AirAsia

I was just amazed when I read in this mornings paper regarding AirAsia quarterly earnings report: More passengers lift AirAsia Q1 profit

Yeah, not too happy at how and what is happening here and the core of my displeasure is simply at how our IPO is marketed.

When AirAsia made its IPO last Oct 2004, there were indications that perhaps their IPO projection earnings was simply too optimistic.

The following is a snippet from one our local newspaper business section.

AirAsia expects profit to soar
By ALICE CHIA
BUDGET carrier AirAsia Bhd expects net profit for the financial year ending June 30 2005 to more than triple to RM159.9 million compared with RM49.1 million before. Revenue is also expected to jump 90.1 per cent to RM746.6 million from RM392.7 million, according to its prospectus.

Yup. AirAsia expects its net profit to triple the very year its stock will be listed!

Very rosy isn't it?

And needless to say a year later, on Aug 2005, AirAsia simply missed its overly optimistic earnings forecast. Here's another business article snippet.

Monday August 29, 4:09 PM
Malaysia's Airasia Misses Yr Net Profit Forecast
KUALA LUMPUR, Aug 29 Asia Pulse - AirAsia Berhad (KLSE:5099) has reported group profit after tax and minority interest of RM111.635 million (US$29.6 million) for its financial year ended 30 June 2005, up 127.5 per cent year-on-year.
However, the net profit was 30.2 per cent below the RM159.9 million forecast for the year in the prospectus issued in relation to its initial public offering [IPO] last year, the budget airline said in a filing to Bursa Malaysia on Friday.

Let me work out what it means. When it AirAsia made its IPO prospectus, the total number of shares for AirAsia was 2,335 million shares.

Now based on AirAsia meeting its rosy IPO earnings projection of 160 million, an IPO investor investing in AirAsia was investing in a stock which promised to earn around 6.9 sen earnings per share. The IPO price was priced at 1.40, which meant that the IPO investors assumed that they were investing in AirAsia at an earnings multiple of 21 times fy 2005 earnings. Which is probably ain't too shabby if and if AirAsia delivers what its IPO earning promises.

However... AirAsia failed.

When AirAsia only managed a distance earnings of only 111 million for fy 2005, this totally changed the whole picture lor. This meant that AirAsia only made an earnings per share of only 4.8 sen.

Instead of 6.9 sen.

Which ultimately meant that based at a price of 1.40, these IPO investors invested in a stock trading at an earnings multiple of 29x.

In investing, whether if one is investing in a stock or a property, one's investment goal is to simply to get our investment purchase right. When we buy right, the chances of us achieving success in our investment simply increases mah. Tiok boh?

In simple, whenever we pay less, we should be getting more.

So at 29x earnings multiple... do you think the IPO investor got a fair deal?

Yeah, yeah, yeah... them smartie alecs would be saying no one forced us to invest in this stock mah.

True. So very true.

However, here's another food for thought.

This AirAsia IPO was to raised a whopping RM1.04 billion.

If the retail shares are priced at the maximum MYR1.40 each and institutional shares at MYR1.51, as AirAsia assumes in its prospectus, the IPO will raise about MYR1.04 billion, surpassing KLCC Property oldings Bhd.'s (5089.KU) MYR766 million offering in August.

Now for me, would it be wrong to say that this is a whopping lot of moolah to be parked at a stock at a high earnings multiple? A huge drain of market capital? Am i wrong to put it that way?

Now here's another food for thought. After missing its earnings forecast, there were brokerage houses still expecting rosy earnings numbers from AirAsia. One broker had their earnings estimate set at around 170 million for its fiscal year 2006. Some even had it around 180 million.

All expecting and assuming that AirAsia will deliver such rosy earnings.

Well, well, well.. AirAsia announced its first quarterly earnings for its fiscal 2006 yesterday.

AirAsia only made a net profit of 11 .67 million.

So when the business article today posted that more passengers lifted AirAsia earnings, it just simply amuses me.

Put it this way.... 11.67 million ar? At an annualised basis (err assuming that AirAsia will make lebih kurang the same amount of net profit per quarter for the remaining of its fy 2006) AirAsia will make around 46 million.

Ahem.. that's an eps of only 2 sen lor.

