BURSA Analysis:-

Excel – http://lcchong.wordpress.com/2014/04/20/bu...is-20-apr-2014/

My View:-

- Market Timing:
– EY%: Buy below 8.27, sell above 11.06
- In my opinion, in FY14, the following risks will outweigh the growth drivers
– Withdrawal of foreign investors in very large scale.
– US QE taper will cause higher volatility in the market. This may cause investors stay out of (or monitor) the equity market.
- Despite risks of higher volatility due to QE taper, The 1Q14 earnings results were, in all, a good start to the year for Bursa. The increased interest by retail investors, in particular, is a positive sign. Local institutions remain a steady presence in the market, buffering stocks from the worst of the effects of selling by foreign investors.
- I remain sanguine on the company’s outlook over the longer term, as a proxy for the country’s growth. Its business model is also fairly resilient. As mentioned above, recurring and other incomes, including interest income, is sufficient to cover some 91% of total operating expenses.
- I may/may not accumulate BURSA in the near term. Let see how it goes.

Latest Financial – Q1 2014 Financial Report (17 Apr 2014) http://www.bursamalaysia.com/market/listed...cements/1595933

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

PBBANK Analysis:-

http://lcchong.wordpress.com/2014/04/22/pb...is-22-apr-2014/

My View:-

- Fair values/Market Timing:
– 5Y DCF: 18.28 – 21.35 (MOS: -10% – 5%)
– EY%: Buy below 17.76, sell above 22.36 (MOS: 9.64%)
– MOS to be used is 23.47%
– By looking at the fair values, I think PBBANK is now fully valued (or a bit overvalued). Even if the models proposed fair value above 20.00, but the MOS is not higher than 23%.
- PBBANK has been climbing up since Jul 2012 with couple of small corrections. In my opinion, PBBANK may starts to range somewhere around 20.00.
- In FY14-FY15, intense competition amongst financial institutions for market share as well as the need for higher capital conservation due to the requirements of Basel III capital framework, will continue to put pressure on pricing of products and return on equity. PBBANK growth will be slowing down, and this is proven from the declining ROE in the past 5 years.
- I will continue to hold and monitor PBBANK, but will not accumulate PBBANK at this moment. After holding PBBANK for almost 15 years, the dividend gains covered almost 95% of my cost. I will just let it float with so called "cost free".

Latest Financial – Q1 2014 Financial Report (21 Apr 2014) http://www.bursamalaysia.com/market/listed...cements/1598265

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

TENAGA Analysis:-

http://lcchong.wordpress.com/2014/04/27/te...is-27-apr-2014/

My View:-

- Fair value:
– Absolute EY%: Buy below 10.61, sell above 13.97 (MOS: 14.52%)
- The new tariff rates, which took effect from 1st Jan 14, are expected to boost bottom-line by RM1.17b per annum. While a review on tariff structure is expected every six months, the tariff is expected to stay unchanged at least till Dec 2014 given the recent wave of subsidies cut, which had resulted in rising living cost and inflationary pressure. Moving forward, when a new set of fuel cost pass-through mechanism is in place, TENAGA’s earnings are expected to stabilise. Its financial performance would then depend mainly on its operational efficiency.
– The tariff review in Jun could also bring about more earnings visibility, as it could signal that the government will continue to allow Tenaga to review its tariff in order to facilitate the pass-through of costs.
- Tenaga declared an interim single-tier dividend of 10 sen per share, representing 27% of its free cashflow. Dividends were in line as we expect dividends to be stronger moving forward given that it is committed to paying 40-60% of its annual free cashflow.
- In my opinion, the current price already factored in the growth drivers and risks.
- I will continue to hold TENAGA, and may accumulate TENAGA in the future.

