Saturday, June 30, 2007

Weekend Reading

Posted on Claire Barnes's Apollo Investment Management ( here ) :

Do click on that article. Great reading for the weekend.

Friday, June 29, 2007

Analabs



Analabs just announced its earnings 2007 Q4 earnings tonight. Quarterly rpt on consolidated results for the financial period ended 30/4/2007

1. Q4 earnings on a y-y basis was ok but poor on a q-q basis.

2. Poor track record since fy 2002 but the company has performed pretty well this year.

3. This was what the company said in its notes.


  • The Group’s turnover for the year ended 30 April 2007 at RM35.403 million was higher compared to RM34.141 million for the corresponding period in the preceding year, representing an increase of 4%. The major contribution of the revenue was derived from formulation and repackaging of chemicals segment and recovery and sales of recycled products.

    Profit before taxation increased by RM4.447 million or 101% mainly due to increase in contributions from formulation and repackaging of chemicals segment, recovery and sales of recycled products segment, and gain on disposal of quoted investments for the year ended 30 April 2007.

    The decrease in revenue for the current quarter as compared to the preceding quarter was mainly due to decrease in revenue contribution from formulation and repackaging of chemicals segment and aqua-culture divisions.

    Profit before tax of RM1.075 million was higher than the loss before tax of RM0.453 million for the corresponding period in the preceding year mainly due to the gain on disposal of quoted investment in the equity market for the current quarter as compared to the preceding corresponding quarter which included an allowance for diminution in value for OTT investment in South Africa.

4. Company dabbles in the share market. The current fiscal profit of 8.325 mil is boosted by disposal of securities, which saw Analabs gaining 1.837 mil from its disposal of shares this fiscal year. Some folks hate such share dabbling!

Currently, as stated in the earnings notes, "The investment of RM5.096 million in the condensed consolidated Balance Sheet for the current quarter has been reclassified as non-current assets". The market value of these shares is now worth rm6.094 million.

5. Cash balance is extremely healthy, so is the cash flow. Net cash is now 35.197 mil.

6. Dividends.

Decent improvement in payout since fy 2005 but pale in comparison since fy 2002.

Now company has tons of cash, hence it is argued that it should have done much better in sharing its wealth back with its shareholders.

Another Misleading News Article?

Surfing thru the Bursa website, I chanced upon this announcement: Ygl Convergence Berhad ("Ygl" or "the Company") - Article Entitled:"YGL embarks on acquisition trail"


  • Reference is made to the query letter from Bursa Malaysia Sceurities Berhad ("Exchange") dated 25 June 2007 (Ref No: NM-070625-51075) on the above article ("Query Letter").

    The Company wishes to inform the Exchange that the Company had some problems with the office fax machine for the past few days and as such, the Company only managed to receive a copy of the Query Letter which was re-faxed by the Exchange at 3.47 p.m. on 28 June 2007. The Company sincerely apologise for any inconvenience caused to the Exchange by not being able to reply to the Query Letter in a timely manner. Accordingly, the Company furnish herewith the reply within one market day from the date the Company received the Exchange's Query Letter.

    In this respect, the Company wishes to clarify the following statements which appeared in the New Straits Times, Biznews, page 42, on Saturday, 23 June 2007:-

    (i) Pertaining to the sentence "... several acquisitions and joint ventures are on the horizon this year… ".

    The Company wishes to clarify that the Company did not comment on the number of acquisitions and joint ventures nor its timing thereof during the press conference. The press had misinterpreted the Company's statement in reply to the question raised as to the reason for the recent fund raising exercise of RM9 million undertaken through the issuance of new shares via a private placement. The Company informed the press that the fund raising exercise was mainly to cater to the YGL group's working capital requirements.

    (ii) Pertaining to the sentence " YGL… is also eyeing listing on a regional bourse… ".

    The Company wishes to deny this statement as
    YGL at this particular moment has no plans to list on a regional bourse.

    This announcement is dated 29 June 2007.

How?

1. Was this simply POOR reporting or was there an intent to mislead?

2. How would a normal reader of our newpapers know if what they read was badly misinterpreted by the reporter?

3. Will the newspaper publish a retraction of what has been written?

4. Do you believe that something needs to be done URGENTLY?

NextNation II

Here's an update to past blog posting, NextNation.

NextNation announced its quarterly earnings tonight.
Quarterly rpt on consolidated results for the financial period ended 30/4/2007

Well, from an investing perspective, it's pretty ugly.

Compare the quarterly earnings posted versus the quarterly earnings done on the
NextNation posting.



It's a worry.

And of course their receivables concern again should not be discounted as mentioned earlier. Frankly I do not see what the receivables should be so high!

Flashback to what was written earlier (
NextNation )

  • The biggest concern for me is that NextNation has an issue with its receivables and because of this, one do not really see wealth being generated in the company's cash flows despite its very impressive earnings.

Wednesday, June 27, 2007

Misleading Article: Tamco Part II

Blogged last night: http://whereiszemoola.blogspot.com/2007/06/tamco-misleading-article.html

In this incident, the source had clearly insinuated an extremely price sensitive statement.

  • Tamco Corporate Holdings Bhd is mulling a plan to dispose of its core switchgear manufacturing operations to a foreign investor. The deal, if closed, would land it a neat cash pile that could potentially be distributed to shareholders.

    Sources reveal that Tamco may get as much as RM388 million in cash if the deal goes through.

    On a per share basis, if all the cash is distributed, Tamco's shareholders could get up to RM1.50 per share. However, the disposal will leave Tamco without a core business, which means it will have to acquire a new one.

A cash distribution of RM1.50 per share when the stock was trading only in the 90 sen region.

This clearly drove the price UP.

So now that Tamco has said that it was unable to comment on whether a cash distribution of RM1.50 per share will be undertaken, do you reckon that the reporter should be questioned who the source was?

Yes, my dearest reporter(s), please tell us who your informer(s) are! Just who are your sources of constant misleading information?

Don't you want to see integrity in our financial news?

Now, this Tamco story was published on the Edge Weekly. The denial was posted on Bursa Website. So for the common news reader, if such constant denials were to continue to happen, then how would these news reader know if what they are reading is true or false?

Don't you think it's extremely ludicrous to ask the readers to refer to Bursa website to confirm the news that they had read is true or false?

If this is the case, then I strongly suggest each FINANCIAL NEWS display a huge disclaimer informing their readers that what they read could be false!

Or PLEASE REFER TO BURSA WEBSITE TO CONFIRM THE NEWS THAT YOU HAD JUST READ IS TRUE OR FALSE?

Simply ludicrous, isn't it?

Tuesday, June 26, 2007

Cooking And More Cooking!!

Two articles posted on The Edge Weekly on TransMile and Megan.

Quote: In a nutshell, it was a well-designed scheme running for years involving some customers and suppliers and the company's top management.
Quotes:
  1. "If everyone writes off their loans completely, the banks will still stand but there will be a substantial impact on earnings. It's a problem," says a bank executive last week
  2. "It's like a house of cards. All you need is for one bank to pull the credit line and the whole company will collapse," he says.
  3. Megan Media seems to worry the lenders more. As at January, its borrowings total RM888 million, of which RM320 million is in the form of Islamic bonds that have defaulted. Megan's principal bankers are Citibank, CIMB, DBS, HSBC, Malayan Banking and RHB. "
  4. Each bank's exposure to Megan ranges from as low as RM10 million to RM250 million. So the size of the hit will vary," says the bank executive.
  5. "For now, it's generally agreed among the creditors that there's no point pulling back credit lines or calling for the company to be liquidated. But some are wary of Citibank because its head office may decide to pull the plug," notes the bank executive.

