and Harta is now down.

yup not unexpected for me. Earnings, although was very good, but the market was already expecting those good numbers.

This post has been edited by Boon3: Jan 26 2021, 09:23 AM

LWC. Richest man in Malaysia soon.

Gloves down as a sector.
Market chasing PBB is the surprise for me. RM20 too expensive, RM 4 OMG so cheap! Buy!

dont la... alot people all in gloves here.. hahaha

such comments .. very sensitive meh?


lucky I only post and read comments here .....
lucky this thread got 007 name .... BWC ....


better I go play with my spiders more

This is BWC so hentam only. No need to worry about how it gets across.
You play with your spiders anymore you might become the new Spider Man.

Wahhh....

Big brother give okay sign.....

Post in a bit some new comments on Harta based on Kenanga reports....

Hahahah , all fun and games

Comparing Kenanga's report on Harta before and after Harta's earnings report.

Before



After



Water Observations

1. They said above expectations.

2. They increased FY21 earnings by 13%

3. It's tricky cos yesterday earnings was fy21 Q3. Now instead of basing the Toilet Paper prices on fy22, Kenanga decided to use CY 21 earnings. Calendar year earnings. Which means Toilet paper earnings will be based on FY21 Q3 (already reported) + FY21 Q4 + FY22 Q1 + FY22 Q2 earnings.

We know that the Q3 earnings was already high at 1 billion.

4. Yup, despite earnings beat expectations, they did NOT raise the Toilet Paper price of 21.00.

Before



After



Water Observations

1. FY21 net profit estimate is raised from 2.88 Billion to 3.2 Billion

2. FY22 net profit is left unchanged. (Ah, Harta's earnings is estimated to be higher in FY22. Unlike TopGlove)

3. To put fy21 numbers into perspective... currently Harta 3 quarters net profit already totals 1.76 bil. Which means Kenanga is estimating Harta would earn 1.52 bil for its next quarter (fy21 Q4). Yes, from 1 bil to 1.52 billion. That's how high the EXPECTATIONS.

4. Look at the risk to their call. They are saying that the risk is that they might be too optimistic.



Interesting?

It is interesting.
It is almost a case of putting the cart before the horse. Instead of looking at the data and deriving some off it, it is instead concluding Harta is a great buy at the start and seeing what numbers can be pulled together tu support that view.

The volatility of glove makers probably nobody knows how to value them due to the fluid situation we have, blending vaccinations and new mutations.

On another note, I am ready for CNY considering how festive my portfolio looks right now. It's gone from the red and green of Christmas to mostly red.

Superman's Q coming, yes?

In the same context ...



and this is Kenanga last report on Superman...



the earnings estimation ....



Water observations

1. They use CY (calendar year) instead of FY.

2. Their FY21 estimate is at 3.16 Billion

3. Their FY22 estimate shows a lower trend. Just like TopGlove.

4. Comparing their FY21 estimates with actual Superman numbers.

Their estimates is at 3.168 billion.

Superman did 789 million for its FY21 Q1.

Meaning to say, Kenanga assumes/estimates that Superman will report 3.168-0.789 ~ 2.379 million remaining 3 quarters. Average out = 793 million per quarter.

Kenanga doesn't think much of Superman ....

( Haven't been paying attention but the bar is set very low... )

My expectation of Superman's QR is it should include the letter 'B'.
Kenanga is less bullish of Superman's prospects, and the falloff for '23 is interesting.

Out of curiousity, between the Big 4, which would be your personal pick if you were forced into one?

Just came across the article below in the Star.


Covid-19 pandemic could last four or five years: Singapore minister
https://www.thestar.com.my/aseanplus/aseanp...gapore-minister

If you look at the screenshot, the consensus net profit is only slightly higher at 3.3 Billion for fy21. CIMB is at 3.231.

Anyway, for Kenanga, in Aug 2020, after Superman reported an earnings of 526 million, the fy21 Estimates numbers was 1.63 billion. That was upgraded to 3.168 billion in Oct.

So ya... a billion dollar net profit for its next quarter should be considered a blowout quarter .....

That's the number you would want to see.....




