Bashing iCapital and Tan Teng Boo for No Reason?

Received the following comments on the following posting, A Look At iCapital's Buy Call on NasionCom!

• 廖福深 said...
  I feel sad for TTB because some people here just like to bash people on some small mistakes. TTB has been in the market for a long long time and I don't think his record is anything is be ashamed of. Depending on how you look at your portfolio, I believe you can allow for some 100% writeoffs in your stocks (just like structured warrants expiring worthless). For every Nasioncom, our friend has a few LionDIV. If you strcutured your investment to allow for such eventuality, no need to say sorry!

Dear 廖福深,

Let me explain what has transpired here on this blog.

I had been noticing that Mr. Tan Teng Boo has been rather bullish on the mass media early this year. Several articles have been quoted that Mr. Tan had declared himself to be bullish on the markets. And in his OWN subscription editorial, he had stated that he was a long term bull on the local markets and that his long term targets for the KLCI is at 2000 pts.

(ps if you see this posting here one would notice that in iCapital own words "Instead of boring our subscribers with our LONG-HELD and CONSISTENTLY BULLISH VIEWS...!" )

Which was fine with me.

That's his opinions and views as an independent investment advisor.

I am not even challenging whether his views are correct or not.

Now what I found discovered in the quarterly earnings during this very same period that he had been telling the Malaysian public he was bullish, he contradicted what he said by selling some rm50 million worth of shares.

Everything else aside, is such actions correct?

Why tell everyone one you are bullish when you are actually disposing a lot of shares?

If it wasn't Mr. Tan and it was me. Imagine me blog about Hai-O and imagine me saying that Hai-O is a wonderful stock. And while I am singing my praise to you, I sell my shareholdings in this very same. Now is this correct?

Don't you think that this shouldn't be?

Now if I am wrong, then what about Mr.Tan Teng Boo?

Let's not judge who I am but judge the actions!

Which is why What Do You Think of ICap's Recent Disposal Of Shares Held? was posted. And then followed by More Rumblings On Tan Teng Boo's ICapital's Disposal Of Shares. Which lead to a blogger commented that Tan Teng Boo Declares Warren Buffett to be a lousy Economist! and Is iCapital Views Consistent? Is Warren Buffett a Lousy Ecomist?

Which comes to NasionCom, a stock that I had blogged a couple of times before. NasionCom Founder Charged With Bribery!

And I was shocked to read iCap recommended a BUY call on this stock.

Why was I shocked? I knew NasionCom was a terrible stock. That was a fact.

Let me repeat what I had posted on More on iCapital Buy Call On NasionCom

• A lot of folks like to rate investment advisors based on their accuracy, which is bench marked against the said stock movement.
  
  I do have a differing opinion.
  
  When one is focused on benchmark issues like accuracy and the performance of the said stock, then it renders the actual usefulness of the investment analysis/report. Focus is on performance, right? So what's the difference between a report/analysis with the basic stock tipster?
  
  Is there any difference?
  
  I see zero difference then because everyone is judged on how that stock performs, which ultimately renders the analysis/report useless.
  
  And more so when one considers that in the market, sometimes some stocks go mysteriously higher after a report is published. Which makes one wonder if the analysis was really good or perhaps the dark force was simply stronger?
  
  So what do I prefer?
  
  I prefer to rate the analysis/report based on the reasoning why a certain call is made on the stock.
  
  Yes, I do not want to see contradictory buy calls made despite the glaring issues within the stock.
  
  In short, it's not about how the stock call or recommendation performs but how the call is made.

Yes for me, most important is how the call is made.

Look at NasionCom.

The BUY call totally contradicts the glaring weakness in the stock. How could one well known and good independent investment advisor company like iCapital not able to acknowledge the weakness in the stock?

Am I bashing without a reason?

Or am I merely pointing out what is happening here?

Is it wrong for me to point this out?

ps... I actually feel sad to see all this happening.

More on iCapital Buy Call On NasionCom

Received the following comments on the posting, A Look At iCapital's Buy Call on NasionCom!

• KC said...
  Don't be so naive to think that Icap will have 100% accurate in their analysis.
  
  Read it, do your analysis, form your own judgement. Act on your own risk!

Dearest KC ,

Let's not be so arrogant and yes, obviously, everyone do understands that one should also do our own analysis and use our own reasoning and not rely on companies like iCapital.

And I am not here to suggest that iCap needs to be 100% accurate in their analysis.

The posting was made because I was simply amazed and appalled by how our most reputated INDEPENDENT INVESTMENT Advisory company could have had come up with the conclusion.

Do read the next comment for random.

And random said...

• The issue is not whether investment advisors can get it 100% accurate..
  
  If you can get 6 out of 10 correct, you're already very very good
  
  The issue is whether or not they own up to it when they've made a mistake..
  
  Last I heard, there is such a thing as a SELL call..

Dear random,

A lot of folks like to rate investment advisors based on their accuracy, which is bench marked against the said stock movement.

I do have a differing opinion.

When one is focused on benchmark issues like accuracy and the performance of the said stock, then it renders the actual usefulness of the investment analysis/report. Focus is on performance, right? So what's the difference between a report/analysis with the basic stock tipster?

Is there any difference?

I see zero difference then because everyone is judged on how that stock performs, which ultimately renders the analysis/report useless.

And more so when one considers that in the market, sometimes some stocks go mysteriously higher after a report is published. Which makes one wonder if the analysis was really good or perhaps the dark force was simply stronger?

So what do I prefer?

I prefer to rate the analysis/report based on the reasoning why a certain call is made on the stock.

Yes, I do not want to see contradictory buy calls made despite the glaring issues within the stock.

