Friday, June 24, 2011

Smartag: I Am Wrong Because The Stock Moved Higher?

From the posting Is Smartag Worth A Bet?:

  • ST said..

    SMARTAG shoots up yesterday. Stop being jealous and stop writing nonsense on SMARTAG!
Ok. Smartag moved higher yesterday. So I am wrong because the stock moved higher.

But the jealousy part? The nonsense part?

Err... sorry if I am stupid but I just don't get it.

When I wrote the posting, Is Smartag Worth A Bet?, Smartag was looking like this.


Hmm.... if you take the effort to look at it, at the time of the posting - yesterday morning (started writing at 9.04am) , Smartag was trading at its lowest ever since listing, at 28 sen. So what's there to be jealous about?

Could I be jealous that Smartag is trading at its lowest ever?

If that's a good reason to be jealous, heck I am guilty .... forever. Lock me up dude/dudess!

And so I am writing nonsense. Ok, I will not use the meaning of blog reasoning and neither will I use the fact that I have stated out clearly that I am nobody's friendly investment advisor (heck, maybe I am just plain jealous and unfriendly!) but let's be a bit mature about it.

I have stated out many times that I do welcome all criticism. Yes, if I have the guts to write it out, then I should be more prepared to take all sarcasm and criticism openly.

Meaning to say, if you think what I wrote was all nonsense in the posting Is Smartag Worth A Bet?, I openly invite you to give me the exact reasoning why and what that I wrote was non agreeable - hence a nonsense to you. Seriously? That's an open invitation and I do hope you take what I am writing here with good faith.

So the stock moved up. I am wrong because of that?

Now in the posting ACE Market: Same Old, Same Old Issue, I highlighted the charts of the six newly listed ACE stocks.

Now I am not sure if you are aware but the main culprits, the stocks that were giving the ACE IPO stocks a bad name moved up strongly. Yes, have you considered the fact that perhaps there's a chance that Smartag moved up and rebounded strongly because of this issue?

The badest of these newly listed ACE stocks was of course XOX.

And how did XOX do yesterday? It surged 8.5 sen or 24.29% yesterday.


And its side kick IJacobs soared 12% or up 3 sen too!


Smartag was up a nice 2 sen or 7.14%.


And that Mclean was up 1 sen or 4%.


I am leaving out MPay ( up 1 sen or 6% ) and BoilerM (unchanged) .

But how? Look at those 4 charts of XOX, IJacobs, Smartag and Mclean. These were all newly listed ACE stocks and they all traded below their IPO prices and with a very similar looking charts, they all moved up yesterday.

How?

Is there not a chance that these stocks moved in tandem via association (newly listed ACE stocks trading below IPO pricing) ?

Ah... that's my interpretation.

And I openly say now that I could be wrong about it.

But that's my flawed opinion and I stick to it.

So let's talk about the writing nonsense part. ( Aiyoh - I leave out the jealous part lah. Pointless lah. But if you think I am jealous, so be it. That's your right of opinion lah )

I hope you would indulge in me for a couple of moments longer. Thanks.

Now here is Smartag public info.



Smartag have some 227,000,000 shares.

Ok. let's look at some facts.

On 13th April 2011, Smartag reported 2 set of quarterly earnings.

  1. Q1 -  Quarterly rpt on consolidated results for the financial period ended 31/12/2010
  2. Q2 - Quarterly rpt on consolidated results for the financial period ended 31/3/2011
Q1 - a loss of 386 thousand

Q2 - made 653 thousand.
Current ytd earnings - 267 thousand!
Now the current half year earnings from Smartag is only 267 thousand, my friend.

Smartag have 227 million shares, which means the current half year eps is only 0.16 sen. 0.16 sen only.

Want to calculate the possible PER?

KN 'forecasted' Smartag could be earning some 10.4 million for this current fiscal year and KN is basing it's target price on this year's earnings.

The table again.



Now this is all facts. Not nonsense. I am not twisting anything but merely highlighting this fact.

If you disagree so far, let me know.

Ok.. past earnings does not represent the stock price. Stock price are all based on its future potential. Do you agree? Or is this nonsense too?

And everyone who follows the stock market, knows Smartag potential is in their RFID solution. And Smartag was indeed mentioned to be part of the ETP project.

Yes. That's a fact.

But it's also a fact, that currently, this is still a MOU only and that according to Smartag own announcement, this MOU is terminatable by both parties.

And currently "Smartag, together with the Royal Malaysian Customs Department, will undertake a trial run of the RFID system at the latter's checkpoints from June 1."

