VITROX Analysis:-

http://lcchong.wordpress.com/2014/08/27/vi...is-27-aug-2014/

My View:-

- Fair value:
– 5Y DCF: 2.10 – 2.39 (MOS: -28% -> -13%)
– Absolute EY%:
– Trailing:
– FY13 (EPS: 0.104) – Buy below 1.15, fair value 1.37 (MOS: -97.2%)
– R4Q (EPS: 0.177) – Buy below 1.95, fair value 2.33 (MOS: -16%)
– Forward:
– FY14 (EPS: 0.18) – Buy below 1.98, fair value 2.36 (MOS: -14.2%)
– FY15 (EPS: 0.183) – Buy below 2.02, fair value 2.41 (MOS: -12%)
– EPS applied to reach the current stock price (2.7): 0.205
– At 2.7, the market assumed EPS 0.205. 0.197 is achievable based on the current outstanding booking, but this also means the current price already factored in its superb trajectory growth.
– VITROX is over valued. The current price already factored in the future earnings.
- I believe that FY14 will be a growth year for VITROX because of the recovery of global semiconductor industry and improving US, Japan and European markets.
- I still sees a lot of growth in Vitrox – the catalysts from Agilent’s exit in 2016 and competitive products should help it compete to get individual orders. But with the trend moving towards a single supplier, which provides the entire array of testing equipment that seamlessly talk to each other, Vitrox is currently being left behind. A substantial change in its internal R&D activity to innovate or potential acquisitions with talents or acquisitions with new product offerings to complement its existing portfolio, are the only ways for Vitrox to grow in the longer term.
- I will continue to hold VITROX, and will accumulate VITROX if there is correction.

Latest Financial – Q2 2014 Financial Report (21 Aug 2014) http://www.bursamalaysia.com/market/listed...cements/1716629

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

WILLOW Analysis:-

http://lcchong.wordpress.com/2014/08/27/wi...is-27-aug-2014/

My View:-

- Fair values:
– 5-Y DCF:
– 2.03 – 2.31 (MOS: 57% – 62%)
– Absolute EY%:
– Trailing:
– FY13 (EPS: 0.08) – Buy below 0.65, fair value 0.73 (MOS: -19.8%)
– R4Q (EPS: 0.081) – Buy below 0.67, fair value 0.74 (MOS: -17.3%)
– Forward:
– FY14 (EPS: 0.091) – Buy below 0.75, fair value 0.83 (MOS: -4.5%)
– FY15 (EPS: 0.104) – Buy below 0.85, fair value 0.95 (MOS: 8.3%)
– EPS applied to reach the current stock price (0.87): 0.095
- I think the current price already factored in the future earnings. On the other hand, looking at its cash flow growth, WILLOW is still undervalued in long term (5 years).
- I will continue to study this stock.

Latest Financial – Q2 2014 Financial Report (20 Aug 2014) http://www.bursamalaysia.com/market/listed...cements/1715229

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

CARLSBG Analysis:-

http://lcchong.wordpress.com/2014/08/27/ca...is-27-aug-2014/

My View:-

- Fair values/Market Timing:
– 5-Y DCF:
– 12.80 – 14.71 (MOS:4% – 17%)
– Absolute EY%:
– Trailing:
– FY13 (EPS: 0.602) – Buy below 10.16, fair value 12.5 (MOS: 2.1%)
– R4Q (EPS: 0.637) – Buy below 10.76, fair value 13.24 (MOS: 7.6%)
– Forward:
– FY14 (EPS: 0.626) – Buy below 10.58, fair value 13.02 (MOS: 6%)
– FY15 (EPS: 0.659) – Buy below 11.13, fair value 13.7 (MOS: 10.6%)
– EPS applied to reach the current stock price (12.24): 0.589
- 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.
- At the current price (12.24), CARLSBG is slightly under valued. I am considering to accumulate CARLSBG because its DY% maintains at 5%.

