CPO up above 4000, its a big push from plantationsss........

But how come IOI drop so much leh, scratchingmy head....

Because market doesn't believe it is sustainable for long term. Don't know market is right or not. Your guess is good as others now.

It is as same as gold situation, gold price sky-rocketed to USD950, but gold mining stocks only up marginally as same as oil stocks situation.

oil NOW 102 is it?
CPO now 3989 is it?

Can someone kindly confirm the above data as of friday nite plsss.

Super inflation for Malaysia in 2008, petrol, cooking gas, food, sabun, shampoo, cooking oils, cosmetics .... everything will up price very soon.

Wah, DJ tonite kena teruk lah, next week red chilli week.

This post has been edited by chinkw1: Feb 29 2008, 10:54 PM

haiya....everyday eat red chilli, investors also kena diarrhea

Just found this shocking news.
Cannot believe it.

Recently, ALL plantations companies revealed handsome financial reports, some announced up to 200% higher than the corresponding previous quarter. Thumbs up for plantations.

But, there is one that announced worse than previous quarter. guess which one is it?
http://biz.thestar.com.my/news/story.asp?f...28&sec=business

DJIA lost 300 points to close at:

12,266.39 -315.79 -2.51%

black friday in US....

wooo scary monday in asia regional market...

Not that shocking either, once you have been old enough in the market, you won't find this quite shocking anymore.

Told you back when discussing about Synergy Drive time, mega merger is not 1 + 1 = 2, sometimes it is 1 + 1 = 1.5 only. Most (although not all) GLCs again and again disappointing the market. Its plantation businesses still running fine, the more concern part is Sime taking up Bakun project one.
Actually the previous/initial proposed Synergy Drive as pure plantation stock is more appealing than a conglomerate which is more attractive to foreign investors. If it is a pure plantation then with CPO sky-rocketed, its share will be performing more magnificient. But this proposal suddenly being off-course in the middle, nobody knows why, even Synergy Drive name being discarded. The deal become more like Sime takes over the other companies.

The key question, why some others similar within the same industry can post good result while GLCs cannot?

This post has been edited by cherroy: Mar 1 2008, 09:25 AM

2nd opinion :-

Sime : Operating profit is up by 66% . But the co wrote off some unusual big item, so the net profit drops.

Genting : Operating profit rose marginally even with Asiatic. Some big item gain makes the net profit more attractive.

Both have impact on EPS. It is up to you to interpret the results. Could be misleading at times.

just my 2sen opinion.

P/S > MAS in the past used to sell off airplanes at profits to make accounts more attractive.

This post has been edited by SKY 1809: Mar 1 2008, 10:05 AM

This is the concern part. It is not the first time already since after taking over the Bakun project.

Yes, one always should look into the details to analyse the earning result. On the front, sometimes can be misleading without properly analyse the details, why earning goes up or down. Generally market will prefer and view the most positively with profit increment that are purely generated by businesses revenue or increse in profit margin in all or at core businesses.

Just like Sime, after the mega-merger, it will include the earning of previously GHope, Guthrie, H&L etc. So profit surely increases as size of company become 2x, 3x bigger already, so it is better to look at net operating earning of EPS will give a clue whether the merger is effective or ineffective.

Yes , I agree with you. One should examine the details and not solely depending on Net Profit or Earning Per Share.

In the case of Genting Bhd , Net Profit rosed 32% :-

Taking a closer look :-

1) Disposing off profitable company ( Sanyen ) and replaced with UK Casino ( loss closed to RM 1 billion from impairment). Genting INt 's Intangible assets = rm 4.35 billions.

note: Genting Int sales is about RM 1.7 billions, just managed to break even ( operating profit less interest cost )

http://203.115.192.58/cms/content.jsp?id=c...7b2220-c2adac11

2) Genting. Finance Cost is RM 400 million per year. Final Q operating profit dropped compared to previous year. Despite better profit contributed by Asiatic ( up 55sen ).
3) Gambling luck has increased so the profit margin drops.
4) Intends to dispose off ( part ) Resort World share or taking it to private.
5) having intention to sell off " Asiatic" ( golden goose keeping 500m cash/investments ). just market saying only.


It is replacing a good asset with a poorer one, so I doubt it is from Strength to Strength.


It reminds me of "Proton ".