This is the trial run. Smartag as per their own announcement will bear all costs for the trial runs.

Any twisting of facts so far?

And according to the Chairman, let me requote that BTimes report "KUALA LUMPUR: Smartag Solutions Bhd stands to make a minimum RM70 million a year once its Radio Frequency Identification (RFID) solution to track container movements is made compulsory. "

So what do we have?

Once the RFID solution is made compulsory, Smartag stands to make a minimum of 70 million.

And so that's the potential, yes?

Agree?

Oh dearie me, I hope I am not writing any nonsense so far.

So the potential of Smartag all hinges on one statement from Smartag's chairman, which is Smartag stands to make 70 million a year if the RFID solution is passed and made compulsory.

Now let's do some simple maths.

Let's do some very basic understanding of what kind of potential we are talking about here.

Let's see.. Smartag have 227 million shares. An earnings of 70 million per year would equates to an eps of 30.8 sen!

And eps of 30.8 sen!

Which means Smartag based on a 9x PE ( 9x PE too low? Maybe. But right or wrong, I use 9x to follow KN's valuation method) , Smartag should be worth at least 2.77.

Do you agree so far that potentially Smartag could be worth some 2.77 if the Smartag's Chairman estimate holds true?

Mind you, that Chairman stressed clearly 'a minimum of 70 million'.

Now if this holds true, then the logical and sensible focus should be on Smartag's disposal of shares recently!

Yes?

Or am I writing nonsense because I am highlighting this fact?

Think about it. "On the 19th April, Smartag was announced that it will be getting a slice of the ETP projects. On the 9th May, the CEO shows his confidence in his own company by selling 6,800,000 shares? Average price of disposal was 35.2sen."

And on 20 June 2011, The wife's company also sold shares. Some 4,250,000 were disposed at a price of 32 sen.

How?

Isn't there the disconnect?

Chairman says a potential minimum of 70 million per year. This equals to an eps of 30.8 sen. So why did the CEO himself dumped some 6,800,000 shares at 35.2 sen. Wife's company dumped it for 32 sen.

Now is this not a serious issue to consider?


I could be wrong but I reckon this issue should be carefully examined.

Why? Because we are not talking about small change, yes? Potentially, based on a simple 9x PE and based on Chairman's 70 million estimate, Smartag should be easily worth some 2.77. Why did the CEO and his wife think otherwise?

Think about it..... that's all I would say.

And yeah.... Smartag is up again. It currently last traded at 0.305.

Oooopsy daisy me... I must be wrong again...and I am also jealous...... since I am writing ... err... nonsense again.

ST, no matter what, good luck lah. But again.. if you could afford your precious time, do share with me, why you consider what I wrote on Smartag as nonsense.

ps: ST, if you really believe that Smartag RFID solution could bring a potential earnings of 70 million per year, seriously, just buy all of Smartag. Yes, buy it all the way. Sapu everything! 50 sen, 60 sen, 70 sen, 80 sen, 90 sen.... just buy! Why? At 70 million per year, Smartag should be worth easily above 2.70 lah. Ok ma?

24 comments:

William Wang said...

These ACE IPOs dropped by yards & raised by an inch & the suckers start shouting hurray with enthusiastic euphoria. Those executive directors of such companies should be rounded up & send to china to be shot, better still promotors included. These people are cheating the investing public in broad daylight with nonsense in their companies. Should anyone still have some good words for them, they are just plain ignorant or incorrigibly stupidest.

naik ka said...

Moo Moo, these animals are just distractions. They are in the jungle and the greedy hunters (the owners in cahoots with the promoters (bankers)and the supervisors (regulators)) are targetting them. If they want to end up on the barbeque grill what to do? Guys like you at the farm will be safe. Please continue.

KC said...

To all bloggers in town,

Ha ha mad cow jealous ? I dont think so , I think st shouldnt use the word jealous but "Lousy ".

This is not his first failure if u still remember his call to sell airasia at 2.50 ?

Just curious , when his buddy dali called to buy kzen which is running at huge loss company, mr cow never give a word on it, when osk or other recommended a running losses stock, he came out & critics them ! why ?

Double standard ka ? ha ha I think u guys hv yr answer in heart already.

so mo mo, is kzen (RA) a good buy ? running at huge losses still a good buy ?

ha ha u are really a double standard king !

Mun Wai said...

"...At 70 million per year, Smartag should be worth easily above 2.70 sen..."

Moo, you might want to amend the following : "2.70 sen"

Moolah said...