Tamco: Misleading Article?

Posted on The Edge Weekly:

The article suggested the following.

  • Tamco Corporate Holdings Bhd is mulling a plan to dispose of its core switchgear manufacturing operations to a foreign investor. The deal, if closed, would land it a neat cash pile that could potentially be distributed to shareholders.
    Sources reveal that Tamco may get as much as RM388 million in cash if the deal goes through.
    On a per share basis, if all the cash is distributed, Tamco's shareholders could get up to RM1.50 per share. However, the disposal will leave Tamco without a core business, which means it will have to acquire a new one.

The sources strikes once more!

Now get this, if the reader of this financial news article had no idea how to surf the Bursa Website, how would the reader knows the story is misleading?

This is what Tamco said in its announcement on Bursa.

  • We refer to the Exchange's letter dated 25 June 2007 (Ref NM-070625-53228) on its query on the article concerning Tamco which appeared in The Edge, page 21, on Monday 25 June 2007.

    We wish to reply as follows:

    1. As announced by the Company on 9 May 2007, Tamco has appointed Credit Suisse (Singapore) Pte Ltd and ECM Libra Avenue Securities Sdn Bhd as the Company's advisors to look for prospective strategic partner(s)/investor(s) for the core medium voltage switchgear business of the Company. The Board wishes to inform the Exchange that the process is still on-going and the Board has not received any definitive proposal from potential partner(s)/investor(s).
    As such, the Board is unaware of how a sale figure of RM388 million (as mentioned in the article) is derived. For the same reason, the Board is also unable to comment on whether a cash distribution of RM1.50 per share will be undertaken.

    The Board will make the necessary announcement in due course should the occasion arise in accordance with the provisions of the Bursa Malaysia Securities Berhad Listing Requirements.

    2. The Board wishes to inform the Exchange that the Group's accounts for the financial year ended 31 May 2007 are currently being prepared. As such, it is unable to comment on whether the revenue for the Group for the full financial year ended 31 May 2007 will come in at RM445 million as mentioned in the article.

Ahem!

Would you call the financial news as misleading?

Now consider that cash distribution of RM1.50 per share thingee.

Tamco was a share trading around 0.90 sen!

So when the financial news suggests such a massive cash distribution, surely this would have been one heck of a sexy story!

Well have a look at the current stock trading data for Tamco.

Do note how the stock jumped to life a day before the publication was published and note how the stock gained handsomely the day of the publication!

Monday, June 25, 2007

Interview With Mohnish Pabrai

Posted on Value Quest, an interview of Mohnish Pabrai on Bloomberg.

Great Stuff, give it a click here: Bloomberg Interviews with Mohnish Pabrai

Sunday, June 24, 2007

What lies Ahead?

Posted by Eric Miller on Bankstocks.com

  • Importantly, the economy and the stock market have thrived on cheap credit, but the price and availability of credit has been changing. The question is how large of a change lies ahead.

Great article for a lazy Sunday reading: The Retreat of Complacency

Saturday, June 23, 2007

Regarding Bina Puri Article on Star Bizweek

My Dearest JL,

Regarding the article on
Bina Puri taps overseas market to grow order book.

Yes, the stock has been on a tear! It is hot!


  • The news has piqued investor interest; Bina Puri’s shares have been steadily rising and hit a 27-month high of RM1.18 on Wednesday. Year to date its shares have gained over 70%.
However, there are certain issues in the article that I believe you should address!
  • As at end-March this year, the company had as much as RM18.1mil in cash and bank balances while its long-term bank borrowings stood at RM108mil.

That's a rather misleading statement.

Here is the link to that B.Puri's earnings notes as at-end-march (reported on May 2007). http://announcements.bursamalaysia.com/EDMS/annweb.nsf/8b25383a269fcce548256d79001af770/482568ad00295d07482572e9003141f9/$FILE/BPHB-1st%20Qtr%202007.pdf

1. "As at end-March this year, the company had as much as RM18.1mil in cash"

Well, B.Puri has 18 mil more in FD that the article failed to mention. Total cash is 36.386 million.



2. while its long-term bank borrowings stood at RM108mil.



Total group borrowings is 386.034 million.!!!

So let's look at the statement again.


  • As at end-March this year, the company had as much as RM18.1mil in cash and bank balances while its long-term bank borrowings stood at RM108mil.
Based on that statement, it would appear that B.Puri is a company with a nett debt of 89.9 million only.

But if i were to account the corrected one, total cash should be 36.386 milllion, whereas total debts should be 386.034 million. Which means that B.Puri is a company with a nett debt of 349.648 million!

Wow!

Total net debts is mis-stated by the reporter by some 259.748 million!

Makes a whole lot of difference, yes?

So, do you think that such business news reporting is misleading?

And what chance does the normal investing public has when our business news are constantly filled with misleading information?

What if the normal investing public does not know how to check from the Bursa website?

Don't you think the investing public, the minority shareholders will lose out in the long run when our local financial journalist continues to publish misleading articles?

The reporter then paints the exciting prospect, the links between B.Puri and tycoon Tan Sri Syed Mokhtar Albukhary and with it the link to MMC Corp and the link to Saudi Bin Laden Group!

  • In its notes, which accompany its financials, Bina Puri adds that is also likely to ink jobs in Vietnam, Thailand and the Middle East, which should augur well for the company. Presently, some 35% of Bina Puri’s revenue stems from abroad.

    Jobs in the Middle East could also be promising for the company particularly on the back of a commonly held notion that the company is linked to tycoon Tan Sri Syed Mokhtar Albukhary, not least because his flagship company, MMC Corp Bhd has tied up with the Saudi Bin Laden Group for a massive US$30bil project to build the Jizan economic city in Saudi Arabia.

    Feisal, largely deemed to be in “Syed Mokthar's circle”, sits on the board of two other companies also believed to be linked to Syed Mokhtar. They are Gula Padang Terap Bhd and Aliran Ihsan Resources Bhd.

    Feisal holds a direct stake of 6.5% in Bina Puri. Other substantial equity holders in Bina Puri are its managing director Tan Sri Tee Hock Seng, who has 16.7% shareholding in the company held in his own name and via his vehicle Tee Hock Seng Sdn Bhd, and company director Tony Tan Cheng Kiat with about 11.2%.

    The largest shareholder of Bina Puri is privately-held Jentera Jati Sdn Bhd with a 25.2% interest.

    According to the company’s annual report 2000, Syed Mokhtar has a 7.3% interest in the company via Vickers Ballas & Co Pte Ltd, while Jentera Jati owns a 18% stake.
That massive US$30bil project to build the Jizan nicely mentioned makes the stock sexy, yes?

And then what amazes me is the last two paragraph.

  • For the quarter ended March this year, Bina Puri posted a net profit of RM1.4mil on the back of RM104.7mil in sales, an improvement of some 27% and 5% respectively from a year ago. Kenanga Research attributes the improvement to higher profit contribution from associates and lower tax expenses.

    In a recent research report, TA Securities forecasts Bina Puri raking in as much as RM11mil in net profit on the back of RM550mil in revenue for the current financial year – an improvement of about 116% in net profit with revenue gaining by an estimated 10%.
So two research house reports were mentioned by the reporter.