In short, it's not about how the stock call or recommendation performs but how the call is made.

Let me show what I am mumbling about.

Let's look at NasionCom table again. I added a new row to indicate the ttm (trailing twelve months) or most recent 4 quarters earnings then.

1. Earnings was poor yes? Look at the trailing earnings. A net profit of 4.352 million from a sales revenue of 178.352 million, equated to a net profit margin of a mere 2.44%. What's the likely conclusion from these numbers? Wasn't NasionCom a company that had razor thin profit margins? And given the extremely poor earnings shown in NasionCom's fy 2005 Q3 and Q4, shouldn't this be a concern?

2. Cash. Cash as at 05 Q1 was 10.285 million. 4 quarters later cash was only 3.638 million. Isn't it correct to say the cash is depleting?

3. Loans had ballooned from 28.138 million to 64.356 million. Isn't that not a concern?

4. Receivables exploded from 48.445 million to 71.150 million. Isn't that not a concern?

How?

What does common sense suggest here?

Let's see, with a cash balance of only 3.6 million versus total loans of 64 million, surely the level of borrowings is a worry. And when one adds in the fact the company ONLY made a net profit of 1.7 million for the quarter, surely the level of loans is totally massive! And to makes it worse, receivables is at a whopping 71.150 million!!! Why did the receivables grow so much? Anything smelly?

Commonsense question again.. which sane company would want to do business where the amount that is owed to the company is more than their loans? Why can't the company collect these receivables? And if these receivables, these money are collectable, then the company won't even need the loans right? Doesn't it make sense?

So many clear issues within this stock and yet Icapital comes up with the following conclusion.

• iCapital finds NasionCom to be an interesting company, with one of the factors being the direction and strategy that the new managing director has planned for the group. However, what worries us is the level of borrowings currently carried by the group. As at 1Q06, the group has rm64 million worth of borrowings, rm3.6 million of cash, and incurred interest expenses of rm1.3 million (35% of operating profit). On balance, iCapital rates NasionCom as a Buy below rm0.15 for the medium-term.

How would you rate iCapital based on such reasoning??

They see high level of borrowings but yet they chose to discount it.

Why?

How could they come out with such a terribly poor recommendation?

And this is how I would rate iCapital.

ps: Look at NasionCom now. The company cannot even officially release their fy 06 earnings and the company is fighting hard to ward off delisting from Bursa Malaysia!

A Look At iCapital's Buy Call on NasionCom!

I have gotten an interesting comment on my posting, NasionCom Founder Charged With Bribery!

• From The Wanderer
  Dear Moola, (the financial watch cow)
  I don't want I Cap to conveniently forget about their buy call on 18/08/2006
  The buy below 0.15 is......?????

Here is the screen shot of what The Wanderer posted.

In the last paragraph, iCapital wrote the following:

• iCapital finds NasionCom to be an interesting company, with one of the factors being the direction and strategy that the new managing director has planned for the group. However, what worries us is the level of borrowings currently carried by the group. As at 1Q06, the group has rm64 million worth of borrowings, rm3.6 million of cash, and incurred interest expenses of rm1.3 million (35% of operating profit). On balance, iCapital rates NasionCom as a Buy below rm0.15 for the medium-term.

Ok, iCapital was looking at 06 Q1 earnings of Nasioncom, Quarterly rpt on consolidated results for the financial period ended 31/3/2006

It was nice to see that iCapital recognise that NasionCom had a terrible balance sheet but then on the other hand, why then does it want to rate NasionCom as a BUY below rm0.15 for the medium-term???

Sounds not so correct, yes?

So I decided to compile a table on NasionCom.

Let's look at the numbers based on simple logic reasonings.

1. Net profit - Ok, for 06 Q1 did ok but the previous 2 quarters 05 Q3 and 05 Q4, the earnings has been terrible.

2. The net profit margins is terrible eh?

3. Cash balances. Cash balances have depleted, yes? Exactly a year ago, Nasioncom reported it had cash of 10.285 million in its 05 Q1 earnings. Now it only has 3.636 million.

4. Loan balances. Total loans is at 64 million. A year ago for the same period, Nasioncom had loans of only 28.138 million!

5. Receivables. Holy moly. Incredible. A year ago, Nasioncom Receivables was at 48.445 million. A year later, the receivables have balloned to 71.115 million. Which didn't make sense because during this period, from 05 Q2 to 06 Q1, NasionCom only had net earnings of 4.352 million! Earn so little, how could the receivables balloon so much? Not fishy, meh?

How?

Seriously, NasionCom looks like a damn lousy company yes?

Poor earnings, terrible margins, depleting cash, ballooning debts and receivables.

So many issues yes?

Would you want to invest in this company based on these information?

And yet, iCapital had a MEDIUM-TERM buy on this stock at 0.15 sen!

Do you understand their MEDIUM-TERM buy recommendation at all? I, for one, do not.

So why did iCapital make such a call?

And the only announcement of significant that NasionCom had was on the very same day, Nasioncom announced that it had a huge private placement of up to 80,000,000 new ordinary shares of RM0.10 each (Shares) in NHB, representing up to 10% of the existing issued and paid-up share capital of NHB (Proposed Private Placement)

And this is how NasionCom has done since 18th Aug 2006.

ps: The Wanderer, I wonder if iCap changed their recommendation on NasionCom since Aug 2006?

NasionCom Founder Charged With Bribery!

Utterly shambolic!

Published on Star newspaper today, NasionCom founder faces eight counts involving RM3.85mil

• KUALA LUMPUR: The founder of telecommunications service provider NasionCom Holdings Bhd Datuk Chee Kok Wing was charged in two courts with eight counts of bribery involving RM3.85mil.
  
