Noted.

A spin-off question.

Shareholders can put their shares under nominees/trust funds. As such, only the nominees or trust fund names appear in the 30 largest shareholders list.

Then, isn't it possible for the management to park their shares under the nominees/trust fund names? Then when they need to sell in a hurry, that will not attract a lot of negative attention from the public.

Correct?

Thanks.

I see. Thanks Sifu Gark!

Ha ha. But to do that, the uncles and cousins must be 100.9% trustworthy..

Some you can trust and some you can't. That is life.

Gee, scary thing to know. With the lawyer's help, is this legal? I know, stupid question, lots of things can be done with $$$$$.

Then, when the management urgently need to sell their shares (due to some negative inside infor), they can do it without revealing themselves.

My takeaway from this, red flag when there is a big disposal, does not matter whether it is by management or not.

Thanks for the insight, Gark!

Cheerio.

My brother is thinking of investing in an R & D company. Like to know what is approach in analysing such companies (biotech, medical, energy). It is still in the research phase. Annual balances in the red. Normal FCF, DCF, etc will not be applicable here.

Good web site, books?

Thanks.

Thanks, Gark.

My apology, you recommended that book to me some time ago. I did not check and do my own homework first.

Yes, chapters 22 & 23 (Valuing Firms With Negative Earnings, Valuing Young & Startup Firms) are relevant for my brother.

Cheerio.

Hope the sifus out there can help me with this.

With the introduction of GST, will that reduce excise tax on that product or amount of excise tax stays the same?

Thanks.

Thanks. That is what I thought as well. But I want to be sure.

If govt reduces excise tax after GST, then food for thought are the "sin" companies.

One of the reasons for the high "sin" taxes are govt drive to make these products expensive to reduce usage (apart from generating more revenue for the govt). So I doubt the govt will reduce these taxes after GST. But I will keep an eye on this nevertheless.

Cheerio.

The life of a company is in stages, e.g., startup, growth etc.

How can one tell which stage a company is in?

From sales figures (the rapid growth, the plateau, the decline)?

Any other parameters to gauge the company life stage?

Many thanks.

Noted and thanks.

Gee, did not know that banks have found the fountain of youth! Ha.

I need to look out for the companies which have reached their maturity and are on the decline phase. Thus my question. I guess there is no clear cut answer. Even a matured company can still go through cycles.

Out of interest, where are companies like Microsoft, Apple, Shell, Boeing, Nestle? Matured but still growing?

Thanks.

Another beginner's question.

If I have earning and EPS figures, then I should be able to calculate the number of shares for that period, right?

EPS = earning/# share

Then # share = earning * EPS.

I tried that for a few companies. For some companies, the # shares calculated above are the same as the SPG quoted figure but some are not the same, eg Eng Kah 61 vs 69 million. Why?

Thanks.

Noted and thanks Professor Gark!

This accounting subject is not as straight forward as I have hoped but filled with twists and turns, at least to me. Ha.

Cheerio.

Need help on this.

Understand that not all financial yardsticks are applicable to all industries.

Like to know whether FCF is valid for the financial industry. Reason for asking is, AEON Credit has negative FCF for many years in a row. Is this expected for a financial company?

Thanks.

Learnt this some time ago but still wandering how it can help me to interpret/analyse ROE better.

asset/equity * revenue/asset * profit/revenue = ROE

i.e., A * B * C = ROE

The only thing I can gain is, if ROE decreases, then see which one (A or B or C) decreases, i.e., the cause.

Other hidden inside things I should know?

Thanks.

river.sand,

Noted and thanks. Will carefully digest the article. Ha.

Some directors own some company's shares while some do not. I know there is no definitive rule saying that if directors own some shares, then the company will do well or vice versa. Case by case basis to consider for each company.

Appreciate your help in compiling the list below. Then I can use that as a guide when evaluating a company and reading the annual reports.

Positive if they own some company's shares
* shareholder friendly in general
* they will try to improve company's performance as they will also see the return via their shares, eg higher EPS, DY etc.
*

Negative if they own some company's shares
* they own a big chunk of company's shares
* insider trading potential
* manipulating ESOS to their advantage
*

Positive if they do not own some company's shares
* no insider trading (beside for spouse etc)
*

Negative if they do not own some company's shares
* nothing for me in return attitude
*

Many thanks.

Another rookie's question here.

Bursa M'sia requires at least 1/3 of the directors to be indept directors (i.e., not employees working for the company or owning company's shares. I hope I got this right).

I see a conflict of interest here. These indept directors are paid by the company for their services and they are nominated by the board of directors. So if these indept directors pointed out "insider/dirty" dealings of the directors, then they will not be nominated for the indept directors later. Tendency is to flow with the board's tide. So, how can they be really indept? Maybe there are Bursa's finer details you know of?

Thanks.

Please help.

Taken from an annual report.

"The financial statements for the preceding year were audited by another firm of auditors whose report dated 28 August 2012, expressed an unqualified opinion on those statements."

What is meant by "unqualified opinion"? The previous auditors do not have the qualification to state their financial statement findings?

Thanks.

Noted and thanks.

I interpret it the other way round! Wish they would use simple English rather than specific terminology only the relevant experts know.

Cheerio.

Another question pops up when reading an annual report.

Stated that they used Malaysian Financial Reporting Standards as from 2012. Then can one compare the financial reports using this MFRS with the reports using the old standards? Comparing apples with pears (i.e., quite similar) or apples with bananas (i.e., very different)?

What are the top 2 important changes which will affect the magnitude of $$ calculated (compared to the previous standards)?

Do they redo past financial statements using the new MFRS so that the results are comparable and consistent? I don't think they do as there are no second issues of past years annual reports.

Many thanks.