Friday, December 31, 2010

And Silver Bird's Net Profit Soars... err... err... err...

Here's another great article...

Silver Bird Group 4Q net profit up 36.6% at RM835,000

Up 36.6%.... wow ... wow .... wow ... wow....

But ... it's ONLY at 835,000.

  • Silver Bird Group 4Q net profit up 36.6% at RM835,000
    Written by Surin Murugiah at
    Thursday, 30 December 2010 19:31

    KUALA LUMPUR: SILVER BIRD GROUP BHD’s net profit for the fourth quarter ended Oct 31, 2010 rose 36.66% to RM835,000 from RM611,000 a year ago mainly due to the sales growth in its core business of consumer food division.

    Its revenue for the quarter rose 6.75% to RM153.92 million from RM144.19 million in 2009. Earnings per share were 0.22 sen while net assets per share was 53 sen.

    Reviewing its performance in 4Q, Silver Bird said on Thursday, Dec 30 that its consumer food division’s revenue rose by 4% year-on-year from RM46.2 million to RM48.2 million due to sales channel expansion.

    Meanwhile, its telecommunication business recorded an increase in revenue as well by 8% from RM98.0 million to RM105.7 million, it said.

    For the financial year ended Oct 31, Silver Bird’s net profit surged to RM3.65 million from RM1.44 million a year earlier on the back of revenue RM593.51 million.

    On its prospects, the company said it would continue to improve the revenue of its core business of consumer food whilst containing its costs in order to further improve its bottomline.


With such news reporting... all is certainly well!

Happy New YEAR!

And oh.... last blogged Silver Bird on July 2010: Silver Bird Wants To Raise More Capital

Berjaya Corp's Net Profit... err....errr...

The Edge Financial Daliy's version: Berjaya Corp 2Q net profit up 66.9% to RM86.54m

  • Berjaya Corp 2Q net profit up 66.9% to RM86.54m
    Written by Surin Murugiah of
    Thursday, 30 December 2010 19:03

    KUALA LUMPUR: BERJAYA CORPORATION BHD net profit for the second quarter ended Oct 31, 2010 jumped 66.9% to RM86.54 million from RM51.83 million a year ago.

    The better performance was due mainly to write-back of impairment in value of investment in associated companies and gain on disposal/partial disposal of subsidiary companies as well as gain arising on accretion of interest in an associated company and lower finance costs.

    BJCorp said on Thursday, Dec 30 its revenue for the quarter rose 6.2% to RM1.72 billion from RM1.62 billion in 2009. Earnings per share were 1.97 sen while net assets per share was RM1.39.

    It said the increase in revenue was mainly due to higher revenue contribution from the direct selling, retail and distribution business, higher property sales reported by the property development and investment division and higher agency sales registered by the general insurance business in the current quarter.

    For the six months ended Oct 31, its net profit rose 231% to RM212 million from RM91.73 million, while revenue increased to RM3.46 billion from RM3.23 billion in 2009.

    BJCorp said barring unforeseen circumstances, the company’s operating performance for the remaining quarters of the financial year ending April 30, would remain satisfactory.

The Star Biz version: BCorp Q2 net profit up on write-back of impairment

  • Friday December 31, 2010

    BCorp Q2 net profit up on write-back of impairment

    KUALA LUMPUR: Berjaya Corp Bhd's (BCorp) net profit for its second quarter ended Dec 31 surged 67% to RM86.54mil from RM51.83mil previously.

    It told Bursa Malaysia the higher profit was mainly due to RM32.64mil write-back of impairment in value of investment in associated companies and gains on disposal/partial disposal of subsidiary companies as well as gains from accretion of interest in an associated company and lower finance costs.

    Revenue for the period rose 6.2% to RM1.72bil.

    In a separate statement, BCorp announced that it had appointed Datuk Robin Tan Yeong Ching as chief executive officer effective Jan 1, 2011.

    He replaces his father, Tan Sri Vincent Tan Chee Yioun, who has been redesignated as chairman.

Belated Comments Received Regarding Mudajaya

Ah.. here's a reply to a OLD post, SC Article On Mudajaya Reveals Serious Allegations Made Against Mudajaya

Best I highlight it.

  • Eric said...

    The cost of IPP depends on the specifications and quality so as motocar. All cars with same cc will cost differently. Just compare proton 1.8 litre with continental car with 1.8 litre. The price difference is huge. Using cost per/MW as argument is just lame justification.

    By the way, has anyone considered the possibility of Indian Partner reducing their investment price in order for Mudajaya to increase theirs. Then there will be no inflation of cost for the plant. CIMB, pls do your homework!