  Chee, 45, claimed trial at a Sessions Court here to six charges of accepting bribes amounting to RM3.1mil and was slapped with another two bribery charges involving RM750,000 at the Petaling Jaya Sessions Court later.
  
  The former NasionCom Holdings group managing director is accused of committing the offences to help the listing of a seafood company on Bursa Malaysia and to stop investigations by the Securities Commission (SC).
  
  He is alleged to have received a RM1mil bribe each via a bank account from Gropoint Ocean Food Sdn Bhd (GOF) director Lee Sin Teck as an inducement for SC division director Kris Azman Abdullah to help in the listing of GOF on Bursa Malaysia and to stop a probe by the SC.
  
  He is said to have committed the offence at the Alliance Bank Malaysia Bhd in Mid Valley City here on May 19, 2006 and May 25, 2006.
  
  Chee faces a third charge of obtaining a bribe of RM600,000 from GOF director Datuk Lim Kim Ming through businessman Koh Yuet Yee for the same purpose at the NasionCom office here on May 29, 2006.
  
  He allegedly received a RM50,000 bribe from GOF corporate services division director Wong Tze Yen through Koh for the same matter at the same place on May 30, 2006.
  
  Chee is said to have received RM50,000 and RM400,000 from Lim through Koh at the same office on May 30, 2006 and the next day for a similar purpose.
  
  If convicted, he can be jailed up to 20 years and fined five times the amount of the bribe for each charge under the Anti-Corruption Act 1997.
  
  Judge S.M. Komathy Suppiah granted bail at RM500,000 in one surety and ordered him to report to an investigating officer once in two months.
  
  Komathy set June 27 for mention on an application by DPP Abdul Razak that the prosecution had yet to decide if it wanted a joint trial with his other bribery case.
  
  At 2.50pm, he claimed trial at the PJ Sessions Court to accepting bribes on two occasions from Lim for the same mattter at his house in Seri Kembangan between June 17, 2006 and the next day.
  
  Judge Nurmala Salim granted bail at RM50,000 in one surety and set June 26 for mention. His wife posted bail.

Incredible!

A year ago, this very same NasionCom boss was charged for giving false information in its financial statements!

• SC Charges Three For Giving False Information In NasionCom Case
  
  KUALA LUMPUR, May 28 (Bernama) -- The Securities Commission (SC) today charged three individuals for their involvement in the submission of false information related to NasionCom Holdings Bhd's financial statement for the year ended Dec 31, 2005.
  
  They were also charged for giving false information on NasionCom Prospectus for listing on the MESDAQ Market.
  
  The three charged were Datuk Chee Kok Wing and Shamsul Khalid Ismail, both directors of NasionCom, and Mah Soon Chai, a shareholder of Express Top-Up Sdn Bhd, a subsidiary of NasionCom, the SC said in a statement today.
  
  The Companies Commision of Malaysia (CCM) also charged Chee for authorising the making of false statements in NasionCom's documents, namely invoices, dealer agreements, ledgers and bank deposit slips.
  
  Chee is being charged with two offences under the securities law and one offence under the Companies Act 1965:
  
  He was charged for causing the issuance of NasionCom Prospectus for listing on the MESDAQ Market, which contained misleading information. The offence carries the punishment of a maximum penalty of RM3 million fine or 10 years imprisonment or both.
  
  He was also charged, in his capacity as a director, for submitting false information to the SC contained in the 2005 Annual Report of NasionCom, in particular, its revenue for the financial year ended Dec 31, 2005. This offence is punishable by a maximum fine of RM3 million or imprisonment not exceeding 10 years or both.
  
  He was also charged under the Companies Act 1965 for authorising false statement in the document of NasionCom Sdn Bhd which were used for the preparation of NasionCom financial statement for the financial year ended Dec 31, 2005.
  
  Shamsul was charged in his capacity as a director of NasionCom for the same offences.
  
  Mah is charged for abetting NasionCom to submit the false information.
  
  On conviction, Shamsul and Mah are liable to pay a maximum fine of RM3 million or imprisonment for a term not exceeding 10 years or both.
  
  The Court has offered the cases to be jointly tried from November 21 to 23 this year.
  
  The Court granted bail to the accused persons in the following amount with one surety and their respective passports to be surrendered to the court: Chee: RM200,000, Shamsul: RM100,000, Mah: RM50,000.
  
  The prosecution of the individuals follows the SC's action on Feb 15 this year where it publicly reprimanded NasionCom and directed the company to rectify and re-issue its financial statements for the financial year ended Dec 31, 2005.

And what's even more shocking is that 28-03-2008: Chee sells out of NasionCom

• KUALA LUMPUR: NasionCom Holdings Bhd’s major shareholder and former chairman Datuk Chee Kok Wing has disposed of his entire 13% stake in the telecommunications services firm to TBM Resources Sdn Bhd for RM4 million cash.
  
  NasionCom said yesterday it had been notified by Chee that he had on March 24 entered into a shares sale and purchase agreement with TBM to dispose of 100 million shares held directly or indirectly.
  
  As at June 29, 2007, Chee had 105.03 million shares or 13.13% in the Mesdaq-listed company, of which 38 million were held in his own name, 51 million shares under Wing Ken Jie Holdings Sdn Bhd and 15.81 million shares under Beyond Accord Sdn Bhd.
  

Chee has sold out and the company has received a show cause letter on De-Listing of Securities and it's even more shambolic because the company till today still cannot produce it's quarterly earnings for the period ended 31 December 2006 (“2006 Q4 Report”)!!

