My Pick for 2012

Despite all the gloomy economic news nowadays, many pundits are still hanging around near Starbucks arguing among each other and confronting one another about who will predict the right timing for the economy to fall into recession. Instead of sitting down at kopitiam drinking RM1.50 coffee for poor people like me, why not try figuring out what will be best pick on Malaysian shares for 2012?

What will be my pick for Malaysia shares in 2012?

First, for the 1st half of 2012 i will like to remind fellow investors to beware of election. If election is approaching, meaning it is asking you to "Leave the Market before you get hit!!". Prior to election, i will advise fellow investor not to take risk and stay sideline during election time.

However, besides election, what are the stocks that i will be eyeing for? For the 1st half of 2012, i will stay Bullish on CPO price and predicting CPO price will remain at the range of 2900 to 3200. Thus, i am still looking for plantation shares during the first half of 2012. Plantations share with good valuations that i am eyeing are (Gnealy TP 7.20, Hsplant TP 3.30, Kmloong TP 2.70, Thplant TP 2.80 and Tdm TP 4.10) 

Secondly, the sector that investors should scrutinize at is rubber sector. Rubber price has plunge from around RM11/KG to RM7/KG. This will bring beneficial to the rubber glove companies. The top pick for rubber glove companies are (Hartelaga TP 7.50 and Supermaxx TP 4.30)

Thirdly, i will remain defensive on consumer sector and will be scrutinizing on companies that pay out high dividend yield. Please take a look at (Bjfood TP 1.40, Yhs TP 2.40, Carlsberg TP 9.00, and Ajinamoto TP 4.20) Most of this shares that i am looking are paying out high dividend. Currently, i am monitoring closely on Yhs and Bjfood. Will write more on this companies once the timing is right. Take a look at Yhs, as they have change management and i can foresee that the changes of management did took effect on their earnings outcome. However, it is still too risky to make a decision yet. Thus, if Yhs continue to consolidate at 2.00, it may be a buy call. On the other hand, for Bjfood, they are expanding their business to Indonesia and China, i am anticipating that their business will bring a positive earning outcome for the company as i like Bjfood healthy balance sheet.

Lastly, i will be looking more on defensive and more liquidity shares. These are (Kpj TP 5.10, Oriental TP 5.50, Jtinter TP 7.30, Tenaga TP 6.50, Mediac TP 1.30, Parkson TP of 6.10, Genm TP 4.10 and Dialog 2.70). For more defensive purpose i prefer Oriental as their balance sheet is still hoarding with a vast amount of cash. For Dialog, oil price is still remaining at a high end level and it is one of the major oil company that having strong balance sheet. However, for Genting Malysia, their expanding in New york and UK. This may have an impact on their earnings.

Having a rough idea on what will i be looking at for 2012? Remember, once you got your ang pao, don't hide it under the bed! It won't turn your bed into gold!! Take it out and invest and generate more income!! But please do be more cautious for this year and any of you do have issue or problem, please do email or leave comment! Happy investing!!=)

2012 World Uncertainty

On the second half of last year was a mischievous and most miserable year where the world is stuck with full of ambiguity that triggering a slowdown in the develop countries especially America and Europe.

The mounting of Europe debt, the downgrading of American credit rating by S&P, the standstill of U.S unemployment at 9%, the wide spread of European sovereign debt crisis to Spain, Italy and Greek, the noises flying around Spain due to the the soaring of unemployment rate to around 25%, Greek citizen going on strike after government announce to take austerity measure to curb the debt level, and so on. So the last year main topic was due to the disastrous and the failure of Europe and America to control their mounting debt. When you read any news, the main topic is only DEBT and the DUEDEAD of the debt. 

For the year of 2012, i am quite bearish for the U.S economy and i am expecting the U.S economy and most of the U.S big corporation like, Goldman Sachs and Citibank Group to face a major stall speed and a decline in their earnings. Nonetheless, U.S retail sales did went up, and unemployment did came down too. Is this a good sign? First and foremost, the U.S unemployment did came down because less people are looking for jobs and people that are applying for jobs quite searching. Thus, is this a good sign that the U.S economy is recovering? 