* but note .... see how Superman's earnings is supposed to fall off the cliff in 2022.

This post has been edited by Boon3: Jan 26 2021, 01:56 PM

Projected growth rate of Thong Guan’s cash flow in the next 5 years.

TGuan’s YoY net profit has been growing at CAGR of 15.23% (NP T4Q 80615 - 39679 NP 2015 over the last 5 years).

*all figures are in 000’*

Conservatively speaking, I’ll take CAGR 10% after factoring in possible drop in sales, fluctuation of resin prices & foreign exchange losses).

Discount factor formula: 1/(1+risk free rate)^n , whereby n = number of years to be discounted.

Our current OPR is 1.75%. (In United States, risk free bond rate is used instead).

Based on above formula:

Discount factor of TGuan in next 5 years:
1/1.0175, 1/1.0353, 1/1.0534, 1/1.0719, 1/1.0906 for year 2020, 2021, 2022, 2023, 2024 respective.

Discount factor of TGuan: 0.983, 0.966, 0.949, 0.933, 0.917

Next, we need to find the discounted value of all future cash flow. (DV)

DV = Projected cash flow x Discount factor

Assuming the projected earnings and cash flow to be increasing at the rate 10% annually, the projected cash flow for year 2020 = free cash flow 2019 + 10% growth.. free cash flow for year 2021 = free cash flow 2020 + 10% growth…etc..

Free cash flow 2019: 227,217

Projected free cash flow 2020: 249,938
Projected free cash flow 2021: 274,931
Projected free cash flow 2022: 302,424
Projected free cash flow 2023: 332,666
Projected free cash flow 2024: 365,932

Total discount value for year 2020-2024: 245,689 + 265,583 + 287,000 + 310,377 + 335,559

Total number of outstanding shares to date: 380,969

Intrinsic value: sum of discount value / NOSH = 3.79 MYR.

Hence,based on projected free cash flow in the next 5 years, discounted to present value, one share is worth 3.79 MYR as of today.

This post has been edited by MedElite23: Jan 26 2021, 08:11 PM

I’m not sure how to tag you, so I’ll ensure you get notified this way

It worked.
Tag someone by using the brackets [].
Then put @username inside the brackets.

Gimme a few minutes while I work though the data.

MedElite23

I need some assistance to understand the principles of the valuation.
Based on the data, it's based entirely on free cash flow in isolation. Basically judging a company based on the cash balance in the bank. What is the basis behind this valuation method? And why 5 years, not 4 or 6?

I'm also crunching some other numbers based on the formula, I'll add on some info soon.

This post has been edited by statikinetic: Jan 26 2021, 08:58 PM

Okay, if I use the calculation method and tried to value a business today using past numbers instead of using projected values, I'll pick out the past 5y cash flow. No discount applied due to it being actual numbers.

In that sense, TGuan is calculated to have a present value of RM 2.11.

Still, I have questions on the principles behind the calculation as I don't think I fully understand the concept.

There’s a saying in mandarin that goes: when you invest in a company, you’re actually buying its ability to generate cash flow in the future. Warren Buffet is a proponent of this approach.

As a matter fact, you can use 3 years, 5 years or 10 years, it’s an arbitrary number based on your own estimation. There’s no fixed value but only a range to be used as guidance.

The pre-requisite is the earnings should be consistent and predictable. With a small deviation of CAGR, projected earnings won’t vary much as well.

You can download “profit from the panic” by Adam khoo, read from page 119 onwards. The free ebook is available for download, I think it will appear at the top when you key that in google searching engine.

IMO, it’s not quite fair to use the past 5y cash flow without discount and simply plot in the numbers into the equation, as they were many manipulative variables. For example 5 years ago, the CAGR range, risk free rate was different, the value of 2.11 was way bigger, the total NOSH were much lesser... all of these play huge role in determining the intrinsic value.

It’ll take time to grasp the gist, as we’re dealing with technical knowledge here. It makes me wonder though..how do other investors here come out with the intrinsic value of a stock..do they just guesstimate or eyeball it or take the simply way by comparing to its 52 weeks low?

This post has been edited by MedElite23: Jan 26 2021, 09:33 PM