In a recent announcement dated 6th May 2008,

• Status of issuance of the following financial statements:
  (a) Quarterly financial results for the period ended 31 December 2006 (“2006 Q4 Report”) pursuant to Rule 9.22(1) of the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) for the MESDAQ Market (“MMLR”);
  (b) Annual audited accounts together with the auditors’ and directors’ report for the financial year ended 31 December 2006 pursuant to Rule 9.24(b) of the MMLR (“AAA FY2006”);
  (c) Quarterly financial results for the period ended 31 March 2007, 30 June 2007, 30 September 2007 and 31 December 2007 pursuant to Rule 9.22(1) of the MMLR (“2007 Q1, Q2, Q3 and Q4 Report”);
  (d) Annual Report for the financial year ended 31 December 2006 pursuant to Rule 9.24(a) of the MMLR; and
  (e) half yearly research reports for the period ended 31 December 2006, 30 June 2007 and 31 December 2007 pursuant to Rule 9.23(1) of the MMLR.
  
  The Company wishes to announce that it is still unable to release the above financial statements.
  
  Bursa Securities had earlier issued notice on removal of the Company’s securities from the official list of Bursa Securities on 4 April 2008 in view that the Company has failed to issue the AAA FY2006, 2006 Q4 report and 2007 Q1 report within the extended timeframe, i.e. by 29 February 2008 and the Company had subsequently obtained a stay order dated 3 April 2008 restraining Bursa Securities from removing the securities of the Company from the Official List of Bursa Securities on 4 April 2008. Currently, the removal of the Company’s securities is deferred until further notice.
  
  The Company had on 13 March 2008 announced the resignation of Messrs Deloitte KassimChan (“DKC”) as Auditors of the Company and will convene an extraordinary general meeting in due course to appoint a new Auditor in place of DKC.
  
  This announcement is dated 6 May 2008.

And isn't it shambolic and ludicrous that Chee had already disposed his entire stake!

And NasionCom was a stock that I remembered too well.

April 10th 2007, I had written the following posting, NasionCom & Our Financial News Again!

Yes, I was utterly appalled by how OUR financial press had helped promoted this stock!

No joke!

Here read what I had written back then:

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

My Dearest Moo Moo Cow,

I was going through my old blog postings and I found these interesting sequence of postings.

Let's take a step back in time.

------------------------------------------------------------
Saturday, February 11, 2006

Is our financial news really financial news?

Back in Sept 10th 2005, there was this article on Nasioncom.

In that article, again it was crystal clear how ludicrously written the article was. Words like it is believed, sources says, currently believed, it is understood were splattered all over the article.

Makes you wonder if our financial press was printing out actual financial news based on facts or was our financial news being used a tool for some to churn out rumors to seduce punters and speculators to punt on the stock?

And it was such blatant shenanigan when the reporter played around with some actual financial notes.

Take a look at the second last paragraph of that news article:

• For the six months ended June, NasionCom posted a net profit of RM7.2mil on the back of RM112.9mil in sales. In the notes accompanying its financial results to Bursa Malaysia, NasionCom says, “Compared against the group’s results for the financial year ended December 2004, for the half-year ended June 2005, the group has recorded a revenue of RM112.9 million or 70.2% of financial year (FY) 2004’s revenue and a profit after taxation of RM7.18 million, surpassing FY 2004’s full-year profit of RM3.76 million. Moving forward, the group believes that its continuous investments in Internet protocol network infrastructure, broadband infrastructure and Internet data centre, together with development on niche products and services, will yield positive contributions in the future.

The problem is, first of all...

Nasioncom first quarter net earnings was 5.171 million.
Nasioncom second quarter net earnings was 2.009 million.

The earnings report, which the reporter was referring to, saw Nasioncom's net earnings decline from 5.171 million to 2.009 million. This meant that Nasioncom's earnings weren't as rosy as what was indicated by the newsreporter. (see the highlight in blue: a revenue of RM112.9 million or 70.2% of financial year (FY) 2004’s revenue and a profit after taxation of RM7.18 million, surpassing FY 2004’s full-year profit of RM3.76 million.)

Now if I dig into Bursa Malaysia reports, the following is the link to that Nasioncom's earnings report:

Quarterly rpt on consolidated results for the financial period ended 30/6/2005

Click on the attached wordfile... and search for Nasioncom's REVIEW OF PERFORMANCE in their earning notes.... there was 4 paragraphs of remarks...

Ho ho ho... guess what? this reporter DECIDED to highlight ONLY the good stuff!!

The reporter only used the bottom 2 paragraphs, and cleverly ignoring and omitting the first two paragraphs of Nasioncom's notes.

I have pasted those 4 paragraphs in question...

• The 2nd quarter under review has shown a lower overall performance when compared to the immediate preceding quarter ended 31 March 2005. The Group recorded revenue of RM 51.798 million; earnings before interest, tax, depreciation and amortisation (EBITDA) of RM 6.186 million; and profits after taxation and minority interest of RM 2.009 million.
  
  The second quarter results has been impacted by lower revenue due to competitive pricing.
  
  There were no corresponding second quarter results for 2004 as this is the Group’s first 2nd Quarter result after its listing on 25 February 2005 on the MESDAQ Market of Bursa Securities.
  
  Compared against the Group’s results for the financial year ended 31 December 2004, for the half-year ended 30 June 2005, the Group has recorded revenue of RM112.9 million or 70.2% of FYE 2004’s revenue and a profit after taxation of RM7.18 million, surpassing the FYE 2004’s full year profit of RM3.76 million.
  
  Moving forward, the Group believes that its continuous investments in Internet protocol (IP) network infrastructure, broadband infrastructure and Internet data center (IDC) together with development on niche products and services would yield positive contributions in the future.
  
