Before last Tuesday, everything in KLSE seem normal. All of sudden, selling volume increase tremendously. I manage to sell off Cscstel at 1.32 and Marco at 0.155 to increase my cash position and gain around RM180 after deducting trading charges. However, I did a mistake of adding 20 lots Supermax at 2.4 increasing my average price to Rm2.195. This make me hesitate on Thursday to increase my position at RM2.22 when panic selling happen again.
I will keep Supermax since its quarter report should be out by next week. Hopefully the result will be great since US dollar appreaciate a lot and rubber price has been stable all this while. Demand also increases as I observed there are quite a lot outbreak of bird flu around the world including Mers in Saudi Arab, H7N9 in China, H1N5 in Cambodia, H1N1 in India and flu season is coming in US from October to May.
FED's minute on last Friday did not mention much of QE tapering so I would expect there will be another round of panic selling around 17 and 18 September. For the mean time, we may observe technically rebound and the one thing I wanna make sure is whether foreign shareholders will sell again. So far this had happen to Indonesia, Thailand and Filiphine, it just unknown when is Malaysia's turn. Therefore, I get ready my bullet and also buy myself a new gadget Samsung S4 as a reward for myself.
Saturday, 24 August 2013
Thursday, 8 August 2013
Position strategically
After some time invested in KLSE, I believe we all can perform much better as long we can position our portfolio well. Although we may not be as professional as fund manager, retail investor has much more freedom in handling their portfolio. Unlike retail investors, fund managers not only need to invest more than 90% of the fund at any time, but also most of the time only cover stocks which are relatively well known. Fund managers seldom touch on small capital counter as they are mostly under coverage. Therefore, it will be the best if retail investor can make the move much faster than those fund manager did. Along the years, I observed many such counters such as Prestariang, tambun, Myeg and so on. These hidden gems are little known when they firstly listed and become popular when some report are written on them. I believe there are still many such counters since there are over 1000 counters in KLSE. Such value investment is alike with the popular investor called the Cold Eye or Fond Si Ling in Malaysia.
Before start any investment, I will always look for a theme behind those counters. Supermax for example is bought when H7N9 broke out in China. Only after i bought in Supermax, i found out MERS in Saudi Arabia has lasted even longer than H7n9. Now Malaysia Ringgit depreciating and reducing rubber price will surely help Supermax to gain further. This is because its earning is positively correlated with US dollar value since Supermax export all its rubber glove manufacture in Malaysia. Rubber price that contribute to the cost of rubber glove is negatively related with Supermax's earning. Although Supermax's new plant haven't finish according to the schedule, I believe the 2nd quarter result will be much better than before. Buy in the right time, right place and we will gain the right returns. Lets wait and see.
Tuesday, 6 August 2013
New move into the market
After tired of waiting for correction, I made some move this few days.
Last thursday I bought in 30 lots of Cscstel for 1.29 in anticipating for 2nd quarter result but it seems to be quite dissapointing as it turned out EPS only 2cents making EPS up till 2 quarters only around 6 cents. In quarter report, Cscstel is anticipating a much weaker outlook for next half year since steel is still abundance from China. However, I observed Cscstel started a new round of share buyback again. With 70 cents per share, I think Cscstel can use those money to buy back share in the open market to improve EPS since they seldom distribute special dividend this few years. The following is the newest price target by Hong Leong together with their report:
Hong Leong Trading Buy for Cscstel aiming RM1.50
Highlights
On a qoq basis, 2Q13 net profit weakened to RM7.5m (from RM17.5m in the previous quarter) mainly on the back of:
(1) Lower sales volume;
(2) Lower selling prices; and
(3) RM9.4m inventory writedown.
1H13 net profit rose by 54.3% to RM25.1m mainly on the back of the strong performance due to sharp recovery in sales volume (whereby earnings registered in 1Q13 itself was already more than the earnings registered in 1H12), but partly mitigated by RM9.4m inventory writedown incurred in 2Q13.
While international steel prices seem to have stabilized, we are holding our cautious view on the company’s mediumterm outlook as overcapacity in the region (in particularly, China, Indian, and Korean steel mills) will continue to weigh on the sector’s profitability including CSC Steel. Despite our less bullish view on the company’s earnings outlook, we believe share price downside is limited by its RM265.8m net cash (translates to 70 sen/share or 54% of share price) in its balance sheet.