The issue for me is that the reporter highlights TA Securities forecast of 11 million.

Firstly, it's great to see the reporter GOING GREAT LENGTHS and research what's been said and mentioned by research houses.

However, it would be nice if the reporter highlighted Kenanga Research forecast too, right?

Why highlight one without highlighting the other?

So I dig around. Kenanga Research can be found on Bursa website. http://eresearch.bursamalaysia.com/download.aspx?id=5719&type=research

This is what I found.



Kenanga Research forecast for the said current year 2007 for Bina Puri is only 7.5 million!

Yes, profit forecast is never easy nor is it precise but I am left seriously wondering here.

Why did the reporter left out Kenanga's forecast of only 7.5 million and only mentions TA's much higher forecast of 11 million?

I wonder if there is an intent to mislead?

How?

Same if the cash and debts issue, yes? Reporter highlights it BUT understates the total debt by some 259.748 million, and then the reporter chooses to highlight TA Securities net earnings forecast of 11 million, which is just about some 46.7% higher than Kenanga Research forecast!

How?

Here is the link to Bina Puri's last fiscal year Q4 earnings posted on feb 2007. Quarterly rpt on consolidated results for the financial period ended 31/12/2006

Bina Puri earned some 5.2 million for fy 2006 only.

Which means TA Securities earnings forecast of 11 million is rather hugely optimistic, yes?

And just for the record, Bina Puri last traded at 1.26 up 11 sen on Friday 22nd 2007.

And here is the NICE chart of BPuri.

Tip Of the Iceberg??

Them US stocks they didn't do too well, and as reported on CNN, Stocks sold off big Friday, with the Dow industrials sliding more than 176 points, as subprime woes reemerged and investors remained nervous over rising interest rates.

  • The dollar hit a 4-1/2-year high against the yen, oil rose, and bonds mounted a mini-rally on a flight to quality.

    Stock trading has been volatile in recent weeks due to ongoing worries about whether rising bond yields and mortgage rates would hurt the economy, just as growth seemed to be picking up from a weak first quarter. Those worries returned Friday.

    In addition, rumors about more hedge fund problems were hurting the market, according to Todd Clark, director of stock trading at Nollenberger Capital Partners in San Francisco.

    "People think there might be another hedge fund that might be in trouble," said Clark.

    The rumors came after two Bear Stearns hedge funds nearly folded earlier this week, apparently stung by bad deals in the subprime lending sector. Bear Sterns said Friday that it's bailing out one fund to the tune of $3.2 billion, and is still working on a rescue plan for the other.

    News of the bailout spooked investors.

    "This is not over yet," said Awad. "We don't know who's involved, who's not. The whole recovery has been built of confidence, leverage and cheap money. This has the potential to be widespread in terms of seizing up capital."

Cheap money is a huge issue isn't it?

Regarding the subprime woes, here is an excellent blog posting posted on The Big Picture. How Might Subprime Issues Unravel?.

And FSO Market commentator, Brian Pretti gives an excellent write on The "State" of Affairs in Mortgage Lending.

And over at Comstock, The Tip of the Iceberg?

The damage estimates

  • It is estimated that various institutions own about $6 trillion of mortgage-backed securities of which about $800 billion are subprime. About 13% of subprime mortgages are currently in default, and foreclosure rates on these loans are soaring.

And how the rise in interest rates would hurt them. $2 TRILLION of mortgage securities which could be adjusted to higher rates!

  • In addition about $2 trillion of mortgage securities are backed by adjustable rate loans (ARMS) that have been or will soon be reset at higher rates.

And here is the possible danger.

  • There are undoubtedly a large number of other hedge funds with portfolios similar to those of Bear Stearns, and it appears that, in the vast majority of cases, the securities have not been marked to market. The big fear is that any auction of the Bear Stearns holdings will expose the true price of all these holdings and result in immense losses with an unknown, but potentially dangerous chain reaction throughout the financial system. The ratings agencies have generally given these securities high ratings and have only recently started to slash their grades. Last week Moody’s cut ratings on 131 bonds backed by pools of subprime loans and are reviewing 247 others, including 111 it had recently lowered. This could force the sale of bonds that were cut to "junk" from "investment grade" and result in significant portfolio write-downs.

    The problem is that what we’ve seen to date is probably only the tip of the iceberg. David Viniar, Goldman Sachs CFO, and former head of firm-wide credit risk, stated that "I continue to believe that we haven’t seen the bottom in the subprime market. There will be more pain felt by people as that works through the system." Ara Hovanian, CEO of big builder Hovanian Enterprises said "There isn’t a recovery about to happen." SEC Chairman Christopher Cox stated that "Our concern is with any potential systemic fallout." In our view the potential effects of the falling housing market on both the economy and the financial arena puts the stock market in an exceedingly risky position in the period ahead.

Posted on Bloomberg News. Bear Stearns Fund Collapse Sends Shock Through CDOs

  • Pretty Ugly
    Merrill's decision yesterday to accept bids on $800 million of bonds it took as collateral for its loans further stifled trading in CDO securities, said David Castillo, who trades asset- backed, commercial-mortgage and CDO bonds in San Francisco at Further Lane Securities.
    ``Nobody wants to look at the truth right now because the truth is pretty ugly,'' Castillo said. ``Where people are willing to bid and where people have them marked are two different places.''
    The perceived risk of holding Bear Stearns bonds jumped to a three-month high, according to traders betting on the creditworthiness of companies in the credit-default swaps market.

Thursday, June 21, 2007

BCT Part II

My Dearest Doc,

Finished the posting
BCT late. I do feel that there were stuff I did not mention as I had I did a fairly rush job on it.

Firstly, here is BCT's quarterly earnings so far.



Total earnings for the 3 quarters is some 9.896 million.

Regarding the last two paragpraphs. The comments from HDBS and KN.

Jun 8th, 2007, from HDBS

  • Cheap stock. With 3-year CAGR of 40%, BCTT shares are trading at only 5.0x FY08F EPS. We believe it should be worth 8x FY08 EPS or RM1.70/share, which implies a very conservative 0.2x PEG.

Key note for me is 3-year CAGR of 40%.

This means that HDBS is really assuming and expecting an amazing growth for BCT. Have a look at HDBS earnings table posted below.

So, BCT which earned 10.5 million for its last fiscal year ( its current earnings for 3 quarters is 9.896 million) is expected to earn 25.8 million by FY 2008.

And because it is expected to do so good, and based on this expected achievement, BCT is then reasoned cheap by HDBS.

For it's rather optimistic.

Let's compare with KN.

Jun 11th, 2007, from KN
  • Maintain BUY with a revised 12-month target price of RM1.56 (+30.0%) based on a FY08 P/E of 10.0x (2-year (FY06-FY08) PEG ratio of just 0.52x). BCTT’s FY07 and FY08 net profit growth of 45.9% and 38.6% y-y remain respectable despite our slight exchange rate driven earnings downgrades. At RM1.03, BCTT shares are trading at highly attractive FY07 and FY08 P/E of 8.8x and 6.6x, respectively.

My opinion? Strange. Cos how could "BCTT’s FY07 and FY08 net profit growth of 45.9% and 38.6% y-y remain respectable" when this is but just a projection. Doesn't BCT has to achieve these targets before being getting its respects?

Anyway, here is KN's earnings table projection for BCT.