  

~~~~~~~~~~~~~~~

So I wonder, if this reporter made a simple mistake or perhaps there was intent by the reporter?

By leaving out the first 2 paragraphs, the reporter omitted the current poor performance of the company and most important leaving out the fact that the Nasioncom clearly said that the lower earnings was caused by competitive pricing. Isn't this not an important issue to report?

On 30th November 2005, Nasioncom reported its earnings again.

Quarterly rpt on consolidated results for the financial period ended 30/9/2005

Total net earnings from Nasioncom was only a paltry 260k!!!!!!!!! See how important the issue that in the previous quarter, Nasioncom had already being affected by lower earnings caused by competitive pricing?

So in summary:

Nasioncom first quarter net earnings was 5.171 million.
Nasioncom second quarter net earnings was 2.009 million.
Nasioncom third quarter net earnings was 260k.

Yup... and if you look at the very statement of that article: It appears that there is a lot going on at Mesdaq-listed NasionCom Holdings Bhd.

LOL!!!.... what nonsense isn't it?

That was then. In today's Bizweek, the very same reporter, made another attempt to sell the stock!

New major shareholder to emerge in NasionCom

Same style!

"Sources say, it is understood, it is believed" are plastered all over the article again. All hearsay and no actual facts!

Now check this out...

• The price tag of 50 sen may appear a tad high (compared to its current share price of around 29 sen), but an analyst says not necessarily so. “At 50 sen, NasionCom is being valued at a price earnings of about 9 times, which is fair considering the average PE of 15 times of some of the other prominent stocks on Mesdaq such as Green Packet Bhd and REDtone International Bhd.”

Now I really wonder who on earth this analyst is! Nasioncom's current earnings, which is declining drastically, totals some 7.4 million for the first 3 quarters of the year.

Let me put this 50 sen price tag into perspective. This ANALsyt is effectively equating that Nasioncom should be worth, in terms of market capital, some 400 million ringgit!! (This is the price one has to pay if one wants to buy each and every single share of Nasioncom @ 50 sen price tag!)

So can a company making some mere 7.4 million and worse still, in its last reported earnings in November reported a paltry earnings of 260k, be worth a whopping 400 million ringgit????

So clearly this ANALyst is basing the valuation on some incredibly high earnings per share!

Let's see... at 50 sen, with a price earnings ratio of 9 times, this means Nasioncom's earnings per share is some 5.5 sen. Now Nasioncom has some 800 million shares... which means this ANALyst is saying that Nasioncom's net earnings equates some 44 million!

44 million?

Amazing! Truly amazing!.. and how much is Nasioncom's current earnings? Some 7.44 million?

And regarding this ANALyst... isn't it a wonder that this reporter makes no attempt in naming who he or she is?


ps...

this blog entry is not about what and how Nasioncom will trade in the near future! Will Nasioncom go up or down? It interests me not!

Most important issue: Is our financial news really financial news?

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

4 days later, I wrote the following article.

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

Wednesday, February 15, 2006

What again about our financial reporting?

The issue of our financial news used to instigate wild speculation ideas on stocks.

Here are some blog postings on the issues:

• Is our financial news really financial news?


• Should Financial Press be allowed to spin-off Rumours?


• Mutiara

And incredibly, all of those articles was creatively written or should I call it engineered by one same reporter and his so-called sources (or should I call it as Maggie Sauce?!)

Take the latest one: Is our financial news really financial news?

Let's take the issue of Nasioncom. That article was posted on 11th Feb 2006.

1. Nasioncom ended the day trading on the 10th Feb 2006 at 0.305.

2. Nasioncom ended the day trading on the 13th Feb 2006, the day after that incredibly creative story was written, at 0.345. See how nice it is to publish a story, throws in the wild speculative 'according to sources" stuff all over the article. And better still, add in a wild insane, nonsensical valuation based on ONE so-called UN-NAMED analyst! Job done, eh? Check the high volume traded on that day!

3. Nasioncom ended the day trading on the 14th Feb 2006 at 0.30. What a lovely, I Love You Deep-Deep Valentine present from this reporter, eh?

4. Now? The selling pressure 'looks' very strong (errr... you might want to get a second opinion on this statement cause I am not one that could read what the trade is saying!).... anyway... at 11.30, Nasioncom is now trading at 0.285.

How?

Do we need such wild no-substance stories?

And worse still, how come one reporter in our financial newspaper can repeatedly publish nothing but speculative rumors in the financial news?

What good is our financial news if everything is but speculative rumors?

How?

Does all this even matters?

Or does it NOT matter as long as it provides us with an opportunity to punt in the said stock(s)?

Or should I question who gives the divine rights to allow this reporter to write as per his own whims and fancy?

How?

Or should I request that our financial news to be changed to our RUMOUR mill?

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

And the rest is history!

One year later...

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

Friday, February 16, 2007

Nasioncom Caught Inflating Sales Revenue

Posted on Business Times.

SC raps NasionCom
for inflating
revenue figures

The telecommunications service provider has to rectify and re-issue its financial statements for the year ended December 31 2005 within a month

“NasionCom’s revenue of RM194.98 million as reflected in its 2005 financial statements contained RM143.11 million sales that were not transacted,” the SC said in a press release late yesterday.

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

NasionCom & Our Financial News Again!

My Dearest Moo Moo Cow,

I was going through my old blog postings and I found these interesting sequence of postings.

Let's take a step back in time.

-------------------------------------------------------------------------------
Saturday, February 11, 2006

Is our financial news really financial news?

Back in Sept 10th 2005, there was this article on Nasioncom.

In that article, again it was crystal clear how ludicrously written the article was. Words like it is believed, sources says, currently believed, it is understood were splattered all over the article.

Makes you wonder if our financial press was printing out actual financial news based on facts or was our financial news being used a tool for some to churn out rumors to seduce punters and speculators to punt on the stock?

And it was such blatant shenanigan when the reporter played around with some actual financial notes.

Take a look at the second last paragraph of that news article:

• For the six months ended June, NasionCom posted a net profit of RM7.2mil on the back of RM112.9mil in sales. In the notes accompanying its financial results to Bursa Malaysia, NasionCom says, “Compared against the group’s results for the financial year ended December 2004, for the half-year ended June 2005, the group has recorded a revenue of RM112.9 million or 70.2% of financial year (FY) 2004’s revenue and a profit after taxation of RM7.18 million, surpassing FY 2004’s full-year profit of RM3.76 million. Moving forward, the group believes that its continuous investments in Internet protocol network infrastructure, broadband infrastructure and Internet data centre, together with development on niche products and services, will yield positive contributions in the future.

The problem is, first of all...

Nasioncom first quarter net earnings was 5.171 million.
Nasioncom second quarter net earnings was 2.009 million.

The earnings report, which the reporter was referring to, saw Nasioncom's net earnings decline from 5.171 million to 2.009 million. This meant that Nasioncom's earnings weren't as rosy as what was indicated by the newsreporter. (see the highlight in blue: a revenue of RM112.9 million or 70.2% of financial year (FY) 2004’s revenue and a profit after taxation of RM7.18 million, surpassing FY 2004’s full-year profit of RM3.76 million.)

Now if I dig into Bursa Malaysia reports, the following is the link to that Nasioncom's earnings report:

Quarterly rpt on consolidated results for the financial period ended 30/6/2005

Click on the attached wordfile... and search for Nasioncom's REVIEW OF PERFORMANCE in their earning notes.... there was 4 paragraphs of remarks...

Ho ho ho... guess what? this reporter DECIDED to highlight ONLY the good stuff!!

The reporter only used the bottom 2 paragraphs, and cleverly ignoring and omitting the first two paragraphs of Nasioncom's notes.

I have pasted those 4 paragraphs in question...

• The 2nd quarter under review has shown a lower overall performance when compared to the immediate preceding quarter ended 31 March 2005. The Group recorded revenue of RM 51.798 million; earnings before interest, tax, depreciation and amortisation (EBITDA) of RM 6.186 million; and profits after taxation and minority interest of RM 2.009 million.
  
  The second quarter results has been impacted by lower revenue due to competitive pricing.
  
  There were no corresponding second quarter results for 2004 as this is the Group’s first 2nd Quarter result after its listing on 25 February 2005 on the MESDAQ Market of Bursa Securities.
  
  Compared against the Group’s results for the financial year ended 31 December 2004, for the half-year ended 30 June 2005, the Group has recorded revenue of RM112.9 million or 70.2% of FYE 2004’s revenue and a profit after taxation of RM7.18 million, surpassing the FYE 2004’s full year profit of RM3.76 million.
  
  Moving forward, the Group believes that its continuous investments in Internet protocol (IP) network infrastructure, broadband infrastructure and Internet data center (IDC) together with development on niche products and services would yield positive contributions in the future.
  
  

