Generally, as a rule of thumb, you can say that for a company with a long-form ROE of 10%, the P/BV will roughly be around ~1.0X. However, from here on out, there is an exponential relationship between ROE and P/BV. So say a company with a long-form ROE of 20% may have a P/BV of 3.0X, and a company with a long-form ROE of 30% may have a P/BV of 6.0X etc.

For SCICOM over the past 2 years it has consistently got an ROE of ~42%. It's P/BV is 8.0X. I think it's an OK price. May even be undervalued. But I have no idea about future outlook since that's always priced in.

Personally, I never invest in these types of companies. Cause there is very little downside protection. The moment ROE tumbles P/BV will also fall hard.

I rather invest in "fallen giants" with depressed valuations or "growers" with undemanding valuations to protect myself on the downside. But really, you need to do your own research, cause SCICOM may fall under the "growers with undemanding valuations" category.

What do you guys think about Tenaga Nasional? It remains to be one of the stock with the LARGEST divergence in current market value vs Bloomberg consensus (Bloomberg is at 20% above CMV). https://docs.wixstatic.com/ugd/b9900a_64ee8...99b18b35947.pdf

All the major research houses - Maybank, AmSec, CIMB, Kenanga etc - have it as a top buy.

My question is...Tenaga is effectively the second largest company in Malaysia by market cap. How can there be such a large divergence? Shouldn't all the good and bad be priced in? Reading the analyst reports it seems like only the bad is priced, the good not yet. And YTD Tenaga is in negative territory vs most other major KLCI stocks which are up.

This post has been edited by contestchris: Jun 4 2017, 05:02 PM

Actually Tenaga owns 80% of SESB (Sabah Electricity).

Buy yeah I get that Tenaga is one of those secular growth companies in Malaysia. Lean balance sheet, 50-70% retained earnings for future growth from net profit (one of the highest in the KLCI), foreign acquisition, aim to be Top 10 power utility by 2025 in terms of Market Cap (currently no. 18).

I bought when it was at 1.42X BV @ 13.68, I think that was neither too low nor too high.

If however it does hit RM17.00 within the next one year I will sell it and lock my profits in, and then buy again when it eventually dips.

This post has been edited by contestchris: Jun 4 2017, 07:18 PM

Yes, equity attributable to shareholders is less non controlling interests, unless non controlling interests is in negative territory. See AirAsia for the latter, Tenaga for the former.

Given I just started investing at the start of this year, can any sifus here give comment about my choices and returns, and future prospects of my holdings?

Because my portfolio weighting has a heavy tail (earlier purchases small amounts, later ones have larger amounts), I will list them down below. Plus, my earlier purchases have been my best performers, my latter ones are rather flattish.

Date | Counter | Transaction price | % of portfolio on cost basis

3/1/2017 Armada - 0.605 (4.7%)
10/2/2017 Armada - 0.63 (4.1%)
27/2/2017 AirAsia - 2.67 (3.8%)
3/3/2017 Ikhmas - 0.57 (6.1%)
13/3/2017 Esceram - 0.465 (5.3%)
7/4/2017 Parkson - 0.64 (14.3%)
21/4/2017 Tenaga - 13.68 (28.6%)
15/5/2017 Hevea - 1.29 (18.1%)
26/5/2017 Ikhmas - 0.74 (SELL ALL)
7/6/2017 Tchong - 1.82 (15.3%)

My gross returns (before fees) are 6.97% and my net returns are 5.34% using the basic returns calculation formula. If I use a XIRR formula the returns are much higher but I don't think it's fair to use that.

My next move would be to sell off AirAsia (since it makes up such a small, insignificant portion of my portfolio). I will also look to top up on Parkson and/or Tchong depending on a wide-range of factors (none of my other holdings will be topped up at current values), or look to expand my portfolio with prime candidates being Mhb, Tambun and Prlexus. I truly do regret my inability to buy Prlexus when it was lower. I always stalled and stalled, then when I wanted to make a move the price always moved up. So maybe this one has got away from me yet again (after it suffered the drop recently due to Shariah non-compliance).

This post has been edited by contestchris: Jun 10 2017, 02:57 PM

Any idea how the ICPT will impact Tenaga? Will it cause the stock to re-rate upwards by the market? Was it a potential downside risk previously?

http://www.theedgemarkets.com/article/govt...ubsidy-says-tnb

I bought Hevea at a local minima in May at 1.29. Decent returns (including dividend) in a short span of time but this was a serious investment after lots of study and I personally am certain it will hit 1.80-2.20 within 12 months. I wait till then, maybe keep holding more if the fundamentals have improved. Only sell when story has changed.

