7160 PENTA

这星期看起来有点橱窗粉饰的效应，因为大马股市从星期一开市的1,634.34点冲到今天的1,693.14点。另外在今早十点多左右冲破了1,700点，过了不久就经不起前方的挑战就一直跌到今天闭市的1,693.14点了。明天就是31号了，也就是2015年的最一天，本人在这里衷心地祝大家新年快乐，身体健康，万事如意，忘掉今年不开心及不如意的事情，珍惜眼前人，明天及明年会更好！！最后当然少不了天天赚大钱！！哦！对了，忘了介绍今天的功课，那就是 PENTA：

Company Overview

·         Business:

1.    Innovative services in technological solutions, designing and manufacturing of precision machinery components, as well as design.

2.    Manufacturing of automated and semi-automated machinery and equipment

3.    Assembly and installation of computerized automation systems and equipment.

·         Main business can categorized as automated equipment (60%) and automated manufacturing solution (40%).

·         Company website: http://www.pentamaster.com.my/

Additional Information

·         Strengthening of US dollar will bring benefit to PENTA. Here prove from AR2014:"Pentamaster being a manufacturer in an export driven business, the depreciation of the Ringgit to certain extent benefited us."

·         New factory building is start being build up to increase the assembly and testing activities. Leasehold of land is cost RM 5,015,790 and PENTA paid 20% as initial payment.

·         In Q3''2015, PENTA disposed two subsidiaries, that are Pentamaster Engineering (M) Sdn Bhd and Pentamaster Solutions Sdn Bhd.

·         This two non-current asset are the heart of manufacturing in PENTA, so the business focused currently is designing.

·         PENTA also acquired Origo Ventures (M) Sdn Bhd in Q3''2015. Main business of Origo is Smart Home and Building Automation Solution for property and construction industry.

·         Target of RHB-OSK investment firm is RM 0.90.

·         Executive Director, Mr. Tan Boon Teik is sold nearly 2% of total share outstanding and his latest holding share % approximately 6.22%.

·         CEO, Mr Chuah Chong Ewe was just appointed as CEO in February 2015 and his buying price of PENTA is RM 0.750 with 3 % of share outstanding.

·         From table, we can see the trend in year 2014 is uptrend and then current trend of EPS in year 2015 same uptrend too.

·         Each of the quarter made up to 100% growth rate improvement on EPS by comparing same quarter in both years.

·         *EPS mainly contributed by "other income" which weighted 2.17 EPS. If excluded this EPS, PENTA may made 1.93 EPS in Q3, there increased 28% if compared with Q3''2014.

Personal Comment

·         Above information show PENTA was disposed its manufacturing asset which accounts 40% of revenue and this must covered by new business entered in property and construction industry.

·         New business's performance in next quarter result is important for determine the effectiveness and efficiencies of new entered business activity.

·         To understand deeply on the new business acquired by PENTA, may Google or YouTube search the word “Internet of Things". That is the main services provided by Origo.

·         I think the services provided by PENTA may target on the customer who prefer high quality of security and facilities of HOME. So the customer may categorize as middle income or upper income group.

·         PENTA is zero dividend payout company.

·         Year 2013 may turning year to PENTA, because it is turn the net loss to net positive and PENTA's effort on clearing borrowing of company in this year can clearly be seen.

·         PENTA also start to accumulate its holding cash since year 2013.

·         ROE is increasing since year 2013 too and step to latest trailing three quarter result with 14.47%.

·         Current PE and ROE is attractive with result 8 and 17.52% respectively.

·         Earning valuation model and DCF model are giving intrinsic value of RM 0.709 and RM 0.98 respectively.

本文只供参考。共勉之。

7229 Favco

美国 FED 终于在前两天宣布升息0.25%了，这是美国踏入更强国的第一步，毕竟美国是各国家里是最突出的那位而且全部国家都以它为头。另外耶伦在未来会慢慢地把息升去1.25%，所以以后可能还需要升4次息了。然后，在美国宣布升息的当天，世界各地的股市跟着美国一起跳高，不过跳高的下一天就拉着降落伞紧急降落。最后，美国的升息会对世界的股市和经济有什么影响呢？个人觉得短期内美国会强势然后其他国家为了不让待在自己国家的外资跑去美国所以也跟着一起升息，“升息潮流”会不会在明年实现呢？这些就让时间为我们证明吧。另外在这里介绍 Favco 的功课：

（温馨提示：用chrome的朋友可以在本图按右键然后再按“Open image in new tab"，这样会比较清楚） 

Company Overview

·         The principal activities of FFB's subsidiaries are designing, manufacturing, supply, servicing, trading and renting of cranes.