~~~~~~~~~~~~~~~

So I wonder, if this reporter made a simple mistake or perhaps there was intent by the reporter?

By leaving out the first 2 paragraphs, the reporter omitted the current poor performance of the company and most important leaving out the fact that the Nasioncom clearly said that the lower earnings was caused by competitive pricing. Isn't this not an important issue to report?

On 30th November 2005, Nasioncom reported its earnings again.

Quarterly rpt on consolidated results for the financial period ended 30/9/2005

Total net earnings from Nasioncom was only a paltry 260k!!!!!!!!! See how important the issue that in the previous quarter, Nasioncom had already being affected by lower earnings caused by competitive pricing?

So in summary:

Nasioncom first quarter net earnings was 5.171 million.
Nasioncom second quarter net earnings was 2.009 million.
Nasioncom third quarter net earnings was 260k.

Yup... and if you look at the very statement of that article: It appears that there is a lot going on at Mesdaq-listed NasionCom Holdings Bhd.

LOL!!!.... what nonsense isn't it?

That was then. In today's Bizweek, the very same reporter, made another attempt to sell the stock!

New major shareholder to emerge in NasionCom

Same style!

"Sources say, it is understood, it is believed" are plastered all over the article again. All hearsay and no actual facts!

Now check this out...

• The price tag of 50 sen may appear a tad high (compared to its current share price of around 29 sen), but an analyst says not necessarily so. “At 50 sen, NasionCom is being valued at a price earnings of about 9 times, which is fair considering the average PE of 15 times of some of the other prominent stocks on Mesdaq such as Green Packet Bhd and REDtone International Bhd.”

Now I really wonder who on earth this analyst is! Nasioncom's current earnings, which is declining drastically, totals some 7.4 million for the first 3 quarters of the year.

Let me put this 50 sen price tag into perspective. This ANALsyt is effectively equating that Nasioncom should be worth, in terms of market capital, some 400 million ringgit!! (This is the price one has to pay if one wants to buy each and every single share of Nasioncom @ 50 sen price tag!)

So can a company making some mere 7.4 million and worse still, in its last reported earnings in November reported a paltry earnings of 260k, be worth a whopping 400 million ringgit????

So clearly this ANALyst is basing the valuation on some incredibly high earnings per share!

Let's see... at 50 sen, with a price earnings ratio of 9 times, this means Nasioncom's earnings per share is some 5.5 sen. Now Nasioncom has some 800 million shares... which means this ANALyst is saying that Nasioncom's net earnings equates some 44 million!