Alamak! Them grass must be very special nowadays. I can't seem to write....... :P


TQ Ah Wai. :)

Mun Wai said...

You are most welcome!

Aiyoh, suffer from food poisoning ? Go eat some other types of grass to clean your internal system.


Best regards, Ah Wai :)

dumb cow said...

Why your post is nonsense posted here http://forum.lowyat.net/topic/1810657/+200

dumb cow said...

No reply? Admit you are wrong.

Moolah said...

Sriously? You do not want me to post in detail what I might reply to the post.

phantom78 said...

moo. why are you wasting your energies in this? divert it in other more useful posts! the internet is full of these idiots so we just gotta learn how to live among them.

Moolah said...

Phantom78: Good point. Thanks.

I actually spend a little time on that forum and I had found several inconsistencies in what was said in the forum.

Rather unreal imho.

Anyway, I seriously welcome any discussions and more so, crticism if anyone disagrees with what I had written because I could always make a mistaken. But criticim needs to be backed with a decent set of reasoning and not blasting me for being jealous and writing nonsense. Yes, I would be more than grateful if they have the deceny to share why my post was nonsense.

Anway I still welcome comments on Smartag itself. Do show me a decent reasoning why I wam wrong.

Thanks anyway Phantom78.

( ps: nice nick. You fan of POP? )

phantom78 said...

moo, actually i LMAO when i saw that he used lowyat.net as reference for his argument. i mean... seriously? lowyat.net??

yup, i am a huge fan of Phantom of the Opera since i was a kid. i am active in other forums like stock tailou, tradesignum etc, but i am essentially a TA guy. and i can assure you there are more of "them" out there...

anyway, please by all means ignore these noise, and keep on doing what you do best - writing! i always look forward to your posts!

Moolah said...

LOL!

I assumed you like Phantom of the Pits.

:D

phantom78 said...

interesting... PoP.. i googled it after ur reply, and i'd be sure to find out more about it. i am reading the turtles now. thanks for this revelation, moo...

Moolah said...

You are welcomed.

Reading is very important but end of the day.. oneself and how one reasons beats all text. :)

Jollybee said...

Moolah, everyone knows they are buying Smartag on the Custom story.

If you argue the possibility of a BN stock whether it will secure the 70 million sales or not, it does not matter. At the end of the day, the cost will be delivered to the logistic end users.

One more thing, does Sarawak Taib Mahmud familiar to you. Guess how much billions of dollar he currently owns. Smartag Custom project is just a bonus sweet to him and his cousin by the Federal.

ccdev said...

moolah,

any new thoughts with the new developments?
http://www.btimes.com.my/articles/26RFID/Article/

seems like smartag came thru on the testing (if you put any weight on the positive feedback from the Air Freight chairman and multinational clients).

also, moolah, if you care to share, what are your thoughts on their response, particular the share issue -
"Dear Mr. Steven,

Thank you for your email.

The decision by that Thai company to sell the shares in Smartag Solutions Berhad is a collective decision of their shareholders. Our CEO Lim Peng Keong do not have direct control, or indirect control in that Thai company. That is the reason it stated as "Other Interest"."

ccdev said...

moolah,

follow up comment that i missed 'Thank you for your email.

The disposal of Namnan Co. Ltd's shares in Smartag was done by collective decision of 9 foreign shareholders of Namnan.

At the point of disposal on 14 and 15 June, Namnan is no longer a substantial shareholder of Smartag.

As we have reply to Mr. Steven's email, Mr. PK Lim do not have Indirect or Direct interest/control of the company. That is why it is known as Other Interest.

As of today, Smartag's key management, and staffs have not dispose any Smartag's shares.

We have no idea on how other remisiers made the assumption.

The Customs project is currently ongoing, and is in full force.

We are happy that there is a showcase on the project by PEMANDU to the Prime Minister in the morning on 5 July 2011 at KLCC Convention Center. Cash Cash Cash Cash Cash Cash

It will be open to the public after lunch and you are invited to come over and view the progress.

Please do not hesitate to contact us if you have any queries.

Thank you.

-Investor Relations- "

Moolah said...

ccdev: ?

http://www.btimes.com.my/articles/26RFID/Article/
is a link to the old article published in Sep 2011.

Anyway.. it appears that Smartag has 'passed' the testing.

But what's next?

All we have is nothing.

Yes. Nothing.

Nothing except that statement made to the press 'Once the RFID solution is made compulsory, Smartag stands to make a minimum of 70 million.'

That's about it.