Also... at this rate of earnings... do you think AirAsia can make more moolah this fiscal year compared to last year total of 111 million?

Soooooo based at current price of 1.61, AirAsia is trading at a whopping earnings multiple of 80.5x its annualised 2006.

How?

Sibeh geng leh?

So u want to buy this discounted budget Airline stock onot?

Oh, another food for thought..

We have seen two of our recent biggest IPO, Titan and AirAsia, making overly optmistic earnings projection in their IPO prospectus.

Yes, earnings projections is never easy. It is very understandable that companies will miss their projections but when their earnings projections misses by miles, it really makes me wonder the quality of our Malaysian Talk.

Is all our corporate talk so cheap?

I really wonder.

Ze Numbers Game!

Ok..ok..ok...we have this company which made a reverse takeover of a listed company...

And the company net earnings showed the following set of numbers:

15.5 -> 16.2

Now if a research company comes in with all guns blazing: Bang! Bang! Bang! and declares the following earnings projections (in green italic):

15.5 -> 16.2 -> 26.7 -> 41.3 -> 50.7million.

And the most recent/rolling net earnings was only at 16.9million....

So a company with a hardly visible growth record is expected to grow ini macam!

What do you think of such earnings projections?

Fairly optimistic?

Or overly optimistic?

Oh i am toking about OSK and Crestbuilder. Click here for proof: Crestbuilder

So the company reported its earnings today. Click here

So this stock made a total net profit of 9.667million for the first 3 quarters of its fiscal year 2005.

Nothing really wrong lah with the company's earnings performance. (Make moola mah... beh pai mah... tiok boh?)

but...but...butt...buttt.....

it just makes u wonder.... cos OSK is projecting a net profit of 26.7 million for Crest Builder fiscal year 2005.

Which means Crest Builder has to make an astounding net profit of 17.03 million (err.. 26.7 - 9.667 = 17.03 lor) for its Q4 period.

Dun u think that would pretty hard to achieve?

And if so.... we have yet another company failing to meet EXPECTATIONS?

or perhaps the EXPECTATIONS was simply wayyyyyyyyyyy too optimistic?

ahem... makes u wonder.... doesn't it?

No? How about this then? When OSK made that write-up in April 2005, Cresbld was trading at a price of 1.44. And this how OSK valued Cresbld:

However, by taking into account only the basic shares outstanding, we obtained a fair value of RM2.59 based on FY06 earnings, which provides an upside of 72.7% to its current share price.

ahem!

See onot?

And they based it on fy 2006 earnings! Earnings which went bang! bang! bang! like this below:

15.5 -> 16.2 -> 26.7 -> 41.3 -> 50.7million.

Fiyoooh... 41.3 million!!!

Incredible isn't it?

2005 FY projections is already perhaps a bit too optimistic at 26.7 million... but no... OSK did not based their valuations upon those numbers but instead they based it at an even more optimistic earnings of 41.3 million!!!!!!!!!!!!!!!

Now wouldn't u say that this is a bit too optimistic?

And when they make such optimistic projections, this simply allows them to create a stock with such a great upside potential (72.7% wor!) when they make their so-called BUY recommendation!

ps. Cresbld closed at 0.795 today.

And when OSK made the buy recommendation Cresbld was at 1.44!

Oh... see the clear and present danger of relying on research reports!

TITANic Bull Part II

Well, Titan closed yesterday at 1.44. (ahem!)

What is most interesting is that the Star has another write-up on Titan: Titan dips on expectation profit may fall short

Here's some of my comments on it.

1. The IPO price was priced at 1.77. (me was mistaken lah. I thought is was 2.17!!)

2. No mention on why Titan's IPO projection earnings for fy 2005 was soooooooooo optimistic.

3. The article focused on non-issues like sales growth. Duh! Sales growth so important meh?

4. Article suggested Titan has a share buyback which might limit the downside risk.

Now the last suggestion for me is totally nonsense.

Yes, share buyback can at times lend a boosting hand to a stock price and ultimately engineering a share price support and even a share price appreciation.

However... for me, it counts for nothing... it does not add extra 'value' to the company's fundamental value. And if and when Ze market deems a share not its worth, a company's share buyback will not stop a share price decline if and when Mr.Market heads for the exit. If so, how does one define might limit downside risk?

A good example? Take MPI. Many, many moons ago when MPI started its slide from its high, the company embarked on a share buyback in an attempt to support the shareprice around the RM30.00 region. Look at MPI's price now?

Sooo.... if and when a company has a share buyback program.... do u think it is wise to .... err..... errr.... (lol...lol...lol...... yeah.... here comes Posexpress favourite!) A S S - U - M E that the downside risk will be limited?

:D

TITANic Bull!

LOL!!!!

It's just normal.

Just prior to their listing, during their ipo period, these companies would promise their prospective investors heaven and earth. Bright future prospects with optimistic earnings growth.

And of course, needless to say, their merchant bankers, marketing their ipo, were just as optimistic.

Oh... i am toking about Titan Chemicals.

Here are some of the optimistic claims made on the local news media.

Friday May 27, 2005
Titan confident of meeting 2005 profit forecastY
SURAJ RAJ

TITAN Chemicals Corp Bhd is optimistic that it can meet its net profit forecast of RM604mil for the financial year ending Dec 31, 2005.

“Based on an annualised first quarter net profit, we have exceeded the forecast,” said chief financial officer Fauzi Ghani at a ceremony to launch the company's prospectus in Kuala Lumpur yesterday.

After being listed, the company made its 2005 Q2 earnings report on Aug 25th. It reported a net profit of 111.326 million for the quarter, giving it a year-to-date total net profit of 270.585 million.

And of course the company was very upbeat the day it released its earnings.

This was one of the headliners.

Friday August 26, 12:38 PM

Malaysia Titan sees strong profit margin until 2009

KUALA LUMPUR, Aug 26 (Reuters) - Malaysia's Titan Chemicals Corp said on Friday it expects its strong profit margin to continue until 2009.

Managing director Donald M. Condon Jr says Titan Chemicals has been largely unaffected by the surge in oil prices because it is able to pass growing costs to customers

And here is a snippet of another article.

Titan on track to meet financial goals
By KANG SIEW LI
September 5 2005

TITAN Chemicals Corp Bhd, Malaysia’s largest petrochemical company, said it remains on track to meet or exceed its financial goals for the full year, allaying concerns over the negative effect of higher oil prices on the company.

Titan announced its 2005 Q3 earnings last nite.

Net profit was 71.914 million (the previous quarter it made 111.326 million! Ahem!), giving it a total net profit of 342.499 million.

Ahem.... one quarter left for the fiscal year... and they had just promised not too long ago that they can boleh-out a PROMISED net profit of 604 million to their ipo investors.

Let me put it clearer..... 2005 Q4 net profit + 342.499 million = 604 million wor.

Which means...2005 Q4 net profit should be around 261 million.

Ahem... which looks very, very unlikey.... prompting Titan to fast-fast sing-out that it may not meet its 2005 IPO forecast. In fact it now warns that net profit for full year 2005 may fall 25% to 30% below its initial public offer (IPO) forecast of RM604.1mil.

Like this how cannnnnnnnnnnnnnnnnn??????

Belum listed, they can promise all the sweeties in the whole world.

After listed.... ahem!

Here is a table from OSK during Titan's ipo.


Quote:
Fair value of RM2.50Applying our fair PER of 7x to CY06 EPS, we derive a fair value of RM2.50.



That above table was from OSK.

1. Look at net earnings row.
See 2004 ~~~~~>>>> 2005.
see how net profit TITANICALY ROSE from 262.2 mil to 604 mil? LOL!!! Dun u forget, this was Titan's promised earnings wor!

2. see how OSK priced the IPO? It assigns a fair value of 2.50 based on Titan's projection to make a net profit of 624 million for fy 2006.

Ahem! Simply TITANIC cause now Titan is saying (warning) that it may not even meet its 2005 net profit forecast.

If 2005 tak boleh, then 2006 boeh ka?
If tak boleh, then what does this means about the IPO price sold by Titan to their IPO investors?

Titan is now trading at 1.49. IPO price? Errr.... if not mistaken was 2.17 wor!

How can?

See how the game is being played?

It's like when we go pak-toh-ing. During pak-toh, everything olso can. But after that, if and when we get Mary, ho ho ho..... !!!!