44 million?

Amazing! Truly amazing!.. and how much is Nasioncom's current earnings? Some 7.44 million?

And regarding this ANALyst... isn't it a wonder that this reporter makes no attempt in naming who he or she is?


ps...

this blog entry is not about what and how Nasioncom will trade in the near future! Will Nasioncom go up or down? It interests me not!

Most important issue: Is our financial news really financial news?

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

4 days later, I wrote the following article.

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

Wednesday, February 15, 2006

What again about our financial reporting?

The issue of our financial news used to instigate wild speculation ideas on stocks.

Here are some blog postings on the issues:

• Is our financial news really financial news?


• Should Financial Press be allowed to spin-off Rumours?


• Mutiara

And incredibly, all of those articles was creatively written or should I call it engineered by one same reporter and his so-called sources (or should I call it as Maggie Sauce?!)

Take the latest one: Is our financial news really financial news?

Let's take the issue of Nasioncom. That article was posted on 11th Feb 2006.

1. Nasioncom ended the day trading on the 10th Feb 2006 at 0.305.

2. Nasioncom ended the day trading on the 13th Feb 2006, the day after that incredibly creative story was written, at 0.345. See how nice it is to publish a story, throws in the wild speculative 'according to sources" stuff all over the article. And better still, add in a wild insane, nonsensical valuation based on ONE so-called UN-NAMED analyst! Job done, eh? Check the high volume traded on that day!

3. Nasioncom ended the day trading on the 14th Feb 2006 at 0.30. What a lovely, I Love You Deep-Deep Valentine present from this reporter, eh?

4. Now? The selling pressure 'looks' very strong (errr... you might want to get a second opinion on this statement cause I am not one that could read what the trade is saying!).... anyway... at 11.30, Nasioncom is now trading at 0.285.

How?

Do we need such wild no-substance stories?

And worse still, how come one reporter in our financial newspaper can repeatedly publish nothing but speculative rumors in the financial news?

What good is our financial news if everything is but speculative rumors?

How?

Does all this even matters?

Or does it NOT matter as long as it provides us with an opportunity to punt in the said stock(s)?

Or should I question who gives the divine rights to allow this reporter to write as per his own whims and fancy?

How?

Or should I request that our financial news to be changed to our RUMOUR mill?

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

And the rest is history!

One year later...

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

Friday, February 16, 2007

Nasioncom Caught Inflating Sales Revenue

Posted on Business Times.

SC raps NasionCom
for inflating
revenue figures

The telecommunications service provider has to rectify and re-issue its financial statements for the year ended December 31 2005 within a month

“NasionCom’s revenue of RM194.98 million as reflected in its 2005 financial statements contained RM143.11 million sales that were not transacted,” the SC said in a press release late yesterday.

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

How now, my dearest Moo Moo Cow?

Nasioncom Caught Inflating Sales Revenue

Posted on Business Times.

SC raps NasionCom for inflating revenue figures

The telecommunications service provider has to rectify and re-issue its financial statements for the year ended December 31 2005 within a month

“NasionCom’s revenue of RM194.98 million as reflected in its 2005 financial statements contained RM143.11 million sales that were not transacted,” the SC said in a press release late yesterday.

What again about our financial reporting?

The issue of our financial news used to instigate wild specualtion ideas on stocks.

Here are some blog postings on the issues:

• Is our financial news really financial news?


• Should Financial Press be allowed to spin-off Rumours?


• Mutiara

And incredibly, all of those articles was creatively written or should I call it engineered by one same reporter and his so-called sources (or should I call it as Maggie Sauce!)

Take the latest one: Is our financial news really financial news?

Let's take the issue of Nasioncom. That article was posted on 11th Feb 2006.

1. Nasioncom ended the day trading on the 10th Feb 2006 at 0.305.

2. Nasioncom ended the day trading on the 13th Feb 2006, the day after that incredibly creative story was written, at 0.345. See how nice it is to publish a story, throws in the wild speculative 'according to sources" stuff all over the article. And better still, add in a wild insane, nonsensical valuation based on ONE so-called UN-NAMED analyst! Job done eh? Check the high volume traded on that day!

3. Nasioncom ended the day trading on the 14th Feb 2006 at 0.30. What a lovely, I Love You Deep-Deep Valentine present from this reporter, eh?

4. Now? The selling pressure 'looks' very strong (errr... you might want to get a second opinion on this statement cause I am not one that could read what the trade is saying!).... anyway... at 11.30, Nasioncom is now trading at 0.285.

How?

Do we need such wild no-substance stories?

And worse still, how come one reporter in our financial newspaper can repeatedly publish nothing but speculative rumours in the financial news?

What good is our financial news if everything is but speculative rumours?

How?

Does all this even matters?

Or does it NOT matter as long as it provides us with an opportunity to punt in the said stock(s)?

Or should I question who gives the devine rights to allow this reporter to write as per his own whimps and fancy?

How?

Or should I request that our financial news to be changed to our RUMOUR mill?

Is our financial news really financial news?

Back in Sept 10th 2005, there was this article on Nasioncom.

In that article, again it was crystal clear how ludicrously written the article was. Words like it is believed, sources says, currently believed, it is understood were splattered all over the article.

Makes you wonder if our financial press was printing out actual financial news based on facts or was our financial news being used a tool for some to churn out rumours to seduce punters and speculators to punt on the stock?

And it was such blatant shenanigan when the reporter played around with some actual financial notes.