(1) Overcapacity in China remains over the longer term; (2) Volatile input prices; and (3) Influx of steel products at cheap prices.
Positives – Strong balance sheet
Negatives – Inability to pass on higher cost of raw materials to end-users
Source: Hong Leong Investment Bank Research - 5 Aug 2013
http://klse.i3investor.com/servlets/ptres/17341.jsp
Besides that, I also topped up another 15 lots of Supermax at RM2.25 today to add up total of 50lots. Malaysia Ringgit depreciating toward Us dollar together with softening of rubber price and increasing of Mers cases lead me to accumulate more Supermax. Supermax at PE 12.39 still way behind its opponent's PE namely Topglov 17.6, Harta 21.15 and Kossan 16.52. Still waiting for Supermax latest quarter result to see what is the next move. I hope this will come before Fed next meeting on 16 and 17 September as I will clear of some stocks again to wait for another round of stock discount. Tomorrow will only be half day trading since Raya is coming. Selamat Hari Raya for those who are celebrating.
Last thursday I bought in 30 lots of Cscstel for 1.29 in anticipating for 2nd quarter result but it seems to be quite dissapointing as it turned out EPS only 2cents making EPS up till 2 quarters only around 6 cents. In quarter report, Cscstel is anticipating a much weaker outlook for next half year since steel is still abundance from China. However, I observed Cscstel started a new round of share buyback again. With 70 cents per share, I think Cscstel can use those money to buy back share in the open market to improve EPS since they seldom distribute special dividend this few years. The following is the newest price target by Hong Leong together with their report:
Hong Leong Trading Buy for Cscstel aiming RM1.50
Highlights
On a qoq basis, 2Q13 net profit weakened to RM7.5m (from RM17.5m in the previous quarter) mainly on the back of:
(1) Lower sales volume;
(2) Lower selling prices; and
(3) RM9.4m inventory writedown.
1H13 net profit rose by 54.3% to RM25.1m mainly on the back of the strong performance due to sharp recovery in sales volume (whereby earnings registered in 1Q13 itself was already more than the earnings registered in 1H12), but partly mitigated by RM9.4m inventory writedown incurred in 2Q13.
While international steel prices seem to have stabilized, we are holding our cautious view on the company’s mediumterm outlook as overcapacity in the region (in particularly, China, Indian, and Korean steel mills) will continue to weigh on the sector’s profitability including CSC Steel. Despite our less bullish view on the company’s earnings outlook, we believe share price downside is limited by its RM265.8m net cash (translates to 70 sen/share or 54% of share price) in its balance sheet.
Risks
Downside risks-(1) Overcapacity in China remains over the longer term; (2) Volatile input prices; and (3) Influx of steel products at cheap prices.
Forecasts
We are maintaining our 2013 earnings forecast, but cut 2014 earnings forecast by 19% to RM43.5m largely to account for lower sales volume assumption.Rating
Trading BUYPositives – Strong balance sheet
Negatives – Inability to pass on higher cost of raw materials to end-users
Valuation
SOP-derived TP cut by 6.8% to RM1.50 to reflect the downward adjustment in our 2014 earnings forecast, which more than offset a slightly higher net cash balance. Maintain T.BUY call on the stock.Source: Hong Leong Investment Bank Research - 5 Aug 2013
http://klse.i3investor.com/servlets/ptres/17341.jsp
Besides that, I also topped up another 15 lots of Supermax at RM2.25 today to add up total of 50lots. Malaysia Ringgit depreciating toward Us dollar together with softening of rubber price and increasing of Mers cases lead me to accumulate more Supermax. Supermax at PE 12.39 still way behind its opponent's PE namely Topglov 17.6, Harta 21.15 and Kossan 16.52. Still waiting for Supermax latest quarter result to see what is the next move. I hope this will come before Fed next meeting on 16 and 17 September as I will clear of some stocks again to wait for another round of stock discount. Tomorrow will only be half day trading since Raya is coming. Selamat Hari Raya for those who are celebrating.
Friday, 26 July 2013
Tired of waiting
Well, looking at KLCI that move up higher and higher is a very tiring process especially when already sold out most of the stock in my portfolio. So I decided to buy in some hidden gems again. This time the stock is MARCO. http://www.marcoholdings.com.my
Marco Holdings Berhad is a Malaysia-based company engaged in investment holding and the provision of management services to its subsidiaries. The Company, through its subsidiaries, is engaged in the distribution of electronic calculators and timepiece including the brand of Casio, Catterpilar, Movado, Hush Puppies and Dunlop . Within 5 years from 2007, Marco's eps from 0.56 cent had rise to almost four times at 2.04cent in 2012.
