EcoFirst (Kumpulan Emas)

EcoFirst Consolidated used to be known as Kumpulan Emas until the name change back in Jan 2006.

Here's a long article posted on Star Biz back in 2006.

• Saturday February 25, 2006
  
  What’s in store for EcoFirst with new MD
  
  BY ERROL OH
  
  FOR a company whose market capitalisation has been more than halved since the start of last year, any major change usually brings hope to its minority shareholders. So it was for EcoFirst Consolidated Bhd when Datuk Clement Hii had recently bought a substantial stake and later became its group managing director.
  
  Hii's appointment on Jan 27 was part of a boardroom revamp that also included former academician Tan Sri Dr Syed Jalaludin Syed Salim taking over from Datuk Patrick Teoh Seng Foo as chairman. The latter is now the deputy chairman but retains his executive directorate.
  
  Before that, there was a name switch. This explains why, for some people, EcoFirst does not ring a bell. The stock had been trading as Kumpulan Emas Bhd until Jan 20.
  
  However, the bigger changes at EcoFirst are still ahead. For one thing, the diversified group – it has interests in oil palm plantations, property, education and manufacturing – intends to venture into new fields. Biotechnology is one area.
  
  The idea is to ride the government's push to build up the industry via the National Biotechnology Policy, which was unveiled last April. EcoFirst's immediate plan is to tie up with some Indian companies to produce herbal products for the domestic and foreign markets.
  Says Hii, “The main thing is to focus on core businesses that will bring in money. The problem with EcoFirst is that it doesn't have a core business that generates a steady stream of income.”
  
  This absence of sturdy anchor activities has led to losses in financial years 2004 and 2005. To make things worse, EcoFirst had to part with some valuable assets last year to lighten its debt burden.
  
  The disposals were done at depressed prices and resulted in EcoFirst relinquishing control of two listed companies, water engineering specialist Salcon Bhd and furniture manufacturer SYF Resources Bhd. It also reduced its stake in property player Meda Inc Bhd.
  
  (Another listed company in the EcoFirst stable is education provider SEG International Bhd, or SEGi. EcoFirst has almost 26% equity interest in SEGi. Hii is also the chief executive officer of SEGi.)
  
  At the start of 2005, EcoFirst (then still known as Kumpulan Emas) was trading at 27 sen. The shares are now just a little above the 10-sen mark.
  
  It's the kind of performance that frustrates shareholders, and there are many EcoFirst minority shareholders out there. It is a counter that has always had a strong retail following. As at Dec 31, 86% of its share capital was in the hands of almost 36,000 shareholders. Its 30 largest shareholders accounted for only 34%.
  
  Apart from Hii, the only substantial shareholders are Patrick and his brothers, Seng Kian and Seng Aun. The brothers' combined stake is about 12%.
  
  New directions for EcoFirst
  
  Since Hii only bought his 5% stake in November, the minority shareholders' displeasure was mainly aimed at the Teoh brothers. It is understood that this dissatisfaction bubbled to the surface at the company's annual general meeting on Dec 30, with shareholders demanding answers as to why the company has fared poorly.
  
  Such sentiments have also sparked speculation that the Teoh brothers are ready to leave the company. Says a corporate observer, “I think they're just tired of it all – the huge effort required to try to turn things around, and the growing criticism.”
  
  Naturally, Hii's emergence as a substantial shareholder has stoked the rumour mill. He says he invested in EcoFirst because he believes that its diversified business base offers a lot of room for growth. He hints that he will increase his stake, either through acquisitions in the open market or via option agreements with the existing shareholders.
  
  “In any case, EcoFirst has an attractive valuation, at the current market price. So, there is great upside potential. It's a matter of doing a few right things and putting a few things right,” he adds.
  
  “There'll be a major revamp of our management systems and style, and we will pursue greater operational efficiency for our existing businesses. And we will aggressively pursue business developments in new fields.”
  
  He points out that there are many avenues to maximise the potential of the company's existing businesses. For example, the plantation division can be a major money-spinner because palm oil prices in India are higher due to the tariffs that shield the local industry.
  
