Update on 21th Nov 2008.
[b]Latest Leader Universal Quaterly Financial Result.

Quaterly financial report. To view the full report, click this link to read the pdf file.

[B]Summarize of the current quarter performance.
In short, Leader's revenue and profit drops for about 13 % due to the lower earning from wire and cable division. I think that the 13% drop is still acceptable. This is because Leader's share price has dumped for more than 50 % from RM 1.10 ( a year ago) to RM 0.44 .

At the current price, leader is trading at about 3 price earning ratio and this is a good figure.

Leader also announce to give out 1.5% dividend. This is a good news since its share price has dropped so much. If we take today closing price of RM 0.44, 1.5% interim dividend will translate into about 3.4% dividend yield for this quarter.[/B][/B]

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Hi and good day to all.

I think this is the first topic discussing about Leader Universal Holding Berhad. Many people has neglected this company or even don't know about this company, but i think this company worth us to have a deep look and research.

Below are some of the reasons why this might be a good company but hasn't catch the attention of the public.

1. The recent bull market has actually resulted in bunches of share which are undervalued. Leader is among one of those share that has been oversold by the market. This share has been in the watch list of some major stock broking company such as OSK, Standard & Poor’s , JF Apex Securities Bhd, ZJ Advisory and so on. Yeah, you can say that most of the time, those analysist are just bullshit. You are rite and i agree with you, but i pick up this share not because those analyst from the *******, it is because i believe in the big potential of the company myself. The share price of this stock is about RM 0.565, but do you know that it has a Net tangible Asset of RM 0.993? This means you are buying something with a 50% discount.


2. I have checked through the data of the company and i found nth wrong with its fundamental. its revenue and profit has been rising for the past several years. Refer to the figure below.

3. the third reason will be the simplest reason. That is this share is quite cheap. With the current price earning ration of only 3.7, it is extremely undervalued due to the recent selldown. I interpret the recent sell down as irrational as this share has minor exposure to the political uncertainty and hike in the oil price.

4. Political uncertainty does not affect this share. This company major in producing electric and telephone cable. Even if our government happened to be taken over by the opposition, TNB still need to build more transmission line to support the growth of the country. Some more, this share has no relation to the rulling party, party barisan nasional.

5. TM proceed with their high speed broadband plan which costs several billions. This means they need billions ringgit of telephone and broadband cable. Again, this is going to benefit leader as Leader Universal is the largest cable producing company not only in malaysia, but also in asean.

6. A good company is not good enough if it is not expanding. Leader is currently expanding into vietnam in power generation industry. Currently, Leader own a 35-megawatt fuel oil fired diesel engine power plant in vietnam. The more exciting thing is that Leader has also signed its 2nd Power Purchase Agreement, this time to build-operate-own a 200MW coal fired power plant in the port of Sihanoukville in Cambodia. LEADER is continuing to lead the joint venture company in all the works leading to the financial close for the project.



FORGING AHEAD
With much experience and expertise accumulated over the years, LEADER is ready to replicate our success in Cambodia to more power plants in the region and elsewhere. With in-house capability to assess, model, develop and run power plants as our forte, we are definitely gearing up for more challenging quests having made our mark as the first Malaysian developer of an overseas IPP.--Quoted from Leader Universal Webpage.

Below is the short description about its business activity.

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GROUP BUISNESS
Cable & Wire
The LEADER Group (or 'the Group') is the largest cable & wire producer in Malaysia and South East Asia. In Malaysia, the name “LEADER” is synonymous with the cable and wire industry. The Group has been involved in the cable business for more than 30 years producing an extensive range of telecommunication cables such as copper and optical fibre cables, bare conductors and XLPE and PVC insulated power cables from low, medium to high voltage as well as upstream products such as copper and aluminium rods and wires.

Power Generation
The Group’s involvement in this sector of business started in 1994 when it signed the 1st Power Purchase Agreement for the 1st Independent Power Producer (IPP) plant in Cambodia to build-operate-transfer a 35MW diesel engine power plant in Phnom Penh. With our success, expertise and good track record, the Group was able to secure a 2nd IPP project in Cambodia. On 27 March 2008, LEADER signed the 2nd Power Purchase Agreement, this time to build-operate-own a 200MW coal fired power plant in the port of Sihanoukville.