Latest Financial – Q2 2014 Financial Report (26 Aug 2014) http://www.bursamalaysia.com/market/listed...cements/1720665

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

EFORCE Analysis:-

https://lcchong.wordpress.com/2014/08/27/ef...is-27-aug-2014/

My View:-

- Fair values:
– 5-Y DCF:
– 1.14 – 1.30 (MOS: 40% – 47%)
– EFORCE is a rich cash flow company. In long term, EFORCE is very undervalued.
– Absolute EY%:
– Trailing:
– FY13 (EPS: 0.034) – Buy below 0.38, fair value 0.45 (MOS: -53%)
– R4Q (EPS: 0.035) – Buy below 0.39, fair value 0.46 (MOS: -48.6%)
– Forward:
– FY14 (EPS: 0.037) – Buy below 0.41, fair value 0.49 (MOS: -41.1%)
– FY15 (EPS: 0.04) – Buy below 0.45, fair value 0.52 (MOS: -30.6%)
– EPS applied to reach the current stock price (0.685): 0.052
– In short term, EFORCE is probably undervalued.
- EFORCE has been declining from 0.86 to 0.63 since 4 Jul 2014.
- This is another good stock I consider to buy, but I am just not sure about its growth drivers because Malaysia market in stock trading is not as big as US/Europe.

Latest Financial – Q2 2014 Financial Report (26 Aug 2014) http://www.bursamalaysia.com/market/listed...cements/1721493

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

AXIATA Analysis:-

http://lcchong.wordpress.com/2014/08/28/ax...is-28-aug-2014/

PADINI Analysis:-

http://lcchong.wordpress.com/2014/08/28/pa...is-28-aug-2014/

OCK Analysis:-

https://lcchong.wordpress.com/2014/08/29/oc...is-29-aug-2014/

MAYBANK Analysis:-

http://lcchong.wordpress.com/2014/08/29/ma...is-29-aug-2014/

GENTING Analysis:-

https://lcchong.wordpress.com/2014/08/30/ge...is-30-aug-2014/

ALLIANZ Analysis:-

https://lcchong.wordpress.com/2014/08/31/al...is-31-aug-2014/

SUNWAY Analysis:-

https://lcchong.wordpress.com/2014/08/30/su...is-30-aug-2014/

WELLCAL Analysis:-

https://lcchong.wordpress.com/2014/09/01/we...sis-1-sep-2014/

New Changes in Excel – Discount Rate & Fair Value Uncertainty - http://lcchong.wordpress.com/2014/09/03/ne...te-uncertainty/

This post has been edited by lcchong76: Sep 3 2014, 09:28 PM

SIME Analysis:-

http://lcchong.wordpress.com/2014/09/03/si...sis-3-sep-2014/

My View:-

- Fair values/Market Timing:
– 5Y DCF:
– 6.7 – 7.79 (Fair Value Uncertainty is HIGH)
– Absolute EY%:
– Trailing:
– FY14 (EPS: 0.556) – Fair value 8.75 (Fair Value Uncertainty: HIGH)
– R4Q (EPS: 0.556) – Fair value 8.75 (Fair Value Uncertainty: HIGH)
– Forward:
– FY15 (EPS: 0.579) – Fair value 9.12 (Fair Value Uncertainty: HIGH)
– FY16 (EPS: 0.63) – Fair value 9.92 (Fair Value Uncertainty: HIGH)
– EPS applied to reach the current stock price (9.48): 0.602
– Both models indicate either overvalued or fully valued. Also, the uncertainty of fair values are high.
- The share price driver will be the potential spin off exercise within SIME business divisions which should allow SIME valuation to be rerated higher as it should emerge as pure planter. As it is, it has been reported by media quoting Tan Sri Mohd Bakke Salleh specifying that the listing of its motor unit is set to be executed in 1HCY15 subject to market conditions.
- I will continue to hold SIME.

Latest Financial – Q4 2014 Financial Report (29 Aug 2014) http://www.bursamalaysia.com/market/listed...cements/1726089

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

Source: http://lcchong.wordpress.com/2014/09/03/wh...come-statement/

While I will be working on some minor enhancements (most likely transparent to you) in my back log, I will be focusing primarily on applying Defensive & Enterprising Income Statement. "It’s Earnings That Count: Finding Stocks with Earnings Power for Long-Term Profits" details a method for triangulating the true earnings power of public companies. The method is to construct Defensive & Enterprising Income Statement.

Concepts behind this method sounds great, but I need to put them into application in order to test its effectiveness. Unlike Discount Rate and Uncertainty, the Defensive & Enterprising Income Statement is just an add-on to my stock analysis. Thus, you may be able to see 1-2 new spreadsheet in my excel in the future.

If I found this method is not effective, I will stop my research.