KN's net earnings projection for BCT's FY 2008 is 20.9 million. Which is much lower than HDBS projection of 28.9 million!

So for me, it appears to me, that the high target prices are assigned to BCT because both HDBS and KN expects fantastic growth for BCT.

Is this achievable?

For me, this is one of the issue I would address. However, as it is, there isn't much data available but 3 quarterly earnings data from BCT.

rgds

Wednesday, June 20, 2007

BCT

My Dearest Doc,

History.

June 27 2006. Posted on Business Times.

  • MSC-status BCT Tech develops, design and markets mixed signal chip components to manufacturers of products for computer and consumer markets. It develops standard and custom-made chips for areas of power management, power supply and solid state lighting.

    BCT Tech is expected to be listed on Mesdaq market of Bursa Malaysia Bhd in the third week of July. It will be the first fabless integrated circuit (IC) company to make a debut on Mesdaq.

    The company is making a public issue of 12.2 million new shares of 10 sen par value each at a price of RM1.23 per share. Of the total new shares, one million will be available for public application and 1.2 million for the directors, eligible persons and business associates of BCT Tech and its subsidiaries. The remaining 10 million shares will be placed out to selected investors.

    Following the public issue, BCT Tech will be making a one-for-one bonus issue of 60.98 million, with ex-bonus price of 61.5 sen per share.


    BCT Tech expects to raise RM15 million from the public exercise, of which RM4.5 million will be spent on research and development, while RM4 million will be allotted for business development and marketing to drive its expansion. Another RM4.7 million will be utilised for working capital.

July 1 2006. BCT to make analogue and mixed-signal chips.

  • Chip designer

    It appears that intense focus on technology is the main driver of this company’s growth. Over the past three years, BCT has spent more than 27% of its revenue on research and development.

    The fruit of R&D has enabled the company to have more than 25 chips in its catalogue, 46 proven analogue and digital intellectual properties. And of course, these figures will continue to grow as the company expands.

    Despite the fact that BCT first shipped its products to its clients in 2004, the growth and acceptance of its chips have been pretty phenomenal.

    Last year, the company grew by 110% and 527% on revenue and net profit respectively. This was mainly derived from the sales of its products to tier 2 and tier 3 players.

    BCT is working with a few tier-1 customers on future chip products currently at various stages of development. With this development, BCT’s chief executive officer and founder Ken Lee expects to continue growing revenue aggressively.

    Lee says that accessing tier 1 customers for its application specific standard product (ASSP) products is part of its mid-term plan to leapfrog its growth.

    “The average size of the current ASSP customer is between 50,000 and 200,000 units per month. With a tier 1 customer, potentially, you are looking at 300,000 to over 2 million units per month,” he says.

    For its financial year (FY) ending December 2006, BCT is targeting to grow revenue 149% to RM50.61mil, while net profit is expected to grow 74% to RM10.42mil.

    While one may think that profit margins of 21% might be pretty unsustainable, Lee begs to differ.

    “We are not producing “Me too” products. If we were, then we would have to worry about price erosion in our margins. But our chips are high-tech chips with scarce alternatives,” he says.

July 11 2006. Business Times

  • BCT Technology stock a fair value at RM1.20

    July 11 2006

    CHIP design house BCT Technology Bhd, which will soon be listed on Mesdaq, has locked in contracts that could contribute to a 74.6 per cent and 60.9 per cent jump in net profit for this year and 2007 respectively, a research house said.

    Kenanga Retail Research said it pegs the fair value of the stock at RM1.20, which implies 95.1 per cent upside over the initial public offering (IPO) price.

    BCT Tech’s IPO price is 61.5 sen after a one-for-one bonus issue upon the listing.

    “At our RM1.20-target price, BCT Tech shares would be trading at a financial year 2006 and 2007 price earnings of 14 times and 8.7 times, respectively,” Kenanga said in a research note.

July 22 2006, Business Times

  • BCT Technology is the first fabless company, producing analogue and mixed-signal chips, to be listed on the Mesdaq market.

    Being fabless, it only designs and develops semiconductor chips but does not manufacture them.

    BT Technology shares opened with a premium of 15.5 sen, or 25.2 per cent, at 77 sen against its ex-bonus issue reference price of 61.5 sen.

    It closed 11.5 sen or 18.7 per cent higher at 73 sen with 18.72 million shares traded.

Jan 13, 2007. BCT Tech is set to meet its ambitious growth target

  • Up to the nine months of September 2006, BCT has only achieved cumulative net profit of RM6.52mil on the back of RM28.42mil in revenue. Should BCT achieve the full year forecast, it would mean that its final quarter itself is delivering approximately 40% of its entire financial year.

    “We are quietly confident of achieving the RM10mil,” says BCT's founder and chief executive officer Ken Lee.

    Adds BCT's fellow founder and executive director YP Chong. “We are preparing the accounts for audit now, and based on preliminary numbers, we are on target for our profit forecast.”

    Assuming that the profit forecast is in the bag, then based on BCT's current share price of 79 sen, the stock would be trading at 9 times (x) historical price earnings ratio (PER), which appears rather attractive.

    For 2007, K&N Kenanga head of retail research Teoh Cheng Guan appears very positive on this company. He says that essentially locked in contracts will result in a 60.9% jump in FY07 net profit to RM16.9mil.

26/2/2007. BCT announced its Q4 earnings. Quarterly rpt on consolidated results for the financial period ended 31/12/2006

BCT did 10.531 million. This is what the company said in its notes.

  • The Group's recorded revenue and profit before tax of approximately RM17.921 million and RM4.015 million respectively for the current financial quarter, which were approximately RM3.530 million or 24.53% and RM1.680 million or 71.95% higher than the immediate preceding quarter. The increases in revenue and profit before tax were mainly due to the increased sales of ASSP products in the current financial quarter as compared to the immediate preceding quarter . The higher profit margin recorded in the current financial quarter as compared with the immediate preceding quarter was mainly contributed by the introduction of new ASIC products that have higher selling price in the current financial quarter. The increased trade receivables of approximately RM 19.775 million as compared to the immediate preceding quarter was in tandem with the increased revenue generated during the period. Inventory levels also recorded an increase of RM 21.751 million to RM22.971 million as compared to the immediate preceding quarter. This includes buffer inventory and raw materials (WIP wafer) committed by the Company to meet the projected sales demand for first half of year 2007.

14/5/07. Quarterly rpt on consolidated results for the financial period ended 31/3/2007

This is what BCT has achieved since listing.

Margin improved but sales revenue was down a lot.

This is what the company said in its notes.

  • The Group's recorded revenue and profit before tax of approximately RM9.313 million and RM3.546 million respectively for the current financial quarter, are approximately RM8.608 million or 48.03% and RM0.469 million or 11.68% lower than the immediate preceding quarter. The decreases in revenue and profit before tax were mainly due to the slower sales of ASSP products in the current financial quarter as compared to the immediate preceding quarter due to the longer factory down time during the festive season coupled with the shorter number of business days during the first quarter of the year. The higher net profit margin recorded in the current financial quarter as compared with the immediate preceding quarter was mainly contributed by the sales mixed in the current financial quarter which consists of more products with higher selling price and gross margin. The trade receivables decreased by approximately RM16.865 million as compared to the immediate preceding quarter due to management’s decision to tighten credit control. Inventory levels also recorded a decrease of RM3.734 million to RM19.236 million as compared to the immediate preceding quarter. The Company will aggressively reduce its buffer inventory with the aggressive marketing strategy and timely rolling out of its planned new products for the coming quarter in 2007.