Just my 2sen opinion.
---------------------------------------------------------------------------------------
Intangible Asset

What does it Mean? An asset that is not physical in nature. Corporate intellectual property (items such as patents, trademarks, copyrights, business methodologies), goodwill and brand recognition are all common intangible assets in today's marketplace. An intangible asset can be classified as either indefinite or definite depending on the specifics of that asset. A company brand name is considered to be an indefinite asset, as it stays with the company as long as the company continues operations. However, if a company enters a legal agreement to operate under another company's patent, with no plans of extending the agreement, it would have a limited life and would be classified as a definite asset.

This post has been edited by SKY 1809: Mar 2 2008, 07:56 PM

fyi plantation stock price is much like the miners.. whether the stock price can sustain that value depends if CPO can hold that high price for the next 5 yrs.. IMHO right now the market is trying to find the bottom

It's not hard to fathom why Genting has increased its stakes in gaming companies in London. The casino business there is seeing deregulation and by having stakes in the major players, Genting is hedging its bets all around.
This is crucial as unlike Singapore where the government will issue two casino licences instead of one as expected earlier, the UK government is restricting the number of casino licences to only one "super casino".
In the original Gambling Bill, the proposal was to allow an unlimited number of large-scale casinos or super casinos with each holding up to 1,250 slot machines. Subsequently, it was scaled down to eight regional super casinos, following pressure from backbenchers from the Labour Party and charitable organisations. In early April, the House of Lords approved the Gambling Bill after the government scaled it down further to only one. It is to be built in Blackpool.
Apart from the single super casino, the authorities have also allowed eight "large" casinos with 150 slot machines and another eight small casinos with 80 slot machines.

Stanley Leisure is the largest casino operator in the UK. So it's not surprised Genting would have to pay premium to acquire their shares. By having stake in the top 3 largest casino in UK, Genting would have a good chance to share profit from the UK first super-casino build in Blackpool. However, what's unexpected would be the changes in the new tax rates may erodes the company profit.

The Gaming Duty (Amendment) Regulations 2007
Part of gross gaming yield Rate
The first £918,250 15 per cent.
The next £633,000 20 per cent.
The next £1,108,750 30 per cent.
The next £2,340,000 40 per cent.
The remainder 50 per cent.

Previous

The first £267k 2.5 per cent.
The next £593k 12.5 per cent.
The next £593k 20 per cent.
The next £1m 30 per cent.
The remainder 40 per cent.

While Genting Sanyen Paper division with 536.4 million revenue just get 47.3 million profit. Merely a 8.7% Net profit margin. By disposing this segment, Genting get 740 million cash. ROI for the acquirer is at least 15 years.

UK Stanley total paid £639m with an annual profit of £31.9m and annual revenue of £220m. Net profit is approximate 14% and ROI is 20 years if the annual profit is remain the same.

Sourced from http://203.115.192.58/cms/content.jsp?id=c...f8f500-ecb7cbca

This post has been edited by keith_hjinhoh: Mar 2 2008, 02:34 AM

Thank you for your information.

This is not the first time that Mr Lim failed in his calculations. Star Cruise was a good example. Now Genting/Resort is just a minority shareholder.

Senior Uncle Lim faced with many impossible tasks ( at his time ) and yet he built Genting into a World Class Casino/Resorts from virtually jungles on top of mountains . He did it with little resource and money. On papers, this type of project was facing a high chance of failing.

The present Genting management is far more superior than Uncle Lim alone, and yet many things ( calculations ) could go wrong.

On papers :-

A mere 14% net profit only might look good . However, when investors venture into overseas, one needs to consider operating, cultural, environment (smoking) and political risks that are not the same as Malaysia. Do not forget, they need to borrow money to buy the casino, the interest cost.

In actual situation :-

The UK Casino is acquired with a goodwill of RM 1.8 billions and forms part of intangible assets of 4.35 billions ( could be licences etc ).

With Sales Turnover of RM 1.7 Billions ( jumped 250% ) , Genting Int, just breaks even after taking the interest cost ( ignoring impairment loss of RM 1 billion ).

Probably luck is not their side bocs the government imposed Higher Tax and Smoking Ban after the taking over. Otherwise they should be able to get higher profit with 250% increase in sales. They may want to bring down high interest costs that eating up their profit. If not, may have to write off more impairment costs.

In reality, it could a loss to operate this Casino on borrowed money, if sales drops below RM 1.5 billions.

Conclusion :-

I wonder whether is it a good venture, or would it be another Star Cruise ? only time can tell.

