NHFATT Analysis:-

Excel – http://1drv.ms/1oSY1cl

My View:-

- Market Timing/Fair Value:
– EY%: Buy below 1.78, sell above 2.23
– Absolute PE: 2.85 (MOS: 1.9%)
- In the last 5 years, its top and bottom lines have remained flat. Moving forward, NHFATT’s future business growth will depend on how well its overseas exports perform (especially Indonesia), and its success in defending its home turf from imports. NHFATT is just beginning to increase its presence in Indonesia and China. Indonesia’s car volume is almost twice the size of Malaysia’s and is still growing. Despite this, it could take some time before the benefits are materialised and even then there are still uncertainties on whether it would be successful.
- Its share price has doubled in 5 years but its share price is still at a 33% discount to its book value. However, because of flat earnings, constant dividends paid out, and the increase in share price from 2009 to 2013, its dividend yield based on the average prices has come down from 7.4% to 4.5%.
- Besides, its CROIC and ROIC were declining in the past 7 years.
- I will keep this counter in the Discontinued List.

Latest Financial – Q4 2013 Financial Report (26 Feb 2014) http://www.bursamalaysia.com/market/listed...cements/1548869

At the time of writing, I did not own shares of NHFATT.

CARLSBG Analysis:-

http://lcchong.wordpress.com/2014/03/26/ca...is-26-mar-2014/

My View:-

- Fair values/Market Timing:
– 10-Y DCF: 10.09 – 12.36
– Buy under: 7.72 – 9.45 (MOS: -25% -> -2%)
– EY%: Buy below 10.85, sell above 13.21 (MOS: -4.99% -> 1.34%)
- I think the fair value probably range from 10.00 to 12.30. At the current price (12.88 as of 25 Mar 2014), CARLSBG is already fully valued or over valued. Besides, MOS derived from all models are not up to my benchmark.
- The dividend return spread between GAB and CARLSBG vs the 10-year MGS yield has narrowed to only 30-40bpts vs the historical 10-year average of 280-290bpts. (Source: RHB)
- Going forward, I remain conservative and skeptical above volume growth in the brewery sector as some reports show that the industry is saturated, coupled with several other external factors such as rising fuel costs, inflation as well as potential exposure to excise duty hike in the near future. However, earnings should be sustainable at current levels.
- 2014 will be a challenging year for brewers due to competition from contrabrand beers and as consumer spending dwindles. Fortunately, this will be partially alleviated by the Visit Malaysia Year 2014 event.
- In my opinion, there is still some downside risk even though the share prices of both stocks have fallen sharply from last year’s peaks (down 30-45%). 10.24 – 11.50 is a good support zone, from technical aspect. Chances of CARLSBG dropping below this zone is low.
- CARLSBG is determined to move away from a single star beer product company to become a star beer portfolio company. Over the past 10 years, CARLSBG has been trying to launch a couple of new products into the market. To date, however, its Carlsberg Green Label is still viewed as the group’s only crown jewel. As such, a reshuffle has been undertaken in its top management team over the last 2 to 3 years with the aim of bringing good changes to the group. Besides, it has also appointed a few brand managers to oversee the brand building efforts across a few main products, whereby premium brands are expected to form a larger proportion of its new product portfolio. While efforts are being made to build market share for its premium products, the Carlsberg Green Label will remain as the bread and butter of the group. Whether or not CARLSBG will be able to return to its former glory, it is still too early to tell, but the good efforts warrant CARLSBG a buy/hold call for the long term. There are downside risks if things do not turn out as expected.
- I may accumulate CARLSBG if it dropped below 11.00.

Latest Financial – Annual Report 2013 (26 Mar 2014) http://www.bursamalaysia.com/market/listed...cements/1575857

At the time of writing, I owned shares of CARLSBG.

