George kent bhd a value gem to realise

George Kent Bhd a value gem
George Kent (Malaysia) bhd is an investment holding and management company. The company is engaged in the manufacturing and marketing of water meters, waterworks fittings, fibreglass reinforced polyester panel tanks and a variety of hot-stamped brass products and components.

Fundamental analysis
Par value = 50 sen
Share outstanding = 225.31mil
Market cap = 324.44 mil
Current share price = 1.45
Dividend = 0.075
dividend yield = 5.2%
Cash from operating activities = positive trend
Eps = Consistent and have been growing as more projects are coming
Revenue CAGR = have been growing approximately almost 121% last 5 year
ROE = 15%
ROI = 14%
ROA = 8%
NTA = 1.16
Price to sales = 0.64
Cash per share = 0.93
Current ratio = 1.54
Beta = 0.81
PE = 9

Prospect of company 
The main revenue source came from the construction side and the Ampart LRT Extension Project is expected to contribute positively and will significantly affect the earnings of the group for the coming financial year. Moreover, George Kent's manufacturing facility is undergoing a RM50 million 5 year transformation and modernisation program which will bring them a bigger effect on their financial position the next year years. George Kent has being penetrating into vietnamese market and also inroads in cambodia and Laos and the buoyant economy in Indo-China. This will eventually provide positive benefit in the long run of George Kent Business plan. George Kents revenue and profit source will have a steady flow as their subsidiary PNG water ltd has a 22 year concession with Papua New Guinea government to supply processed water to the capital city of Port Moresby. However, on the water side, George Kent is currently undertaking two major water infrastructure projects namely the Semantan Intake Package 3A of the Pahang - Selangor raw water transfer project and Panching Water Treatement plant in pahang value of more than RM 250 million which is each shareholder will receive one pie of the project. To be honest, i dont really find value in construction company but for george kent, their value is way higher as they have many project and many concession in overseas market and not politically link related and their company involves in manufacturing too which is a good growth in their business activities.

Financial View and intrinsic value
First and foremost, their cash at hand is so much that it comprises 64% of the share price and it is 0.93 cent per share. Besides being securing so much contracts, concessions, and manufacturing to export to other country, the company is still hanging on with a huge amount of cash. This amount might be able to allow them to expand further. Construction section, average pe for the market now is around 20 and for the last financial year, the eps of Gkent is 0.16 cent and i predict that since the last quarter they have a 50% increase in their eps, i suppose that with the profitability and expanding business they will continue to at least earn a 6 sen each quarter and come up with a total of 0.24 sen for this financial year 2014.
Thus the intrinsic value of Gkent is 0.24 x 20 = 2.40. Moreover, historically, gkent price to sales is around 1 and recent quarter its price to sales was 0.63 which is a good amount and if Gkent share price were to reflect its historical price to sales of 1 its share price should appreciate to 2.24 where i take the average amount 2.40 + 2.24 / 2 = 2.32 round of to 2.30.
Thus, i remain a target price of Gkent of 2.30 per share.
In addition to the 5% dividend yield that GKent is giving, this year with good financial performance, Gkent might be awarding their shareholder with a greater amount maybe comprise to a 6% dividend yield. Thus, i have started to accumulate this share and its one of my top pick together with picorp and upa, kmloong, tasco and tdm this year.

This is just my two cent point of view of the company, please analyse further and read up your own and invest prudently. Happy investing!

Progressive impact bhd fundamental

Progressive Impact bhd

Progressive impact corporation berhad is principally an investment holding company and provides management and administrative services to its subsidiaries. The subsidiary companies are principally involved in the provision of environmental training, health, safety and environmental consulting, lab testing, and provide management services and waste management engineering.