    Companies recover their investment thru profit from contract awarded back is to a certain extend normal but must be arms length and it must be done without round tripping. I mean investment must be paid up first then only recover your investment over time. In Mudajaya's case it is earn a bit from procurement contract and then pay for the capital in IPP also by a bit. The process is repeated over and over. Any donkeys also can raise capital in that manner.

    How much Mudajaya was given profits to recover their basic/original investment cost is unknown. However, it is certain that they are given the profits to pay for portion of investment that has been inflated, the same portion of investment value that the Indian partner has deflated, I guess.

Do see also last month's posting Quick Look At Mudajaya's Earnings

Thursday, December 30, 2010

May 2011 Be A Year Of Plenty Of Good Luck!

Nothing original here.

Just love this piece of cartoon. XD

And We Have A Stop In Outflows!


Here's the good news.....

The streak of consecutive outflows from stock equity mutual funds by Americans ends at 33 straight weeks babe!

Yes, last week there was an inflow recorded!

Americans have put money into their equity funds.

How much?

Err... just 335 million.

Here's the score. From 28 April 2010 to 22 Dec 2010, Americans withdrew some 100.898 Billion (yeah.. that's no typo and it's Billion) from their stock equity mutual funds.

*** 13 Jan 2010. This posting is rendered pointless! LOL!

Do refer this new posting: New Year New Outflows From Equity Funds

Past postings:

Thursday, December 23, 2010

The Baltic Dry Index (BDI) Is Not Too Happening

It has been a real long time since I blogged on the Baltic Dry Index.

The BDI last closed at 1830!

It's now to happening.

Some recent commentary:

  • The dry bulk market isn’t exhibiting a “festive” behavior, thus cheering ship owners and investors alike. Instead, the industry’s benchmark has been falling this week, with the Baltic Dry Index (BDI) retreating yesterday to 1,886 points, close to its 2010 lowest. Both the capesize and the panamax segments were among the main losing sectors yesterday. During the course of the previous week, the Baltic Capesize Index managed to put a halt in its demise, by posting a marginal increase of 1% on a weekly basis. According to a weekly report from shipbroker Barry Rogliano Salles (BRS), the improvement was mainly due to a surge in demand from the big miners in the Pacific in the later part of the week. However the Capesize 4TC is now hovering around US$25,000 per day, the lowest point since the summer and well down on the average for the year. In India, Karnataka ore sellers will have to wait until mid January to hear a decision on their bid to overturn the state’s export ban. This week India’s top court gave the state additional time to respond to the miners’ legal petition. The Federation of Indian Mineral Industries has already estimated the ban will reduce India’s ore exports by 38% to 66m tons in 2010. The Karnataka High Court earlier upheld the provincial government’s decision to halt shipments overseas” said BRS. (source: here )

Shipping stocks fall...

  • Shipping stocks on the Indian bourses have lost between 11 and 23 per cent in the last one month as Baltic Dry index slumped to a four-month low. Overcapacity because of new vessels and expectation of fleet additions plunged the Baltic Dry Index, barometer of shipping business, to a four-month low of 1,955 points, down 2.2 per cent (44 points) from its previous close. (source: here )

Excess blamed...

  • The Baltic Dry Index, a measure of commodity-shipping costs, fell to the lowest level in more than four months on a surplus of ships.

    The index declined 19 points, or 0.9 percent, to 2,076 today, according to data from the Baltic Exchange in London. That’s the lowest since Aug. 6. Declines were led by rates to hire capsesize ships, the biggest in the gauge. They fell 2.1 percent to $24,852 a day.

    “The dry bulk market is showing no signs of improvement,” Shalini Shekhawat, a Gurgaon, India-based analyst at Drewry Shipping Consultants Ltd., wrote in a report. “The remainder of the year will be no better, with iron ore and grain trade being insufficient to absorb the over-supply of tonnage in the market.”

    Shipping rates have fallen 31 percent this year as new vessels entered the fleet. Capesizes will expand 24 percent in 2010, driving overall dry-bulk fleet growth of 17 percent, Clarkson Plc, the world’s largest shipbroker, estimates. Demand will grow 10 percent over the same time, Clarkson said. Capesizes mostly carry iron ore, used to make steel.

    Source: here

Past postings on BDI: here

What Does 33 Straight Weeks Of Fund Outflows Mean?

It's now 33 straight weeks that Americans have withdrawn money out from their stock equity funds.

And what do you get?

Just more than 100 Billion during this period.

Past postings:

Friday, December 17, 2010

Can You Say No Class?

Got the following set of comments.