Issue to watch. Dilutions of earnings and note KN.

2nd April 2007, HDBS iniates coverage.

  • We accord BCTT a conservative price target of RM1.70, which is based on 8x FY08 EPS, and is a 38% discount to comparable stocks in this region. With a 40% 3-year CAGR, the target price implies a conservative PEG of only 0.20x.

Jun 8th, 2007, from HDBS

  • Cheap stock. With 3-year CAGR of 40%, BCTT shares are trading at only 5.0x FY08F EPS. We believe it should be worth 8x FY08 EPS or RM1.70/share, which implies a very conservative 0.2x PEG.

Jun 11th, 2007, from KN

  • Maintain BUY with a revised 12-month target price of RM1.56 (+30.0%) based on a FY08 P/E of 10.0x (2-year (FY06-FY08) PEG ratio of just 0.52x). BCTT’s FY07 and FY08 net profit growth of 45.9% and 38.6% y-y remain respectable despite our slight exchange rate driven earnings downgrades. At RM1.03, BCTT shares are trading at highly attractive FY07 and FY08 P/E of 8.8x and 6.6x, respectively.

Too little info for me to comment more.

rgds

Tuesday, June 19, 2007

Do you think that Bursa should take action against misleading reporting? Part II

I read with great amusement of what one forum member had posted on Sahamas regrading my blog posting, Do you think that Bursa should take action against misleading reporting?

Posted by Stockraider1,

  • Dear Moolah,
    I read with great amazement on your compilation of Jose Borrock reporting today and suggesting SC to take action.

    1)Why SC wants to do that ? Jose had done a great job exposing the rumor and killing it!

    2)Just bcos of someone misdeeds(insider) u try to blame it to the reporter ! If u are the reporter is it fair.

    3)stopping the reporter from reporting misdeeds (rumor)is wrong is like we preventing catching the robber ? Come on lets bark at the right culprit!

    4)Taking out a reasonable efficient solution (query confirmation) without putting up an alternative is a disservice to the capital market.

    5)the public or is it the stock operator ? Need to be prudent of relying on sensitive info (rumor) which need verifications-If u want to wait for accurate facts please wait for confirmation b4 committing to buying.If u want to speculate who can stop u ?

    6)For those people who wants to invest on pure reasonable good accurate facts my suggestion is to rely on Bursa announcement release every day!
I will not make a reply to these comments but instead I shall leave these comments open and invite everyone to post your opinion on this issue.

Monday, June 18, 2007

Do you think that Bursa should take action against misleading reporting?

Published on Reuters News, Bursa Malaysia may take action against Transmile


  • "Bursa will not hesitate to take action against the companies should they be found to have made misleading announcements; and also against the directors if they had caused, aided, abetted or permitted the breach,"

So what about misleading news publications?

What if a reporter continues to publish misleading articles based on unconfirmed sources, time after time again?

This morning, Star Business reporter, Jose Barrock, reported the following, According to Sources: Ranhill Strikes Oil!!!!!!!!

  • Monday June 18, 2007

    Ranhill Bhd strikes oil

    By JOSE BARROCK

    RANHILL Bhd and its joint venture partners are believed to have struck oil in the Citarum block off West Java late last Friday, according to sources familiar with the company.

By lunch time, the stock flew up, up and away, rising a whopping 54 sen or 29% just because of that "according to sources" article published this morning!

However, before the market re-opened for the afternoon session, Ranhill made the following announcement, which was reported by Bloomberg.

  • Ranhill Bhd., a Malaysian engineering company whose shares surged 30 percent today, denied a report that it struck oil in an area off West Java, Indonesia.

    ``There's no commercial oil and gas show as yet,'' Chief Operating Officer Amran Awaluddin, said in an interview in Kuala Lumpur today.

The stock retreated instantly before it was suspended at 2.18, up 37sen, surrendering 17 sen of its gains!

Now this simply left a terrible taste for most market players, investors, traders and punters.

First it was false accounting, now it is false reporting!

What fighting chance does the market player has against such odds?

Here are some comments posted.

  1. I saw a denial from Ranhill in Bursa today as well about an article in the NST last Friday where they were supposed to be involved in a consortium to develop a RM 9B project in the ME.These reporters should be suspended and blacklisted.

  2. what you have said is very true...that reporter should be called up by SC to investigate who is the so call "source" and whether any money transacted between them to write this piece of rubbish and whether they have profited by this "rumour".Finding hard to read any" truth" news nowaday in the local newspapaer.

  3. Moola, have you compiled a list of links to your articles exposing this JOSE's "creative reporting"?
Well, I do have some old stuff!

1.Saturday January 31, 2004

Metro Kajang eyes Lankhorst

BY JOSE BARROCK

PROPERTY development and management company Metro Kajang is aggressively looking to beef up its land bank. One plan being considered towards this end involves the possible reverse takeover of Lankhorst Bhd. The biggest pull for Metro Kajang is Lankhorst's 54,753 sq ft undeveloped land in Shah Alam. The latter also has 14,000 ha land southwest of Seremban.

Details, however, were hard to come by as industry sources say the plan is still in the preliminary stages.

<=> Here is Lankhorst reply.
RE: ARTICLE "METRO KAJANG EYES LANKHORST" IN THE STAR NEWSPAPER
  • we wish to state that we have not been in any discussion nor are we aware of any discussion held with Metro Kajang for any possible reverse takeover of Lankhorst by the former

But the most incredible thing is this statement.

  • In addition we do not own 14,000 hectares land in southwest of Seremban. What we own is 14.164 hectares of quarry land in the Mukim of Jimah, District of Port Dickson, Negeri Sembilan.

Lankhorst denied and stated that they did NOT own that 14,000 hectares of land stated by the reported.

So where did the reporter get the info from? Who is the source?

2. Feb 14th 2004.

  • Fountain View in talks to buy Kurnia Setia stake

    BY JOSE BARROCK

    FOUNTAIN View Development Bhd is eyeing a stake in plantation counter Kurnia Setia Bhd. It is believed that talks between both parties have just commenced and therefore, details are not forthcoming.

    Kurnia Setia – a little known main board plantation counter with a market capitalisation of only about RM69.32 million – has some 11,522 ha of oil palm and rubber plantation, and is controlled by the Agricultural Development Board of Pahang with a 45.41 per cent stake in the company.

    It is believed that Fountain View Development is looking to increase its presence in the plantation business, especially in oil palm cultivation, capitalising on high crude palm oil (CPO) prices to boost its earnings.
    The company has been suffering losses since financial years 2001 and 2002.

    The financial year just ended may not bring much cheer to Fountain View Development shareholders as well. The company, for the nine months ended September 2003, posted a net loss of RM3.84 million on the back of RM56.32 million in sales.

    CPO prices have been on an upward trend since September last year, gaining some 35 per cent to close at RM1,892.50 on Thursday.

    “The problem is with the company's property development arm which is based in Johor. A focus on plantations will boost earnings, especially with the current high CPO prices,”
    the source says.

