See if you want to use fundamentals, sometimes you must look and see why the stock not laku.

For example, as pointed out, if compared to Apollo Food, LonBis share price is really like heaven and earth....
LOW PE somemore...
why not laku.

Yup, whenever if I see a company with low PE, sometimes I ask myself, why all the more clever investors not interested in the stock?

So when you look deeper, esp in the cash flow statement, you can straight see.

for example, the statement ...

""Property, plant and equipment at aggregate cost of RM24,745,000 (2013-RM33,570,000) was acquired
during the financial period of which RM15,422,000 (2013-RM9,579,000 ) was acquired by means of hire
purchase and term loan."

was mentioned in the cash flow statement.

Then you straight think... why a company like this buy what PPE for 33.5 million last year and this year buy another 24.7 million?

Straight away you want to avoid.................

Yes, LonBis has a lot of loans.
Sometimes it's not the issue of how much loan a company has ....
it's more the issue how the company is building up the total loans.

First you can compare simple yardsticks... (see no need complicated ROIC or whatsoever)

I curi tulang and borrow cgmalaysia data.

in 2003, LonBis makes PAT (profit after tax) of 9 million. Total borrowings 36 million
current TTM PAT is about 16 mil. Total borrowings about 260 million.

So in a ten year span, PAT increases 7 million. (from 9 to 16million)
An increase of 77%.
However to increase 77%, the company's loans increase from 36m to 260m!!!!!
Loans increased 7.2x!!!!!!

Straightaway we know something not right.

Then we need to find out why....

We see the company buying and selling property, plant and equipment.

Straightaway.....we go face palm!!!!

latest annual report: http://www.bursamalaysia.com/market/listed...cements/1484433

page 49:
Gain on disposal of property, plant and equipment = (1,153,311)

LonBis lost 1.1 million from disposal of PPE!

Face palm !!!!!!!

Mind you LonBis borrows money one to buy PPE!

Do what cow business do until like this one?
How would you evaluate such a company?
Loans build up so much and then you find out the company loan build up is due to the constant purchase of PPE...
then only to discover company is also active selling those PPE they had purchased!!!

My face also pain.....

The nice story.... 

http://www.thestar.com.my/Business/Investi...ovid-FV-46-sen/

The fine line....

They say 46 sen because "RHB Research ascribed a 17.0 times fully diluted calendar year 2015 earnings per share, at a discount to the 18.9 times average of its peers."

Sounds innocent.

The finer line....
CAGR is not something like you dump into the wok and start frying....     

It's compounded annual growth...

and in this case ... compounded annual growth for TWO CONSECUTIVE years....

which means HOVID profits must fly from 20 mil to 32.7 mil or an increase of 63.5% over 2 years.

LOL!

This is where they get away with it...

when they RHB write CAGR of 18.5%, ordinary folks thinks 'ok what' , not a bloody fei kei target...

but when it's translated it means a bloody 63.5% increase in profits!!!!

Now put it a much better context when you relate to current prices...

price of Hovid this morning is 41 sen.
RHB says fair value is 46 sen or a 12.2% upside potential....

BUT to achieve this 12.2% upside, HOVID profits must increase 63.5% over the next 2 years!!!

face palm!



Hovid's current numbers?

2011 - lose money
2012 - 15.6 million profit
2013 - 20.3 million profit
ttm - 19.4 million profit -- huh? decrease wor! (current 9 months profit only 13.7 million - decrease 5%!)

come 2016 - can reach 32 million???

LOL!!!

come 2015 -- do you even remember what RHB wrote about Hovid today???

Then you did not note of HLIB comments on KNM?

KNM's eps is 1.8 sen. ( only 1.8 sen only)

When HLIB wrote, KNM at that time price was 90.5 sen, which meant that KNM is already trading at a pe of 65x!!


No problem so susah to fix.
All HLIB needed to do was to project KNM's eps to be 8.4 sen.

They gave this reason, that reason, this reason...
Which by alone, sounds reasonable....

But then...
when we compare the finer point...
what HLIB was actually saying was....
KNM eps would jump from 1.8 sen to 8.4 sen.

Cow jumped over the moon.

EPS is supposedly will increase 4.66 times!!!!

And because KNM's eps can jump so high...
they think a PE multiple of 16x is FAIR....

So 16 x 8.4 = 1.35 TP.

Now everyone can jump over the moon.
.... and yes...
this is where it's confusing for the average players.....
they be arguing how come if KNM so lousy...
why can KNM fly so high?

Why, why, why..... like so much NTA????

NTA can be so misleading....

( and since it can be misleading, I really don't depend on this silly yardstick)

Sometimes when market is hot, you see some unscrupulous folks using this yardstick to sell the stock.
And most of the time, it is done when the said stock doesn't have much earnings to show for. 

Back to property stocks.

Simple REAL example....

Let me ask you. LOL!
Which property stock .....
got plenty, plenty and plenty of land ( = high NTA)
but then ....
the company very conservative....
one year (maybe two) only do one housing project........
which means....
despite great balance sheet ( tons of cash), huge landbank ..... but lousy profit.

Worth investing?

If you don't know...
means you haven't look c look c the stock yet.

   

See above reply to cp88,

LONG LONG term investment ?

recovery of lost in a layman terms? which stocks?

They have this land which they will develop in the future. Their impair it reducing the land price, meaning they sort of overvalue that piece of land. Impairing with affect P&L, reducing their profit. Now reverse back so profit will go up.

5m volume also cannot bomb malton 1.13 barrier 

I thought you have to reach certain percentage of ownership in order to consolidate financial statement?

Above 50% control right? Less than that would be accounted as investment in associate I think...if I'm still right lol