If you are a logical investor ... would you want to invest based on ONE STATEMENT to the press?

How many times have we not seen a CEO make grand optmistic statements in the press?

See.. so... we have Smartag... as per the latest earnings ( was it yesterday or was it thursday? ) still having NOTHING to show.

Yes... still no earnings.

And the most obvious question is can SMartag deliver? Can it turn potential into real profits? And how could is Smartag in 'managing' its profits? What kind of profit margin will the investor/minority shareholder see?

Do I know?

I don't and I think it's rather pointless to guess at this moment of time.

And just who is Mr. Steven?

?????

Moolah said...

And the second so-called dear Mr. Steven email.

Err... who is this Mr.Steven?

Is the email really from Smartag?
Any prove?

Gotta be real careful cos a lot of things can vbe fabricated. I do not know who is this Mr. Steven and how can we vouch the authenticity of the email?

And last but not least... if u pay attention towards the end ... 'We are happy that there is a showcase on the project by PEMANDU to the Prime Minister in the morning on 5 July 2011 at KLCC Convention Center.'

Errr.... dude... 5 July 2011?

It's now Nov 2011... and I guess whether the email is valid or not, it makes no difference cos it's OUTDATED already.

And another point... put the emails and Smartag latest earnings (or the lack of sales - ahem.. did you see the sales revenue? Is it a shocker for u?) into perspective... and think about it... what do we have now?

Has Smartag really deliver anything?

Or is Smartag still a company being talk about its potential?

ccdev said...

moolah, the issue was not so much the date but the share sale. anyway the date "the Prime Minister in the morning on 5 July 2011 at KLCC Convention Center.'" is becoz i was going thru the old post in lowyat. i just recently came across this smartag discussion.

unlike some who dismiss straight up comments from that forum, i was wondering what you thought abt their response regarding the share sale. but if you say "can be fake", then i guess there's nothing much to add.

as for the sales revenue, well it sucks but in the report, it was already subtly hinted at by kenanga that "they expect earnings to grow marginally in the next 2 years and the impact of the project shall arrive in fy13". the sponsor kenangar can't really say "its gonna suck". so not much of a surprise, for me. what was nice was their notes to account, which they explained quite throughly why the revenue is so and the present position reasoning, and what they plan for future. many companies would just put a 1 paragraph thing and that's it.

as for "Nothing except that statement made to the press 'Once the RFID solution is made compulsory, Smartag stands to make a minimum of 70 million.'

That's about it.

If you are a logical investor ... would you want to invest based on ONE STATEMENT to the press?"

i guess that depends how long you wwanna ride this thing. but no, not one statement and the figure could be 70m, could be 20m, i don't know, and businessmen make a lot of boast all the time. it doesnt matter to me at this point, my rough guesstimate is that if there is a contract, it wont be small or disadvantageous to the company. dont have exact figures so any bet now would be on the potential commercialization of the product via a customs long term contract. i dont know what the figures may be be, but if they get it (and chances are it looks good) i feel there's more upside, less downside also becoz of the fact that the company is effectively starting at a very low revenue and profit base. your investment now is maybe not to ride the whole thing, but the first "wave", based on their their success test and prob of the customs contract.

at this point, if youre investing based on the first wave, yes it'll be on potential. if you looking at profit margin details to be ready, that would probably be further done the line,where a rerating of the company would be done. and when real profits hit, a further rerating.

as it is, the feedback on the trial has been positive. you cannot discount the fact at the time the MOU w customs was given little weight (and rightly so), but now things are more certain,they may actually have a viable commercial product, so some credit should be given there as well.

Moolah said...

ccdev: I am truly sorry but it's a bit like duck and chicken talk because I don't surf lowyat forum, so I am at lost at what's being said and I certainly at lost who is Mr. Steven.

Having said that I am impressed with your WAY of reasoning. :)

Keep it up and I am sure you should do well. :P

ccdev said...

duck n chicken??? too bad then. it is YOUR reasoning that i like, that's why i wanted to hear your thoughts. anyway,tq for words of confidence.

Moolah said...

ccdev: Er.. let me explain myself. Sorry. Because I don't participate in that lowyat forum, I wouldn't know whatever said or not said. And likewise, whatever been said here might not be heard over there in the forum.

So if I may be the duck, whatever I say will be duck talk. And on the otherside, it will chicken talk.

And this ain't no way to have a conversation or discussion. :)

This is why I try to avoid what's been discussed in another forum here. I am not even a participant of the forum, hence my duck and chicken analogy.