Latest Financial – Q2 2014 Financial Report (24 Apr 2014) http://www.bursamalaysia.com/market/listed...cements/1602769

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

DIGI Analysis:-

http://lcchong.wordpress.com/2014/04/27/di...is-27-apr-2014/

My View:-

- Fair values:
– 5Y DCF: 4.97 – 5.68 (MOS: -8% – 6%)
– EY%: Buy below 5.08, sell above 5.62
– Both models indicate that DIGI is either overvalued or fully valued.
- The outperformance of 4Q13 was mainly due to lower-than-expected depreciation and taxes. I am not sure whether this is something recurring for long term.
- With Internet subscribers increased by 14.5% and blended ARPU increased by a modest 2.1% to RM48, I am quite positive with DIGI future prospects.
- DiGi.Com attributed the better results to higher usage of mobile Internet services with Internet customers growing to four million from three million a year ago, contributing RM374 million to its revenue in FY14Q1.
- However, I believe that DIGI is currently fully (or nearly) valued.
- The last time I accumulated DIGI was in Jul 2013 at 4.66. Thus, I won’t accumulate DIGI for the time being.

Latest Financial – Q1 2014 Financial Report (25 Apr 2014) http://www.bursamalaysia.com/market/listed...cements/1604049

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

PANTECH Analysis:-

http://lcchong.wordpress.com/2014/04/27/pa...is-27-apr-2014/

My View:-

- Fair value/Market Timing
– EY%: Buy below 0.82, sell above 1.30
- The next two quarters could be quiet for the trading division given that the fabrication and downstream oil and gas projects is likely to only pick up from 2HCY14 onwards which coincides with PANTECH’s 2Q15 earnings.
- The outcome for the US anti-dumping suit that affects PANTECH’s stainless steel division 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.
- For more risks/challenges and growth drivers, please read http://lcchong.files.wordpress.com/2014/03...ly-22022014.pdf
- For the time being, I am not so keen to invest in PANTECH.

Latest Financial – Q4 2014 Financial Report (24 Apr 2014) http://www.bursamalaysia.com/market/listed...cements/1602845

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

Hi there! It looks like u r a stock enthusiast who has plenty of experience in d stock market.

I wud like 2 consult u d following:

1. When selecting stocks, which of these is of utmost importance if I wan 2 invest 4 d long-term? Is it dividend yield, net tangible assets backing per share or price earnings ratio?

2. How can we differentiate d gud stocks frm d bad? e.g. If an individual bought Dlady in 2009, which was around RM12/ share, he or she wud hav profited greatly as d price of Dutchlady now is around RM48. On the other hand, if an individual bought Shell in 2009, he or she wudnt benefited much as d price hovers around RM6-RM10.

3. Warren Buffett practises value-based investing, and he studies annual reports. My question is, wat information frm annual reports r supposed to be analysed? I tried analysing several ann. reps. but I still cant understand it, as its all figures & numbers, names of people running d company, etc...

4. Shud youngsters in their 20s invest in stocks which offer high dividends or shares dat can grow in many yrs time to get capital gain?

I'm juz a student, so naturally I'm confused about d stockmarket. I know d importance of financial freedom and wud like 2 gain more knowledge bout stok picking.

I am only able to answer 4.
It depends on your risk appetite and how much you have got to lose. Do you know which shares can gain a lot in many years? If not, just go for a strong fundamental company with dividend.

If you are looking for a place to keep your money with higher returns.
Dividend stock might just be a better deal than saving your money in the bank.

Untitled2 answered your fourth question.

As for the rest, I may have to write a book to answer.

Indeed. Here goes my plan towards financial stability. (Roughly) I plan 2 put money in FD first. (to create a reserves fund) Then, I'll try investing in shares. After dat, I'll go for real estate. Recently, I read a newspaper articlce dat putting money into d stockmarket will enable u to gain in d long term, provided I invest correctly, and d profit exceeds FD. I oso understand dat putting lots of cash in d bank will be killed slowly by inflation.

Oh. Definitely not d answer I was searching for nor hoped for... Anyway, thx for replying~ Yes, wif d knowledge and experience, u could consider writing a book for newbies like me. Probably it'll bcome a bestseller~

If you invest in the right stock, you will be rewarded. In fact, the best way to make more money, is by spending wisely. I can say that many people who invest and reap some return from it, will eventually spend on things they don't really need.

I started investing pretty early age of 24 too. I was so excited with the stock market thinking that making money though it would be easy. I did a test run with simulated stock market based on actual live performance.

The result was pretty good. I spend 1 hour before the market open, doing some quick research on possibly top performer of the day and set a plan on what to buy n sell within a day (Day Trading) then I trade on the market till the market close.