Fundamental analysis
Par value = 10 sen
Share outstanding = 658m
Market capitalisation = 178m
Current share price = 0.26
Dividend = 0.0136
Dividend yield = 5.23%
Cash from operating activities = consistent over past 5 years
EPS = consistent and haven't been in losing profit
ROE = 16%
ROI = 22%
ROA = 15%
Profit margin = 20%
NTA = 0.19
P/B ratio = 1.36
Price to sales = 1.8
cash per share = 0.02
Current ratio = 2.3
Beta = 0.4
PE = 10

Fundamental Analysis
Fundamentally, progressive impact has outperform the market and truthfully the fundamental of picorp is great for a share that is 0.26 sen. its profit margin has been always above 20% for the past 5 years. They have also been awarded by government under a 20 years concession for their services made to client, thus we can say that picorp wont have earnings issue in that sense that they wont ran into negative earnings. As you can see that government shares never fail to disappoint you, for instance, myeg, cypark, prestariang datasonic and bimb. Last 2 to 3 years if someone were to tell you to buy this few share especially myeg and prestariang and cypark, will you buy? Probably for prestariang as they have being awarded quite a number of government concession. How about cypark? Most investors will feel that where is the value of this ICT company? and these company debt are so high. You might not be interested. I once bought presbhd but sold it off after getting abit of profit as i was just speculating that since they receive quite a number of award, they should be able to perform but never though that its share price could surge to this high. Until today i cant believe the share price is so high and those company pe is way beyond 20 (Totally bullshit). Thus, what i am saying is, if you are in malaysia, government shares might pay off if the company has good fundamental and government are giving them projects.(Now that i have look through, for government shares, if you were to value it, whateva eps the company is multiply with a pe of 20 or 30 which is the true value) - JOKE - only happens in Malaysia.  Picorp is a safe bet as it did not incur much debt or unsecured loan. Moreover, their cash flow over sales is positive which means most of their cash are incur from the sales. Some of the directors have been accumulating their shares since 15 cent and until today at high 0.27 cent which is a 80% capital gain and which the given out 5% of dividend, the directors are now filthy rich and yet they are not disposing any of the shares and more investors are accumulating the share since 20 cent and yet to take any profit.

I wouldn't advise you to buy or sell but this company but it is worth taking a look at. If the this year profit were to go up the share price might break 0.30 and there is when the share price might turn into a huge gain like prestariang and myeg. Lab testing comprises 37% of the picorp revenue and recently it increases 4% compare to previous year and mainly was contributed by the increase of sales from the operation in indonesia. Most likely, this will continue to help them in their increase in revenue segment.

However, this is just my two cent opinion, please further analyse the company and buy at your own risk. Thank you, happy investing.

UPA TP

UPA Corporation Bhd. is principally engaged in investment holding and provision of management services. The Company operates in two segments: manufacturing, which includes manufacturing of paper-based products and plastic products, and machine trading which is engaged in selling, reconditioning and servicing of printing and printing related machines. The Other segment comprises operations related to the holding of properties and trading of plastic products.

Fundamental analysis
Par value = RM1
Share outstanding = 79.58m
Market capitalisation = 109.58m
Current share price = 1.36
Dividend = 0.08 sen
Dividend yield = 5.8%
Payout ratio = 53%
Cash from operating activities = consistent over 5 years
ROE = 9%
ROI   = 9%
ROA = 7%
Profit margin (average for 5 years ) = 14% (2012 result)
NTA = 2.30
Price to sales = 0.80
cash per share = 0.50 sen
Current ratio = 4
Beta = 0.6