    Fountain View has about 11, 570 ha of plantation land, of which almost 70 per cent is cultivated with oil palm while the remaining are planted with rubber and cocoa. Previously known as Plantation and Development (Malaysia) Bhd, Fountain View was a PN4 counter. Under a restructuring scheme, Plantation and Development became a wholly owned subsidiary of Fountain View after a share swap, capital reduction exercise, issuing of irredeemable convertible unsecured loan stocks and debt compromise.

    News of Fountain View's interest in Kurnia Setia has yet to hit the market.
    Kurnia Setia shares closed at RM1.11, down three sen from its close on Wednesday. It hit its 52-week high of RM1.25 on Dec 8 last year while its low of 63 sen was on Feb 27 last year.

    Fountain View shares have risen six fold, since listing at RM1 on Nov 18 last year. The counter closed at RM5.80 on Thursday.

Here is Fountain View reply. ARTICLE ENTITLED : "Fountain View in talks to buy Kurnia Setia Stake"

  • The Board of Directors wish to inform that the Company has never been involved in any talks to acquire a stake in Kurnia Setia Berhad and as such wish to deny the following statement :

    "Fountain View Development Bhd is eyeing a stake in plantation counter Kurnia Setia Bhd."

    In addition, the board have no knowledge as to the sources on the publication of the above-mentioned article.

3. Feb 12 2005.

  • Tradewinds breaks six-year losing streak

    BY JOSE BARROCK
    TRADEWINDS Corp Bhd (formerly known as Pernas International Holdings Bhd), it is believed, will report profits of about RM100mil for FY04. This represents a marked improvement, breaking a six-year losing streak.

    The company is expected to announce its results at the end of the month.

    “Tradewinds (Corp) has turned around significantly. It made about RM100mil profit after incurring losses last year. Debt too has been slashed considerably,” says a source.

    For the financial year ended December 2003, Tradewinds Corp suffered a net loss of RM73.7mil from RM1.1bil in sales. But the signs of improvement were already evident from the first nine months performance of the company. For the nine months ended September 2004, the company - largely involved in the hotel business, property development and plantations -
    posted a net profit of RM54.2mil on the back of RM938.5mil in revenue.

    Sources say
    both the plantations and sugar businesses have lent a boost to the company’s earnings.

    Tradewinds Corp controls as much as 53% of Tradewinds (Malaysia) Bhd, a company that owns Central Sugar Refinery Sdn Bhd, which controls as much as 40% of Malaysia’s RM1.5bil sugar market.

    In the future, more can be expected from Tradewinds Malaysia as the company just strengthened its position in the sugar business via the acquisition of Gula Padang Terap Sdn Bhd, from among others Tan Sri Robert Kuok Hock Nien’s PPB Group Bhd, for RM188mil.

    Tradewinds Corp’s hotel business, it is understood has just about broken even, but the prospects seem promising. “There are a lot of improvements ... some of the loss-making hotels have turned around. The Mutiara Pedu (Golf and Lake Resort) in Kedah and the Hilton Batang Ai (Longhouse Resort in Sarawak) have also made progress, things are looking better for the group,” the source adds. The two hotels were previously up for sale with a price tag of around RM100mil.

    Tradewinds Corp has managed to cut its debt from RM2.5bil in 2003 to the region of RM1.2bil now which will undoubtedly reduce its finance cost burden.

    Year to date, Tradewinds shares have gained 11 sen, having reached a 52-week high of 78.5 sen in late January this year. The counter ended trading on Tuesday at 76 sen.

What was wrong?

1. Tradewinds first 3 quarters net profit only totals 54.2 million. So this source is suggesting that Tradewinds makes a whopping net profit of 100 million for its current fiscal year. Which means Tradewinds will make a whopping 45.8 million (100 -54.2 ) for the last quarter of the year. And how did Tradewinds do? Some 11 days later, Tradewind reported a loss for its remaining quarter of its fiscal year and only ended its fiscal year making some 52.504 million.

2. Debts only 1.2 billion? Badly twisted! Traewinds had a total debts of 1.894 Billion!

Now consider the impact on the stock.

Well Jose Barrock wrote that article on Saturday, Feb 12th 2004. Before that incredible according to sources article was written, TWSCorp (Tradewinds) was a stock trading around the 77 sen and many thanks to the article, TWSCorp went up some 4.8% on Feb 14th. Now after TWScorp hitting a 52-week high on the next trading day, Feb 14th 2005, 8 trading days later, on Feb 24th, TWSCorp closed at 63 sen!!!

4. November 19, 2005

  • Saturday November 19, 2005

    China boost for Salcon

    BY JOSE BARROCK IN LINYI, CHINA

    WITH a large contract in the booming Chinese market under its belt, and the possibility of inking more lucrative deals, there appears to be a steady flow of positive news for water treatment specialist Salcon Bhd.

    ...

    For the first six months of its financial year, Salcon posted a net profit of RM570,000 on the back of RM112.6mil sales. The company’s earnings per share during the period was 30 sen, while its net tangible asset per share stood at 52 sen.

Terribly misleading! Salcon EPS at that time was only a mere 3 sen and not 30 sen!

5. 21 Jan 2006. Courting AV Ventures

  • Courting AV Ventures

    By JOSE BARROCK

    SECOND board counter, AV Ventures Corp Bhd (formerly Autoindustries Ventures Bhd) may have a new controlling shareholder pretty soon, sources familiar with the company say.

    Datuk Amanullah Mohamed Yusoof, who is a non-independent, non-executive director of the company, is currently the majority shareholder with 28% equity or 12.1 million shares in AV Ventures.

    He is believed to be looking to cash out of AV Ventures to focus on his oil and gas business currently held under a private company Pivotal Achievement Sdn Bhd.

    BizWeek was told that several parties have expressed interest to take up his stake in the company, one of whom includes Tan Sri Syed Mokhtar Albukhary.

    Syed Mokhtar’s interest in AV Ventures, which manufactures automobile parts, such as wiper arms, car window regulators, horns and other parts for the auto industry, it seems stems from his shareholding in another automotive player, conglomerate DRB-HICOM Bhd in which he acquired 15.8% equity last year.

    The tycoon is believed to have sent his feelers out and made an offer to Amanullah via merchant bankers CIMB Bhd, offering RM1.20 a share, which works out to a total of about RM14.5mil for Amanullah’s shares.

    The RM1.20 per share offer is a steep premium to AV Ventures close of 66 sen on Thursday and its net tangible asset peer share which at end September stood at 27.5 sen.

Massive rumours! An offer of 1.20 for AV Ventures was simply sexy because AV Ventures was just trading at 66 sen then!

Here is AV ventures reply yo Bursa. AV VENTURES CORPORATION BERHAD ("the Company" or "AV Ventures") ARTICLE ENTITLED "COURTING AV VENTURES"

  • Reference is made to the enquiry by Bursa Malaysia dated 23 January 2006 with regards to the above article in The Star, Bizweek on Saturday 21 January 2006 and on the following particulars:-

    (1) Datuk Amanullah Mohamed Yusoof.... is believed to be looking to cash out of AV Ventures..."

    (2) "...several parties have expressed interest to take up his stake in the company, one of whom includes Tan Sri Syed Mokhtar Albukhary."

    (3) "The tycoon is believed to have...made an offer to Amanullah via merchant bankers CIMB Bhd, offering RM1.20 a share; which works out to RM14.5 million for Amanullah's share"

    The Company, after due and diligent enquiry with all its Directors, major shareholders and all such persons reasonably familiar with the matters for this disclosure, wish to inform the following:-

    Question 1
    Dato' Amanullah Bin Mohamed Yusoof confirmed that he is not looking to cash out of AV Ventures. However, as an entrepreneur, Dato' Amanullah may be open to any offers which may benefit the shareholders of AV Ventures.