·         Four main cranes - Tower cranes, Offshore cranes, Crawler cranes and Wharf cranes.

·         Company website: http://www.favellefavco.com/

Personal Comment

·         EPS recorded CAGR of 25.32% from year 2010 to 2014.

·         From law of 72, 25.32% return may double our capital in 2.8 years. High growth rate of return is one of reason Favco's PE low as 6 currently.

·         Favco's total liabilities actually mainly build up by trade payable and this trade payable is going seriously by yearly. This may one of the weaknesses Favco.

·         High payable and net negative trade may show Favco is unable to pay off their creditor.

·         Favco's effort on clearing its short term borrowing can detect clearly from year 2010 to 2014. It is diminishing and going zero in last year.

·         ROE is striking through the years too; it is recorded 19% last year. It is pass my ROE target on criteria to choose firm.

·         Investment Master, Cold Eye always suggests his follower to deal the company's share during its PE is under 10 and Favco's PE is under 10 every year.

·         Free cash flow of Favco is attractive as it is growing every year, it is recorded CAGR of 44.36% within latest four years.

·         As current market trend is bottom tide of international oil price, it may affect Favco's business activity but I think it may a tiny effect to Favco's business is diversified by heavy lifting in construction area.

·         Favco also able bring us least 4% of return which derived from DY 4%. From view on EPS, Favco is categorized as growing stock.

Additional Information

·         Latest Q3''2015 report mention Favco has outstanding order book of RM 776 million as at 18/11/2015.

·         Order book mainly builds by global oil and gas, shipyard, construction and wind turbine industries.

·         Revenue of Favco divided into Inside Malaysia and Outside Malaysia (reports no mention detail revenue of outside malaysia), both segment of revenue is approximately balance.

·         Outside Malaysia include Singapore, United State, Australia, Denmark and China. China is the new market explored by Favco currently.

·         Listed public company Muhibbah Engineering (M) Bhd (5703) is holding 60% of shareholding. Favco is one of the subsidiaries of Muhibbah Engineering.

·         Price Target of investment firm:

1. RHB-OSK - RM 2.84 (update 25/8/2015)

2. MIDF - RM 3.30 (update 4/8/2015)

·         Chart showing the data from year 2011 to 2014 and include the latest Q3''2015.

·         Revenue is hiking from 385 million to 798 million and there is uptrend.

·         Revenue and profit look forward to break new high again in annual report 2015.

·         Dividend payout exceeds 50% in year 2014 and achieves 8.73% DY last year.

·         Profit margin also maintained around 10%.

本文只供参考。共勉之。

WTI Crude Oil Price VS KLSE Index

            First chart is WTI crude oil price while the next chart is index of Kuala Lumpur Stock Exchange (KLSE). By comparing both charts, we can evidently conclude that the WTI Crude Oil Price is direct linked to KLSE. When the WTI Crude Oil Price is going bearish, KLSE index will has a same moving with it too. I think this is because the core income of Malaysia is totally depending on the Petroleum. When international oil under over supply condition, oil price will going down and lastly affect the Petroleum Malaysia badly.

The detail of circle indicator as shown below:

i.              Dark Blue (1996) Asian financial crisis

ii.            Yellow (1998) Russian financial crisis

iii.           Green (2000) Dot-com bubble

iv.           Red (2002) Argentine economic crisis

v.            Light Blue (2008) Global financial crisis

vi.           Brown (2009) European sovereign debt crisis

vii.          Grey (2014) Russian financial crisis

viii.        Blue (14/12/2015) ???

Total consists of 8 indicators included 4 HEAD indicators and 4 TAIL indicators. HEAD is the top part of graph or BULL DIE while TAIL is the bottom part of graph or BEAR DIE. When bull going back home, the bear will replace its place to control the market and make it crash. A vice versa theory applied when bear going back home and replaced by bull.