DAYANG Analysis:-

https://lcchong.wordpress.com/2014/09/14/da...is-14-sep-2014/

My View:-

- Fair value:
– Absolute EY%:
– Trailing:
– FY13 (EPS: 0.146) – Fair value 3.24 (Fair Value Uncertainty: HIGH)
– R4Q (EPS: 0.174) – Fair value 3.85 (Fair Value Uncertainty: HIGH)
– Forward:
– FY14 (EPS: 0.252) – Fair value 5.58 (Fair Value Uncertainty: LOW)
– FY15 (EPS: 0.284) – Fair value 6.29 (Fair Value Uncertainty: LOW)
– EPS applied to reach the current stock price (3.5): 0.158
- Dayang’s current orderbook is RM4.7b, lasting through to 2018. The company’s tenderbook is approximately RM1b. Base on its historical tender success rate of 40-50%, new order replenishment of RM400-500m is expected by the end of this year. The bulk of the new jobs could be engineering, procurement, construction and commissioning (EPCC) of offshore structures. There could potentially be another RM3-4b worth of local offshore EPCC jobs up for grabs in the next 2-3 years. It is also a beneficiary of any improvements in associate PERDANA earnings.
- Market speculations on Perdana Petroleum. Apart from utilising the private placement funds for its foray into the EPCC segment and for the Pan Malaysia HUC jobs, there are market speculations that Dayang is interested to increase its stake in its associate company, Perdana Petroleum. We believe that this market speculation might hold some truths in it. Our view is that Perdana Petroleum could potentially be dropped from the Securities Commission Shariah-compliant list as the company has a gross debt level of approximately RM594m, out of which, RM533m is in USD denominated debts. As such, Lembaga Tabung Haji which owns a direct and indirect stake of 8.43% (62.2m units) and 0.21% (1.56m units) respectively might be forced to dispose all of its shareholdings in the company. Since Dayang already has a 24.5% strategic stake in Perdana Petroleum, there is a possibility of the company taking up all of Lembaga Tabung Haji’s stake, which at current price level is worth a total RM113m. However, this could then trigger a general offer, which would require Dayang to acquire Perdana’s remaining shares worth an approximate RM870m. This could be done via bank borrowings and share swap.
- I am generally positive on the current developments and progress of Dayang’s HUC projects. In addition, the company is venturing into the EPCC segment of the value chain. Given the company’s history and reputation of being a conservative and risk-averse company, the EPCC venture will bear fruit in the medium to long term.
- DAYANG is currently undervalued. I am seriously considering to buy DAYANG, but I already have quite a few O&G counters in my portfolio. Thinking.…….

Latest Financial – Q2 2014 Financial Report (22 Aug 2014) http://www.bursamalaysia.com/market/listed...cements/1717757

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

PCHEM Analysis:-

http://lcchong.wordpress.com/2014/09/15/pc...is-15-sep-2014/

My View:-

- Fair values:
– 5-Y DCF:
– Base Scenario – 6.11 (Fair Value Uncertainty: HIGH)
– Good Scenario – 6.81 (Fair Value Uncertainty: HIGH)
– Absolute EY%:
– Trailing:
– FY13 (EPS: 0.393) – Fair value 7.38 (Fair Value Uncertainty: MEDIUM)
– R4Q (EPS: 0.298) – Fair value 5.6 (Fair Value Uncertainty: VERY HIGH)
– Forward:
– FY14 (EPS: 0.421) – Fair value 7.89 (Fair Value Uncertainty: MEDIUM)
– FY15 (EPS: 0.463) – Fair value 8.68 (Fair Value Uncertainty: MEDIUM)
– EPS applied to reach the current stock price (6.3): 0.336
- I do not expect that earnings in FY14 will match that of FY13 despite the end of major turnaround activities. There will be other smaller planned maintenance exercise which will not severely impact overall group earnings. However, I think that this is a short term problem. In long term, growth drivers of PCHEM are still intact.
- My family member accumulated some shares yesterday at 6.42, and will continue to hold and accumulate.

Latest Financial – Q2 2014 Financial Report (11 Aug 2014) http://www.bursamalaysia.com/market/listed...cements/1706501

At the time of writing, my family member owned shares of PCHEM.

OCK Analysis:-

http://lcchong.wordpress.com/2014/09/15/oc...s-15-sept-2014/

My View:-

- Fair values:
– Absolute EY%:
– Trailing:
– FY13 (EPS: 0.05) – Fair value 1.12 (Fair Value Uncertainty: VERY HIGH)
– R4Q (EPS: 0.049) – Fair value 1.1 (Fair Value Uncertainty: VERY HIGH)
– Forward:
– FY14 (EPS: 0.07) – Fair value 1.57 (Fair Value Uncertainty: HIGH)
– FY15 (EPS: 0.09) – Fair value 2.02 (Fair Value Uncertainty: MEDIUM)
– EPS applied to reach the current stock price (1.44): 0.064
- I will revisit OCK after completion of the purchase of an 85% stake in PT Putra Mulia Telecommunication (PMT). My worry is Indonesia government may interfere this acquisition.
- If the acquisition is successful, I will seriously consider to buy this stock.