  • neno said

    dali called to buy jcy @1.60, proof here >

    Darlie singh call buy on JCY @ 1.60 :-
    Thursday, February 11, 2010
    JCY's New Pricing

    JCY looks likely to slash its IPO price to RM1.60 from an earlier indicative RM2.00. At RM1.60, its a good price level to get in. I still think its fair value is at RM1.80. Enough said.
    Posted by Salvatore_Dali at 1:41 PM
    Labels: JCY, Rannes Man


Dear neno or whoever you are ( yes, it's so easy to create a name many times and post countless 'comments') .

Darlie Singh???? ( Hmmm.... where have I heard this name before? Where ah?)

Take a good look at yourself. Are you proud of what you are doing here? Name callings at other blogs? Don't you have any class at all? Or perhaps you are simply rude? Tsk! Tsk! Tsk!

So apparently JCY has gone down.

Yeah... so what?

Does Dali owe you anything all? Does he get paid by for what he blogs? Are you paying him for any investment advice? Did he point a gun to you and force you to buy whatever he posts?

So Dali blogs a posting and the stock tanks.

Yeah.. naughty and bad Dali for blogging such a stock.

But wait just a minute.

Why on earth are you dragging that posting to this blog of mine?

Do I owe you anything?

Does my blog look like a complaint department?

Yeah... get burned in a stock by following what's written on a blog posting and just forward all your grumblings and rantings here?


Grow up lah and be a real man.

Thursday, December 09, 2010

And According To Sources, DRB Might Be Privatised

The stock is having a fantastic run. Perhaps fantastic is an understatement. :=)

And guess what?

The local press decides to jump on the bandwagon to spice up the stock.

Err... sometimes don't you wonder about our press?

Yeah.. what's their objective?

To spice up the stock market? To add fuel to the stock? Yeah, 'kar yau' babe!

Let's send the stock to the up and beyond. :=)

Yeah, babe. I buy the local business newspaper because I want to find out which stock will be stir fried ala Paul style babe!

You be the judge. On Business Times:

  • Syed Mokhtar mulls DRB-HICOM buyout

    By Francis Fernandez Published: 2010/12/09

    Tan Sri Syed Mokhtar Al Bukhary is believed to be considering taking auto and banking group DRB-HICOM Bhd (1619) private, people familiar with the plan said yesterday.

    It is further believed that the tycoon is being advised by Maybank Investment Bank Bhd on the plan which could cost him close to RM2 billion.

    Sources said the offer will be comparable to DRB-HICOM's net tangible asset (NTA) value. As at end of September this year, DRB's NTA stood at RM2.50.

    There has been speculation that Syed Mokhtar could offer anywhere between RM2.20 and RM2.70 for the DRB-HICOM shares he does not own.

    As at July 21 this year, Syed Mokhtar holds a controlling 55.92 per cent of DRB-HICOM, via privately held Etika Strategi Sdn Bhd.

    "The plan is being considered, but a firm decision has yet to be made," said the source. DRB-HICOM's group managing director Datuk Mohd Khamil Jamil declined to comment.

    DRB-HICOM's stock closed 11 per cent higher at RM1.70 yesterday, giving the group a market value of RM3.3 billion. It was also its highest close in 52 weeks.

    The stock has gained 68 per cent so far this year, much better than the broader market's 19 per cent gain in the same period.

    Mohd Khamil has been instrumental in changing DRB-HICOM's fortunes over the past couple of years. His cost-cutting measures have kept the conglomerate keep a keen focus on its bottom line. The group nearly doubled its revenue over the past five years to RM6.31 billion in 2010 from RM3.52 billion in 2006.

    After suffering a pre-tax loss of RM196.74 million in 2006, Mohd Khamil, a close confidant of Syed Mokhtar, has steadied the ship, helping the group post four years of healthy profits.

    In the financial year ended March 31 2010, DRB-HICOM posted a pre-tax profit of RM657.89 million.

    For the six months ended September 30 in the current financial year, its pre-tax profit stood at RM409.64 million, more than two times its pre-tax profit of RM163.65 million in the same period a year ago.

    DRB-HICOM assembles foreign marques like Mercedes Benz, Honda and Suzuki but it also has steady income from its Islamic bank, insurance and power plant maintenance business.
    It is also building up its property business in the Klang Valley and Johor.

    As for its motor vehicle business, DRB-HICOM aims to sign a definitive agreement with Volkswagen AG (VW) this month.

    VW had in August signed a memorandum of understanding with DRB-HICOM to produce VW cars from 2012 at the group's plant in Pekan, Pahang.

    Eventually, the deal may include the export of VW cars to Asean countries, among other things.