PANTECH Analysis:-

http://lcchong.wordpress.com/2014/03/27/pa...is-27-mar-2014/

My View:-

- Fair value/Market Timing
- EY%: Buy below 0.64, sell above 1.18
- As of FY14 Q3, PANTECH recorded cumulative revenue 447,178 which is 30% lower than FY13 revenue 635,663. I think the next two quarters could be quiet for the trading division given that the fabrication and downstream oil and gas projects in Malaysia are still sluggish. PANTECH is still contesting the US anti-dumping suit in its stainless steel division. A resolution is expected by July-14. As mentioned previously, PANTECH’s alternative strategy is to shift production to higher-end stainless steel fittings production (which is not subject to such anti-dumping laws and have higher margins than stainless steel pipes); and is actively exploring other potential export markets such as South America and Europe.
- PANTECH envisages better fortune from 2Q15 onwards, which would coincide with our view that fabrication contracts will likely only materialize from 2QCY14 onwards.
- For more risks/challenges and growth drivers, please read http://lcchong.files.wordpress.com/2014/03...ly-22022014.pdf
- I will put PANTECH in the Reserved List for the time being.

Latest Financial – Q3 2014 Financial Report (22 Jan 2014) http://www.bursamalaysia.com/market/listed...cements/1522453

At the time of writing, I did not own shares of PANTECH.

HAIO Analysis:-

http://lcchong.wordpress.com/2014/03/27/ha...is-27-mar-2014/

My View:-

- Fair values:
– 5-Y DCF: 3.04 (Base) – 3.43 (Good).
– Buy Under: 2.51 – 2.83 (MOS: 18% – 28%)
– EY%: Buy below 2.40, sell above 3.18
– I think that HAIO is currently slightly undervalued.
- Due to decline in the purchasing power of consumers and margins erosion due to the weakening of Ringgit against USD, I think HAIO FY14 performance will be mediocre. However, because healthcare product is quite essential nowadays, the impact will be short term only. With its expansion to Indonesian market, HAIO will have greater potential, rather than just focus on Malaysia market.
– While I am positive on HAIO’s longer-term prospects as its MLM division is intensifying its product strategy by focusing on more "small ticket" items, which are affordable, the rise in operating cost and the depreciation of Ringgit would continue to affect their margins, going forward.
- I will continue to hold HAIO, and accumulate HAIO whenever possible.

Latest Financial – Q3 2014 Financial Report (26 Mar 2014) http://www.bursamalaysia.com/market/listed...cements/1576949

At the time of writing, I owned shares of HAIO.

KMLOONG Analysis:-

http://lcchong.wordpress.com/2014/03/28/km...is-28-mar-2014/

My View:-

- Fair values:
– 5-Y DCF – 3.47 – 3.87
– Buy under: 2.84 – 3.16 (MOS: 21% – 29%)
– EY% – Buy below 2.47, sell above 3.31
– In my opinion, 3.4 – 3.8 is fair value range for KMLOONG. KMLOONG is currently undervalued.
- The CPO price moves in a cyclical manner. In a worst case scenario, KMLOONG, a net cash company with a low cost of production and an experienced management team would be able to withstand the turbulence and even take up expansion opportunities.
- Going forward, I expect KMLOONG to perform better in FY15 as it plans to improve production, while benefiting from favourable palm oil prices.
- Recently, I have purchased KMLOONG at 2.8, and then 2.74.

Latest Financial – Q4 2014 Financial Report (27 Mar 2013) http://www.bursamalaysia.com/market/listed...cements/1577605

At the time of writing, I owned shares of KMLOONG.

As you mention before, the resistance is between 2.8 and 2.6 from 2008. Now the price is at resistance range, why don't you purchase it at lower price later?

You are right. I did consider this.

After considering potential CPO bullish and also strong bullish breakout (with high volume) on 7 Mar, I think it should be OK to buy KMLOONG.

PADINI Analysis:-

http://lcchong.wordpress.com/2014/03/28/pa...is-28-mar-2014/

My View:-

- Fair value/Marketing Timing
– 5Y DCF: 2.98 – 3.38
– Buy under: 2.51 – 2.85 (MOS: 37% – 45%)
– EY%: Buy under 2.00, sell above 2.80
- Looks like PADINI is currently undervalued and quite attrative.
- New 3 Brands Outlet stores and a Padini Concept store were opened in the current financial year. In the coming months, there are plans to add another 3 Brands Outlet stores and another 2 Padini Concept stores which would add upwards of 90k sq ft of retail floor space to >800k sq ft. In addition to the new store openings, we are positive on the changes made to merchandise development and pricing strategies, which would allow PADINI to capitalise on the Visit Malaysia Year 2014.
– Five out of the nine new stores in FY14 are located in Miri, Seremban and Langkawi. They will provide the group with new revenue stream from the less competitive markets in the second tier cities.
- Based on the growth analysis, PADINI has great potential to have higher net profit and owner earnings in FY14.
- I will consider to buy PADINI. May be my wife will buy it.

Latest Financial – Q2 2014 Financial Report (26 Feb 2014) http://www.bursamalaysia.com/market/listed...cements/1549673

At the time of writing, I did not own shares of PADINI.

Do you know the share price has dropped from 2.33 on Aug 2012 till now with rm2 resistance? So it may have some correction later based on technical analysis. Just my opinion.

This post has been edited by 500Kmission: Mar 28 2014, 11:48 PM

ARMADA Analysis:-

http://lcchong.wordpress.com/2014/03/30/ar...is-30-mar-2014/

My View:-

- Fair value:
– EY%: 4.15 – 6.21
- With Current orderbook is approximately RM13.2b with optional contract extensions of RM8.9b.
- By looking at price chart, 4.08 – 4.16 is a very strong resistance zone. The positives are:
– 3.5 – 3.7 is a very strong support zone.
– Spotted 4 higher lows.
- I revisited ARMADA on 30 Mar and decided to move it to the Discontinued List. Reasons:
– Despite improving revenue and net profit, CROIC, ROIC, Gross Profit Margin and Net Profit Margin are declining in the past 4 years.
– This company is also highly leveraged.

Latest Financial – Q4 2013 Financial Report (20 Feb 2013) http://www.bursamalaysia.com/market/listed...cements/1543993

At the time of writing, I did not own shares of ARMADA.

UNIMECH Analysis:-

http://lcchong.wordpress.com/2014/04/02/un...sis-2-apr-2014/

My View:-

- Market Timing
– EY%: Buy under 1.46, sell above 1.89
- Analyst foresees better outlook for Unimech in FY14-FY15. We expect net profit to register a 3-year CAGR growth of 12.0% in FY15 on the back of 10.4% growth in revenue. We forecast net profit reaching RM26.20mn and RM28.6mn in FY14-FY15 while revenue will be RM263.9mn and RM295.0mn, respectively. Revenue growth is expected to be driven by generally higher demand for VFI and Pumps products in the domestic and overseas market. The VFI and Pumps division is expected to grow by 14% and 7%, respectively in FY14. On top of that the expansion of distribution network and warehouse to overseas market, especially Indonesia and Thailand, will also help the group better serve its existing customers and gains new customers.
- For the time being, I think UNIMECH is currently overvalued.
- I will compare UNIMECH with PANTECH very soon.

Latest Financial – Q4 2013 Financial Report (27 Feb 2013) http://www.bursamalaysia.com/market/listed...cements/1552485

At the time of writing, I did not own shares of UNIMECH.