Fundamental analysis
Fundamentally, Upa is strong comparatively to other company with the 3rd quarter result accumulative of 12 sen and assuming that the next coming quarter with an increase in 4 sen which result to a 16 sen and with an average pe of 10 the target price of 1.60. Not to mention half of the company share price are comprises with its cash after given out all the dividend they are still holding huge amount of cash. This huge amount of cash can be use to cover all its debt in the company and if not the company can use the cash for expansion of the business. Many investor overlook this company and might not realise its true value of this company. This company has potential to go up to its target price of 1.60 because they are fundamentally strong and businesses wise, they are 50% recession proof as they are manufacturing paper and plastic. During recession, all business or company still need paper for printing and shampoos company need plastic for their packaging. Thus, i will say this company is a safe play with huge potential value. Moreover, they have huge dividend of 5% coming up in few months time and with this increase in this quarter the company might pay out a 6% dividend which is much better than fixed deposit in the banks. recently, there has been some buy banks from the company as the company buy backs the share because the company knew that the shares are undervalue. Crucially, the NTA of the company is 2.30 and however the company now is trading only at 1.36. During market and economy bull, most company are now trading above their NTA but however, UPA is still under consolidating mode and trading way below its NTA. 

Technical analysis
Upa is now heading its uptrend after rebounding its 1.20 support level which is a good buy because i love buying uptrend shares and not downtrend. Its resistence if it can break 1.43 level. 50 day MA just pass through 200 day MA which might signal a buy signal. Bollinger band is heading upwards and once it squish upwards with consolidating prices around 1.30 to 1.40, its a good buy and target price of 1.60 to 1.70. If huge volume it might go upwards more. Macd just cut through signal line which might indicate a buy signal too.
Thus, i strongly recommend investor to accumulate but must be patient as its beta is only 0.6 thus volume might not be as high as other counter or investors are hoping to gain the 6% dividend, i will encourage u guys to park your money here instead of fixed deposit. By the way, please buy at your own risk as this is just my opinion and if the share plunge and u lose around 6 to 8% please cut losses and dont be greedy after getting dividend and the capital gain from increase in share price. Happy investing!!

Maa out of PN 17 TP 0.80 cent

Maa has been long in PN 17 and there are few reasons why i am betting on Maa to find a way to restructure its company and getting out of PN 17.
Recently, Maa group and Zurich insurance company have settled a dispute over the sale of former insurance business where Zurich insurance will be paying 78 million in settlement which increase their cash pile to RM180 million. Maa has dispose most of their business and focusing on rebuilding and recapitalising their takaful insurance to a newer height. Moreover, with their recent cash pile and no borrowings in their book, Maa will also have plenty of room to grow up if they require to acquire new business or to increase their value of maa takuful. Maa has also recently dispose their mutual fund with a consideration cash of 53million which will in turn increase their cash pile even more.
Maa recently has show a 0.07 cent increase in their profit just by having its takaful business and after disposal of their bad business, maa shows and increase in their net asset and became a debt free company. Moving foward, Maa are planning to survive with its takaful business and strive towards bigger capitalisation of their business and continue showing profit growth. Thus, Maa has already dispose all their bad businesses, and has a huge cash pile in their balance sheet, growing revenue, growing operating operations, there is no reason why maa is still in PN 17.

Insurance trend on play

We have seen many ups and down in certain industry. As for last year, i have shown some prediction for the 2012 shares and this year one of the headline will be the insurance industry.

Over the last two years, the local industry saw an increase in the number of foreign insurers acquiring stakes in local insurance companies, such as Japan's Mitsui Sumitomo Insurance in HL Assurance, Zurich Insurance company in MAA.

Thus, in 2013 the domestic and golbal insurers will benefit from the region's organic premium growth potential brought by increasing insurance penetration. Fitch Ratings has a stable outlook rating for Malaysia's life and non-life insurance and takaful segments for the next 12 to 24 months.As you can see recent months saw the share prices of stocks like Alllianz being chased higher, partly on speculation of M&A involvement and partly due to good growth prospect. 

I understand many of you are afraid and pessimistic about the general election that will be on going somewhere march or mid of the year. However i have an old saying advice, if u are running now, keep running and hoard more cash.(waiting for the opportunity) On the other hand, if u are holding quite a number of shares, and you are very confident Barisan national will win the general election, go ahead and keep your shares and once barisan nasional win the election, that's your big ang pao.