    Read more: Syed Mokhtar mulls DRB-HICOM buyout

Wednesday, December 08, 2010

Is There Value In London Biscuits?

London Biscuits reported its earnings recently and according to the management, the performance was within expectations.

  • The Group achieved a profit before income tax after minority interest of RM6.715 million on the back of RM56,922 million in turnover, as compared with the profit before income tax after minority interest of RM3.516 million and a turnover of RM46.656 million, respectively, reported in the preceding year corresponding quarter. The Group’s result is within management’s expectation.

London Biscuit was blogged several times before. See . Here's the updated numbers.

Looking decent but the issues mentioned before, still persist.

The balance sheet issue mentioned in the posting Review Of London Biscuit and Regarding London Biscuits Borrowings

  • Yes, that's London Biscuit's balance sheet and seriously, from my flawed point of view, I really think it's awful!

    That's no way how one would grow a business. I know I wouldn't if the business was mine

Here's the updated numbers. Look at the spike in debts and receivables. Cash increased due to bank overdrafts.

In regards to its 'investing activities' mentioned in the posting Review Of London Biscuit and I guess one should not forget how London Biscuit 'shot' itself in the foot via its investment in Lay Hong, London Biscuits Disposal Of Its Stake In Lay Hong

And in regards to the Property, Plant and Equipment (PPE) issue mentioned in the posting Regarding London Biscuits Again. In that posting, in my flawed opinion, I felt that 'the company is wheeling and dealing in PPE (Property, Plant and Equipment)!!!'

Well, London Biscuit now only reports a summarised cash flow statement in its quarterly earnings. So sadly, one has to wait for the annual report.

Tuesday, December 07, 2010

K-Star Attempts To Explain Its Plunging Shares

Now K-Star shares have been doing 'poorly' lately.

On the Edge Financial yesterday:

  • K-Star: TDR listing beneficial
    Written by Kathy Fong
    Monday, 06 December 2010 14:22

    KUALA LUMPUR: The management of K-Star Sports Ltd is still puzzled by the big plunge in its share price as it soared to a record high only to tumble to its lowest ever in just a matter of one week.

    “We are surprised with the selling on K-Star shares. We are not aware of any corporate development that will affect the share price movement, other than the proposed TDR (Taiwan Depository Receipts) programme that we had announced to the stock exchange,” K-Star’s chief financial officer Lim Yeow Eng told The Edge Financial Daily over a phone interview.

    “We don’t want to speculate what the reason is behind the selldown,” he commented when asked about the heavy selling of K-Star shares recently.

    Lim said the proposed TDR programme should be positive news to the company.

    “Most companies’ share prices go up when they announce their plan to undertake the TDR programme,” he said. Lim also reiterated that the company’s operation was intact and was performing up to expectations.

    The China-based sports shoemaker had on Nov 27 unveiled a proposal to seek a second listing in Taiwan. It is the second company on Bursa Malaysia to do this after XingQuan International Sports Holdings Ltd. K-Star intends to float 100 million shares, equivalent to 29.24% of its enlarged share capital, comprising 75.6 million new shares and 24.4 million existing shares, on the Taiwan Stock Exchange via the proposed TDR programme.

    In Singapore, there are a growing number of companies seeking dual listing in Taiwan via the TDR programme, for instance Super Group Ltd, United Envirotech Ltd, Yangzijiang Shipbuilding (Holdings) Ltd and Osim International Ltd, the latest to jump on the bandwagon.

    Share prices of these companies rallied after announcing the TDR listing. For instance, instant coffee manufacturer Super Group’s share price soared 40% after announcing its TDR programme.

    Similarly, news on the dual listing exercise lifted United Envirotech’s share price by over 60%. Usually there is a price disparity between the shares that are listed in Taiwan and Singapore. Shares in Taiwan tend to trade higher than those listed in Singapore.

    Lim said the proposed TDR programme is a positive move as the company could raise fresh capital for expansion at lower costs.

    However, there have been concerns over shareholding and earnings dilution since K-Star will issue 75.6 million new shares, which are equivalent to 28.4% of its existing issued share capital, compared with XingQuan’s 15%. On this, Lim said with the new capital, raised at lower costs, would be invested to expand K-Star’s operations to enhance the company’s earnings in the future.

    The latest results announcement showed that K-Star’s net profit rose 27% to RM14.3 million for 3QFY10 ended Sept 30 from RM11.3 million a year ago. Revenue grew 25% to RM88.36 million against RM70.4 million. For the nine-month period ended Sept 30, its accumulated net profit amounted to RM30.3 million or 0.39 sen per share compared with RM29.9 million or 0.5 sen per share previously.