Just 2 sen opinion.

This post has been edited by SKY 1809: Mar 2 2008, 09:02 PM

so in short.. better not to buy genting or resorts now?

This post has been edited by aretla: Mar 2 2008, 01:51 PM

Of course, it's undeniable that luck is not on their side. Even all the UK casino faces this problem. However, this is unavoidable as Genting Int. mission is to become world largest casino operator. There's alot of company venture into UK gaming industry in the recent years, so it's not only Genting take up the bait, in fact they're having majority stake in UK gaming industry listed company. By securing their position in the UK, I guess in the near future, it will be profitable. However, only time will tell.

[attachmentid=408897]

Refer to the chart, the industry worth of 60b pound and there're alot of company venturing into UK. It would be stupid for Genting not taking up that opportunity, however, it does look stupid after the changes in legislation and the turbulence in the UK politics towards the Gambling industry.

Afterall, Genting will still be a profitable company and recession proof as well (assume that their management team is still doing their work). Pick a right price and the future of Genting is still bright as I believe their company ATM is still heading the right direction.

This post has been edited by keith_hjinhoh: Mar 2 2008, 02:47 PM

Looking at DJ close level last friday, next week will be eating chili for regional market. CPO, OIL and other commodities are sky high, inflation is teruk lor.

Hopefully the bear market in klse is shortlive, otherwise all ta kong chai suffer.

Plantation counters all pls wake up and jump lor.

The impairment loss of RM 1 billion could be used to buy up 51% of a small Listed Co in Malaysia. Again, there is no guarantee that Genting Int would not do the write off again in future.

On the bright side, with a net profit of 3 billions or more a year, Genting is a strong position to absorb more losses. Remember gambling luck is on the rise and Casino's profit margin is quite flat in Malaysia.

However, in the long run, they would have hard time to get supports from the bankers ( heavy borrowings ) and minority shareholders. Minority's share of profit is erosed.

Impairment Charges: The Good, The Bad and The Ugly

http://www.investopedia.com/articles/analyst/110502.asp

It is also a rumour that IOI is talking to Genting to buy over Asiatic. If the deal comes through, Genting would have cash of RM 3.6 billions in hand. But is it worth to sell Asiatic to pay for the impairment cost of UK Casino ?

Investors also confident that their Casino in Singapore should be able to do well.

Just my 2 sen opinion.

This post has been edited by SKY 1809: Mar 2 2008, 11:24 PM

hi, got a noob question here. after reading the book secrets of millionaire investors, found that it is not bad to invest in US stocks. However i would need to know as a Malaysian, is it legal to invest in US stocks? and which are the licensed agent (broker) to provide such service. Thanks in advance

Not to be confident that their Casino in Singapore should be able to do well due to the following

1) Sand casino will be operating/opening earlier that Genting casino in sentosa (Profit will bound to drop due to diversion of tourist to new Sands casino).

2) Sand casino is in the main land. Location wise is near to the heart of singapore like changi airport and shopping complexes and flexible for tourist or near to their SG home.

3) Theme park will not see making profit due to highly recurring maintanance fee. eg HK Disney Land is making a loss indeed as reported.

4) Travelling is very inflexible and even longer to travel to sentosa compare to mainland Sand casino. alot Hidden cost for tourist. Competition.

5) Tourist/Gamblers nowadays were talking about flexibility and easy n convienance due to the hot wheather and climate changing.

6) China man company always is very stingy (when comes to $$). Just Formality for showing investor that the company is improving and changing but altitude and bad habits does not change overnight or even does change at all internally. Character of each person does not change and is born with it. 360 degree change is off the books.

7) Economy dampens after the election and interest on borrowing will burden the whole group for another 10 years again. Too heavy an investment is indirectly not good for the group when a recession returns worldwide and interest rates rise. history will indeed repeat again. All interest borrowing will increase and alot of hidden possibilities is bound to flop up soon.

8) No such thing is sure win and taking alot of risk were bound to in any investment. Greed will be the beginning of a down fall for any investor.

9) Always Mainland is more safety than island (Maybe tsunami will occur in island due to climate change)

10) Group with too huge of a diversity is not good sign for the company. alot of $$ involve and the return will take years/decades to recover. Difficult to manage and alot of transparency behind. Gambling tax will increase from time to time.

just my 2 cents opinion

This post has been edited by mlpk: Mar 2 2008, 04:06 PM