So next time got new IPO...
better see properly first lah b4 we say 'I wan! I wan!'

Tiok boh?

Salcon

Date listed 7th Aug 2003.

IPO price 1.20. Price now 0.455 (waa!!!!...buy and hold? or issit buy and die kow-kow?!)
Forecasted a net profit of 29.3 million for fy 2004.

this is what Salcon did.

2004 Q1.... 5.402 mil
2004 Q2.... 5.570 mil
2004 Q3.... 0.217 mil
2004 Q4... -1.923 mil

for a total of 9.266 million. Which means Salcon missed their IPO prospectus earnings by some 20.034 million or by some 68%. (now u see why them ipo investing is sooooo risky esp when companies prospectus earnings are soooooooo overly optimistic!! - err... some call it bullshit hor!)

And how did Salcon the next fiscal year?

2005 Q1.... 0.252 million
2005 Q2.... 0.085 million
2005 Q3.... 0.230 million
2005 Q4.... 0.003 million (Ahh.. Salcon is changing their fiscal calender, so this quarter was shortened to 2 months only)

But still... Salcon only managed to earn only 0.570 million. With current number of shares at over 212.045 million (oh, there's a private placement thingy, so future earnings would be even more diluted!), Salcons earnings per share totals a paltry 0.3 sen. (0.3 sen hor and not 30 sen hor)

Sibeh geng leh!

How?

Company never deliver what they promised to their IPO investors (still can trust ka?).. and today.. there's a huge write-up on Star Bizweek: China boost for Salcon , which was written by me favourite creative write, Jose Barrock.

Correct me if i am wrong here cause i am seeing a trend developing here. Want a nice juciy article written in a 'creative manner', just call Jose!

Sigh. Isn't it utterly disgusting? No?

Take a look: (snippet of the creative writing in dark blue italic)

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

EPS of 30 sen????!!!!???

See how badly the fact is twisted? An error of intent? Or was it a mere printing/typo error?

If this was a printing/typo error, how come such error occurs so frequently?

And i like this part...

“At present, Salcon is for investors with an appetite for slightly longer-term gains. The fund managers are not sure when the sector will pick up, so they are scared to take positions, I can understand that ... There is a lot of opportunity here, we have the right contacts and have forged some strong relationships here. Just like when we started out, it was difficult. It is all part and parcel of business. So far we have done well,” he says.

See how creatively written?

Here's my simple question: How can an investor trust that you will deliver when you have utterly failed to deliver what you promised to them ipo investors? Another case of talk is cheap?

At its close of 45.5 sen on Thursday, Salcon is trading at a price earnings ratio of some 9.4 times. The company’s price to net tangible asset per share is at an attractive 0.9 times, which is well below that of its peers, Puncak Niaga Holdings Bhd and Taliworks Corp Bhd.

A PE ratio of 9.4 times?

LOL!!!.... yet another badly twisted fact. EPS is only 0.3 sen lor and not 30 sen. So how to get a PE ratio of 9.4 times? LOL!!!

Isn't it utterly disgusting that we have such blatant shenanigans going on in our daily financial news?

Sigh!

Cheetah eyes double-digit growth

Cheetah eyes double-digit growth

Talk is cheap because supply exceeds demand.

Yeah.. just remembered that little quote I read in my Auntie's site... :D (see i do baca one lah)

Here is what ze Cheetah boosie is saying in that article (or could it be the business reporter got it all wrong?)

1. Cheetah is ze market leader in the local sports and casual apparel industry.
2. It aiming for double-digit growth in revenue for its financial year ending June 30, 2006.

Ok fair enough.

Let's ASS-U-ME that fact one is indeed true and that Cheetah is indeed the market leader and then of course one cannot really fault another for aiming high and having an ambition right?

Tiok boh?

Of course, i can easily blog that i aim to achieve an annual compounded investment return of 12% for the next ten years. That's my aim. My investment ambition but whether i can achieve it onot is another story. And more important, whether i have the ability and the skills to actually achieve my aims is another story.

Tiok boh?

Back to Cheetah.

Cheetah was listed January 2005. IPO price was 75 sen.