Hence, are we in the bear or bull run? Is the bear taking over the bull? With all the scary news still coming out of Europe, chronic high unemployment, sovereign credit downgrades everywhere, economic slowing down in China, the likelihood of recession in Europe, speculation stating China may face hard landing and escalating conflict over Iran, the bears can easily make the argument that this is a market top and lower prices lie ahead. Conversely, some pundits argue that this year will be another bull run. Why? They point out strong technical indicators, improving economic reports at home (unemployment dropping, manufacturing increasing, retail sales soaring) and so this argue that the bull market is intact. 

So, what should be the pick for Malaysian stock market? The next post i will be writing on what will i be focusing for the year 2012. Try studying between the bear and the bull market as market timing is one of the crucial steps that investors should look for. With right market timing, you will have bigger Ang Pao!!!

PARKSON

PARKSON OVERVIEW


Parkson Holdings berhad is a Malaysia-based investment holding company. The Company, along with its subsidiaries, is principally engaged in operations of the parkson brand department stores. The businesses are located in the Malaysia, Hongkong and also Vietnam. The Company has a chain of 85 Parkson department stores, with 35 in Malaysia, 44 in China and 6 in Vietnam. In July2011, it acquired Puncak Pelita Sdn Bhd. In November 2011, the Company announced that Tianjin Parkson Shopping Mall Co. Ltd acquired the land of a shopping complex located at the northeast corner of Nanmenwai Street and Shenyi Street, Heping District, Tianjin City, the People's republic of China, which consists of a five storey building with a land area of approximately 13,424.6 square meters and total gross floor area of about 45.022.15 square meters.

Fundamental Analysis
MARKET CAP = 6234 MIL
SHARE OUTSTANDING 1093.69MIL
CURRENT SHARE PRICE = 5.53
ROE = 15%
ROI  = 17%
5 YEAR AVERAGE EPS GROWTH RATE = 20%
AVERAGE PE   = 15
QUICK RATIO = 1.20
CURRENT RATIO = 1.34
DEBT TO EQUITY RATIO = 88.99
CURRENT EV/EBITDA = 10
PREDICT EV/EBITDA (BASE ON 6.30 F SHARE PRICE) = 9.60
P/BOOK VALUE = 2.04
DIVIDEND YIELD = 3%
CASH PER SHARE = 2.5 SEN PER SHARE
LAST YEAR EPS AS AT AT 2011 = 0.32 SEN

Comment on fundamental view
Fundamentally, Parkson did incur a vast amount of debt but in this case as an investor i wouldn't be worry as it is foreseen that the mounting of debts are used for expansion. As you can see during the preceding year, Parkson Holdings plans to expand its retail network in Indonesia from six outlets presently to 20 to 24 outlets by 2015. Likewise, Parkson Holdings cash per share increases by 23% to an amount of 2.7 billion which is 2.5 per share. With cash rich hoarding in Parkson balance sheet, i wouldn't be worry if any default payment happens on Parkson.

Intrinsic value for 5 years
Assuming that EPS growth rate for 5 years is 40% (Adjusted higher than average as assuming their expansion will take effect on their earnings)
EPS for 5th year = 0.47 per share
Average PE = 16
Forecast share price = RM7.52
Discounted value base of 4% = 0.822
Parkson Intrinsic Value = RM6.20 per share 

Comment :
Parkson Holdings has an impressive growth momentum. The downside risk will be slowdown in China's and Malaysia's consumer discretionary spending. However, i presume that estimated of 7 to 9 more stores to be open and this will continue to aid their earnings growth. Most impressively, Indonesians operations are beginning to rival the Vietnamese operations despite being relatively new. Although their dividend may not look appealing to certain investors, but what i would recommend is that it is more on a defensive play. As global ambiguity are circulating around the globe, i would standstill on investing more on defensive play. Thus i will remain Buy call at 5.50.

Technical view 
Share price is trading around 100 MA. 100 MA is crossing above 20 MA. I would advice investors to accumulate at a range of 5.40 to 5.55. Its more of a time to start accumulating this share. RSI remain around 50. Historically, when it slide slightly below 50, it will bounce back. Thus, i strongly recommend investors to start accumulating. For your info, please buy at your own risk. Happy investing!!!