Now to wait for Tenaga to wake up; for Tan Chong to bring new models and begin the turnaround; and Parkson to match the valuations of its two listed subsidiaries (with 30% holding col discount). I also have smaller positions in Bumi Armada, ES Ceramics and Airasia. Looking to buy Prolexus, MMHE and Tambun Indah, or top up Parkson and Tan Chong.

What's your target/aim/thesis? You still see upside despite the recent rally? Short term holding, or mid/long term?

So far I receive nothing from Maybank OST and Public Invest. I don't know what platform but their backend is the same.

Sharing some powerful investment advice:

https://s-media-cache-ak0.pinimg.com/736x/7...ce-business.jpg

http://www.azquotes.com/picture-quotes/quo...er-59-88-24.jpg

http://3.bp.blogspot.com/-4M0BJ9qCsUk/UuPm...Lynch+Quote.png

Gonna buy Malaysia Marine and Heavy Engineering soon (MHB). I queue at RM0.76 but may enter at RM0.78 too. Very deeply undervalued, healthy balance sheet, downside risks almost fully priced in. Will easily react to any good news. Many EPICC/CCP/floater conversion contracts to be given out in the next 6 months. Petronas-linked, 75% of shares controlled by MISC/Technip. Trading at 0.5X of book value. Best/most advanced marine shipyard in Malaysia, top 3 in SEA, highly regarded in Asia.

This will be my third "depressed"/fallen-giant purchase. Previously bought Armada and Tan Chong. MHB and Tan Chong will be my go-to accumulation targets over the coming months if they remain at roughly their current price level (better yet if they fall a bit more!).

Different industry no doubt, but the essential raw materials for the mushroom cultivation comes as a by product/waste of Hevea's main business. So IF they get it right, the mushroom business can rightly be a very high-margin business. Good thing they just allocate a bit for CAPEX first, tak tau jadi or not. But I think should be fine.

Which is precisely when you should be buying, if you feel that the company is at a cyclical low and has bottomed out. Takes lots of courage and mental strength, but this is how you can win -- by doing things differently from the general market.

Obviously. Fundamentals of the company is very important, maybe the most important thing. I do believe MMHE and Tan Chong are both fundamentally sound companies at the through of their cycles.

Lol, have been going down for a few days is NOT a reason to buy a stock. It might present an opportunity...but usually only after the stock has been going down for many months or even years!

What's your investment thesis? Is DiGi selling at compelling valuation? As far as I can tell, the mobile telecom space in Malaysia is extremely saturated and mature. Competition is intensifying. Where do you see the value from? Who's to say that DiGi won't continue falling for the next 2 years? Maybe the drop is just the start and the stock will be in terminal decline for a long time to come...have you thought about all of this? How much have you looked at protecting the downside? Did you do any risk analysis on the downside risks and upside catalysts?

Does anyone have access to UOB Kay Hian's portal? Mind sharing their strategy report that was released today?

Got in to MMHE at the death. RM0.775. All time low at a P/BV of 0.49X. I believe I've done my due diligence, and plan to hold for 3-5 years and will average down every 5 cents it goes lower. Target 2-3X returns over that period of time at the very least.

This post has been edited by contestchris: Jul 14 2017, 05:22 PM

Hevea has been amazing. Bought at RM1.29 in mid May, not at RM1.65 (plus RM0.025 dividend received in between). But I seriously think there is lots more value to be unlocked here, even if there may be a pull-back in the near term. I intended to hold this for 12-24 months. But will sell earlier if the price gets hot fast (i.e. RM1.95 by end August, or RM2.35 by end of Dec).

Bumi Armada...I don't know why it's regressing. Tenaga is plodding along. AirAsia has refound some power. Parkson has been hovering at the mid 50sens. Esceramics may come back after the drop from ~RM0.46 last Q. Tan Chong and MMHB are too new in my portfolio (both ~-2%), and these are cyclicals that will take time to turnaround but the payoff in the end should be amazing.

Hevea is my saving grace. It's propping up my portfolio.

Either way, tomorrow will be fireworks day as two of my holdings reported their Q today - Tenaga and Esceram. Esceram results are bad, but Tenaga's...hard to say how the market will react to it. YoY it's bad but I think the market already priced that in (due to El Nino heatwave last year).