Property Development
The Group’s involvement in property development began in the late 80’s. It has to date developed several major projects located mainly in Penang. These projects consist of residential, commercial or mix development ranging from shop lots, retail units, terraces houses, bungalows, condominiums and super condominiums. The business has progressively scaled down due to reduced land bank that the Group now owns.

""""""
LINK -[/B] Leader Universal
LINK - [Leader Universal - Region Top Player!

So what you all think about it?

This post has been edited by mycrystalhouse: Nov 21 2008, 09:24 PM

The share price of this stock is about RM 0.565, but do you know that it has a Net tangible Asset of RM 0.993? This means you are buying something with a 50% discount.

Looking at NTA is not very useful as most businesses are going concern. Furthermore, d figure of assets in the balance sheet is only an accounting methods.
Such as u bought a PC, it can be used for 10 years which means it should b depreciated for 10 years period. However, d PC has no value after several years bcoz of technology advances, no 1 wan to buy ur PC thus leaves it wif no values anymore.

Investors may concern more on the ability of a company to generate profits in the long run.
Leader may has d upperhand as it power generation business is a stable recurring income business.
Tis company has improved a lot with its activity of streamlining its business such as disposin non core business and non-profitable business.

Ya, what you say is right. NTA should not be the only parameter that we look into when deciding what stock to buy, however it worth a look. This is the only indicator to tell us what is the value of a company at a certain time. About the depreciation in value, i think i need further clarification on whether the depreciation has been taken into consideration when preparing the financial statement. Because what i know is, to calculate NTA, depreciation of the asset has been taken into consideration.

Leader's profit and turnover have been increasing for 5 consecutive years and its future remain sound although the recent economy slow down. The power generation division provide a good heaven for this company to generate a good amount of profit. This is a business which it wont be affected much by the economic and political scenario.

This post has been edited by mycrystalhouse: Sep 30 2008, 06:40 PM

One thing i don like this counter is the earnings fluctuated a lot. Only recently they managed to make profit. They are making losses for the past five years.

If you buy LionInd also same what. They calculated its worth twice as much as its share price. But yet it still goes down from 2.3x to now 1.3x.

Nono, for the past five years, both the revenue and benefit has been increasing steadily. You can refer to the link below.
Leader Universal - Bright future ahead

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Added on October 1, 2008, 5:36 amI didnt do research on LionInd, so I cant giv my opinion. Some time a stock dcline is because some one knows that the company is facing some problem or the future for the company is not stable. But for Leader, from all the info that i have, i am still confident with it. Even if there is a big problem with this company which the management doesn't wish to let the shareholders know, we will never know too .

This post has been edited by mycrystalhouse: Oct 1 2008, 05:38 AM

Hi,

Ask you a simple question: why should anyone buy this counter?

A) How do you plan to make money from this stock??

i) Trade?? Buy and hold for a short period of time and then sell

ii) Invest?? Buy and hold for a long time and then sell

iii) Dividend play?? Buy for dividend income??


B) If everything went well, how many percent per year that you can earn from this stock?

C) What make you think that number is achievable??

So,

1) What is the holding period?? 3 months, 6 months, 5 years??

2) What is the entry price?? What price that you should buy??

3) What is the exit price?? At what price do you sell?

4) What is maximum loss that you should expect?? Aka, if the stock drop X%, you should sell?? What is X??

Answer question (1) to (4) for us. If not, you have not done your homework.

For example, right now, I can buy PBBank and enjoy a relative safe 7% dividend every year without worry. And, there is upside on the stock price too. So, what makes you think this company can give me a lot better return??

Dreamer

Dreamer101 is right. I'm not saying Leader is a bad company, but aren't there better companies out there in the market. Will take a deeper look for curiosity sake.

All right, Question A...
I should say it is an investment rather than betting. I intend to hold it until 2012 years or 2013 years because by that time, another power generation plant is going to start operating in cambodia. The share price of leader now is too low and even the power generation business already worth quite a lot. For dividend, you are right that PBBank pays out higher dividend, but i believe that this counter has higher growth and it is undervalued by the current market ( current dividend yield is about 5%. You can say pbbank is safer, however this counter is not that risky with its power generation business which i can say will be a safe heaven. About the cut loss price, i would set at RM 0.450. But I don't really agree with much of the people to set a cut loss price. What makes you to buy or sell a company is due to the company strong fundamental, i will sell this counter if the power generation business facing some problem. Even if it plunges to RM 0.450 but the fundamental remain strong and future remain bright, i won't sell it too.