It was pretty good at first but after 6month of doing that, I notice that you are just placing bets, you may make RM1,4k per day and the next day, RM200, another day RM2,000 then after that, -RM2000. Its all plus plus and minus minus. In the end, you probably end up around the same figure as you invested, but you spend the whole day trading. I would have earn RM5k on first month with 8k Capital, but you can easily lose that amount the next month.. I was lucky I stop after 6month and reap RM2,000 earnings from it. I then know if I don't stop, either I end up losing everything, or breakeven, or maybe if "lucky" you can make much more ? (Even if you earn much more, you might possibly lose everything one day)
Btw, it wasn't easy. I spent 4 hours at night looking through a few good companies and active counters of the day. Study the technical chart and historical trends (Day trade is based more on technical analysis to me) 1-2 hour before trading opens to see how much queue on a stock, n check if theres any last minute annoucement.

Then I converted to Middle to Long term Investor. On counters that will see growth in 6 month, 1 year, or 3-5years in the future. The growth is there, but I believe the KLSE isn't as volatile as many other exchanges. It has been improving these years which is good. Stocks that are good are starting to move. I start to make 10-30% a year on more conservative stock trading. ( I am keeping to this strategy, less stress everyday and that's the wise way of investing.)

The lesson i learn is,
1. I wont take the money that I gained from stock trading, out of my trading account. Because it will be reinvested and your money will grow. If you take it out, you will think of what to buy with the RM300 you make, leaving a net of 0% increase in your pocket.

2. Rumour and speculation is dangerous. If i tell you this lousy stock will jump tomorrow, its a 50-50 chance. Invest with some risk management.

3. Policies & the Economy changes every now and then, you will always update yourself everyday. The Business section of newspaper is a good source but a bit slow. I am heavily relying on TheEdgeMalaysia on mobile phone. Getting the latest update might give you first hand information on what is the good stock of tomorrow. (E.G if MRT Project, Iskandar Project, High Speed Rail, Oil Exploration, all these news have impact on certain sector. It will move construction sector and other supporting industry, you will be expecting additional revenue in these company)

Until today, I can never call myself a investing guru, I know am still lacking a lot of investment knowledge. As long as i stick to my principle and try my best to resist temptation, you will likely to earn more money here than FD or any Bank plans.

I still have a lot of stories but aiya, cut things short. lolz
By the way, I never gambled in any casino not even for leisure. Not even Chinese New Year.
Because I believe the only way to win money through gambling, is to open a casino, and not placing bets.

This post has been edited by Untitled2: Apr 29 2014, 04:11 PM

like!

AHEALTH Analysis:-

http://lcchong.wordpress.com/2014/04/30/ah...is-30-apr-2014/

My View:-

- Fair Value:
– 5Y DCF: 6.87 – 6.70 (MOS: 23% – 33%)
– EY%: 3.35 – 4.02 (MOS: -12%)
- In 2013, RM 30 million was spent to acquire and retrofit a 50,000 square feet industrial building to support growing business volumes at Apex Pharma Marketing Pte Ltd in Singapore.
– Thus, FY13 FCF is lower if compare to previous years.
- As a pharmaceutical company, AHEALTH is a defensive company. However, what I dislike is balance float of shares in market is around 15% only. Liquidity of this stock is low.
- I may buy some shares of AHEALTH in the future. I will continue to monitor it.

Latest Financial – Annual Report 2013 (28 Apr 2014) http://www.bursamalaysia.com/market/listed...cements/1605913

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

In the updated AHEALTH analysis, I have added few more worksheets:

1. Quality Score – This table is not meant to eliminate a counter for the time being. For me, this scoring system acts as an alert system. For instance, if quality score of FY13 declined and lower than previous years, this will trigger an alert, and help me to identify the root cause.



2. Ownership Summary – This is self descriptive.

3. I added few comparison charts as requested by my wife.

http://lcchong.wordpress.com/2014/04/30/qu...parison-charts/

Nice chart you have there

Good for you! Hope u succeed in investing in stocks!
Thx for sharing~

i learn a lesson

In addition to Quality Score, Ownership Summary and few comparison charts, I have added two more worksheets. You can see the latest changes by clicking here.