And this is how Cheetah has performed since listing. Yeah .. before i continue, i would like to state the fact that 3 quarterly earnings is never ever enough to gauge and rate a company..

but... but... buttt.....

sometimes.... certain trends in the earnings does emit some worrying signs...

anywayyyyyyy for all its worth, the following is Cheetah's quarterly earnings since listing.

05 Q2 net earnings = 5.638 million
05 Q3 net earnings = 1.675 million
05 Q4 net earnings = 0.304 million

How? Since listing, Cheetah's quarterly earnings is less and less.

Yes, the apparel business is highly seasonal in nature... there will be months where the business will really pak the Wu-Ying...

how?

With such a quarterly earnings track record, do u think this company is letting go tons of hot-air in an attempt to promote the company and the stock? Yalor, do u think that talk is indeed cheap?

Or would u have faith in the company?

Any Cheetah lovers out here?

ps..

Waahhh....stock last traded at 0.415. Them IPO investors wouldn't be too darn happy with the stock performance!

Mile High Projection.

In today's Star Biz, there is a piece on Transmile down on worries over 2005 result .

Makes me wonder cos i do know that Transmile performance for its current fiscal year 2005 has been rather decent.

The following is Transmil net earnings this fiscal year.

Q1 net profit = 10.816 mil, Q2 net profit = 13.206 mil, Q3 net profit = 18.090 mil.

As can been seen its net earnings has been improving each quarter.

Beh pai mah. Tiok boh?

And its current nine-month net profit total of 42.112 million is much more than its last year nine-month profit for the same period of 27.296 million.

Now this one tiny-little-itsy-bitsy-problem.

Ze market sifus is EXPECTING and PROJECTING (some call it assuming - LOL - making ze ass-out-of-u-and-me mah) a net profit of over 105 million for the current fiscal year.

LOL!!!

Comeon.... isn't such projection way too rosy? Way too optimistic?

Look at simple maths.

3 quarters done and Transmile has managed only 42.112 mil.

Soooooo.... in order to meet ze market sifus projections of 105 mil... and with only ONE quarterly earnings left in Transmiles current fiscal year.... what ze market sifus are saying is that they expect and they ASS-U-ME dat Transmile will make 62.888 mil (105 minus 42.122 = 62.888) for that remaining Q4 earnings.

Aisehhhhhhhhhhhh lah..... like dis can meh?

From 10.816mil -> 13.206 mil -> 18.090 mil -> 62.888 mil??

Comeon...... be a bit more realistic lah.... !!!!!

Tiok boh???

And here is a snippet (in blue italic) of their write-up...

X We like Transmile for: (1) Its unique product, i.e. point-to-point express air transportation service; (2) Its ability to secure traffic rights for lucrative routes; and (3) Its EPS that is expected to grow at a CAGR of 67% between FY12/04 and FY12/07, backed by two full-fledged US-bound services. Maintain OUTPERFORM with a DCF-derived indicative fair value of RM12. In our DCF model, we apply a discount rate that is equivalent to Transmile’s WACC of 10.1% (based on a 20-year risk free rate of 6%, an equity premium risk of 7.5%, Transmile’s Beta of 1.07x, a target debt-equity ratio of 0.7x, and an average before-tax borrowing cost of 6% per annum).

Can see onot?

A CAGR of 67% between fy12/04 and fy12/07?

!!!!!!!!!!!!!!!!!!!

Gosh..... now that's a mile high projection lah!

Ohhh.... and when the stock does not meet such lofty projections assigned by these market sifus... those stock are considered to be performing below market expectations!

Gee.... so what is ur expectation?

Mine?

I think its still rather dark in my ninja-turtle-shell lah!

:D

See Ya at One Zilo Zilo Five!

Oh yeah, Star Business section had this nice little-tiny-weenie write-up on OSK Research: KLCI to hit 1,005 points within a year.

What is so geng with these cowboys is One-Zilo-Zilo-Five.

So accurate wor.

Really so geng ah?

Also got time frame and got exact points wor.

How lah?

Aiseh or behsai?

This section of the write-up got me attention:

Quote:

“Increase in interest rates will result in higher cost of running the business, thus having an mpact on banks' net interest margins.

We need a hike in interest rates because of the gap with other regional countries, except for Singapore. As it is, our rates are way below the rates in the US,” Yee said.

This got me thinking lah...