MARCO's major operation can be divided into local market and regional market (thailand, singapore, vietnam, brunei, cambodia, myammar). In local market, it is further divided into timepiece division, calculator division and musical keyboard and digital camera division. In 2012， timepiece division's revenue covered 56%， calculator division covered16%， musical keyboard and digital camera division covered by 7% and regional market covered 21%.
Since Malaysia government started to distribute BRIM in 2012 to students from all level including primary, secondary and tertiary, this drived MARCO's calculator division revenue to rise 4.2million or 29% from 14.2million in 2011 to 18.6million in 2012. Although calculator division is only the third contributor，I believed Marco's Casio calculator has indispencible position in Malaysian education system. I personally have few of this and still usable until this days. I bet every Malaysian have one because it has become a neccessity in studying Mathematics in the secondary.
SWOT Analysis
Strength
1. Marco has operated since 1972 and 41 years of experience prove the company can go through any economy crisis.
2. Government every year provide book voucher and allowance for students to buy stationary and indirectly increase the purchase of calculators.
3. Casio calculator is well known for its quality and long lasting which increase its brand awareness.
4. The table for quarter financial result above shows a steady increase in EPS proving that the company is in the right track.
5. The dividend given in 2012 was 1.4 cent which equivalent to DY of 9% based on share price of 15 cent.
6. The company is cash rich with 5.6 cent per share equivalent to more than 30% of the share price.
7. Casio calculator is the main preference for all secondary and tertiary students.
8. Marco had achieved positive earning since 2002 and continue to increase in EPS according to http://klse.i3investor.com/servlets/stk/fin/3514.jsp
Weakness
1. Marco does not possess the monopoly in the market as consumer can get Casio from other suppliers.
2. There will be competitors for its watches since Marco only distribute few brands.
3. Marco's warrant will reach due date in 2014 and will sure dilute its EPS. Marco's share issued is 794,589,500 units, Marco's wa is 272,484,780 units. Let say all the WA is exercised and the total share unit will be 1,067,074,280. If company maintain the profit like 2012 which was RM14,872,000, then EPS will be RM14,872,000/1,067,074,280= RM0.139 which still make MARCO's PE around 10 now.
Opportunity
1. The number of students in Malaysia is the potential client for Marco's calculator.
Number of students in Malaysia
Boy Girl
Preschool 97,158 94,784
Primary 1,411,082 1,332,067
Secondary 1,134,792 1,144,378
Total 2,643,032 2,571,229
Total amount : 5,214,261
source :http://www.moe.gov.my/
2. Government had assure there will be BRIM for students annually increasing student's purchasing power.
Threat
1. Economy downturn decreasing sales of Marco's watches and calculators.
2. Government may not be able to continue BRIM for long term.
In the process of studying this stock, I even email Marco to ask about their operation and I did get the reply rather fast from the head of marketing department as below:
My email:
Hi, I am one of the new share holder of Marco Holding Bhd. I read through your website and annual report but I failed to confirm whether Marco is the sole distributor for Casio product in Malaysia or in this South East Asia region. Is Marco the only distributor for Casio calculator?
In the list provided in the website did not include established bookstore such as Popular Book store, MPH, Smart Book shop and larger chain of book store that I think Marco can further explore into to increase market share in calculators. If Marco can monopoly the supply of Casio product, I believe the revenue and profit will increase tremendously.
Marco's reply:
My name is Lam Wai Khuen & I am appointed Head of Department of Sales & Marketing for Marco Corporation.
The core product that I am handling is CASIO watches & calculators product
Marco are indeed the official authorised distributor for CASIO (Timepiece, Calculators, Musical Instrument & Digital Camera) in Malaysia.
Under the current practices by CASIO Computer, they have not been encouraging their authorised distributors to use the term called "sole distributors" for reasons.
The recognized all their appointed partner as DMD (Domestic Marketing Distributor).
To clear the doubts, yes we are the only appointed distributor in Malaysia
Please refer to the web link (by CASIO) mentioned below:
For Watches: http://www.casio-intl.com/asia-mea/en/support/sales/wat/
For Calculators: http://www.casio-intl.com/asia-mea/en/support/sales/calc/
For Camera: http://www.casio-intl.com/asia-mea/en/support/sales/dc/
For Musical Instrument: http://www.casio-intl.com/asia-mea/en/support/sales/emi/
We are currently supplying to your mentioned key resellers.
In our distribution channel, supplying of product could be either direct or indirect approach.
Off course, we which we preferred direct supplying as we have more control of the supply & execution of marketing activities.
But there are some retailers tends to consolidate the suppliers & only work with certain appointed company to supply.
Under such icircumstances, we have to opt for the indirect supplying approach.
The product that supplied by Marco Group of Companies are instantly recognized upon via the imports stickers which mentioned of "Diimport Oleh"
Next to be trace, it our warranty card issued by MARCO.
As benefit to an appointed DMD, we are supplied with rare or limited editions to maximized our sales.
Also, we are supported with marketing fund to executed CASIO global marketing events such Shock The World Promotional Tour & sales campaign which ultimately benefit the brand & profitability to the business.
Along our progress, we as DMD is authorized to set up flagship store for CASIO (Timepiece) under the tradename called G-Factory
Monopoly market doesnt exist for CASIO products.
Parallel importations or grey marketeers do exist & this are not new scene in distribution trade.
Eg: In automobile industrial: you have the AP to import car, in phone industry: AP units & others consumer or electronic goods.
We sincerely, hope the above would clarify to your thoughts and continue to provide you the confidences as share holder to Marco Holding Berhad.
Thank you.
Best regards,
Lam Wai Khuen
Marco Holdings Berhad is a Malaysia-based company engaged in investment holding and the provision of management services to its subsidiaries. The Company, through its subsidiaries, is engaged in the distribution of electronic calculators and timepiece including the brand of Casio, Catterpilar, Movado, Hush Puppies and Dunlop . Within 5 years from 2007, Marco's eps from 0.56 cent had rise to almost four times at 2.04cent in 2012.
MARCO's major operation can be divided into local market and regional market (thailand, singapore, vietnam, brunei, cambodia, myammar). In local market, it is further divided into timepiece division, calculator division and musical keyboard and digital camera division. In 2012， timepiece division's revenue covered 56%， calculator division covered16%， musical keyboard and digital camera division covered by 7% and regional market covered 21%.
Since Malaysia government started to distribute BRIM in 2012 to students from all level including primary, secondary and tertiary, this drived MARCO's calculator division revenue to rise 4.2million or 29% from 14.2million in 2011 to 18.6million in 2012. Although calculator division is only the third contributor，I believed Marco's Casio calculator has indispencible position in Malaysian education system. I personally have few of this and still usable until this days. I bet every Malaysian have one because it has become a neccessity in studying Mathematics in the secondary.
SWOT Analysis
Strength
1. Marco has operated since 1972 and 41 years of experience prove the company can go through any economy crisis.
2. Government every year provide book voucher and allowance for students to buy stationary and indirectly increase the purchase of calculators.
3. Casio calculator is well known for its quality and long lasting which increase its brand awareness.
4. The table for quarter financial result above shows a steady increase in EPS proving that the company is in the right track.
5. The dividend given in 2012 was 1.4 cent which equivalent to DY of 9% based on share price of 15 cent.
6. The company is cash rich with 5.6 cent per share equivalent to more than 30% of the share price.
7. Casio calculator is the main preference for all secondary and tertiary students.
8. Marco had achieved positive earning since 2002 and continue to increase in EPS according to http://klse.i3investor.com/servlets/stk/fin/3514.jsp
Weakness
1. Marco does not possess the monopoly in the market as consumer can get Casio from other suppliers.
2. There will be competitors for its watches since Marco only distribute few brands.
3. Marco's warrant will reach due date in 2014 and will sure dilute its EPS. Marco's share issued is 794,589,500 units, Marco's wa is 272,484,780 units. Let say all the WA is exercised and the total share unit will be 1,067,074,280. If company maintain the profit like 2012 which was RM14,872,000, then EPS will be RM14,872,000/1,067,074,280= RM0.139 which still make MARCO's PE around 10 now.
Opportunity
1. The number of students in Malaysia is the potential client for Marco's calculator.
Number of students in Malaysia
Boy Girl
Preschool 97,158 94,784
Primary 1,411,082 1,332,067
Secondary 1,134,792 1,144,378
Total 2,643,032 2,571,229
Total amount : 5,214,261
source :http://www.moe.gov.my/
2. Government had assure there will be BRIM for students annually increasing student's purchasing power.
Threat
1. Economy downturn decreasing sales of Marco's watches and calculators.
2. Government may not be able to continue BRIM for long term.
In the process of studying this stock, I even email Marco to ask about their operation and I did get the reply rather fast from the head of marketing department as below:
My email:
Hi, I am one of the new share holder of Marco Holding Bhd. I read through your website and annual report but I failed to confirm whether Marco is the sole distributor for Casio product in Malaysia or in this South East Asia region. Is Marco the only distributor for Casio calculator?
In the list provided in the website did not include established bookstore such as Popular Book store, MPH, Smart Book shop and larger chain of book store that I think Marco can further explore into to increase market share in calculators. If Marco can monopoly the supply of Casio product, I believe the revenue and profit will increase tremendously.
Marco's reply:
My name is Lam Wai Khuen & I am appointed Head of Department of Sales & Marketing for Marco Corporation.
The core product that I am handling is CASIO watches & calculators product
Marco are indeed the official authorised distributor for CASIO (Timepiece, Calculators, Musical Instrument & Digital Camera) in Malaysia.
Under the current practices by CASIO Computer, they have not been encouraging their authorised distributors to use the term called "sole distributors" for reasons.
The recognized all their appointed partner as DMD (Domestic Marketing Distributor).
To clear the doubts, yes we are the only appointed distributor in Malaysia
Please refer to the web link (by CASIO) mentioned below:
For Watches: http://www.casio-intl.com/asia-mea/en/support/sales/wat/
For Calculators: http://www.casio-intl.com/asia-mea/en/support/sales/calc/
For Camera: http://www.casio-intl.com/asia-mea/en/support/sales/dc/
For Musical Instrument: http://www.casio-intl.com/asia-mea/en/support/sales/emi/
We are currently supplying to your mentioned key resellers.
In our distribution channel, supplying of product could be either direct or indirect approach.
Off course, we which we preferred direct supplying as we have more control of the supply & execution of marketing activities.
But there are some retailers tends to consolidate the suppliers & only work with certain appointed company to supply.
Under such icircumstances, we have to opt for the indirect supplying approach.
The product that supplied by Marco Group of Companies are instantly recognized upon via the imports stickers which mentioned of "Diimport Oleh"
Next to be trace, it our warranty card issued by MARCO.
As benefit to an appointed DMD, we are supplied with rare or limited editions to maximized our sales.
Also, we are supported with marketing fund to executed CASIO global marketing events such Shock The World Promotional Tour & sales campaign which ultimately benefit the brand & profitability to the business.
Along our progress, we as DMD is authorized to set up flagship store for CASIO (Timepiece) under the tradename called G-Factory
Monopoly market doesnt exist for CASIO products.
Parallel importations or grey marketeers do exist & this are not new scene in distribution trade.
Eg: In automobile industrial: you have the AP to import car, in phone industry: AP units & others consumer or electronic goods.
We sincerely, hope the above would clarify to your thoughts and continue to provide you the confidences as share holder to Marco Holding Berhad.
Thank you.
Best regards,
Lam Wai Khuen
Thursday, 18 July 2013
Time line of a the 2008 Sub Prime Mortgage Crisis.
Tuesday, 16 July 2013
Reduce mistake
Just had a simple talk on investment strategy with my second brother last weekend. We talked about his early investment route that cost him more than 10k loses. He stepped into Klse right before the 2008 Great Depression and got out of control when he chose to buy cheap warrant stocks. At that time, I still haven't start my investment since still study in university.
Cheap plus warrant is simply the fastest way to lose money. Warrant is just issue for certain time and one who buy this must be ready to exercise it. Although I had invested in stock market for more than two years, I still haven't confident with warrant so I choose not to touch it. My brother could have avoid such loses if he did not buy something he not clear with.
Cheap plus warrant is simply the fastest way to lose money. Warrant is just issue for certain time and one who buy this must be ready to exercise it. Although I had invested in stock market for more than two years, I still haven't confident with warrant so I choose not to touch it. My brother could have avoid such loses if he did not buy something he not clear with.
Saturday, 13 July 2013
Plantation counters
Well, it looks like CPO future is reducing in fast pace. Just surfing around and found this website that I think is pretty good with its news and data. http://www.palmoilhq.com/palm-oil-plantation-stocks/ .
Subscribe to:
Posts (Atom)