    Question 2
    Dato' Amanullah has confirmed that several parties have expressed interest to take up his stake in the Company,
    but did not receive any offer from Tan Sri Syed Mokhtar Albukhary.

    Question 3
    Dato' Amanullah confirmed that Tan Sri Syed Mokhtar Albukhary did not make any offer

How? 3 strikes in one article?

Some more recent stuff.

6. December 2, 2006 ( TM eyes Time dotCom )

  • TM eyes Time dotCom

    By JOSE BARROCK

    THE board of Telekom Malaysia Bhd (TM) is expected to deliberate on a proposal this week, one that it has been mulling for some time now. Sources say the state controlled telecommunication giant is considering a plan to acquire a 42.7% stake in Time dotCom Bhd from its parent Time Engineering Bhd.

    BizWeek understands that the offer price for some 1.1 billion Time dotCom shares, although yet to be finalised, may be in the region of RM1 and RM1.20 per share. A decision is expected to be made soon

Here is the reply.

  • We wish to inform the Exchange that the above statements are inaccurate and misleading and they were not attributed to any sources from Telekom Malaysia Berhad (TM). We further wish to state that TM has no plan currently to acquire a stake in Time dotCom nor Time Engineering Berhad and that there is no Board of Directors meeting scheduled this week as erroneously reported.

    For the record, TM Group owns the largest network of fibre optic cables in Malaysia totaling more than 220,000 core kilometers.

7. Dec 9 2006. Dialog Group to list unit in Singapore Stock Exchange

  • OIL and gas player Dialog Group Bhd is planning to list one of its units on the Singapore Stock Exchange. The plan, if it materialises, may involve a sweet surprise for shareholders as the group may distribute special share dividends in the Singapore-listed unit.

    “The plans are looking good. The listing is likely to be pursued,” says a source close to the group.

Dialog's denial.

  • We wish to clarify that in line with its business expansion regionally and globally, Dialog has continuously explore various options to fund these expansion. However, at this point in time, the Board of Directors has not made any decision in regards to a listing of any one of its subsidiaries on any stock exchange nor has appointed any consultant or adviser.

Fast forward.. too long... more recent stuff.

8. April 21st 2007. ( Syabas shake-up in the pipeline? )

  • By JOSE BARROCK

    IT is understood that Kumpulan Perangsang Selangor Bhd (KPSB) is looking at acquiring Puncak Niaga Holdings Bhd's 70% equity interest in water supply services player Syarikat Bekalan Air Selangor Sdn Bhd (Syabas). Kumpulan Darul Ehsan Bhd (KDEB), the Selangor government's investment arm, owns the rest of the Syabas shares.

    KDEB is also KPSB's parent company, with a 55% shareholding. KPSB intends to buy the 70% stake at the present market value, according to a source,
    who declines to disclose any figures.

    Syabas has a 30-year concession, which commenced in early 2005, to supply water to Selangor, Kuala Lumpur and Putrajaya.

    KPSB is considering the share purchase so as to allow the State Government to firmly control the concession.

    There is also likely to be synergy between Syabas and KPSB's existing water businesses. Says a source, “It's about accountability”.

    “At present, the accountability for the water supply lies mainly in the hands of a listed company controlled by an individual. This will change when KPS takes over the helm,” the source adds.

    “At present, the accountability for the water supply lies mainly in the hands of a listed company controlled by an individual. This will change when KPS takes over the helm,” the source adds.

    Executive chairman Tan Sri Rozali Ismail is the face of Puncak Niaga. He has a 41% stake in the company, both directly and via Central Plus (M) Sdn Bhd and Corporate Line (M) Sdn Bhd.

    KPSB is no greenhorn in the water sector. It has 55% equity interest in Titisan Modal Sdn Bhd, whose subsidiary, Konsortium ABASS Sdn Bhd, operates a water treatment plant in Selangor. KPSB also has an associate stake, to the tune of 30%, in Syarikat Pengeluar Air Selangor Holdings Bhd, another supplier of treated water.

    At press time, it is not clear how KPSB plans to finance the acquisition.

    After a loss-making 2005, the main board company rebounded last year to post an unaudited net profit of RM17.8mil on the back of RM351.3mil in sales.

    As at December, the company had RM271.3mil in deposits and cash balances, while its trade receivables stood at about RM561mil.

According to sources and misleading info! Reporter highlights the cash balances without stating KPS's loans which totals more than 1.2 billion!

4 days later, KHSB lost 0.165 or some 17% since that article was published.

9. Saturday June 9, 2007 ( Tie-up in the offing? )

  • Tie-up in the offing?

    By JOSE BARROCK

    PROPERTY developer Equine Capital Bhd may see the entry of a new major shareholder in the form of the Employees Provident Fund (EPF), or a company controlled by the pension fund – Malaysian Resources Corp Bhd (MRCB).

    The plan for the retirement fund to acquire a stake (speculated to be 30%) in Equine, says a source, is related to the potential development of a new airport in Penang that is being mooted by Equine Capital.

MRCB posted these set of comments on Bursa Malaysia.

  • We refer to your letter dated 11 June 2007 and to the article which appeared in the Star Bizweek, page BW4 on Saturday, 9 June 2007.

    We wish to confirm that we are not aware of the alleged proposal reported by Star Bizweek in its article on 9 June 2007.

Equine Capital, on the other hand made the following set of comments.

  • The Company wishes to advise that it is not aware of the speculated acquisition of a 30% stake in ECB by Employees Provident Fund ("EPF") or Malaysian Resources Corporation Bhd ("MRCB"). Todate, it has not received any notification from EPF or MRCB of this speculated acquisition. Further, it has no knowledge of the speculated re-development of the existing Penang Airport land nor the building of a new airport at Batu Kawan.

10. Same day! Saturday June 9, 2007 ( Interest in DNP fuelled by privatisation talks )

  • Interest in DNP fuelled by privatisation talks

    By JOSE BARROCK

    Since April this year, the counter has risen almost three fold. Last Wednesday, the company’s shares breached the RM3 mark in intra day trading.

    Market chatter has it that the interest surrounding DNP Holdings stems from the major shareholder of the company, Wing Tai Holdings, planning to take the company private.

Well.. I could go on and on! Really! But I do think this is more than enough!

How?

Do you think that Bursa should take action against such misleading reporting?

According to Bloomberg: Ranhill Denies!

Posted this morning. http://whereiszemoola.blogspot.com/2007/06/according-to-sources-ranhill-strikes.html

Well, I was alerted by my dearest cousin, Tucows about a news clip posted on Bloomberg. (
here )

  • June 18 (Bloomberg) -- Ranhill Bhd., a Malaysian engineering company whose shares surged 30 percent today, denied a report that it struck oil in an area off West Java, Indonesia.

    ``There's no commercial oil and gas show as yet,'' Chief Operating Officer Amran Awaluddin, said in an interview in Kuala Lumpur today.

    Ranhill shares jumped after the Star newspaper reported today that the company and its partners have found oil after drilling 6,000 feet, beating earlier projections.

How?

Ranhill was up a whopping 54 sen or 29% just because of that "according to sources" article published this morning!!!!

If Ranhill tanks later, how?