    Lim added that the dual listing in Taiwan would also help to increase the liquidity of the stock and raise the company’s profile and its brand name further. K-Star’s share price surged to a record intra-day high of RM1.21 on Nov 30 but the stock succumbed to intense selling, subsequently plunging to end at 45.5 sen last Friday — the lowest close since its debut on Bursa.

    Trading volume surged to 27 million shares last Thursday. Over the last three trading days, some 70 million shares or 26.3% of K-Star’s issued capital changed hands.

    According to Lim, the moratorium which was applicable to 83% of the company’s shareholding expired last Saturday. K-Star International Ltd is the major shareholder controlling a 58.4% equity stake. Some pre-initial public offering (IPO) investors hold the remaining 24%.

    “The moratorium (on K-Star shares) is one of the highest on Bursa Malaysia,” said Lim.

    However, under the proposed dual listing scheme, pre-IPO shareholders who have held shares in the company for over 12 months could sell part of their stakes via the TDR programme in Taiwan.

    Among the pre-IPO shareholders who can dispose their shares in Taiwan are Skylitech Resources Sdn Bhd, A1 Capital Sdn Bhd (former Golden Eagle Resources Sdn Bhd), Yap Son On and Fortune United Investment Ltd.

    This article appeared in The Edge Financial Daily, December 6, 2010.

Ah yes... K-Star the share SOARED recently before it's 'tumble'.

The bigger picture shows it...

The 1 for 3 stock split done at end Oct gave the share 'Kar Yau' factor!!

Posted on 7 Sep 2010: K-Star Wants To Split To Enhance Liquidity And Marketability. Let me reprooduce the entire posting in full here:


Posted on 25th Aug 2010. A Look At K-Star Sports

It was a simple posting, highlighting the rather optimistic earnings growth projection made by OSK.

What was also interesting was that K-Star appeared in the local news saying it wanted to raise more funds. I found it amusing and I wrote...

According to that OSK report, K-Star raised some 32.9 million for its IPO and K-Star was listed on the 4th June (postponed from 31 May 2010).

It's now 24 Aug 2010 and on today's Star Biz, there was an article on K-Star: K-Star looks to raise funds

  • It is looking at options such as rights issue, share placement and even a dual listing in Taiwan
K-Star wants to raise funds???????????????????????

Errr.... is the Malaysian investing public an atm machine?


Yesterday, K-Star made an announcement. Instead of the rights issue. share placement or dual listing talk mentioned earlier, K-Star said it wants to do a 1 into 3 stock split!


It's reasoning... enhance liquidity and marketability....

  • The Proposed Share Split is expected to enhance the liquidity and the marketability of the K-Star Shares on the Main Market of Bursa Securities and will indirectly encourage a wider spread of public shareholders, ranging from different and diverse type of investors. The Proposed Share Split will also enable the existing shareholders of K-Star to hold a larger number of ordinary shares in K-Star while maintaining their equity interest.
This means that K-Star number of shares would be enlarged from 88,800,000 to 265,400,000 shares.

This is how K-Star had performed since listing...

Yeah... the 'chart' shows that it's 'stock' performance had been rather lacking!

Can a stock split 'improve' and 'enhance' the stock?


They cannot be serious can they?

Perhaps K-Star should ask some of Mr.Sotong's deep fried associates if they could comment a culinary chef.

Or perhaps K-Star should look at their own earnings performance for the clue why their shares lacks marketability!

As mentioned in the earlier blog posting: A Look At K-Star Sports
  • Now K-Star reported its earnings on the 20th August 2010.
    It was K-Star 2nd quarter earnings and K-Star only managed to make 5.94 million, giving it a half year earnings of only 16.467 million. ( see K-Star posts lower 2Q net profit at RM5.94m )

Yes, prior to the listing, K-Star made the following earnings announcement on 31 May 2010. Quarterly rpt on consolidated results for the financial period ended 31/3/2010

It said it earned some 10.542 million.

Then in Aug 2010, after being listed, K-Star's earnings came in at 5.94 million! ( See Quarterly rpt on consolidated results for the financial period ended 30/6/2010 )


You said it WALOEHHHHH!!!

And best of all OSK's said in its IPO notes for K-Star listing was that K-Star is projected to earn some 52 million! Yup, OSK based its fair value for K-Star at rm 2.63 based ON that rather optimistic earnings projection!

Apparently, the market currently disagrees with such a valuation!

No wonder... K-Star 'feels' its shares lack marketability!



Yeah... thanks to the share split and of course the bubbly market, K-Star the share got all the marketability it wanted. It received the 'Kar Yau' factor and the stock soared up, up and away.