However, for the insurance industry player, there will be plenty of opportunity out there for everyone. No matter, market are heading south or north, everyone need insurance, like general insurance, life insurance, health insurance, gap insurance and so on so forth. The reason i opine that this topic will be one of the hottest topic because i believe that Merger and Acquisition of insurance company will continue in the near future. The reason is because small insurance company are trying to strive in order to compete, thus they will have to merge with a bigger company to compete and this is where foreign company like Zurich Insurance and Ace Ina international insurance company (US),etc come to play.

I have no say or neither do i have any information on which company will come into play but however, this is just a prediction and estimation on what will be happening to malaysia insurance company in the next 1 or 2 year.
One of my top pick will be MAA and Syarikat takaful and P & O bhd. I will come back to that later.

Thanks,
VC

Why China will dictate the America?

In the past few years, many pundits have been arguing that china will be taking over the America and renminbi will be trade as international currency around the globe. After analysing some data, true enough that 10 years down the road, if the Americans are still not growing, China might take over the U.S. Why?

First and foremost, comparatively, China Gdp is growing at a much faster pace for the pass few years than the U.S. China debt to GDP is much lower and China reserve is around 3.2 trillion. What about U.S? U.S growth has came to a halt and stagnant after the global financial crisis in 2008. Many parts of the US economy were imploding or had ceased to function. The U.S central bank has been pumping money like there is no tomorrow. But the question that ponders one's m is that where does the money come from? Interestingly, Washington has lose out of cash and had been borrowing money from China.

Secondly, China tax revenue is increasing nearly 30% for the pas few years while the U.S tax revenue is plummeting due to sluggish economy. China has 810 million workers and US has only 160 million workers. Which is a tremendously 5 times more than U.S and the unemployment in China is only 3%. On the other hand, U.S unemployment is at the all time high of 8.6% that is around 14 millions people that is unemployed.

In the case of U.S, gasoline prices have skyrocketed, heating oil futures are escalating, milk and cheese prices are up around 18% and 15% respectively. All this are causing the decline in the dollar's buying power. As a result, IMF, UN are also calling for the end of the dollar's reign as the world reserve currency. For instance, Caterpillar and Macdonald's recently finance their mainland china projects directly via yuan bond offerings instead of the U.S dollars. Besides, Apple computer is even accepting itunes payments in yuan. Therefore, why is U.S claiming the China authority to unpegged the yuan and their claiming the yuan is undervalued which causes the demand for china product to be more attractive. But, the average U,S worker earns 6.5 times more than his or her chinese counterpart. These skyhigh labour costs are cooked into every product in America. Thus, a simple term can make one's understand that why product in America is much more expensive comparatively to China.

However, the only reason i can think of why the U.S is demanding the Yuan to appreciate their value is because by raising the value of the chinese yuan, U.S and china will automatically crush the value of the U.S dollar. So the U.S can repay its otherwise unpayable debts with cheaper value. U.S debt which is standing at 15 Trillion while Europe debt is standing at a high of 5.8 Trillion. U.S debt is 5 times more than the Europe debt. In fact, U.S only hope of avoiding default is to destroy the value of its own currency. In addition, the weaker dollar and stronger chinese yuan, China will be able to buy up even more of U.S debt and protect the massive investment it has already made in America by helping U.S to avoid default.

Malton

Malton Overview

Malton Berhad is an investment holding company which operate in property development, construction and project management segment. Malton is also launching few property development projects.