HSPLANT

HSPLANT OVERVIEW


Hap Seng Plantations Holdings Berhad is a Malaysia-based investment holding company, which carries out marketing and trading activities for its subsidiaries. The company is engaged in cultivation of oil palm and processing of FFB carried out in Malaysia. As of December 31, 2010, the compayny covers plantation estates of 39,803 hectares are situated at three geographical areas. The first is a contiguous plot of land measuring approximately 36,354 hectares is situated between Lahad Datu and Sandakan; the second area, measuring approximately, 1,276 hectares, namely Ladang Kawa Estate is in Tawau and the third area, measuring approximately 2,173 hectares, is at kampung Natu, Kota Marudu. During the year ended December 31, 2010, the company produced 677,071 tons of FFB; 149,941 tons of palm oil and 33,409 tons palm kernal. The company is projected to produced more in the near future as demand from China and India still remain strong.

Fundatmental analysis
MARKET CAP = 2320.00MIL
SHARE OUTSTANDING= 800 MIL

ROE = 15% 

ROI   = 13%

5 YEAR EPS GROWTH RATE = 50%

AVERAGE PE = 10

QUICK RATIO  = 2
CURRENT EV/EBITDA = 9.00
PREDICT EV/EBITDA (BASE ON 3.30 PER SHARE) = 9.30
P/BOOK VALUE = 1.20

DEBT TO EQUITY RATIO = 31.25%

DIVIDEND YIELD = 6%

CASH PER SHARE = 0.15SEN

CURRENT EPS 3RD QUARTER = 24 SEN

Future share price value

With current CPO remain 3000 and above, and production of Hsplant remain stable and above average, predicting their next quarter eps will be around 8 sen. 

Future EPS for whole quarter = 0.24 +0.08 = 0.32

Average pe = 10

Future value = 3.20 (For 2012)

Intrinsic value for 5 years

Assuming that 5 years eps growth rate is around 50%.

EPS for the 5th year = 0.48 sen

Assuming average pe increase to 12 (as number of share holder increases) 

Forecase share price = 5.76

Assuming discounted value of 4.8% base on beta of 1.16 = 0.822

Hsplant intrinsic value = 4.70 (4 to 5 years time)


Comment:
Base on the 1h2012, i still remain positive of CPO at above 3000. The trend for 2012 will be looking for much profitable and growth prospect plantation company. The downside risk is that if CPO were to drop below 2800, this will affect most of the plantation company. However, Hsplant cash and equivalent are increasing tremendously from the previous year. This cash might be use to pay out to investor as dividend or shares buy back. Thus, i remain a strong buy call for Hsplant as their management and growth prospect in the next few years will be splendid. Overall, their balance sheet remain healthy, without any debt and as the world economy remain in a turmoil and ambiguous state, this share remain a defensive share and more of a long term escalating growth prospect.  

Technical view:
200 MA cut 50 MA. I would recommend investors to start accumulating now as it is the right timing to buy. In the short term, i foresee that the share price may consolidate at a range of 2.85 to 2.95 but in the mid to longer term, the share price may skyrocket to its intrinsic value. The volume has shows that there have been some accumulate at 2.80 to 2.85. Investors are still holding for longer term. I would strongly advice investors to accumulate at 2.80 to 2.90. For your info, please buy at your own risk. Just a two cent of advice. Happy investing!!!

WELCOME!!!

Hi, thank you for visiting my blog, as i am more of a value investors, but i do take technical analysis into account to predict the right timing to accumulate the shares. However, i make and recommend shares base on my view and please analyse carefully before buying into any shares. Besides, if you have any question or doubts or skepticism with my analysis, please do email or made some comment. I will appreciate that if you do.

Please do be more active in my blog. I would appreciate any comment, suggestion, or opinion. If any of you want me to analyse on any company that you are interested in, or any news that you want me to give you my two cent opinion, i would love to. Feel free to email me : danielsoh_92@hotmail.com or Vincentsoh_92@hotmail.com if you wish to ask anything or post in the comment. So if you can just scribble my comment or my blog, but make sure it is logical and related!! Hope to see feedback and comment!!