Now tell me, what do you think of that news article published this morning?

Should SC investigate the reporter and his sources?

According to Sources: Ranhill Strikes Oil!!!!!!!!

Posted on Star Business: Ranhill Bhd strikes oil

  • Monday June 18, 2007

    Ranhill Bhd strikes oil

    By JOSE BARROCK

    RANHILL Bhd and its joint venture partners are believed to have struck oil in the Citarum block off West Java late last Friday, according to sources familiar with the company.

Are believed! According to sources!

How about publishing who these sources are?

  • It is understood that the top brass at Ranhill are pretty upbeat with the prospects at the Citarum block, with the company having struck black gold after only some 6,000 feet of drilling, which substantially beats earlier projections.

    StarBiz understands that Ranhill may make an announcement pertaining to the discovery of oil as early as Wednesday to the Bursa Malaysia.

    “It’s quite a big oil field, possibly in the region of 350 million barrels, which is almost five times what was initially estimated.

    "It’s also quite promising in that the find comes after only about a month of drilling,” a source familiar with the ongoings at Ranhill said.

Now Ranhill is now UP a whopping 28 sen because of this news based according to sources!

So if this news is DENIED by Ranhill, then how?

Another thing, why is our news reporter reporting before Ranhill Bhd?

If this story is admitted by Ranhill, then we need to address who are these sources leaking this news to the newspaper.

And also if these sources is able to obtain such stock market price sensitive information, then shouldn't we address the issue of what if certain parties had obtained these info and profited from them? Doesn't this constitute insider trading?

How?

Bumi Armada Sailing Again???

WOW!

What a horrific and disgusting news on a Monday morning.
Bumi Armada set to sail back to Bursa


  • BUMI Armada Bhd may raise funds from an initial public offering in Malaysia as it needs to spend RM1.2 billion to buy 17 ships and service the deepwater oil and gas industry.
    The firm, owned by tycoon T. Ananda Krishnan, may also borrow part of the money needed to finance the two-year initiative.

Yeah, now they need the investing public money again. So they want to seek listing!

A couple of years ago, they delisted their listing, because they felt that there is MUCH MORE money for them if Bumi Armada was privatized!

  • Bumi Armada would complete its circle if it returns to Bursa. Ananda, through Objektif Bersatu Sdn Bhd, had taken the company private in 2002.

See this posting http://whereiszemoola.blogspot.com/2006/09/pirates-which-siezed-armada.html

Ms. Claire Barnes of Apollo Investment Management wrote the following (here )

  • To go back to the merits of the shares: in the five years since we first bought Bumi Armada, revenue has tripled. This corresponds to growth of 25% per annum, which is perhaps slightly higher than the growth in other aspects of the business, but broadly reflective. In purely qualitative terms, before thinking about valuation, this is one of the gems of the Malaysian market. It has an excellent service record, it has good relations with its customers in the offshore oil and gas sector, and apart from 1997, when it recorded unrealized FX losses on an appropriately matched loan book, it has sustained returns on equity of comfortably over 20%. It is highly cash generative, and when the Land & General stake was overhanging the market we put forward an MBO-and-buyback proposal which would have seen the debt paid down in short order while generating phenomenal growth in earnings, net assets, and cashflows per share. This opportunity was not taken, but delisting aside, the shares would remain attractive; the offer is far from generous, and clearly includes no premium for privatisation. We didn't sell at RM8.00 two years ago, and Mayban Securities on Friday published a buy recommendation valuing the shares at RM12.20, which is arguably conservative.

    Bumi Armada reported earnings per share of RM1.01 for 2002, with an upbeat assessment of outlook for the year ahead, so is on a current-year PE of 6-7 - perhaps half that of the market
    , despite better-than-average business characteristics and growth prospects, although some discount is normal for illiquidity. In its recent announcement, it has however cut back on operational background, provides no details of major contracts, and omitted any final dividend despite its earnings growth. (This last has particularly incensed some minority shareholders who are surprised 'that Ananda Krishnan should be involved in such a deal'.) This reticence is unfortunate given the conflicts of interest involved.

    In the event of a forced delisting, we believe that there would be a legal case against the directors and the controlling shareholders for oppression of the minorities, but costly and time-consuming legal action is a last resort for investors in any jurisdiction.

    We were pleased to see that Mayban remains optimistic about Bumi Armada's prospects, but admit to being surprised by the timing. Maybank, its parent, was amongst those which originally jumped at the RM7. This must be proof of their Chinese walls - or of the different thought processes of bankers and investors. We are more impressed by this than by the role of RHB Sakura, which also agreed to sell its Bumi Armada shares in August, and wonder whether it was already advising the company or the buyer: as far as we know, the invitation was extended only to Malaysian banks, and not to a single foreign bondholder. Bondholders who expressed a desire to participate immediately after the deal became public were told that it was already too late - which is presumably lawful, but was certainly discriminatory, and not the sort of thing to make foreign investors think they are on a level playing field.

    If an offer is mandatory, it is not necessary to have bureaucrats review the decision. In this case, the controlling shareholders have to pay RM7, but they only have to pay it much later to minorities than to the favoured few. In other cases, it might suit a cash-strapped acquirer very well to avoid a general offer altogether; again, why should officialdom help him? (To avoid any confusion, we would like to be absolutely clear: if a shareholder acquires control, there should be a general offer at the same price, but minority shareholders should be free to refuse.)
    Information flows are important, and much more troublesome than they should be in the era of electronic communications. International investors frequently cannot obtain announcements and circulars through the global custody network in time to consider them adequately; frequently they arrive too late to meet corporate action deadlines. Listed companies should be required to copy the local stock exchange and international wire services with all announcements relevant to investors - such as announcements to Euroclear. This responsibility should not be left to companies: they respond when it suits them, and forget when it doesn't.

So Bumi Armada was highly rated. Growth of over 25% per annum, excellent service record, return of equity of over 20% and great cash flow.

Then out of the blue, Barmada (Bumi Armada), as Claire described "has however cut back on operational background, provides no details of major contracts, and omitted any final dividend despite its earnings growth."

And then it decided to announce to delist with an offer of 7.00! When Mayban conservatively valued it at 12.20.

Me? Honestly, I thought the share should have been worth at least 18.00!

And the rest of was history. Many was simply appalled at the manner Barmada was delisted.

Now let's refer back to Claire's original pirates article which was written back in 2003.
Pirates attempt to seize whole Armada: pitfalls of investing in Malaysia

Read her opening statement again.

  • There are many attractions to living in Malaysia, but we cannot muster the same enthusiasm for investing here (a change from July 99, when we were defending our decision to hold; our major investment then as now was Bumi Armada). Our recent experience has been far from encouraging, and it seems timely to provide an update.

So Bumi Aramada seriously plans to list again, eh?

Well, this is another extremely sad day in the history of stock exchange.

How could foreign investors, like Claire, be enthusiastic about investing in our stocks when our corporates has utter no respect for the minority shareholders?

When there is value in the company, the seek delisting. When they need your money, they seek listing again.

Oh, life is never fair, it has been said.

How true!

However, let me add this, life is never fair if in the future, the investing public shuns our stock market due to stunts like this!

Oh and for Bumi Armada, if it lists, I would AVOID the stock like plague! How could I safely know that I would ever be fully compensated for taking the investment risk in investing their company? What if the pull the same stunt and delist at a cheap valuation again?

Oh, life is never fair!