  Subsidiary PalmTech India Ltd has a concession for contract farming with local landowners, who collectively own more than 280,000 hectares (ha). However, only 10,000 ha have been planted over the last five years. “To me, that shows not enough emphasis has been given to oil palm,” says Hii.
  
  He adds that EcoFirst is talking to provincial governments in India to get new additional concession areas, not just for oil palm, but also to cultivate other cash crops and herbal plants (such as vanilla, aloe vera and jatropha, whose oil can be used to make biodiesel) for the export market.
  
  In addition, there are plans to transfer to Malaysia the expertise of the Indian biotechnology partners. EcoFirst has initiated discussions with Malaysian landowners on possible joint ventures for large-scale farming and processing of herbal products.
  
  Are the Teoh brothers in or out?
  
  Such plans may well be a reason for optimism, but some observers say investors are equally interested to know if the Teoh brothers will continue to be involved in EcoFirst.
  
  When asked about the talk that they are exiting the company, Patrick says, “Who told you that? We are still substantial shareholders. We'll each have our role. Datuk Clement will run the company, while my role is more at the board level.
  
  “It's just like how it was at SEGi. We don't want to meddle in the operations of the company. It's a move towards separating the ownership from the management of the company. That's the way it should be. Look at Salcon, although there has been an ownership change, the management is still in place.”
  
  Hii recognises that the negative perception about EcoFirst is linked to how people feel about the Teoh brothers' handling of the listed companies in the group. He, however, insists that in the four and a half years that he has run SEGi, the brothers have seldom interfered in management and operational matters.
  
  The question of whether the Teoh brothers will stay on at EcoFirst may become irrelevant if Hii stamps his mark at the company.
  
  Those who know him from when he was appointed as SEGi CEO say he is decisive and hands-on. A former senior journalist, Hii had ventured into the education business and became the SEGi boss in 2001 after it had acquired his Kuching-based institute.
  
  “He is a fast learner, and at SEGi, he has picked up a lot about the corporate world. He's a good choice for EcoFirst,” says a CEO of a listed company who is familiar with the EcoFirst group.
  
  There is the worry that Hii may be spreading himself thin by leading both EcoFirst and SEGi. He maintains that he can do well at both jobs, with the support of the management teams of both companies.
  
  “I continue to be involved in SEGi because education is a personal passion as well as a professional pursuit. Over the past few years, my team and I have embarked on various ambitious projects to move SEGi forward. We are moving into new market segments and we are beginning to show results despite some initial setbacks.
  
  “I am determined to ensure that these projects are realised and that they bear fruit in due course.”
  
  Another challenge is that Hii has to demonstrate that his strength is not just in education, and that he can run a diversified company.
  
  He says, “I have been in business for over 20 years. I hope people see me as an entrepreneur, an enterprise builder. I believe that whatever business we're in, innovation is the key to success.”
  
  In any case, it may not be a long wait to see if Hii has what it takes to restore confidence in EcoFirst. “I don't expect a long honeymoon for my management team and me. We have to add value to our current businesses and bring in new core businesses to generate a steady stream of revenue,” he adds.
  
  “We have to move fast. We give ourselves a maximum of two years to show some positive tangible results. But we should within a few months, and not a few years, make significant progress in developing new businesses.”

I would like to comment on them bold purple fonts.

Firstly on the issue of the growing criticism. Let's face it, Kumpulan Emas performed terribly as a company. Surely the criticism is justifiable! And when the performance is so utterly poor, certainly this would frustate the minority shareholders. Question that begs to be asked is why are these minority shareholders still a shareholder? Surely this is one huge investment gone wrong. Yes?

• “In any case, EcoFirst has an attractive valuation, at the current market price. So, there is great upside potential. It's a matter of doing a few right things and putting a few things right,”

Attractive valuation? And doing a few right things and putting things a few things right. Sounds so easy.

So EcoFirst parted with some valuable assets to lighten its debt burden.

But let's see how has Kumpulan Emas performed as a company under a brand new company name, EcoFirst.

Quarterly rpt on consolidated results for the financial period ended 31/1/2006

Revenue 8.30 million. Loss 2.4 million. ( Total Cash - 2.729 mil, total debts - 143.872 million, Net debts of 141.143 million)

Quarterly rpt on consolidated results for the financial period ended 30/4/2006

Revenue 6.465 million. Loss 1.178 million.