By observe cautiously, we can realize that there are 3 trends from year 1995 to 2009. Trend 1 is from year 1996 to 1998; Trend 2 is from year 2000 to 2002; Trend 3 is from year 2008 to 2009. The entire trend is bearish trend which from the top part drop to the lower part.

On the other hand, the duration of Trend 1 is 3 years; Trend 2 is 3 years and lastly Trend 3 is 2 years. Hereby, we may conclude that the average bearish trend is 2.67 years. These 2.67 years may as the best chance and gold opportunity for intelligence investor to buy undervalue company in the stock market.

After we estimated the 2.67 years as the period of bearish trend, we should apply it to current market. As both charts above, the HEAD indicator recently is year 2014, so we will estimate the BOTTOM indicator at year August 2016. Is it the August 2016 is the end of bear? It may not; this is because the WTI price is showing a clearly shooting bottom trend while the Malaysia stocks market just a small adjustment.

Here one more question again, is it the current downtrend supported by the 20 million ValueCap? Who know it? Every professional speculator is trying to forecast the next year market trend but Mr. Market is not easier to be understood and even guess.

I as the investor is lacking of skill who speculator to forecast and guess the moving of market trend; I also can’t be hedger to limit my lose and maximize my profit due to insufficient fund so the one I can do is closing my ear and eyes to eliminate the news from internet and then observe plus wait patiently for the recovering of trend. 

本文只供参考。共勉之。

7089 Liihen

Company Review

• Main business is furniture product, other business included property rental and plantation.
• Company website: http://www.liihenfurniture.com/index.php 

Personal Comment

• Profit margin of Liihen is increasing through the year.
• Latest Q3''2-15 quarter report show there are trade positive between receivable and payable. This may a good image to show their effort to pay off their creditor.
• Liihen is holding RM 0.56 cash per shares and RM 0.17 borrowing per shares. Net cash positive show company is healthy cash flow condition.
• Q3''2015 which consists of 9 months report get marvelous result with ROE 17.89%. This result reveals the management using the fund effectively and efficiencly.
• Historical DY recorded result above 6%; Liihen is a good investment with extra capital gain if compared with REITs.
• Liihen's business will enhanced and grow at powerful USD dollar. This statement can found from report:" The positive market sentiment in US and the strengthening of USD dollar against RM will continue to enhance the Group’s operation and earnings."

• From the USD/MYR graph, we can clearly see there are present of bullish trend along the year 2015.
• Lowest and highest USD/MYR is 3.4622 and 4.4580 respectively. There is a gap of USD/MYR 1.0000 or increase of 28.76% due to strengthening US dollar against RM malaysia.
• The most interesting case is the price of Liihen rise from RM 2.75 to RM 7.05 with period 10 months; this is the period of powerful US dollar too.
• On the other hand, capex of Liihen normally maintained approximately RM 10 million so result attractive free cash flow and lastly the DCF model get intrinsic value of Liihen worth RM 6.04.
• For the accounting based earning valuation model which seek shareholder equity as heart and get intrinsic value of Liihen worth RM 3.56.
• With the concept of market value, the next resistance of Liihen may RM 2.77 which will amount to RM 500 million market capitalization.

Additional Information

• Liihen mentioned company has a moderate seasonality which sales generally lower in the head of the year due to festival period as well as summer holiday.
• 6 countries direct related to Liihen business, which are America, Asia, Malaysia, Africa, Australia and Europe.
• Clearing and stacking work were completed in end of Feb 2015 and then 750 acres were planted.
• Liihen plan to diversify its business by enter plantation industry but news recently showed the application of RM 22.5 million term loan to Malaysian Timber Industry Board was cancelled.
• Latest Q3''2015 report show the sales segment as below:

• The executive chairman, Mr.Chua Lee Seng's active disposed of share in year 2015. http://www.klse.my/stock/insider/director/all/7089.jsp#stockDetailDiv
• From the Edge Financial Daily, Liihen appears to have expansion plans as RM5 million has been allocated for the purchase of a factory building.

本文只供参考。共勉之。