Now if the hike in interest rates does happen because of this differential gap in interest rates then i wonder what will happen to our market?

Interest rates goes up… stock market in general go up or down?

And then…

The market was likely to pick up from next month onwards as traditionally, December to February is peak season due to adjustment of portfolio by fund managers, he said.

Ahh…Ze Year-End-Rally. Ze Chinese New Year Rally.

Harlo? This DeepaRaya got rally onot?

Sooooooo.... issit safe to make such assumption?

And then…

“If our Malaysian story is strong, there is no reason for foreign fund managers not to look at Malaysia. Our fundamentals are intact. We are seeing good GDP (gross domestic product) growth next year,” he added.

I wonder…if our Malaysian story is strong.. what and why is causing the current outflow of hot money? Why, why tell me why? Also is GDP growth really a good indication of our share market?

"OSK estimated the immediate support level for the CI at 888 points"

LOL!!!

888 wor.

Aiyahhhh... dun be so mean and nasty lah... at least these OSK buggers were brave and bold enough to estimate and ASS-U-ME the immediate support level loh.

Me? Can't u see that i am hiding in my ninja-turtle-shell... keke

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

Edit: 18th Nov 2005

Ahh.. I was wondering what was OSK's outlook for 2005. I did some digging and i found this in their Dec 2004 market write-up, Riding High , see page 11.

Going into the New Year in about one month’s time, we remain optimistic of the local bourse’s direction in the near term as the right ingredients are indeed there for the market to march forward, especially due to the fact that the KLCI is nowonly trading at about 14.1x 2005 earnings. Pegging a fair PER of 16x for the market, the 100-stock index is poised to cross the 1,000 pts mark and reach our fair value of 1,050 pts in 12 months time. A thorough analysis of our expectations for next year will be made available in our 2005 market outlook report, slated to be issued by the end of December 2004.

How nice.... 2005 estimate was One-Zilo-Five-Zilo... 2006 target is One-Zilo-Zilo-Five.....

:D

Ze Creative Writer's Maggie Sauce!

So I have blasted Mr. Jose Barrock for his piece on Barrock On Mutiara

Unjustifiable?

Ahh...Me no simply-simply blast for no reason one. Here take a look at another of his creative works recently. ( See Nasioncom )

Have a look at a snippet from his creative arrticle:

It appears that there is a lot going on at Mesdaq-listed NasionCom Holdings Bhd. Sources say that NasionCom, a broadband telephone company, has been forging ties with several companies controlled by low key tycoon Tan Sri Vincent Tan Chee Yioun.

One of the deals, it is believed, involves NasionCom securing a a contract for the provision of Worldwide Interoperability for Microwave Access (WiMax) from Intan Utilities Bhd.

The senior management of both companies, it is believed, have been in negotiations for a few months and a deal is likely to be sealed between NasionCom and Intan Utilities’ wholly-owned unit, Premier Merchandise Sdn Bhd in early October.

See how creatively written?

"It appears, it is likely, it is believed, it is understood"...

And not forgetting that his article is bombarded with the phrase "according to sources"

err... say..... what source and what sources ah?

Maggie Chili Sauce kah?

or Maggie Tomato Sauce?

Comeon....that's our financial business article lah.... tiok boh?

Has our financial business article turned into a platform which the journalist can write as creative without any limits and without any concrete facts?

Or is Maggie Sauce simply acceptable in our financial market?

And it worse still... take a look at this part of the 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, woill yield positive contributions in the future.

First of all...

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

For a new listed company with no previous year comparable quarterly earnings, shouldn't one note this DECLINE in net earnings as a worrying factor?

And worse still... if one searches Nasioncom's quarterly earnings announcement posted in the Bursa website and opens the excel file attached in the earnings announcement and look under Nasioncom's REVIEW OF PERFORMANCE worksheet... there was 4 paragraphs of remarks...

ho ho ho... see onot??!!!!!

This creative reporter CREATIVELY used ONLY the bottom 2 paragraphs, TOTALLY OMMITING the very first 2 paragraphs which CLEARLY states the stock's poor perfomance!! End result? He creatively painted a brighter outlook for Nasioncom!!!

Like this olso can meh?

Take a look...

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 ear 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.

How cannnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnn man?