But the company was not 'satisfied'.

Perhaps it was aware that...

  • Share prices of these companies rallied after announcing the TDR listing. For instance, instant coffee manufacturer Super Group’s share price soared 40% after announcing its TDR programme.

So it too, joined the bandwagon!

But K-Star's TDR involves a massive dilution in earnings!

  • K-Star will issue 75.6 million new shares, which are equivalent to 28.4% of its existing issued share capital

Ahem... 28.4% dilution.

Err..... seriously!

What on earth are they even thinking about???? How could they ever possible come up with such a proposal?

Monday, December 06, 2010

Update On Ogawa

Posted last Aug 2010: Ogawa World: Investing In Turnaround?

One of the issues in regarding to investing in turnaround is the 'sustainability' of the turnaround.

  • Spotting a turnaround, investing in the turnaround and profiting from the turnaround, is exteremly difficult. The biggest stumbling block is usually the sustainability of the turnaround.

Ogawa reported its earnings recently. It suffered some minor losses. Now this could be tricky. The 'turnaround investor' is now left wondering if the current result is a minor blip or if the turnaround simply could not be sustained...

Here's the updated numbers...

And the balance sheet..

Recent news clip on the Edge.

  • Ogawa targets Thailand and India, dips into red in 1Q
    Written by Daniel Khoo
    Friday, 26 November 2010 11:32

    KUALA LUMPUR: Ogawa World Bhd, which fell into the red with a net loss of RM135,000 in 1QFY11 ended Sept 30, will expand its market to Thailand and India by the end of its current financial year ending June 30, 2011.

    “Yes, we are in talks with distributors in those countries. Our style is to appoint one main distributor who will then in turn appoint the sub-distributors,” its executive director Louis Chong tells The Edge Financial Daily.

    The company, which mainly sells massage chairs, is aiming to increase its overseas revenue to 60% of total sales in three years from 45% presently.

    Ogawa currently sells its products in China, Hong Kong, Australia, Singapore, Indonesia, Vietnam and Saudi Arabia.

    “I see very bright prospects in the Middle East because the lifestyle there is such that they do not have massage parlours unlike here in Malaysia. We see the opportunity there,” Chong said.

    “Our (massage) chairs are very popular in Saudi Arabia and we are planning to move into Syria, Bahrain, the United Arab Emirates and Kuwait which will be done by the coming year,” he added.

    Chong also said that all their overseas investments are profitable to date and are positively contributing to its bottom line.

    He said the company is expected to spend more on advertising and promotion for the coming financial year from about 5% of its revenues to about 8% of its total revenues to gain the upper hand in the competition.

    Ogawa does not manufacture its products but instead licenses them out to contract manufacturers based overseas such as in China and Vietnam.

    In its 1QFY2011 ended Sept 30 results released yesterday, Ogawa reported a net loss of RM135,000 from a net profit of RM84,000 a year ago.

    Revenues for the 1QFY2011 however, inched higher to RM38.24 million from RM35.21 million. Basic loss per share was 11 sen versus 7 sen in the same period a year ago.

    Net assets per share as at Sept 30 stood at 53 sen.

    The group’s last quarter of loss was 3QFY09. For FY09 and FY08, it recorded net losses of RM12.43 million and RM8.37 million respectively. In FY10, it climbed back into the black with net profit of RM8.3 million.

    Quarter-on-quarter, revenue fell 19.8% from RM47.7 million in 2Q to RM38.24 million in 3Q. The group registered a profit before tax of RM120,000 compared with RM5.18 million in the immediate preceding quarter as a result of lower sales and lower margin.

    The company said the decline in performance was due to higher operating expenses which resulted in lower operating profit.

    “Every first financial quarter, we will usually see slowest growth, then it will usually pick up in 2Q and will remain flat in 3Q and our 4Q will usually be the best performing,” Chong said.

    He attributed this to the seasonality factor of its products which will usually see good sales during Father’s and Mother’s Day celebrations.

    “Some kids who are already well established usually buy our products for their aging parents as well. That is why we usually see good growth in sales during these times”.

    In the notes to its financial results, the company said that retail market conditions remain difficult for the time being and that it will be cautious in managing these challenges as it focuses on executing its medium to long-term growth strategies.

    This article appeared in The Edge Financial Daily, November 26, 2010.

Saturday, December 04, 2010

A Look At AirAsia Stellar Earnings

Back in early Aug 2010, I gave AirAsia credit. Yeah I did. LOL!

In the posting Positive Move That AirAsia Defers Their AirBus Order, I said the following...