Latest Financial – Q2 2014 Financial Report (28 Aug 2014) http://www.bursamalaysia.com/market/listed...cements/1724733

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

GAB Analysis:-

http://lcchong.wordpress.com/2014/09/15/ga...s-15-sept-2014/

My View:-

- Fair values:
– 5-Y DCF:
– Base Scenario: 11.88 (Fair value uncertainty: VERY HIGH)
– Good Scenario: 13.63 (Fair value uncertainty: HIGH)
– Bad Scenario: 10.32 (Fair value uncertainty: EXTREME)
– Absolute EY% Valuation:
– Trailing:
– FY14 (EPS: 0.656) – Fair value 14.18 (Fair Value Uncertainty: MEDIUM)
– R4Q (EPS: 0.656) – Fair value 14.18 (Fair Value Uncertainty: MEDIUM)
– Forward:
– FY15 (EPS: 0.64) – Fair value 13.83 (Fair Value Uncertainty: HIGH)
– FY16 (EPS: 0.669) – Fair value 14.46 (Fair Value Uncertainty: MEDIUM)
– EPS applied to reach the current stock price (13.12): 0.607
- At the current price, fair value uncertainty for both models are from MEDIUM to HIGH.
- 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)
- GAB’s focus on FY15 would be on better cost management by enhancing its efficiency and capability, while the product strategy would see better innovation with more quality new addition to its product portfolio. (Aug 2014)
– In FY15, GAB plans to manage its cost more prudently by improving operational efficiency. Besides, the Group also expects to increase its portfolio by introducing more new products through innovation. New products launched in FY14, including Kirin Ichiban, the best-selling super premium brand in Japan and Smirnoff Ice, the world number 1 RTD brand which received good response, which was reflected in 4Q14 sales growth of 10.8% QoQ. Meanwhile, GAB would still be counting on its core brands, namely Heineken, Tiger and Guinness moving forward in sustaining the sales volume. Although GAB did not reveal the sales figure of the brands, we gathered that Heineken recorded the best sales growth among the core brands, followed by Tiger and Guinness in FY14.
- GAB expects the Malt Liquor Market (MLM) moving forward to remain competitive and challenging, in view of the unfair competition from contraband beers, of which the sales price per unit is lower than the excise duty alone imposed on GAB’s beers as Malaysia has the second highest excise duties for beer and stout products in the world. Meanwhile, the Group is also concerned on the imminent implementation of the GST in April 2015, which may further dent the consumer sentiment and thus discretionary spending.
- 2014/15 will be a challenging year for brewers due to competition from contrabrand beers and as consumer spending dwindles.
- 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%). 11.60 – 13.00 is a good support zone, from fundamental and technical aspect. Chances of GAB dropping below this zone is low.
- If GAB manage to achieve growth in FY15, that means GAB have managed the [impact of] GST and played the market share game well. If that happens, GAB will be good to go.
- GAB will not make any profit out of the GST, but they need to get the margins right for the distributors and they need to recommend the distributor price. However, they cannot set pricing in the whole tier system.
- I may accumulate GAB if GAB declines below 12.50.

Latest Financial – Q4 2014 (Interim FY14) Financial Report (21 Aug 2014) http://www.bursamalaysia.com/market/listed...cements/1716397

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

CANONE Analysis:-

https://lcchong.wordpress.com/2014/09/16/ca...s-16-sept-2014/

My View:-

- Fair Value:
– Absolute EY%:
– Trailing:
– FY13 (EPS: 0.457) – Fair value 3.63 (Fair Value Uncertainty: MEDIUM)
– R4Q (EPS: 0.463) – Fair value 3.68 (Fair Value Uncertainty: MEDIUM)
– Forward:
– FY14 (EPS: 0.48) – Fair value 3.81 (Fair Value Uncertainty: MEDIUM)
– FY15 (EPS: 0.504) – Fair value 4 (Fair Value Uncertainty: MEDIUM)
– EPS applied to reach the current stock price (2.48): 0.312
- As of now, valuation of CANONE looks quite attractive.
- I have to further study this counter and compare with its competitors.
– Another thing I need to study is the story of KIANJOO and CANONE.
- I will put this stock in my watch list for the time being.

Latest Financial – Q2 2014 Financial Report (28 Aug 2014) http://www.bursamalaysia.com/market/listed...cements/1725717

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