Barrock on Mutiara.

Being creative in one’s writings help sells books.

Being creative in a financial business article?

!!??

In the financial world, when the writer attempts to be creative, more often than not, the actual facts is simply distorted and twisted as per the writer’s whimps and fancy.

And the end result? We end up with business financial articles which do nothing but mislead investor(s) who uses the local news media as a source of information for their investing purposes.

So what chances does the investor(s) have if what they reads is badly twisted as per the writer’s own vested interest?

Got chance kah?

Think about it…

If the investor cannot trust what they read in our financial articles, then how does one rate their chances of making moola in the share market?

Sigh.

Take today’s Star Bizweek article written by JOSE BARROCK on Mutiara Goodyear

SINCE Mutiara Goodyear Development Bhd had taken over the listing status of MIT Holdings Bhd back in 2002, the company has deliberately kept a low key.

Hmm…what’s your impression on this opening line?

Mine? It gives me the impression that this is one low key stock which was listed back in 2002. Low key stock? Undiscovered? Interesting?

Well, first of all, how do you really define LOW KEY? Take a look here: Mutiara Goodyear. As seen, this company has been constantly in the news.

So how come the writer, Mr. Barrock, creatively writes that this company has "deliberately kept a low key?"

And worse still, Mutiara was a favourite punter stock since listing. A picture tells a thousand stories. Have a look: Click here . A glorious punter stock in 2003.

A low key company? I beg not.

Next, the article CREATIVELY stated the following:

• They boast of an impressive track record, and unknown to many, played a significant enough role in developing the sprawling Subang Jaya township, back in the early 1970s.

Impressive track record?

Well, how does one gauge a track record?

How about Show Me Ze Moola?

This is Mutiara’s performance since 2002.

          Sales      Net Profit
2003   116.208    17.060
2004   125.808    18.167
2005   123.622    7.388

Impressive?

Or perhaps should I say that fy 2005 was a very DISMAL year for Mutiara, in which net earnings slumped from 18.167 million in fy 2004 to 7.388 million in fy 2005.

And the following is even more interesting:

“We prefer to keep a low profile and concentrate on the business ... but this (our silence) does not mean we do not believe in the company’s prospects,” Yung tells BizWeek.

Having said that however, he admits that the general market outlook is rather weak. “The outlook of the property sector is not that encouraging now ... There is talk of a bubble about to burst and so forth. But since prospects are tied up with assets, we should not have any problem. All the assets are in place. Although our turnover in the past was not that good, we are optimistic of better things to come,” says Yung.

LOL!!! Doesn’t the above contradicts the part in which Mr.Barrock deems that Mutiara has an impressive track record?

“Our optimism is based on the fact that we have RM800mil worth of properties to be launched and sold next year. We will start realising gains soon, and these projects should last us for the next three to four years. These developments will see us through any soft spot in the property market,” Yung says.

Rm800 million worth of properties to be launched and sold next year.

Can believe onot?

Firstly, he admits that the general property market is rather weak and not that encouraging.

And then here he PROMOTES his company and his stock by boldly stating that his company has rm 800 million worth of properties to be launced and sold next year!!

And Mutiara’s last 3 fiscal year track record doesn’t seem to support his optimism, does it?

How? Company has never sold sooooooooo much properties during the last 3 fiscal years. And mind you, those last 3 fiscal years was pretty good for most property developers. As my junior ah kor says, business was bang-bang sound for those couple of years.

Moving on Mr.Barrock writes:

Cash reserves
With some RM58.6mil in cash and bank balances and trade eceivables of about RM23mil, Mutiara Goodyear may be keen to expand but that’s not top on its priority list.

LOL!!!

Like this write olso can ar?

Yes, it’s true that Mutiara has some rm58.6 million in their piggy bank…

But..but…butt….buttttttttttttt….

Err… Mutiara no bank borrowings meh?

LOL!!!

Gosh… and it surprises me not that when I checked on the quarterly earnings notes to discover that Mutiara total company borrowings totals rm 258.3 million.

A highly important fact not mentioned by Mr.Barrrock.

Isn't such reporting soooooooooooooooo blatant?

Dun you think so?

How?

Me find it soooooooooooo utterly appalling to read financial articles written in such a creative manner.