  • However, let me say this, I have to give AirAsia some credit for eating the humble pie and for successfully persuading AirBus to allow them to defer the delivery of the air crafts and more so, this move really gives them a fighting chance to survive and to overcome their insanity of building a company which was clearly over burdened by the immense corporate debts they took upon to finance the building of their business.

    Yeah.. AirAsia should be ok for the next one year or so... yeah.. this is a POSITIVE CORPORATE exercise... it's certainly extremely crucial that AirAsia made this postponement of delivery.... but... deferring is only a postponement.... and in regardless, these air crafts order still needs to be delivered!

And AirAsia the stock had done fairly well since then. (LOL! That would be some major understatement for some)

Air Asia announced its earnings last week.

Was it good?

Everyone thought it was fantastic.

But... but... was it really spectacular for me?

Now since Air Asia had 'borrowed' or perhaps the more elegant word to use is 'financed' its success via massive borrowings, I for one, thinks that it's rather crucial to pay attention to its balance sheet and observe the cash/debts level. And also, since Air Asia had committed itself to a massive aircraft order, observing the capital commitment level is just as crucial.

( * for the record: AirAsia became the world's biggest customer for the Airbus A320-200 after placing an order for 175 aircraft in December 2007, with an option for 50 more. *)

Mentioned in that Aug posting...

  • Anyway... a postponement is a postponement is a postponement. Come 2014 (last August AirAsia deferred 8 AirBus to 2014) and 2015, these air crafts still needs to be delivered. Which means, from now till then, AirAsia still needs to ensure that it builds up its cash flow to ensure it can accept delivery of these air crafts that they had ordered. Unless of course, AirAsia can pull off another miracle by asking AirBus to allow them to defer yet once more. :P
    ps: yeah, AirAsia X listing would indeed help AirAsia financials. It too is required. And it is the ONLY OTHER logical and sensible option for AirAsia to rescue its dire balance sheet

Here's AirAsia updated numbers.. (the format of the table would be the same as in the posting Just How Profitable Is AirAsia Since Listing? )

* fy 2007 numbers is a mess because AirAsia changed its financial year end *

Now I may be wrong but I would NOT discount the following from AirAsia earnings. Yes, the earnings table above includes all of these...
  1. Forex translation gains
  2. Derivative gains/losses in oil hedges
  3. deferred tax benefit granted to AirAsia
  4. I am lazy! :P

( the forex translation gains is a lot for this quarter, yes? )

So AirAsia 'total earnings' for fy 2010 Q3 stood at some 327.286 million. How impressive is that?

The cash/debt level, has it improved?

The c.c or capital commitment column 'improved'. Would I pay attention to the value? Or should I pay attention to the number of aircraft to be delivered?

To put this capital commitment into simple perspective, on June 2010, from the posting How Good Is AirAsia's Latest Earnings?

But some would compare current Q3 cash/debts versus end FY 2009 numbers. Yes, some would compare the current balance sheet versus what AirAsia had end of last fiscal year and when one makes such comparison, AirAsia balance sheet certainly had improved, yes?

But.... then.... one should also take into consideration that AirAsia raised some 509.217 million from its share placement sale done end FY 2009.

And then the Amount Owed By AirAsia Subsidiaries! issue.

The current Q3 earnings notes showed that there is certainly much improvement in this area. Yeah, its subsidiaries is paying back the money owed...

The financial (cost)/income table is certainly interesting eh? ( see page 25 of AirAsia's earnings notes)

Friday, December 03, 2010

KN Downgrades P&O To A Hold!!

They said the stock was cheap. It was trading only at 3x earnings only.

They said the stock had potential because 'the owner was contemplating a divestment in P&O in a deal that could reap proceeds that were well above P&O’s implied stock market valuations.'

And so with all these 'right' ingredients, the stock flew up, up and away. ( Chart belows shows P&O when the posting, Regarding P&O: The Stock That Flew Into Orbit, was made on 31st July 2010)

The local media added more fuel by publishing the following article. Prudential UK eyes P&O takeover

Since then... the Prudential deal was discontinued without much explanation. ( Here's P&O announcement: Proposed divestment of an equity interest in Pacific & Orient Insurance Co. Bhd. )

And the cheapness in earnings?

KN blasted out loud that P&O could earn some 32.87 million for fy 2010, when the company was sitting on half year losses of 1.4 million. However, it did not based P&O target price based on its earnings estimate of 32.87 million but it based it on fy 2011's earnings estimates of 43.47 million!!!! And KN based the 3x earnings cheapness on that 43.47 million! ( See Regarding P&O: The Stock That Flew Into Orbit , And So P&O Earnings Are Said To Be Inline With Expectations and For which fiscal year did P&O earned more than 30 million? )

P&O reported its Q4 earnings last week. Its 2010 earnings came in at some 21 million.