Question B..
I do not set the target for one year time. But my target return for four years from now will be 3 - 4 folds.

Question C...
Already answered above.

This post has been edited by mycrystalhouse: Oct 1 2008, 06:49 PM

Is it some kind of mistake ? cut loss at rm 4.50 ? I thought it is to take profit at rm 4.50 instead of cutting loss. But it is my personal view if you buy leader for for long term, there is a lesser need to set a cut loss point. The cut off loss applies more to speculative stock. Just my personal opinion. perhaps, you did not specify earlier whether it is for long term like 5 years. So people think it is for short term.

Generally. i will be glad if someone like you could identify an up and coming stock like LEADER. Hope you could provide some more info too. This stock in the past did not have good financial reports. But the pasts do not present the present and the future either.

What i mean is if you could spot a loss making co that is likely to do very well in the future ( turnaround ) , the chance you could make a good profit out of it. Not saying you are wrong. Need to do more on R & D.

Wish you all the best.

This post has been edited by SKY 1809: Oct 1 2008, 08:51 PM

mycrystalhouse,

1) So, what makes you think that the profit for this company is going to be 3 to 4 times more than now??

2) To make that happen, the company's profit has to grow about 50% per year.

3) The entry price is RM0.565. The exit price is RM4.50. It is a lot more that 3 to 4 times. Corresponding to that, what makes you think the profit can grow at that rate?

4) What is your cut loss price?

Your numbers do not add up.

Dreamer

What a stupid mistake. What i mean is RM 0.450..... Sorry for the dumb mistake, i will change the reply now. I expect to have a total return of 3 - 4 times in 4 - 5 years from now. So it would be around (RM 0.57 x 4). It is just an estimation, we will never know what happen tomorrow.

Back in around years during 1997 , this stock was not doing well. But from 2003 years onward, its profit is increasing every year. Hope it can sustain its growth and even expand further. If leader can survive in this hard time ( economy crisis in US and political uncertainty in our country), I am sure that the future for it gona be bright.

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Added on October 1, 2008, 7:00 pmSorry for my stupid mistake. The cut loss price would be RM 0.450. ( i might still hold it if the price is lower that it, depends on situation).

First, I think Leader is extremely undervalued now. ( NTA as a reference). It should worth about RM 0.99 per share according to NTA. Its second power generation plant which can generate 200 MW ( 4 times larger than the current one) is schedule to start operating in 2012 years. Hence by that time, the share price should go up further to reflect this. Furthermore, south east asia including malaysia is developing rapidly in the coming 10 years time. The development i mean is in term of telecommunication and construction of electric transmission grid. This means south east asia needs a lot of cable for electric and telecommunication purpose. when the US financial crisis is over and the political scenario in malaysia become stable, the price of this stock will go up.

Apart from this, TM has just signed a pact with the government to start the HSBB project which worth more than 10 billion. I am sure that leader will grab a certain share from this big amount.

This post has been edited by mycrystalhouse: Oct 1 2008, 07:00 PM

Not a loss actually. Mainly it bcoz past years they have disposed off their non profitable and noncore business therefore suffered loss on disposal which actually on tat year they r actually making profits.

Latest Leader Universal Quaterly Financial Result.

Quaterly financial report. To view the full report, click this link to read the pdf file.

Summarize of the current quarter performance.
In short, Leader's revenue and profit drops for about 13 % due to the lower earning from wire and cable division. I think that the 13% drop is still acceptable. This is because Leader's share price has dumped for more than 50 % from RM 1.10 ( a year ago) to RM 0.44 .

At the current price, leader is trading at about 3 price earning ratio and this is a good figure.

Leader also announce to give out 1.5% dividend. This is a good news since its share price has dropped so much. If we take today closing price of RM 0.44, 1.5% interim dividend will translate into about 3.4% dividend yield for this quarter.