Wednesday, March 31, 2010

Astro Privatisation And Sun Direct TV's Immense Potential

I was just reading the following article on Business Times

  • Astro best taken private: Khazanah

    Published: 2010/03/31

    Astro All Asia Networks Plc, the country's sole pay-TV operator, is best taken private at this stage, says Khazanah Nasional Bhd's managing director Tan Sri Azman Mokhtar.

    "(Astro) has better value in being taken off the market with the current stage of development of high definition television (HDTV) and the Indian market," he added.

    However, given Astro's substantial shareholder, Usaha Tegas Sdn Bhd's track record, it may relist the unit later, similar to Maxis, he told reporters on the sidelines of Invest Malaysia 2010 in Kuala Lumpur today.

    It has been reported that major shareholders, led by tycoon T.Ananda Krishnan, intend to take Astro private in a deal valued at RM8.5 billion.

    They believe that privatisation of the company which was listed in October 2003, would optimise its capital structure for local and regional expansion.

    It is also understood the company would need to spend between RM3 billion to RM3.5 billion over the next three years, to accelerate its domestic and international growth, including migrating to HDTV.

    Meanwhile, Ananda's Usaha Tegas owns 58 per cent of ASTRO Holdings Sdn Bhd, Khazanah 30 per cent and Bumiputra Foundations 12 per cent.

    Astro would only be delisted if the major shareholders secure more than 90 per cent of shares from the privatisation exercise. -- Bernama

Ok, I do not understand the statement.

  • However, given Astro's substantial shareholder, Usaha Tegas Sdn Bhd's track record, it may relist the unit later, similar to Maxis, he told reporters.

Listing, delist and relist. Again doesn't this make Bursa Malaysia irrelevant?

Then the following statement from him struck me.

  • "(Astro) has better value in being taken off the market with the current stage of development of high definition television (HDTV) and the Indian market,"

The Indian market.

Aha!

This reminds me of Aircel!

Flashback the posting: Regarding Aircel and Maxis. It seems that as mentioned in a Business Times article in Nov 2009, Aircel had 26 million subscriber growing at one million new subscriber per month!

That was the jewel in Maxis.

The incredible growth in Aircel.

Which got me asking, what about Astro's growth in India.

Sun Direct TV.

So I asked Google.

http://www.afaqs.com/perl/media/story.html?sid=26440

  • As per its website, Sun Direct reaches approximately 5.3 million homes, whereas Tata Sky has a subscriber base of more than 4.5 million and Dish TV has about 6.5 million subscribers.

That article was dated 4th March 2010. Here's a newer one. DTH aims peak subscriber growth in FY'11 on back of sports

  • Tata Sky has 16 per cent of the incremental subscriber growth while Sun Direct has 21 per cent and Big TV 12 per cent, the sources add

Sun Direct has 21% subscriber growth?????

And here is from Sun Direct own website. http://www.sundirect.in/media.php

Check this out.

7th July 2008 http://www.sundirect.in/mediaDetails.php?mediaId=2

  • Sun Direct TV Pvt. Ltd one of the leading DTH service provider announces the achievement of 1 Million DTH subscribers in 200 days.
    The one million subscriber base comes from only 4 southern states i.e. Tamil Nadu, Karnataka, Kerala, Andhra Pradesh and the union territory of Pondicherry.

    On the eve of this 1 Million subscriber achievement , Sun Direct has launched 14 add-on packages ranging from as low as Rs. 10/- to Rs. 140/- "Packages to suit every pocket" in a "Pay for what you watch" concept for the very first time in Indian DTH scenario.

1 million subscribers in 200 days! WOW!

8th April 2009. http://www.sundirect.in/mediaDetails.php?mediaId=5

  • Another landmark achievement for us is crossing the 3 million mark subscriber base by March 2009, as committed earlier; this achievement qualifies us to be the No 2 service DTH provider. In the coming fiscal year we look forward to occupy the pole position. We have added more customers than any other DTH player in the last one year and in the coming days we will be adding more innovative features, services and channels in our offerings.” Added Mr. D'Silva

From July 2008 to March 2009, Sun Direct went from 1 million subscribers to 3 million subscribers!!

Sep 2009. http://www.sundirect.in/mediaDetails.php?mediaId=7

  • Fastest growing DTH player to touch 4 million base in less than two years time

    Chennai, 7th September, 2009: Sun Direct Pvt Ltd, the leading direct-to-home (DTH) service provider in the country achieved another milestone by crossing the 4 million subscriber base; the fastest growing player in the DTH market to do so in under two years, since its launch in December 2007.

    Setting up a scorching growth pace in the market with its Value for Money offer, right regional content mix, deep distribution across the country and offering flexi-content pricing, all of which have enabled Sun Direct to become the fastest growing DTH player in the country today.

4 million subscribers now!!!!

What incredible growth!

How?

Don't you think Sun Direct is a company with incredible potential?

Then the Maxis saga, the listing, delisting and relisting came to mind.

Hmmm... very much possible, yes? What if Astro delist... goes private.. and relist only the Malaysian operations only. Just like Maxis. Dare we say not possible? The new Astro without Sun Direct! Just like Maxis without Aircel.

I know I am usually wrong, so could I be wrong here?

Yeah.. and not to forget, Astro earnings is turning around nicely too!

Update On Rooney's Injury

It supposed to be a big week for MU. Bayern away, Chelsea home and then Bayern home.

And boy did we start badly.

A lost to Bayern despite being gifted an early goal and then Rooney.

Early reports suggests he could be out between 2 to 4 weeks.

Sigh.

Read rest here: http://sportingcow.blogspot.com/2010/03/rooney-update.html

Was Astro Earnings Really So Poor?

The best fit news strikes again!

Could I be wrong by saying so?

Astro All Asia announced its earnings last night.

Here's the screen shot.




How?

Last year, Astro lost a massive 529 million. This year it made a nice small change of 232 million.

Now that's the facts, yes?

How would you describe it? How would anyone describe it in an unbiased opinion?

Is this or is this NOT an incredible turnaround????

Well I was simply shocked and appalled by Business Times title of its article describing Astro's earnings.

Have a look:



Could anyone comprehend what Business Times is doing here?

Yes, Q-Q earnings dropped but was Astro's earnings so bad that Business Times editors decides to use the phrase 'Astro Q4 profit plunges 72pc'?

Yeah, see how it states in bold

  • Pay-Television operator Astro All Asia Networks plc saw its fourth-quarter net profit plunge close to 72 per cent due to higher costs associated with the cessation of the direct-to-home (DTH) business proposal in Indonesia and expenses previously incurred in its development.

Why is Business Times so critical on Astro All Asia???

Oh.. then I remembered... Astro All Asia is being privatised. Surely, the media does not want to put too much attention that Astro All Asia is now doing very, very, very well when compared to its pervious year.

Isn't this another case of best fit news?


Bayern Munich 2 Manchester United 1

A ball to Nani on the right wing. A bizarre and the silliest of foul by Demichelis. Nani send the free kick in, and yes I was sure there was a slight of deflection, Rooney checked his run, Demichelis slipped, and Rooney had the easiest of goal in a champions league.

Incredible!

Bayern Munich 0 Manchester United 1.



What a free gift!

That unfortunately became the turning point or rather the pivotal point of the match.

That goal simply blinded Man United and United turned in one of the most abysmal and disappointing Champions League match ever. I am pretty sure United were thinking that it's their divine right to progress to the semis. Rooney, their inspirational star forward, had scored yet another goal and he scored in less than a minute too. This is going to be an easy peasy match. A walk in the park.

Sadly, that gifted goal simply inspired Bayern Munich. No, they were not going to be thrashed in front of their own fans, no, they are not going to let the opportunity of avening their 1999 Champions League defeat slip just like that. After the goal, they were so pumped up, so fired up.

And judging by the way Bayern was playing and more importantly, how below average United was playing, I knew the lead was not going to last. We be lucky to come away with a 1-1 draw. I be happy.

Half time came.

Surprise, surprise... United was still leading 1-0.

Ok, I then thought, maybe Sir Alex can see how poorly we are playing. Maybe he will get his tactics right at half time and maybe United will once again put in a sterling second half performance.

Boy, was I wrong.

We did not play much better and Bayern came out even more aggressive in their play. Perhaps they sense that this was it. Man United is playing way below par tonight.

And luck rewarded them. Nah, I should not use the word luck. Luck has nothing to do with it. Bayern created their own luck and in the 76 minute, Ribbery, who had a really excellent game, drove in a free kick. Ball hit Rooney's bum if I am not mistaken and left Van der Sar stranded. 1-1. Game on.

Yeah.. we did hit the post twice in the match. From a Giggs corner, Vidic drove in an extremely powerful header against the post. And early on, Nani hit the post with an extremely optimistic cross/shot. That was it.

And how ironically that Bayern scored in the very last minute.


Fate eh?

What comes around, goes around.

http://sportingcow.blogspot.com/2010/03/bayern-munich-2-manchester-united-1.html

Tuesday, March 30, 2010

A Look At Analabs Earnings

I wrote about Analabs back in 2007: Analabs

Analabs reported its earnings last night.

It made some 5.639 million for the quarter and giving it a nice 11.365 million for its 3 quarters earnings this fiscal year.

Its impressive when you compare to the posting made in 2007.



Here are the links to its quarterly earnings for its current fiscal year.

Dec 2009: Quarterly rpt on consolidated results for the financial period ended 31/10/2009. Analabs made some 3.816 million.

Sep 2009: Quarterly rpt on consolidated results for the financial period ended 31/7/2009. Analabs made some 1.910 million.

The jump in its q-q earnings has been very impressive this year.

So why am I posting about this stock?

Well, I had not been positive on this stock before. See the series of postings made here. So this posting is like giving credit when credit is due. :D

For example, some of comments back in 2007 were..

  • 1. Current 9 months profit = 6.409 mil. Numb shares = 60.024. so eps = 10.7 sen.

    2. Analabs last 4 years had been very poor. from fy 2003 onwards: 2.125, 3.299, 4313 and 2.7 mil. Ok on first hand it doesn't look bad, but fy 2002 it was 9.571 mil.. market expectations back in fy 2002 was around 10 mil per year. And to make it worse, it was supposed to earn around 14 mil for fy 2002. And adding more salt, before listing it made 16 mil for fy 2001! And there were

    In short, it's earnings has been really terrible.

    3. Company dabbles in the share market. The current profit of 6.409 mil is boosted by disposal of securities, which saw Analabs gaining 1.116 mil this fiscal year.

    4. Cash balance is extremely healthy, so is the cash flow.

    So main issue for me... is how competitive is Analabs business?

    rgds
And



  • James wrote:
    I know nuts about recycling, though I hear it is kind of a lucrative business.

    I would actually expect things to have gone from bad to worse from 2002 onwards but looking into the balance sheet and cash flow, they seem to be turning the corner. Relative to many speculative companies out there, the share price is mainly backed by cash.


    Hello James,

    Yes, it has been noted right at the start that its cash balances and cash flow is extremely healthy.

    However... because of what happened since listing... Analabs now runs the risk of creating a negative perspective amongst the investing community.

    See, many believes in protecting one's good name. No?

    And I am afraid that Analabs has fared rather poorly here. Simple reasoning it simply failed to deliver. Before listing there was so much hype surrounding Analab pre-listing growth. Most investment research house went goo-ga over it during listing. After listing, it continued to disappoint and disappoint and as mentioned, it got to the point where many has dropped coverage on this stock. So despite its apparent turnaround, Analabs now has been shunned by the market and the investment community.

    Now perhaps the market is wrong here. There certainly could be value in investing in the company. However, if the market and the investment community do not re-rate this stock, the investor could run the risk of investing in a stock that is shunned by the market.

    See this is where it get extremely tricky.

    One one hand, there is nothing wrong in such a strategy but the investor has got to ask themselves a logical question: Are they willing to invest in a stock that is ignored by the market? And if this scenario persist for a long time, in a hot market, the feeling of seeing one investment not producing could be damaging for one sole.

    However, on the other hand, the argument is that good stocks will not be ignored forever. Sooner or later the market will discover the jewel inside the stock. Question is, is the investor willing to wait?

    hope these opinions helps,

    rgds

Oh yeah, back in 2007, Analabs were around 80 sen. Yeah, and I did state I would not buy it back then. :D

Anyway, here is the company's balance sheet.


Some comments:

1. Investment in equity securities. Yet another company again making such investments. Sigh.
2. Cash balances shrunk. ( See cash flow statement below)
3. Receivables increased.


There is the massive 32 million purchase of listed subsidiary! oO

Oh if one was an investor of Analabs, this was acquisition was old news. Back in july 2009, ANALABS RESOURCES BERHAD (“ANALABS” OR THE “COMPANY”) - PROPOSED ACQUISITION OF 100% EQUITY INTEREST IN COVERIGHT SURFACES MALAYSIA SDN BHD FOR A CASH CONSIDERATION OF RM40.0 MILLION (‘PROPOSED ACQUISITION”)

And you read all about Coveright in the pdf file atteched here.

The current segmental earnings shows that Analabs is no longer dependant on recycled products.





And this is what the company has to say.
  • 1. Review of the Performance

    For the quarter under review, the Group recorded a revenue of RM38.4 million, which is an increase of 214% compared to the revenue of the corresponding quarter of the preceding year. This increase was contributed by the newly acquired business of manufacturing and sale of resin impregnated papers by RM27.4 million but was set-off by the lower contribution from the other business segments due to the weak prevailing operating environment vis-à-vis the corresponding quarter of the preceding year. The newly acquired business recorded a sales volume growth of 59% in comparison with the immediate preceding quarter.

    As a result of the positive and substantial contribution in turnover mainly from the business of manufacturing and sale of resin impregnated papers and relatively lower raw material prices, profit before tax for the current quarter recorded an increase of 223% as compared to the corresponding quarter of the preceding year.



How?

Just giving credit when credit is due.

And seriously, I have no idea on how this stock would perform.

*************
Analabs was UP all morning. It last traded at 1.39! up 13 sen!

Bursa Malaysia: Bumi Armada Relisting?

What? What? You just got to be kidding!

Are you serious that Bumi Armada is relisting?

OMIGOSH!!!!!!!!!!!!!!!!

Do say it isn't so!

How tasteless and how ludicrous could things ever get on Bursa Malaysia?

Put it into a perspective of a relationship. Let's call it Durian and Grapes (Not to offend any). Durian and Grapes are happy married. One fine day, out of the blues, Grapes cites the lack of value in this relationship, and Grapes walks out. Taking everything away except for their child, Mustard, age 9. Durian of course was heart broken. A good 7 years past, Durian recovers and is back to cheerio ways. Suddenly Durian wants to walk back in and Grapes gladly takes Durian back, as if nothing has happened. Everything is hunky dory again. But what about Mustard? How would Mustard be feeling now? Lost parent at age of 9, lost the past time of childhood and now Grapes just wants to waltz right back in, as if nothing has happened?

Well, that's the best I could think of.

Mustard is us, the investing public. Durian is the stock exchange. And Grapes is that one company who list, delist and relist its companies into the exchange.

So how do you reckon we, the investing public, would feel about all this?

Does the stock exchange feel it's a swinging door, where companies can just list and delist and relist as per its wimps and fancy? As they say 'Suka-suka list. Suka-suka privatise. Suka-suka re-list.' Like children playing with sand in the back yard?

That's how I feel when I read about Ananda Krishnan's Bumi Armada to be listed?

Felt like throwing up.

First it was Bumi Armada's privatisation back in 2003 and mind you, it was done in so bad taste. The Pirates which seized the Armada ( See also Pirates attempt to seize whole Armada: pitfalls of investing in Malaysia )

Then it was Powertek.

And then it was Maxis.

Well with the Maxis re-listing, Bursa Malaysia made it clear that companies can list and delist and relist as per its wimps and fancy.

Then you have Astro.

Now Bumi Armada wants to relist?

Gosh!

From an investing perspective, is there any logical reasoning to be an investor in this group of companies? Is there any sane reasoning?

With the option of delisting, there is the unknown time frame and price capped on the investment. Correct? What does this mean? What is the risk? Well, if you do not understand the risk issue, it means that at any time a company could be taken private and at any price too. So what if the price is below our investment cost? Look at Astro. It used to trade way above rm 5.00. Look at the privatisation price. Long term investing with such companies? Isn't this such a losing game?

If so, what's the logical thing to do?

So what can we the investing public do?

We can air our displeasure but most important there's one thing we all can do. Which is to be the smarter investor.

So if we think the game 'played' is so damn ludicrous, where companies get to list, delist and relist (some would even ask if they are taking us as fools!), we have the right to ignore this group of companies!

Just don't buy the shares at all.

Yessir me!

Just don't touch any of these shares.

Forget about so-called value (What is value when the majority shareholder has the nasty habit of listing, delisting and relisting the shares) and if the shares go up, so what?

Will we suffer?

Will we suffer so badly at one missed opportunity?

Is it even a crime to miss this one so-called opportunity?

Think about it.

And yes, Bursa, seriously, this doesn't look at all. Don't you think you are degrading the quality of the stock exchange when you allow such events to occur? Yeah, there's absolutely nothing to stop a company from going private because it's a free market. However, surely you can do something about it's relisting. Remember, the company walked away and now it just wants to waltz back in, as if nothing has ever happened? Isn't this such a mockery!

Yeah.. for some, more listing in Bursa is good. It means more business for Bursa and more business, it means more profit and at the end of the day. more pay money.

Sigh.

Yet another sad, sad day.

Monday, March 29, 2010

OilCorp Needs To Explain More On Why It Lost 405 Million!

So on Saturday's: Oilcorp 4th quarter hit by bad debts

  • Saturday March 27, 2010
    Oilcorp 4th quarter hit by bad debts

    PETALING JAYA: Beleagured Oilcorp Bhd suffered a net loss of RM175.95mil in its fourth quarter ended Dec 31, 2009, which was largely due to allowances for doubtful debts and impairment losses, which totalled RM134.44mil.

    The company’s full-year net loss totalled a whopping RM406.56 mil, giving it a loss per share of 185.18 sen per share.

    Oilcorp had failed to submit its fourth-quarter results on time, missing the Feb 25 deadline. As a result, Bursa Malaysia had suspended the trading of its shares since March 8.

    However, Oilcorp said in its statement yesterday that its shares would resume trading on March 29.

    Oilcorp also suffered a lower revenue for its fourth quarter, falling to RM39.86mil from RM84.40mil in the corresonding period last year.

    It said this was due to lower revenue from the oil & gas and engineering division.

    “ Almost all projects have come to a stand still,” the company said its announcement yesterday.

    Basic loss per share stood at 80.14 sen compared with basic earnings per share of 1.32 sen.

    Oilcorp’s full-year revenue fell to RM232.76mil from RM346.77mil previously.

    Its board of directors also expects the group to complete its proposed restructuring scheme within the year.

    Oilcorp, a PN17 affected issuer, had said earlier that the reason for being late in coming up with its fourth quarterly report was a shortage of staff.

    The company had said that it wished to submit the report only after its 2009 accounts is audited because it ‘’is uncertain whether there will be any material adjustments required to the accounts by the auditors, which may render the QR not giving a true and fair view if the QR is submitted at this juncture’’.


Now this doesn't sound so bad yes? The article doesn't portray OilCorp to be a rather poor company.

It was a simple allowance of bad debts and impairment of assets.

Now this is why it's rather to take what's printed in the financial news for granted.

Well for instance, the bigger issue, in my flawed opinion is that perhaps one should address the issue why did these bad debts happened.

Yes, why the need to reclassify their debts as bad debts?

As stated in the posting
OilCorp's Fiscal year Losses Explodes To 405 Million!, OilCorp's receivables increased by an insane 274 million in 2 years. Why?

Was the company financially sound to allow their receivables to soar so insanely?

In the posting
Regarding The Plunge Of OilCorp Shares Today! back in 2008, OilCorp was rather weak. As per its earnings notes and highlighted in the above posting:

  • Long term borrowings......... 187,934
    Trade and other payables.... 254,851
    Short term borrowings......... 216,305

    Well that's what they owe 'others'. A cool 659 million!

    .. fixed deposit if 26.725 million and cash balances of 3.477 million.

    That's not a lot compared to what is being owed by them and most worrying is the 498.257 million in trade receivables!!!!

And the point was the receivables increased by an insane 274 million in just 2 years!

How?

In my flawed opinion, for OilCorp to announce that it is making provision for doubtful debts is not enough. It does not justify what has happened. All I want to know is why and how those receivables increased by an insane 274 million in just 2 years!

Saturday, March 27, 2010

Cosway: Don't You Love The Fact That It's No Longer Listed?

Posted Oct 2009: The Cosway Story Continued..

Let me paste what I wrote back then:

Blogged previously: Singer Malaysia And Seven Eleven Proposed Listing

Oct 2006.


  • Cosway minority shareholders prefer sale
    By Chong Jin Hun
    jinhun@nstp.com.my

    MINORITY shareholders of Cosway Corp Bhd want the direct-selling firm to be put up for sale rather than let its parent Berjaya Corp Bhd (BCorp) take it private.

    "It is a bad idea to take Cosway private as it is a good and profit-making company with a bright future. Investors like to invest in companies with good dividends and bonus issues," proxy holder William Woon told reporters after Cosway's annual general meeting in Kuala Lumpur yesterday.

    He said it would be better to put the company up for sale as competitive bidding can produce higher sale prices.

    Woon was commenting on BCorp's recent announcement that it is considering a proposal to buy the remaining shares it does not own in Cosway. BCorp currently owns 74.4 per cent in Cosway....

They argued against the privatisation.

Worst still was the pricing of the offer.

Cosway had 344,434,000 shares. At an offer of 1.20, Cosway was effectively valued at 413 million.

On today's Star Business. Berjaya to inject Cosway into Hong Kong-listed unit

  • Wednesday October 14, 2009
    Berjaya to inject Cosway into Hong Kong-listed unit
    By YEOW POOI LING

    PETALING JAYA: Cosway Corp Bhd and Biofield Sdn Bhd have proposed to sell their combined 90% stake in Cosway (M) Sdn Bhd (Cosway M) to Berjaya Holdings (HK) Ltd (BHK)
    for RM900mil.

    Cosway, Biofield and BHK are indirect subsidiaries of Berjaya Corp Bhd (BCorp). Madison County LLC, which owns the remaining 10% of Cosway M, is also selling its stake in a separate deal.

    BCorp said the proposed disposal of Cosway M was part of an internal re-organisation within the group that would put the company under BHK, which was listed on the Hong Kong Stock Exchange.

    In a filing to Bursa Malaysia, BCorp said the acquisition would be paid via the issuance of 741.2 million new BHK shares and irredeemable convertible unsecured loan stocks (ICULS) worth about HK$1.7bil and cash of RM44.7mil.
    The RM900mil, representing a premium of about 367% over the consolidated net assets of Cosway M of some RM214mil, was derived based on, among others, the past profitable earnings record and future earnings potential, proven track record, large distribution network, strong presence and the established brand name of Cosway. Cosway Corp will use the proceeds of RM44.7mil as working capital.

    BCorp also said its subsidiary, Berjaya Group (Cayman) Ltd (BGCL), had formed a loan capitalisation agreement with BHK, of which 180 million new BHK shares would be issued to BGCL as full and final settlement of the HK$36mil loan taken in 2001.

    As of Oct 13, the total debt amounted to HK$36.4mil, of which HK$36mil would be settled via the proposal loan capitalisation and the remaining to be repaid by BHK upon receipt of written demand of repayment.

    Meanwhile, Berjaya Hills Bhd, Prime Credit Leasing Sdn Bhd, Inter-Pacific Securities Sdn Bhd and Berjaya Sompo Insurance Bhd, all indirect subsidiaries of BCorp, together with Tan Sri Vincent Tan Chee Yioun and Rayvin Tan Yeong Sheik have proposed to sell their collective 40% stake in eCosway for RM107.6mil, also to be satisfied via the issuance of new BHK shares and ICULS.

    “This is expected to increase the profile of Cosway M in line with its global outlook and expansion plans,” it said, adding that the sale of eCosway was also part of the streamlining and allowed BHK to have full control.

    The proposed loan capitalisation, meanwhile, will enable the BHK’s repayment without incurring any cash flow.

I wonder how would Mr.William Woon feel today.

Sigh.

---------------------------------

Cosway the company grows and grows... really feel sad for Mr. William Woon. The gem he had, was privatised. Gone. Today, it just grows and grows...

Who's speaking out for the minority shareholders, huh?

Who's really looking out for their interest?

Isn't the minority shareholders also the owners of the company?

On today's Star Business: Cosway’s global ambition

  • Saturday March 27, 2010
    Cosway’s global ambition
    By CECILIA KOK


    THE Berjaya group’s Cosway Corp Ltd is on track to realise its global ambition by establishing presence in two of the world’s largest economies – the United States and Japan – in the next few months as well as Europe later this year.

    Already a major player in Asia Pacific, Cosway will begin operations in the US and Japan by end-May and August respectively. Its venture into Europe will kick off in Britain in the fourth quarter of the year and subsequently in Germany early next year.

    Founder and CEO Al Chuah is confident that Cosway’s entry into major developed economies will catapult the multi-level marketing company into the global top three over the next one to two years. At present, it is among the 20 largest direct-selling companies in the world.

    To facilitate its aggressive overseas expansion, Chuah says the company has allocated RM47mil as capital expenditure (capex) for its financial year ending April 30, 2010 (FY10).

    It will increase capex to between RM70mil and RM100mil in FY11. Chuah says the capex will be financed by internally generated funds.

    High growth

    Setting up presence in China is the next breakthrough that Cosway is eyeing.

    “We are still in the registration process and we expect to get the licence to operate in China by the second half of next year,” says Chuah. Although Cosway does not have physical stores in China yet, it has already built a brand presence in the world’s most populous country – thanks to the Internet.

    Consumers in mainland China have been buying Cosway products through eCosway – its global online shopping portal – with their orders being fulfilled by the Hong Kong operations.

    Cosway is somewhat considered a latecomer in the Chinese market, compared with other international direct-selling companies such as Amway.

    But Chuah believes Cosway will catch up and gain a large share of the China market once it obtains a licence to operate there.

    “Our unique business model, which is very hard for our competitors or potential competitors to replicate, is the formula that will help us succeed,” explains Chuah, who founded Cosway in 1979.

    Cosway Corp Bhd was listed in the Malaysian stock exchange after Chuah sold the company to the Berjaya group in the mid-1990s.

    However, Cosway Corp was taken private in 2007 as the management felt that the stock was not accorded a fair valuation although the business was growing fast.

    The market value was around RM400mil prior to the delisting. This compares with Cosway’s current market value of more than RM1bil as a listed company in Hong Kong. Cosway was floated on the Hong Kong Stock Exchange last November via a reverse takeover of Berjaya Holdings (HK) Ltd.

    Cosway’s turnover recorded a compounded annual growth rate (CAGR) of 27% from RM382.22mil in FY06 to RM773.94mil in FY09. Its net profit, on the other hand, recorded a CAGR of 45% from RM19.79mil in FY06 to RM60.72mil in FY09.

    For the six months ended Oct 31, 2009, Cosway posted a turnover of RM493.3mil and a net profit of RM53.53mil. Currently, about half of Cosway’s turnover comes from its Malaysian operations. Overseas contribution is expected to grow significantly as the company makes inroads into major economies.

    “The success or failure of multi-level marketing is tied to the success of the products. So, the lifecycle of the products will implicate the lifecycle of the company,” Chuah says.

    That explains why Cosway keeps coming up with new products every other month. For FY09, Cosway had in its stable around 1,750 consumer products – ranging from household, skincare and cosmetics categories, to health supplements, food, apparel and lingerie – compared with around 1,150 in FY04.

    “The wide range of products in our stable reduces our risk of over-dependence on any one product, and this is one of the key strengths that differentiates us from our competitors, most of which are highly dependent on just several key products to grow,” explains Chuah.

    Besides the wide range of products, he says Cosway’s success is also due to its pricing strategy. “The basic principle is to ensure all our products are priced competitively,” he says, adding that this is possible thanks to cost savings resulting from its economies of scale.

    Cosway’s products are sourced mainly from established manufacturers within the region. This OEM (original equipment manufacturer) sourcing strategy, according to Chuah, has enabled Cosway to take advantage of external resources and expertise for product research and development (R&D).

    In that sense, it’s a win-win solution: Cosway can save on R&D investment and focus its resources on expanding market share, while for the manufacturers, “it’s like striking gold” as Chuah puts it. “Winning a contract to be a Cosway product supplier will secure them a stable flow of income,” he says.

    Although Cosway prices its products comparatively lower in the market, the company is still able to maintain a healthy margin. Gross profit margin, for instance, has consistently stayed around 40% over the last five years.

    “It is important to have a low-price strategy because we are not merely competing against other multi-level marketing companies, but we are also positioning ourselves to compete against all the hypermarkets, discount stores and pharmacies in town,” Chuah says, adding that Cosway has managed to raise the stakes of the game with aggressive sales promotion throughout the year.

    Sending catalogues for promotional products bi-monthly to its members is Cosway’s direct marketing strategy. In addition, the group’s redemption and reward programme has been effective in helping the company retain customers and generate increased repeat sales.

    Expanding base

    Cosway currently has a global member base of more than 650,000 people. The group claims that the base is growing rapidly with its active recruitment drive to build a diverse and expansive marketing force.

    Another key to its success is its extensive distribution and retail network that provides consumers with convenient access to its products in all countries that it operates.

    In Malaysia, for instance, Cosway’s outlets are now commonly found not only in residential and housing areas but also in hypermarkets, shopping malls and other commercial areas.

    This new business model of moving away from the traditional direct-selling concept, with stockists acting as the distributor chain, to a “free-store” concept was introduced in 2008.

    Chuah says the concept has been a key contributor to Cosway’s total turnover as it has enabled the company to broaden its sales coverage. In addition, the concept has also enabled the group to manage its costs better. For instance, the group pays a commission of 10% to traditional stockists compared with 5% for store operators.

    In total, Cosway currently has more than 1,500 stores, with about half of them based in Malaysia, and the remainder in other major cities such as Australia, Brunei, Hong Kong, Taiwan, South Korea, Indonesia, Singapore and Thailand. It plans to increase the number of stores to around 2,500 by end-2011.

Quote from the article...

  • Cosway’s turnover recorded a compounded annual growth rate (CAGR) of 27% from RM382.22mil in FY06 to RM773.94mil in FY09. Its net profit, on the other hand, recorded a CAGR of 45% from RM19.79mil in FY06 to RM60.72mil in FY09. For the six months ended Oct 31, 2009, Cosway posted a turnover of RM493.3mil and a net profit of RM53.53mil.

Don't you just love all these listing the listing and delisting of a company?


OilCorp's Fiscal year Losses Explodes To 405 Million!

The issue with OilCorp was so glaring.

The growth in the trade receivables was astronomical. My initial posting on OilCorp was in 2007, when I wrote,
OilCorp and OilCorp II

Quote:


  • And yes OilCorp share has been rising.
    All I can say is do not confuse a lousy share with a bull market!
    In a hot market any share does stand a possibility of rising.
    However, to use fundamental reasoning as a reason to buy this share is simply a pure insult to all investors!
In the first posting OilCorp (written in July 2007), if you scroll right to the bottom and open the quarterly earnings link, Quarterly rpt on consolidated results for the financial period ended 31/3/2007, look at the trade receivables then. It was 336.107 million. The previous year was 284 million.

A year later, Dec 2008, I wrote the following
OilCorp and Its Trade Receivables. OilCorp's trade receivables has now exploded to 498.257 million back in 2008.

I asked back then..



  • 'Two' fiscal years ago or 8 quarters ago, OilCorp's trade receivables were at 224 million.
    It's receivables this very day is at 498 million.
    An increase of some 274 million!!
Exactly!

That was the the problem.

OilCorp announced its earnings today. It lost a whopping 175 million for the quarter! Which meant that its annual losses was a shocking 405 million!!!!!!!!!!!!!!

I was eager to see its balance sheet and look at the receivables amount. I was pretty darn sure that provision of bad debts had to be made in regards to its receivables.




Receivables is now only 82.188 million!

OMIGOSH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

You can see the previous year same quarter total in the next column. It was only 474 million.

Well as they said... do the math!!!!!!!!!!!!!!!!

That was all I needed to see.

This morning I noted on the Business Times:

  • Bursa eyes bigger retail growth
    The chief of Malaysia's stock exchange wants to see certain regulatory constraints removed to help improve retail participation in stock trading.

Why doesn't the Chief Of Malaysia stock exchange understand a very basic issue.

If the wants a bigger retail participation something drastic needed to be done with companies like OilCorp being listed in the stock exchange. Yeah, stop wishing and start cleaning and getting rid of them bad apples listed in the stock exchange.

Friday, March 26, 2010

A Look At SapuraCrest Earnings

Firstly, I would like to state out that I am impressed with what SapuraCrest Petroleum has done over recent years. Before the earnings reported on Wednesday, I was looking at the following track record.



Now that's impressive, yes? Ok, there's no hiding that fy 2007 was an incredible shocker but other than that year, the growth for this company has been spectacular.

The table above and below are snap-shot from klsetracker.com



The q-q earnings was rather impressive too, yes?

So I was looking at a company with explosive growth and the latest rolling 4 quarters earnings ALREADY indicated that fy 2010 would be super duper year for SapuraCrest.

Then I saw SapuraCrest earnings on Wednesday.

Its net earnings was only some 38 million. I thought it was a shocker.

Needless to say, when compared to previous year same quarter earnings and when you add in the figure to SapuraCrest current fiscal year earnings, the set of earnings sure look GOOD.

But....

on a q-q comparison, the earnings contraction was a shocker for me.

Ah.. but then the local pros say... discount it. Such weakness is only seasonal.

From CIMB:


Quote:

  • Like 1Q, 4Q is typically a weaker quarter for SapuraCrest due to the monsoon season which slows down offshore works.

Just a one liner. 1Q and 4Q typically weaker. That's all. Hmm.. so CIMB is already saying next quarter earnings should also be weak, yes?

From Maybank Investment Bankers:


Ah, this morning, I will not use OSK report.

Anyway both CIMB and MIB are saying 4Q is a seasonal weakness thingee.

So I decided to check it out.

Hey, doing some extra work, won't kill, yes? Surely, I cannot blindly follow what these pros are saying, yes? I mean, don't you think it make sense that I put my lazy bones and make my brains think a bit.

So 4Q seasonal weakness. How do I prove this theory? Compare each year's 3Q and 4Q yes?

Let me start with fy 2006.

Dec 2005:
Quarterly rpt on consolidated results for the financial period ended 31/10/2005
SapuraCrest earned 15.281 million for its fy 2006 Q3.

March 2006:
Quarterly rpt on consolidated results for the financial period ended 31/1/2006SapuraCrest earned 16.927 million for its fy 2006 Q4.

How?
Won't you say that it appears that was no Q4 weakness?

fy 2007.

Dec 2006: Quarterly rpt on consolidated results for the financial period ended 31/10/2006. SapuraCrest lost 38 million for its fy 2007 Q3. Yeah, that was a bad year for SapuraCrest.

Mar 2007: Quarterly rpt on consolidated results for the financial period ended 31/1/2007. SapuraCrest earned 7.344 million for its fy 2007 Q4.

How? Won't you say that it appears that was no Q4 weakness?

fy 2008.

Dec 2007: Quarterly rpt on consolidated results for the financial period ended 31/10/2007
SapuraCrest earned 23.329 million for its fy 2008 Q3.

Mar 2008:
Quarterly rpt on consolidated results for the financial period ended 31/1/2008
SapuraCrest earned 33.376 million for its fy 2008 Q4.



How? Won't you say that it appears that was no Q4 weakness?

fy 2009.

Dec 2008:
Quarterly rpt on consolidated results for the financial period ended 31/10/2008
SapuraCrest earned 36.925 million for its fy 2009 Q3.

Marc 2009:
Quarterly rpt on consolidated results for the financial period ended 31/1/2009
SapuraCrest earned 26.335 million for its fy 2009 Q4.

Aha. This is seasonal weakness, yes?


And we for 2010, we saw Q4 earnings much weaker than Q3!

How would you interpret the facts?

Let me summarise the facts.

From fy 2006 to fy 2008, these 3 fiscal years, SapuraCrest's Q4 earnings did not weakened compare to its Q3 earnings. However, the last 2 fiscal years, it did weakened.

So is this a convincing sign that SapuraCrest earnings have seasonal weakness characteristics?

And last but not least... this posting is not about how SapuraCrest the stock would perform. Would it go up? Would it go down? I have no random idea how it would perform. Ok?

Wednesday, March 24, 2010

Top Ten Reasons Why China Has A Financial Bubble

On Naked Capitalism: Top ten reasons you know China has a financial bubble on its hands

  1. "Great investment debacles generally start out with a compelling growth story." 100% yes. Check.
  2. "Blind faith in the competence of the authorities." See Roach’s comments above or read Goldilocks is not sleeping in America anymore; she’s now in China. Check.
  3. "A general increase in investment is another leading indicator of financial distress. Capital is generally misspent during periods of euphoria. Only during the bust does the extent of the misallocation become clear." See my posts China’s present growth story is built on malinvestment and Jim Chanos still bearish on China, talks malinvestment for evidence that China is misallocating resources. Check.
  4. "Great booms are invariably accompanied by a surge in corruption. Remember this post." “I want to be a corrupt official when I grow up”? That’s exactly what Chancellor is talking about. Check.
  5. "Strong growth in the money supply is another robust leading indicator of financial fragility. Easy money lies behind all great episodes of speculation from the Tulip Mania of the 1630s – which was funded with IOUs – onward." Andy Xie: Chinese monetary policy has to be tightened Check.
  6. "Fixed currency regimes often produce inappropriately low interest rates, which are liable to feed booms and end in busts." Think Latvia or Argentina. Are the Baltics the new Argentina? And we know China’s peg is creating problems because that’s a bone of contention right now. Check.
  7. "Crises generally follow a period of rampant credit growth." "Enron-Esque Characteristics" Hiding An Even More Explosive Credit Growth In China. Check.
  8. "Moral hazard is another common feature of great speculative manias. Credit booms are often taken to extremes due to a prevailing belief that the authorities won’t let bad things happen to the financial system. Irresponsibility is condoned." See Stephen Roach’s comments again. Check.
  9. "A rising stock of debt is not the only cause for concern. The economist Hyman Minsky observed that during periods of prosperity, financial structures become precarious." See #7 again. Check.
  10. "Dodgy loans are generally secured against collateral, most commonly real estate." The Andy Xie story shows you this. Check.

Dude, that's 10 out of 10!

The Portugal Downgrade

Hmm.... this really should not be an issue to discount.

Posted on cnbc:
http://www.cnbc.com/id/36013946


  • Fitch Ratings cut Portugal's sovereign credit rating by one notch to AA- on Wednesday, citing budgetary underperformance in 2009 and warning that a similar outcome this year and next could cause another downgrade.

    The change underlined concerns that the debt troubles that have afflicted Greece will move to other of the euro zone's weaker economies, and it drove European stocks and an already battered single currency lower.

    The premium Portugal has to pay on its bonds compared to German Bunds briefly hit a high of 129 basis points after the announcement but then began to tighten again, and analysts said the move had been well-flagged by Fitch and still left the rating comparable with other agencies.

    Fitch also said the government's long-term budget austerity plan was broadly credible and it did not expect political instability to upset the passage of the necessary legislation.

    "The downgrade has more of an impact on the wider sovereign debt crisis, rather than Portugal at the moment," said Peter Chatwell, bond analyst at Credit Agricole in London.

    "Fitch were in the middle of Moody's and S&P in terms of their rating, so this downgrade has minimal material impact, and doesn't necessarily mean others will follow," he added.

    Fitch's AA- rating is now comparable with Moody's Aa2 rating and both are above S&P's A+. In any case, the rating remains in Fitch's "very high quality" range.

    "The market is taking it very well. AA- is still respectable credit and bears no comparison with Greece," said Kenneth Broux, an economist at Lloyds TSB. Fitch rates Greece BBB+.

    Support for Austerity

    The finance ministry after the decision again urged the opposition to support the government's long-term austerity plan to send a clear signal to calm jittery investors about the country's public finances.

    The minority Socialist government on Thursday will ask parliament to pass a resolution of support for the plan, which seeks to cut the deficit to 2.8 percent of gross domestic product in 2013 from 9.3 percent last year.

    "It is fundamental that Portugal show a firm political effort in implementing its growth and stability program, with a view to correcting public finances and reducing the foreign deficit through increased competitiveness," the finance ministry said in an email to Reuters.

    The leader of the largest opposition party, the Social Democrats, was meeting members of parliament from her party on Wednesday to discuss the program. It was not yet clear whether the party will decide on how it votes.

    An abstention by the Social Democrats would allow the ruling Socialists to pass the resolution, which analysts say would pre-commit parliament to approve specific bills to meet the program's targets. The opposition party abstained in the vote on the 2010 budget on March 12, allowing its passage.

    Finance Minister Fernando Teixeira dos Santos warned on Tuesday that without the political consensus, the program would have no purpose and fears about Portugal's ability to finance itself will persist.

    Although Fitch said the program was credible, it saw a "significant" risk of macroeconomic disappointment with knock-on effects for the deficit particularly in 2012-2013.

    In the meantime, the agency said the likelihood of Portugal facing a liquidity crisis was low.

Posted last month: Denials Over Greek Bailout!

  • Mrs Merkel has staunchly resisted suggestions that the EU must swallow its pride and turn to the Washington-based IMF for a solution to the growing economic turmoil in Greece, with fears that its troubles in international finance markets will trigger a domino effect, toppling other weak members of the eurozone such as Ireland, Portugal, Spain and Italy.

Now Portugal gets the downgrade and more downgrade is possible!

Who is next?

And what if those other eurozone such as Ireland, Spain and Italy is downgraded too?

And what if it starts to snowballs.... ?

Regarding TMC Life Sciences

The company was losing money and because of the detailed presentation from TMC's management, OSK is sticking to its forecast of a net profit of rm 5.8 million from TMC.



  • Management gave a detailed presentation on TMC’s traditional fertility business and the new Tropicana Medical Center. Key highlight was that the new medical centre is expected to turn around this year. We are maintaining our RM5.8m net profit forecast for FY10.
Have a look.





Isn't this the key issue. Company expects to see an earnings turnaround.

On the Edge financial daily, it carried an article based on this report.

OSK Research Neutral on TMC Life Sciences at 34 sen

Now I saw and I glanced thru OSK's report before I came upon the Edge article and straight away, I said to myself, 'yeah right, the neutral is based on TMC's ability to swing from losses to profits this year'. Not sure that it deserves the neutral rating.

Anyway, I decided to read the article on the Edge.

  • KUALA LUMPUR: OSK Research is maintaining its Neutral call on TMC Life Sciences at 34 sen and maintains the RM5.8 million net profit forecast for FY10.

    In terms of recommendation, the research house said on Wednesday, March 24 it was still Neutral on the stock because of its unattractive FY10 PER.

    “Management reiterates that TMC will continue to pay dividends despite the Tropicana Medical Centre is going through a gestation period,” it said.

    OSK Research said the management gave a detailed presentation on TMC’s traditional fertility business and the new Tropicana Medical Center. Key highlight was that the new medical centre is expected to turn around this year.

    All the key operating statistics of the Tropicana Medical Centre such as number of admissions, average revenue / in-patient, number of new beds opened and number of in-patients have improved over the last three quarters. As a result, TMC had recorded positive EBITDA and reduced net losses.

    The research house said TMC had undertaken various initiatives to create greater awareness for the new hospital. Majority of its clientele thus far came from the surrounding communities and the company will continue to promote its services.

    In FY09, TMC derived 59% of its revenue from fertility services and another 29% from hospital services. Two other services namely the wellness program and the stem cell which contributed 9% and 3% respectively to FY09 revenue are expected to remain relatively stable in FY10.

    For the wellness program, marketing agency which has committed to bring in RM42 million sales over the 5 years period would provide stable revenue to TMC though not very significant.

    As for the stem cell business, because of pricing competition and limited stem cell therapies, OSK Research says it is not expecting this division to contribute significantly to TMC at least for the next two years.

I was left wondering. Why the Edge article misses out the biggest point made by OSK? As it is, TMC is a company losing money and despite OSK expecting a turnaround - from losses to a net profit of 5.8 million, it only rates it neutral.

And for the record, TMC lost a huge 8.5 million for fiscal year 2009. See earnings reported last month: Quarterly rpt on consolidated results for the financial period ended 31/12/2009

The Delisting Of Prime Utilities

This morning, Bursa Malaysia said it is rejecting Prime Utilities appeal against delisting and that it will delist Prime Utilities on April 2nd. This wasn't unexpected.

So I decided to indulge in some old news clip on Prime. Rather interesting as usual. Some optimistic views were mentioned in the press and despite the positive comments made, the company's turn around never did happen!


Sorry the links are all broken. :(

31st Oct 2006.

  • Prime Utilities to turn around on new management team
    By Gan Yen Kuan

    Prime Utilities Bhd is confident of returning to the black for the current financial year ending April 30, 2007 following steps taken by its
    new management team to resolve problems affecting the company's performance.

    Its managing director Datuk Paduka Khairuddin Abu Hassan said the company, which posted a net loss of RM118.8 million in FY06, would expedite the completion of its existing 150ha mixed housing project in Bukit Cerakah, Shah Alam, to bill more sales for FY07.

    He said the remaining 15% of the 4,000-unit housing project, which had been delayed since 2004, would be handed over to buyers in six to eight months as the company remobilises its manpower to complete the construction.

    "We know there were few hiccups but now we have a new complete team with good visions. We have the ability to turn around the company," he said.

    Khairuddin, who was appointed in July, said the company was planning to launch another mixed housing development project on a 405ha parcel of land in Bukit Cerakah after "resolving whatever existing problems".

    Khairuddin said the company was in talks to the banks for the restructuring of the loan facilities to settle its outstanding amount.

    "We have no worries at all pertaining to this issue because we still have land and other resources. In the worst scenario, we may sell part of our land to settle all these old debts," he said.

The next day, Star carried this article.

  • Wednesday November 1, 2006

    Prime Utilities to turn around in FY2007

    PETALING JAYA: Prime Utilities Bhd is confident of returning to the black in the financial year ending April 20, 2007, backed by sales that would mainly be from its Alam Perdana project, said managing director Datuk Paduka Khairuddin Abu Hassan.

    In the fiscal year ended April 30, the company posted a net loss of RM2.78mil, which is less than the loss of RM7.66mil in the previous year. Revenue was RM39.28mil, an increase of 31% from RM30mil recorded earlier.

    “Alam Perdana is a mixed residential project spanning over 370 acres at Mukim in Ijok,” Khairuddin said, adding that it would have a gross development value of “a few hundred million ringgit.”

    “We have so far completed 20% of the construction work and we are certain of being able to complete the entire development and hand over to house buyers this fiscal year,” he said after the company AGM yesterday.

    Khairuddin noted that the project was originally scheduled for completion in 2004, but was delayed due to internal hiccups.

    He said he was confident the company, under the new management, would be able to deliver the project within the next six months.

    “I hope this will improve the perception house buyers and investors have of Prime Utilities,” he said.

    On the company's business outlook, he said Prime Utilities intended within the next five years to establish another residential project on 1,000 acres in Ijok, close to Alam Perdana.
    “We will develop most of our property projects in this area as it has high sales potential,” said Khairuddin.

    On Prime Utilities' strategy to decrease its borrowings of RM121.1mil, he said one option was to sell off some of its land.

    For it first quarter ended July 31, the company posted a net profit of RM513,000, a 22% decline from RM657,000 recorded in the previous corresponding quarter. Revenue was down 72% to RM2.6mil from RM9.3mil previously.

New management team and the promise of turning around.

Come 29 December 2006. Quarterly rpt on consolidated results for the financial period ended 31/10/2006 Prime lost 1.383 million.

3 months later, 29 March 2007. Quarterly rpt on consolidated results for the financial period ended 31/1/2007. Prime lost 1.857 million.

June 2007. WINDING UP PETITION

November 2007.

  • 05-11-2007: Prime Utilities hopes to see turnaround by end-FY08
    by Yantoultra Ngui Yichen

    KUALA LUMPUR: Prime Utilities Bhd hopes to see a turnaround by the end of its next fiscal year ending April 30, 2008 (FY08) driven mainly by the development of its 526.1ha land in Shah Alam.

    Its executive chairman
    Datuk Kamal Bilal said the company was currently in various advanced stages of completing the first phase of its residential and commercial project measuring 121.4ha there.

    “Hopefully we can complete phase one by the end of FY08 and start our phase two development by the second half of the next financial year,” he told The Edge Financial Daily.

    Kamal added that the take-up rate for its phase one project was 80% to 90% and the company was confident that it would hit the same “sweet spot” when the second phase rolled out.

    “We are working towards delivering most of the houses to buyers within a short timeframe and to speed up the construction works for the remaining units,” he said.

    Prime Utilities posted a net profit of RM2.4 million for FY07 versus a net loss of RM120.7 million a year earlier while revenue fell 68% to RM13.1 million from RM41.3 million.

    “The lower revenue was mainly due to the slowdown in progress works and no new launching of the development of our project,” Kamal said.

    He added that, however, the company managed to record a profit due to write-back of allowance for doubtful debts.

    “We will improve the company’s earnings for sure. We are also going to participate in the Northern Corridor (Economic) Region, Iskandar Development Region too,” he said, declining to elaborate.

27th June 2008. Quarterly rpt on consolidated results for the financial period ended 30/4/2008

The company announces a quarterly with zero revenue!!!

Oh yes, I did not type wrongly. It's zero! KOSONG!

The company's earnings notes: here is worth having a read!

Cash balances then was only 60 thousand! Loans were no small change at 120 million!

Look at what the management had to say and needless to say, what the company said about its future prospects looks like a might big joke now!

  • 2. Material Changes in the Quarterly Results compared to Preceding Quarter

    The Group recorded loss before tax of RM9.30 million as compared to a revenue of RM1.96 million and loss before tax of RM3.22 million achieved in the preceding quarter.

    The loss before tax of RM9.30 million was basically due to interest provision on borrowings, operating expenses and other short term liabilities. On prudent basis, company has made an allowance for doubtful debts of RM 5.308 million in operation expenses even though the amount is collectable in the longer period.

    3. Prospects for Financial Year 2009
    Barring any unforeseen circumstances, the Directors are of the opinion that the Group’s performance for the financial year 2009 should be improved for its property development activities provided that there is a general improvement in the economic climate of the country.

3 months later. Prime still had zero revenue! Quarterly rpt on consolidated results for the financial period ended 31/7/2008.

From its earnings notes.

  • 1. Review of Performance of the Company and its Principal Subsidiaries

    The Group recorded a loss before tax of RM5.535 million during the current quarter. The Group’s result was derived solely from property development.

    2. Material Changes In The Quarterly Results Compared To Preceding Quarter
    The Group recorded loss before tax of RM5.535 million as compared to a lost of RM2.657 million in the preceding year corresponding quarter.

    The loss before tax of RM5.535 million was basically due to interest provision on borrowings, operating expenses and other short term liabilities.

    3. Current Year’s Prospects

    The Group’s result in next financial quarter is not expected to be materially different from the current quarter. The Company is continuously take necessary steps to improve the financial position of the Group.

Future prospect is not expected to be materially different from current quarter!

What a massive understatement!

Nov 2009.

  • Prime Utilities served winding-up notice
    Written by The Edge Financial Daily
    Monday, 16 November 2009 23:07

    KUALA LUMPUR: PRIME UTILITIES BHD [], a Practice Note 17 (PN17) affected issuer, was today served with a winding-up notice by MALAYAN BANKING BHD [] (Maybank) which is suing the company's former major subsidiary for at least RM78.95 million
    .

    In a statement to Bursa Malaysia today, Prime Utilities said it was unable to determine the expected losses, if any, which could arise from the winding-up order at this juncture. This is because its former major subsidiary Vega Builders Sdn Bhd is currently negotiating for an amicable settlement.

    The sum claimed by Maybank is pursuant to a loan defaulted by Vega, in which Prime Utilities had acted as corporate guarantor. The sum claimed, payable by Nov 1 this year, carries an interest of 1.5% per annum.

    Prime Utilities went on to say that its solicitors were "in the midst of taking necessary steps to set aside the notice".

    According to an announcement dated Dec 21, 2004, Prime Utilities had agreed to dispose of Vega Builders to Outlook Rose Sdn Bhd for RM1.96 million.

Feb 2010.

  • Tuesday February 9, 2010

    Bursa to delist Prime Utilities

    KUALA LUMPUR: Bursa Malaysia has decided to delist the securities of Prime Utilities Bhd (PUB).

    The stock exchange regulator said the financial condition of PUB did not warrant continued listing on the official list of Bursa Securties.

    “Accordingly, the securities of PUB will be removed from the official list of Bursa Securities on Feb 22, unless an appeal is made to Bursa Securities within five market days,” it said.

Ooops!

Time to shut the lights when I leave the room.

Tuesday, March 23, 2010

Misleading

theSun have this article http://203.115.192.117/tuesday/tue_page15.html

  • KUALA LUMPUR: Berjaya Land Bhd’s (BLand) pre-tax profi t for the third quarter ended Jan 31, 2010 rose to RM79.7 million from RM78.9 million seen in the previous corresponding quarter.

    Revenue, however declined to RM993.9 million from RM1.158 billion, it said in a statement yesterday. It said the higher profi t contribution came from its property development division, higher share of profits from associated companies and lower finance costs, which offset the impairment loss on quoted investments and investments in associated companies as well as loss on partial disposal of investment in a subsidiary company.

    It attributed the lower revenue to lower revenue reported by the Number Forecast Operator (NFO) business operated by Berjaya Sports Toto Bhd (BToto) and the hotels and resorts division. For the nine-month period under review, the group reported a drop in revenue of about 8% whilst pre-tax profi t showed an increase of about 48% as compared to the previous year corresponding period.

    It attributed the lower revenue reported by the Number Forecast Operator (NFO) business operated by Berjaya Sports Toto Bhd (BToto) and the hotels and resorts division. For the nine-month period under review, the group reported a drop in revenue of about 8% whilst pre-tax profit showed an increase of about 48% as compared to the previous year corresponding period.

    BLand said with the property market and the hotels and resorts businesses all set to rebound given the improving economic conditions, and expected improvement in BToto’s gaming business following the launch of the Supreme Toto 6/58, which offers a guaranteed minimum upfront jackpot of RM8,888,888 – the highest in town – the group’s operating performance for the remaining quarter of the fi nancial year ending 30 April 2010
    will remain satisfactory.

Financial news talking only about pre-tax profits???????

What the heck?

Err... no need to pay taxes ah?

Anyway, here's a different version of Bland's earnings. BLand posts bigger net loss in 3Q. (Yeah, Bland reported a higher net loss!)

  • KUALA LUMPUR: Berjaya Land Bhd’s (BLand) net loss widened to RM8.57 million in its third quarter ended Jan 31, 2010 (3QFY10) from a loss of RM356,000 a year earlier on the back of lower contributions from its numbers forecasting operations (NFO) and hotels and resorts division.

    Group profit after tax rose 6.9% to RM43.42 million from RM40.62 million, but higher minority interest portion at RM512 million versus RM40.97 million previously resulted in the widening of the net loss.

    Revenue fell 14.2% to RM993.96 million from RM1.16 billion while loss per share was 0.69 sen versus loss 0.03 sen previously. No dividend was declared.

    It said lower revenue from its gaming business operated by Berjaya Sports Toto Bhd (BToto) was due to the traditionally high Chinese New Year festive sales in January 2009 combined with stronger sales from high jackpots in the Mega 6/25 game and lower revenue from its hotels and resorts division which saw cutbacks in business travel due to the global economic downturn.

    BLand said the lower revenue was partly mitigated by a two-fold increase in property sales from several successful residential and commercial development sales launches by the property development division.

    Despite the lower revenue, it said the group’s pre-tax profit was marginally higher at RM79.65 million versus RM78.89 previously mainly due to the higher profit contribution from the property development division, higher share of profits from associated companies and lower finance costs.

    It said these offset the impairment in value of quoted investments, investment in associated companies and loss on partial disposal of investment in a subsidiary company, all totalling RM12.36 million.

    For the nine months ended Jan 31, 2010, net profit was RM35.42 million versus a net loss of RM48.17 million a year earlier.

    The higher profit was attributed to higher net investment income consisting mainly of reversal of impairments in value of quoted investments in the current period arising from improved stock market conditions compared to the previous year where the group incurred substantial impairments in value of investments in associated companies and quoted securities due to poor stock market performance.

    Revenue was RM2.93 billion from RM3.18 billion while earnings per share was 2.84 sen from loss per share of 3.84 sen.

    On its prospects, it expected the property market and the hotels and resorts businesses to rebound.

    “BToto’s principal subsidiary, Sports Toto (Malaysia) Sdn Bhd, had on March 18, 2010 launched its new game, Supreme Toto 6/58 in replacement of its Super Toto 6/49 game.

    “The Supreme Toto 6/58 game offers a guaranteed minimum upfront jackpot of RM8,888,888 which is the highest in town,” it said.

    “With the launch of Supreme Toto 6/58 lotto game, the directors are optimistic that the NFO business under BToto will be good in the remaining quarter of the financial year ending April 30, 2010.”


    This article appeared in The Edge Financial Daily, March 23, 2010.

Here comes the trick question. Who owns this two papers?