KN's estimate again? 32.87 million for fy 2010 and 43.47 million for fy 2011.

So naturally, the earnings was way, way below estimates.

Meanwhile the stock....



And not forgetting in the middle of all this.... a 10% private placement was done...

Some 'interesting' comments from KN from its reported dated 1st Dec 2010.

  • Disappointing quarter with full year net profit of RM21.3m (65% of our RM32.9m estimates) due to a huge set back from unexpectedly high effective tax rate of 50% thus dragging group’s performance. During the quarter, the group took a RM8.7m reversal of it’s deferred tax assets that saw DTA down to RM5.8m from 3QFY10 of RM14.5m and hence contributed to higher than expected tax expenses. However, pretax profit of RM42.3m was inline with our forecast of RM43.8m.

Ahem... 65% of our RM32.9 estimates...

  • We are taking conservative stance after a dismal FY10. FY11F is reduced 21% to RM34.6m and 28% for FY12 PAT of RM37.7m as we reduce our premium sales assumption to 6-8% from 15% previously.

Conservative stance? FY2011 is reduced 21% to rm34.6million??!!! LOL!

  • Target price is reduced to RM0.84 (from RM1.15 previously) based on 6x FY11 while recommendation is also reduced to a HOLD from BUY previously. This values the group at 6x revised FY11 EPS of 14.06sen, which is at the low end of the 6-15x 2010/11 PER of Malaysian general insurers.

Target price is reduced to rm 0.84?!! LOL!

Actually, by itself, P&O performance for this year had been incredible. I have to say that. Take a look at the posting For which fiscal year did P&O earned more than 30 million? again.

P&O 2010's earnings of 21.3 million is the best ever performance from then since 2000.

But the way KN declared the cheapness in the stock was really something else.

Thursday, December 02, 2010

Quick Update on JCY's Earnings

Update to the posting Regarding JCY International

On 25th Nov 2010, CIMB 'warned' the potential glitch in earnings...

JCY reported its earnings on 30th Nov 2010.

It wasn't just weak it was horrific!

Yesterday, 1 Dec 2010, CIMB gave it a huge downgrade!

JCY's target price which was 1.88 on 25 Nov 2010 was lowered to just 0.92!!!!!!!!!

Holy cow!

Err.... well on one hand it's certainly GREAT to see CIMB Research realising the potential humongous shortfall in earnings from JCY and forewarned its readers on the 25th but....... the size of the downgrade is certainly difficult to swallow!!!

CIMB yesterday lowered its forecast for JCY's 2011 earnings to just 168.8 million

Lets compare and refer to the posting Regarding JCY International
  1. During IPO or April 2010: JCY earned some 207 million for its fy 2009. CIMB says times are good in 2010, so JCY should earn some 359 million! And 2011, JCY earnings will be even more super. JCY should earn some 441 million by then!
  2. 21 May 2010 - Target price lowered! fy 2010 earnings is now lowered to 297.3 million and fy 2011 earnings is now lowered to 370.8 million
  3. Monday, 23 Aug 2010 - CIMB to earn some 263 million for its fy 2010. And ....... for fy 2011, JCY is now projected to earn only 304.7 million


Incredible isn't it?

During IPO, April 2010, CIMB valued JCY target price of 2.68 based on 2011 earnings estimate of 441 million.

It's now only Dec 2010. CIMB has slashed JCY target price to just 0.92 based on 2011 earnings of just 168.8 million.

Is Debt Bad For QL

From the posting: Regarding QL Again

  • K C said...

    Is debt bad?
    Corporations borrow money to do business and investors earn amplified returns from the financial leverage. There is an option value of a leveraged business. Hence borrowings is not a bad and in fact it is good thing provided that the borrowings is not excessive and it earns a return higher than the after tax cost of borrowings and that EBIT is able to pay the interest costs comfortably. In QL Resources case, with a relative high leverage of 2.35, QL obtains an excellent ROE of 22% (>15%). ROIC is about 13.5% (>12%), showing a good utilization of capital. Times interest earned is 10 and with good cash flows from operations. Hence I think the management of QL has done a good job in growing the company with proper utilization and management of debt.
Many thanks K C for sharing your opinions.

Let me just share it here so that everyone can have a more 'balanced view'.

It's 30 Consecutive Weeks Of Fund Outflows

More outflows seen...

And that's 30 weeks of continious fund outflows seen. Americans are simply taken out more and more money from their domestic equity funds.

Does it matter?

Does 94 billion taken out since 28 April 2010 matters?

Past postings: