UEM Land said it hopes to raise gross proceeds of RM971.3 million from the one-for-two rights issue. CIMB Group Holdings Bhd and Malayan Investment Bank Bhd were appointed joint underwriters, it said. -- Bloomberg

Amanah Saham Nasional Bhd (ASNB) today announced an income distribution of 6.30 sen per unit for Amanah Saham Malaysia (ASM) for the financial year ended March 31, 2010.
The income distribution will be reinvested in additional ASM units to be automatically credited into the unitholders'' accounts on April 1, 2010.
ASM is a fixed priced equity-income fund aimed at providing unitholders with a long-term investment opportunity that generates regular and competitive returns through a diversified portfolio of investments. -- Bernama

Saturday, March 20, 2010

Plantation Co. Quarterly EPS 2

HS Plant (latest Q eps 5 sen, nta RM 2.10). Fv = 5 x 4 x 10 = RM2.00
At RM2.40 it's fairly priced (@ PER 12), given its historic 5 sen dividend tax exempted to be declared on both June and Oct. I'm expecting a 5 sen dvd tax-exempted this June.
Assume 10 sen tax-exempted, dvd yield = 10 sen/240 = 4.17%

TH Plant (latest Q eps 4.6 sen, nta RM0.93). Fv = 4.6 x 4 x 10 = RM1.84
At RM1.55 it's fairly attractive, considering it may pay 8.5 sen dvd taxable in this May

IJM Plant (latest Q eps 5.2 sen, nta RM1.48). Fv = 5.2 x 4 x 10 = RM2.08
At RM2.50 it's fairly priced (@ PER 12). I think it may not pay the usual dvd of 8 sen in July as it expands its land bank in Indonesia; typical of a good growth stock capex.

Kim Loong (latest Q eps 4.8 sen, nta RM1.39). Fv = 4.8 x 4 x 10 =RM1.92
At RM2.15 it's fairly priced over PER of 11. Usual dvd payout 3 sen in Jul, 4 sen in Nov.

TSH Plant (latest Q eps 5.4, nta RM 1.78). Fv = 5.4 x 4 x 10 = RM2.16
At RM2.06 it's fairly attractive. Usual dvd payout of 5 sen in Jun

Unico Plant (latest Q eps 1.7 sen, nta RM0.88). Fv = 1.7 x 4 x 10 = RM0.68
At RM0.82, it's priced at PER of 12. Usual dvd payout of 2 sen in March and 2 sen in Oct
If you have bought in at RM0.80, dvd yield annualised 4 sen/80 sen = 5 %

Important to note: Investing in Plantation Co. is for the very long term investor.
Catalyst: Adverse weather resulting in dwindling CPO causing price surge. Tracks Soya bean oil as agri alternative and Crude Oil as bio fuel alternatives.
Demographic changes causing scarcity of land banks for agri, manufacturing, infra-structure and housing development. Land banks of plantation companies appreciate in value and surge when converted to development land.

Happy investing...! May Jesus Christ bless you richly in spirit, mind, heart, physique, family relationship, schools, business and in your finance..
J = X

Plantation Co. Quarterly EPS

Here's a simple analysis to determine if the stock shares you intend to buy is undervalued or overpriced. First find out its Quaterly earning per share (Q eps). Then multiply by 4 to estimate its annualised/yearly earnings. Then multiply by PE ratio 10. (PE Ratio simply means the price I paid for its share today, the company should in 10 years time match it with all its accumulated earnings, theorectically).
So simple Fair Value or Price = Q eps x 4 x 10.

Boustead (latest Q eps 16.2 sen, nta RM4.20). Fair Value Fv = 16 x 4 x 10 = RM6.40
At RM3.40 ( ex. 16/3, 6 sen t.e. + 4 sen taxable), it's very attractively priced at abt 55% of its fair value. The only issue is whether the Q eps is sustainable in the following quaters.

TDM (latest Q eps 9.7 sen, nta RM2.88 ). Fv = 9.7 x 4 x 10 = RM3.88
At RM1.70, it's attractively priced at 46% of its Fv. Still holding on to mine as I expect it to declare 14 sen dividend (approx. 8 %) in June.

Will post HS Plant, TH Plant, IJM Plant, Unico, Kim Loong, TSH later or 2moro...

Thursday, March 18, 2010

TA Global's 3Q net profit at RM23m

KUALA LUMPUR: TA Global Bhd (TAGB) recorded a net profit of RM22.51 million in its third quarter ended Jan 31, 2010 (3QFY10) on the back of RM80.56 million revenue. There were no comparative figures in the preceding period corresponding quarter as this is the group's first year of preparing its quarterly financial report subsequent to its listing on the Main Market on Nov 23, 2009.

Earnings per share stood at 0.47 sen. No dividend was declared.TAGB said the group's pre-tax profit rose 53% to RM26.9 million in 3QFY10 from RM17.6 million in the preceding three months (2QFY10) due to higher revenue from its property development subsidiaries and its hotel division.
For the nine months to Jan 31, net profit stood at RM44.79 million on revenue of RM252.09 million, while EPS stood at 0.93 sen."The current economic statistics show that the economy seems to be on the path of recovery," it said, adding that the improved economic environment would boost the demand of future launches of PROPERTIES and hotel rooms.

THP targets 12% ROE for FY10

KUALA LUMPUR: TH PLANTATION Bhd (THP) is targeting a return on equity (ROE) of 12% and to pay 50% of its net profit as dividends for its financial year ending Dec 31, 2010 (FY10), pursuant to its headline key performance indicators (KPIs) announced yesterday.