Take a look at the second last paragraph of that news article:

For the six months ended June, NasionCom posted a net profit of RM7.2mil on the back of RM112.9mil in sales. In the notes accompanying its financial results to Bursa Malaysia, NasionCom says, “Compared against the group’s results for the financial year ended December 2004, for the half-year ended June 2005, the group has recorded a revenue of RM112.9 million or 70.2% of financial year (FY) 2004’s revenue and a profit after taxation of RM7.18 million, surpassing FY 2004’s full-year profit of RM3.76 million. Moving forward, the group believes that its continuous investments in Internet protocol network infrastructure, broadband infrastructure and Internet data centre, together with development on niche products and services, will yield positive contributions in the future.

The problem is, first of all...

Nasioncom first quarter net earnings was 5.171 million.
Nasioncom second quarter net earnings was 2.009 million.

the earnings report, which the reporter was refering to, saw Nasioncom's net earnings decline from 5.171 million to 2.009 million. This meant that Nasioncom's earnings wasn't as rosy as what was indicated by the newsreporter. (see the highlight in blue: a revenue of RM112.9 million or 70.2% of financial year (FY) 2004’s revenue and a profit after taxation of RM7.18 million, surpassing FY 2004’s full-year profit of RM3.76 million.)

Now if I dig into Bursa Malaysia reports, the following is the link to that Nasioncom's earnings report:

Quarterly rpt on consolidated results for the financial period ended 30/6/2005

Click on the attached wordfile... and search for Nasioncom's REVIEW OF PERFORMANCE in their earning notes.... there was 4 paragraphs of remarks...

ho ho ho... guess what? this reporter DECIDED to highlight ONLY the good stuff. The reporter only used the bottom 2 paragraphs, and cleverly ignoring and omitting the first two paragraphs of Nasioncom's notes.

I have pasted those 4 paragraphs in question...

The 2nd quarter under review has shown a lower overall performance when compared to the immediate preceding quarter ended 31 March 2005. The Group recorded revenue of RM 51.798 million; earnings before interest, tax, depreciation and amortisation (EBITDA) of RM 6.186 million; and profits after taxation and minority interest of RM 2.009 million. The second quarter results has been impacted by lower revenue due to competitive pricing.

There were no corresponding second quarter results for 2004 as this is the Group’s first 2nd Quarter result after its listing on 25 February 2005 on the MESDAQ Market of Bursa Securities.

Compared against the Group’s results for the financial year ended 31 December 2004, for the half-year ended 30 June 2005, the Group has recorded revenue of RM112.9 million or 70.2% of FYE 2004’s revenue and a profit after taxation of RM7.18 million, surpassing the FYE 2004’s full year profit of RM3.76 million.

Moving forward, the Group believes that its continuous investments in Internet protocol (IP) network infrastructure, broadband infrastructure and Internet data center (IDC) together with development on niche products and services would yield positive contributions in the future.

~~~~~~~~~~~~~~~

So I wonder, if this reporter made a simple mistake or perhaps there was intent by the reporter?

By leaving out the first 2 paragraphs, the reporter omitted the current poor performance of the company and most important leaving out the fact that the Nasioncom clearly said that the lower earnings was caused by competitive pricing. Isn't this not an important issue to report?

On 30th November 2005, Nasioncom reported its earnings again.

Quarterly rpt on consolidated results for the financial period ended 30/9/2005

Total net earnings from Nasioncom was only a paltry 260k!!!!!!!!! See how important the issue that in the previous quarter, Nasioncom had already being affected by lower earnings caused by competitive pricing?

So in summary:

Nasioncom first quarter net earnings was 5.171 million.
Nasioncom second quarter net earnings was 2.009 million.
Nasioncom third quarter net earnings was 260k.

Yup... and if you look at the very statement of that article: It appears that there is a lot going on at Mesdaq-listed NasionCom Holdings Bhd.

LOL!!!.... what nonsense isn't it?

That was then. In today's Bizweek, the very same reporter, made another attempt to sell the stock!

New major shareholder to emerge in NasionCom

Same style, same crap!

"Sources say, it is understood, it is believed" are plastered all over the article again. All heresay and no actual facts!

Now check this out...

The price tag of 50 sen may appear a tad high (compared to its current share price of around 29 sen), but an analyst says not necessarily so. “At 50 sen, NasionCom is being valued at a price earnings of about 9 times, which is fair considering the average PE of 15 times of some of the other prominent stocks on Mesdaq such as Green Packet Bhd and REDtone International Bhd.”

Now I really wonder who on earth this analyst is! Nasioncom's current earnings, which is declining drastically, totals some 7.4 million for the first 3 quarters of the year.

Let me put this 50 sen price tag into perspective. This ANALsyt is effectively equating that Nasioncom should be worth, in terms of market capital, some 400 million ringgit!! (This is the price one has to pay if one wants to buy each and every single share of Nasioncom @ 50 sen price tag!)

So can a company making some mere 7.4 million and worse still, in its last reported earnings in November reported a platry earnings of 260k, be worth a whopping 400 million ringgit????

So clearly this ANALyst is basing the valuation on some incredibly high earnings per share!

let's see... at 50 sen, with a price earnings ratio of 9 times, this means Nasioncom's earnings per share is some 5.5 sen. Now Nasioncom has some 800 million shares... which means this ANALyst is saying that Nasioncom's net earnings equates some 44 million!

44 million?

Amazing! Truly amazing!.. and how much is Nasioncom's current earnings? Some 7.44 million?

Yet another truly incredible piece of garbage being posted in our daily financial news!

And regarding this ANALyst... isn't it a wonder that this reporter makes no attempt in naming who he or she is?


ps...

this blog entry is not about what and how Nasioncom will trade in the near future! Will Nasioncom go up or down? It interests me not!

Most important issue: Is our financial news really financial news?