JTINTER Analysis:-

http://lcchong.wordpress.com/2014/04/02/jt...sis-2-apr-2014/

My View:-

- Market Timing
– EY%: Buy below 6.12, sell above 7.18
– 5Y DCF: 6.43 – 7.38; 5Y RDCF: 1% growth rate
– Recently, JTINTER dropped from 6.6 to 6.25 which is quite close to 6.18 (EY%)
– Based on analysts’ consensus, JTINTER’s net cash may hit MYR1/share in FY15. JTINTER has, in the past, paid dividends of 15 to 75sen/share when its net cash reached MYR1/share. Its latest net cash stood at 43.8sen/share at end- Dec 2013.
- Analysts expect industry sales volume to contract by 6% in 2014 and 2015 respectively following the recent 14% hike in selling prices. Besides, JTINTER management expects operating environment to remain extremely challenging, primarily due to the hike in excise duty and cigarette prices. In addition, consumption is expected to be impacted by continued inflationary pressures and weak consumer sentiment.
- JTINTER is one of the most defensive stocks in my equity holdings.
- JTINTER had received a conditional takeover offer from JT International Holding BV (JTIH), a wholly-owned subsidiary of Japan Tobacco Inc, to acquire the remaining 39.6% stake or 103.6m shares it does not already own in JTI at RM7.80/share, a 20% premium to its pre-suspension price of RM6.50. JTIH currently holds 60.4% of the share capital of JTI. In making the offer, it does not intend to maintain the listing status of JTI. Other major shareholders of JTI include the Employees Provident Fund (8.13%) and Kumpulan Wang Persaraan (6.84%). (Apr 2014)
– JTI’s business is still very cash generative and investors could undoubtedly hold out for higher dividends – the company tends to pay out special dividends whenever its cash/share hits MYR1. Nevertheless, this is expected to happen only in FY16. Current yields, meanwhile, are about fair at 3.4%.
– Based on my valuation, this is a great deal. I think the takeover offer is a fantastic opportunity to exit this sunset industry.

Latest Financial – Annual Report 2013 (2 Apr 2014) http://www.bursamalaysia.com/market/listed...cements/1583333

At the time of writing, I owned shares of JTINTER.

ALLIANZ Analysis:-

http://lcchong.wordpress.com/2014/04/09/al...sis-9-apr-2014/

My View:-

- Fair Value/Market Timing
– 5Y DCF: 23.11 – 26.33 (MOS: 54% – 60%)
– EY% (FY15): Buy under 8.45, sell above 14.00 (MOS: 24.26%)
- I think MH370 incident will give negative impact to ALLIANZ in short term. So far, ALLIANZ only identified 5 of the passengers are their client.
– For some people, this is a risk, but I view this as an good opportunity.
- ALLIANZ’s dividend payout is extremely low, so never expect good dividend from them. Reasons:
– High capital or surplus retained due to nature of industry
– Stringent regulatory requirement to protect policyholders’ interest
– Managing stringent capital buffer to withstand adverse or unfavorable experience
- Unlike LPI (general insurance and financing on leases), ALLIANZ is heavily dependence on single segment: motor insurance; and also dependence on agent for life insurance. ALLIANZ requires high capital to grow distribution capabilities, and fund new business growth.
- Balance float of outstanding shares is very low: 4.20%.
- My wife and I are considering to buy ALLIANZ with our joint account, while my wife already owned shares of LPI.
- References:
– https://www.allianz.com.my/web/lna/10074/10064/2014#
– http://klse.i3investor.com/blogs/rhb/47700.jsp

Latest Financial – Q4 2013 Financial Report (28 Feb 2013) http://www.bursamalaysia.com/market/listed...cements/1553281

At the time of writing, I did not own shares of ALLIANZ.

But I know several dividend-focused unit trust funds that hold Allianz...perhaps they foresee it to be a future cash cow stock?

That may takes some times, but in overall, ALLIANZ's outlook is good

ya, I also noticed that.. So buy?! haha...

U already got Hwang funds...so stay away, later u over-exposed to Allianz

I think Hwang dump the stock already la, no more in their 10 ten stocks list...

Minimum dividend yield I require from my stocks is 3%, if the stock got decent growth potential.

For stagnant stocks I'd require at least 5% yield.

So, Allianz doesn't fit in.

ALLIANZ is mainly for capital gain. just ignore dividend....