According to its statement on Wednesday, March 17, THP maintained its target to distribute about 50% of its net profits as dividends as well as to achieve a fresh fruit bunches (FFB) yield per mature hectare of 21.6 tonnes."We target to expand our landbank to 50,000ha by 2012 at strategic locations to complement our growth strategy," it said. The company had achieved an ROE of 12.6% in FY09, surpassing its target of 7.5%, but fell short of meeting the FFB yield per mature hectare target of 22.5 tonnes, with an actual 21.48 tonnes due to unfavourable weather and biological tree stress.

It will distribute total gross dividends of 8.5 sen per share for FY09, translating into 58% of net profit.THP said it had surpassed its medium term KPI of positioning the group as a medium size plantation company of 32,000ha by 2009, one year ahead of time by achieving a landbank size of 39,059ha in 2008. The stock closed unchanged at RM1.52 on Wednesday, with just 16,000 shares done.

Monday, March 8, 2010

Steel rolling out a strong 2010

Steel sector Reiterate overweight:
Malaysian long steel makers (Ann Joo, Lion Industries, Malaysia Steel Works, Southern Steel and Kinsteel) staged a strong comeback in 4Q09 after reporting a combined net profit of RM218 million for the Oct-Dec period, more than 100% increase year-on-year and 19% quarter-on-quarter.We attribute the increase in 4Q09 net profit largely to the recovery in steel price, decline in raw material price and cost-cutting initiatives.We reiterate our overweight stance on the steel sector given the bullish outlook.

We continue to like Kinsteel for its exposure to both upstream and downstream steel production, which are expected to benefit from the upsurge in demand and steel prices.We expect margins to recover in 2010 to fuel earnings growth. The decrease in inventory values for three consecutive quarters since December 2008 indicates that steel players have already exhausted/marked down their expensive input (iron ore). As such, the expected increase in steel prices would likely boost FY10 margins and earnings.According to Kinsteel, billet and steel bar prices in January 2010 have rebounded to US$520/tonne and RM2,200/tonne respectively from US$490/tonne and RM2,050/tonne in 4Q09. We expect these prices to continue rising on the back of higher demand for steel from the construction sector. We maintain our target price for Kinsteel at RM1.24, based on 13 times CY10 earnings per share (EPS), which is 8% higher than our 12 times target price-earnings ratio (PER) for the steel sector.

For investors who like to ride through the booming steel sector in China, we recommend Sino Hua-an as it is expected to benefit from rising steel demand due to spike in infrastructure spending under the Rmb4 trillion (RM1.97 trillion) stimulus package. We value Sino Hua-an at 65 sen, based on 10 times FY10 EPS given its smaller market capitalisation.As far as coke price is concerned, we understand from Sino Hua-an that prices have been volatile in the first two months of 2010 relative to the firm coking coal price at Rmb1,400/t. This has resulted in a narrowing spread following the decline in coke price in February. However, we believe the drop in coke price is temporary and foresee the price to strengthen after the Chinese New Year. — TA Securities, March 5

Saturday, March 6, 2010

Quarterly Earnings.

It's great to be back after a looooong break post CNY season. Looking at some of the companies earnings and estimating their fair value using simple Quaterly EPS (earning per share) with annualised PER of 10.

Telcom Axiata Q eps = 7 sen. Fair value = 7 x 4 x 10 = 280 or RM2.80. Current price is RM3.90 which is 1.39 times more or at PER 13.9 which is still cheap considering the average PER for telcom industry is approx 17. So I'm still holding onto my Axiata. Waiting for two catalysts:; Axiata maiden dividend and/or some filthy rich investors buying into Axiata for its South East Asia mobile tel operation

Telcom Digi Q eps = 31.7. Fair value = 31.7 x 4 x 10 = 1268 or RM 12.68. Current price is RM22.30 which is 1.759 times more or at PER 17.59. I bought Digi at RM22.00 and have since received dividend abt RM1.78 which brings a annual yield of 8%. I will continue to hold Digi long term given its attractive dividend of 8%, its strong support at RM22. Look to add if ever it slide to RM20

Maxis Q eps = 6.7. Fair value = 6.7 x 4 x10 = 268 or RM2.68. Current price is RM5.40 which is double or at PER 20.15 which is higher than the industry 17. Paying interim dividend of 6 sen per quarter, it is expected to give an annual yield of 4.4%. I don't have any holding on Maxis and may buy in at RM5.20 level.

GenM Q eps = 6.3 sen. Fair value = 6.3 x 4 x 10 = 252 or RM 2.52. Current price is RM2.78 which is at 1.10 times higher or at PER 11 which ia attractive, given it cash rich position. Still accumulating GenM for its potential special dividend when Gen Bhd needs to milk GenM for its cash to cover GenS expenditure/losses.

Supermax Q eps = 16.4 sen. Fair value = 16.4 x 4 x 10 = 656 or RM6.56. Current price RM6.20 is below PER of 10. Still holding onto it for its dividend and bonus issue 1:5

Adventa Q eps =6.4 sen. Fair value = 6.4 x4 x 10 = 256 or RM2.56. Current price RM3.50 is 1.367 times higher (or at PER 13.67). I think Supermax offers better value.

Maybank Q eps =14 sen. Fair value = 14 x 4 x 10 = 560 or RM5.60. Current price at RM7.00 is 1.25 times higher (or at PER 12.5). Recently declared dividend of 11 sen, ex. 2/3/2010