1. Table of Content – This is long waiting feature requested by few readers.



2. Stewardship analysis – 10 questions to evaluate company management or stewardship:

Have most investments and acquisitions been in line with the company’s core competencies, or does management like to make diversifying acquisitions? All else equal, we prefer companies to stick with what they know best and strengthen their core businesses rather than engage in conglomerate building. Good stewards of shareholder capital might also have a record of selling non-core businesses at good to fair prices.

Have investments and acquisitions been moat-widening? In other words, have returns on invested capital or profit margins improved as a result of management’s decisions? A strong sign of good stewardship is that management’s capital-allocation decisions improved the company’s competitive position and consequently increased shareholder value.


Does the company have a record of taking large impairment charges? Poor stewards of shareholder capital frequently need to write down the value of previous acquisitions and probably need to improve their M&A decision-making processes. Exemplary stewards consistently pay good to fair prices for their acquisitions.

Is management’s investment focus on building long-term shareholder value, or has it engaged in a growth-for-growth’s-sake strategy? Investment decisions that provide both short- and long-term benefits are ideal, but exemplary stewards of shareholder capital should be willing to sacrifice short-term results to create long-term shareholder value. Poor stewards, on the other hand, have a myopic focus on short-term results and have less concern for long-term consequences.

Does the firm have a history of cost overruns or expensive operational missteps? Our methodology doesn’t punish companies for a string of bad luck. Instead, we’re more interested in how management’s actions and decision-making process may have played a role in value-destructive events. Poor stewards of shareholder capital will have a habit of not correcting their mistakes, whereas exemplary stewards consistently avoid repetitive and costly mistakes and quickly fix those that they do make.

Does the firm have the appropriate dividend and buyback policy? The common traits of a good dividend policy are consistency, affordability and transparency. All else equal, firms in cyclical and capital-intensive businesses and those with significant value-enhancing investment opportunities should pay out a smaller percentage of earnings compared with firms in defensive industries or those with fewer reinvestment opportunities. As any successful investor would do, exemplary stewards look to opportunistically repurchase shares when the stock is trading at a material discount to fair value. We don’t like to see executives using buybacks simply as a means of increasing earnings per share or offsetting dilution related to employee stock options with little regard for the price paid.

Does the firm have an appropriate amount of debt given the cyclicality and capital intensity of its business? We look unfavourably on firms with leverage ratios that are inappropriate for their lines of business. Firms that operate in highly cyclical, capital-intensive industries shouldn’t carry a large debt load, as this will serve to exaggerate the inherent volatility in the business. Similarly, firms in mature industries that carry no debt and have few reinvestment needs may not be maximising shareholder value, as issuing debt could lower the firm’s cost of capital.

Does the ownership structure serve as a benefit or detriment to minority shareholders? Dual voting structures with unequal voting rights, large family or insider ownership, and large government ownership positions can have a meaningful impact on executive capital-allocation decisions. The big question to ask is, "Are the major shareholders’ interests aligned with those of minority shareholders?" and if they are not, "Has the arrangement led to value-destructive decisions?"

Has the board of directors established an appropriate incentive structure that rewards value creation? Exemplary stewards will establish annual and long-term bonus metrics that align management’s financial interests with those of long-term shareholders and are appropriate for the line of business. Poor stewards, on the other hand, may not disclose metrics for evaluating performance, have "moving goalposts" when rewarding management, or base incentives on metrics that reward growth without regard to value creation.

Do you think management is forthcoming about strategic missteps and challenges? Exemplary stewards will be communicative with shareholders in both good and bad periods, while poor stewards will look to sweep bad news under the rug or make it more difficult for shareholders to evaluate capital-allocation decisions by rearranging reporting segments or adjusting accounting assumptions.

- See more at: http://www.morningstar.co.uk/uk/news/12362...h.HaRa4CYo.dpuf

Information overload~ Hav 2 study it slowly...

KMLOONG Analysis:-

http://lcchong.wordpress.com/2014/05/06/km...sis-6-may-2014/

My View:-

- Fair values:
– 5-Y DCF – 3.38 – 3.78 (MOS: 15% – 24%)
– EY% – Buy below 2.70, sell above 3.62
– In my opinion, KMLOONG is just slightly above undervalued level.
- 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. Even in the ugly scenario, it still worth 2.69.
- 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.