Projects coming up
1) Ukay Springs, Ampang semi-detached and bungalow houses
2) Sungai long mixed development
3) Sungai Buloh commercial development
4) Nova Saujana serviced apartments
5) V Square at Petaling jaya city center phase 2 (expect to complete in june 2012)
6) Amaya Maluri at Kuala Lumpur ( Expect to be completed by end of 2012)

Fundamental Analysis
MARKET CAP = RM273.86MILLION
SHARE OUTSTANDING = 418.10
PAR VALUE = 1.00
CURRENT SHARE PRICE = 0.65
ROE = 14%
ROI = 11%
PROFIT MARGIN = 15.6%
AVERAGE EARNING GROWTH RATE = 45%
QUICK RATIO = 2.5
CURRENT RATIO = 2.7
DEBT TO EQUITY = 33.1%
CURRENT EV/EBITDA = 5.27
NTA = 1.40
DIVIDEND YIELD = 3%
CASH PER SHARE = 0.76

Comment on fundamental view
Base on fundamental view, i will reckon or recommend investor to buy and hold this share at the price of 0.67. Fundamentally, this company has a strong cash holding and they have increase around 200% to 0.76 cash per share. With this amount of cash position, the company will be able to pay out more dividend or clear some of their debt in bad times. Besides, the company earning have been growing since the past 5 years and i am expecting for the year 2012, the company will remain resilient with the uncertainty around the globe.However, the management remain positive on the earnings of the company as there are few more properties that will be completing this year.

Intrinsic value of Malton
However, for property company, i prefer to take a look at their asset they have and the upcoming projects.
With their NTA o 1.40 its 50% discount base on their share price, therefore, Malton is the only company that are trading way below their NTA. Moreover, their historical PE is around 7. With their earning remain around 20 sen per share, their share price should be 1.40 per share and this is exact the same as their NTA. Therefore, I am predicting a 20% discount and giving my target price for malton a 1.20 per share. Although their earning may be looking down, but for property company, their value is on the property they have and  the upcoming projects inclusive the completion of some projects. On the other hand, It is also estimated that their total GDV of 1185m which is three times more than their enterprise value. After deducting their debt that will be incur for all the projects, it is estimated that their gdv will be around 680m and with a discount rate of 5%, it will come to a 537m base on their GDV. On per share price basis, their share price suppose to be approximately 1.38 per share.


Technical view
Technically, i will recommend investor to accumulate at 0.65 to 0.67. Support will be 0.65 and resistance will be 0.70 follow with a strong resistance of 0.76. Lastly, buy at your own risk and invest wisely! happy investing!

How do i screen stocks?

Many of investors finding difficulties in screening stocks.
Here are some of my method when i start screening for good stocks.

1) Look at the trend that the markets are trending before jumping into any shares. Eg : Decline in rubber prices, we can conclude that rubber glove manufacture will benefit while the rubber plantation companies will be losing out.

2) After looking for trend, start looking for companies that will benefit the most. In other words, start looking for companies that are undervalue or trading below their intrinsic value.

3) After searching for companies by looking at their future prospect, an investors should realize that investors should look at the liquidity of the shares. Preferably, beta with more than 1.20. The purpose of this is that although the shares is trading below their intrinsic value, somehow when there is no liquidity in the shares, there bound to have no volume and the share price will be trading at the same range and investors money will get stuck there.

4) What to look for when there is so many companies. Study the company.

• Is the company conservatively financed? A lack of long term debt is seen as a good indication that a company has a durable competitive advantage. Ideally, long term deb burden less than 4x net earnings.
• Look for business that consistently earn a high rate of return on shareholders' equity. A consistent returns on equity with 15% or higher, provide a good indication that management can profitably employ retained earnings. 
• Look for continuously positive cash flow
• Sustainable growth for the past few years and be sure that their earnings are consistent. 

5) If possible, try to look for fund managers favourite shares. This is because, there will be more liquidity and volume in the shares that make the share price to move up and down in a faster pace.

6) Try not to jump into any shares although you ought to think that the share price is undervalue. Why? Share markets will not rise forever neither will it tumble forever. What i am trying to convey to fellow investors is that don't buy any shares during the peak unless you are a speculator or trader. For value investing, timing is very crucial.

7) Lastly, try learning some basic in technical analysis to time when is the right time to buy the shares after analysing the best shares that caught your mind.

Happy investing!
Daniel

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!!!