Quarterly rpt on consolidated results for the financial period ended 31/7/2006

Revenue 28.981 million. Loss 10.564 million.

Quarterly rpt on consolidated results for the financial period ended 31/10/2006

Revenue 24.235 million. Loss 3.547 million.

Quarterly rpt on consolidated results for the financial period ended 31/1/2007

Revenue 18.752 million. Loss 5.898 million.

Quarterly rpt on consolidated results for the financial period ended 30/4/2007

Revenue 21.584 million. Loss 2.663 million.

Last night it reported its 2007 Q4 earnings.

Quarterly rpt on consolidated results for the financial period ended 31/7/2007

Revenue 28.224 million. Loss 24.944 million. (Total cash of 3.9 mil vs total loans of over 150 million! Any improvement of its debts burden?)

So let's be frank here. If someone critics the poor earnings performance of EcoFirst, do you reckon that there is justification?

7 consecutive quarters of losses!!!!

Improving debt burden? Is there any?

And what was said back in 2006?

• “In any case, EcoFirst has an attractive valuation, at the current market price. So, there is great upside potential. It's a matter of doing a few right things and putting a few things right,”

Doing a few right things and putting things a few things right. Yeah man, it just sounds so easy!

NextNation III

Blogged previously, NextNation II

NextNation just released its Q1 earnings. Quarterly rpt on consolidated results for the financial period ended 31/7/2007

Trade receivables did improve. It's now 61.702 million.

• Revenue
  The Group recorded a revenue of RM17.8 million in the current quarter as
  compared to a revenue of RM21.5 million reported in the previous quarter. The decrease of 17.4% was mainly attributed to the Group’s continuous internal restructuring and system upgrading schemes. As a result, business transactions and projects with partners had been delayed. The management is positive that the restructuring and upgrading will enable better resources reallocation for the upcoming expansion.
  
  Profit before taxation and net profit before minority interest
  The Group generated profit before tax and profit after tax before minority interest of RM0.5 million and RM0.3 million respectively for the current quarter as compared to loss before tax and loss after tax before minority interest of RM0.2 million each in the previous quarter. The increase of 299.2% and 217.1% respectively was mainly due to the absence of allowance for doubtful debts made in the previous quarter.

Going Extremely Tropical In Germany!

Tanjong PLC reported its earnings yesterday. I for one was excited for I wanted to know how Tanjong's Tropical Island investment is faring now. ( I had blogged on this issue before Tanjong's Tropical Island Resort Investment , Tanjong's Tropical Island Resort Investment: Part II and Tanjong )

Firstly, I was always extremely amazed from day one to read that Tanjong was planning to invest in a tropical island in Germany. Yes, a tropical island in GERMANY.

And more so when I read the following news article back in 2003.

• Friday, June 27, 2003
  Tanjong: German park not a significant investment
  
  TANJONG Plc said a bid for 500ha in Germany to build a holiday park will not require a “significant'' investment, addressing concerns its finances will be strained.
  
  “The project is not significant in the context of Tanjong,'' chairman Datuk Khoo Eng Choo told reporters after a shareholders' meeting in Kuala Lumpur.
  
  “Compared with net asset or capitalisation, it's not significant at all,” he said.

Not significant at all, eh?

Anyway, here is Tanjong's earnings link: Quarterly rpt on consolidated results for the financial period ended 31/7/2007

In its earnings notes:

• The increase in the number of visitors to Tropical Islands led to higher revenue from the Leisure segment to RM42 million from RM35 million in the corresponding period. However higher marketing and advertising expenses incurred in relation to the launching of new attractions in the resort resulted in the operating loss of RM29 million remaining at around that of the corresponding period.

A current net operating loss of rm29 million! And this happen despite higher revenue!

Btw, here is the link to Tanjong previous fiscal year 2006 Q4 earnings. Quarterly rpt on consolidated results for the financial period ended 31/1/2007

• As anticipated, revenue from the Leisure segment has decreased to RM67 million from RM97 million in the previous year due to the closure of the Tropical Islands resort between 1 November 2006 to 26 December 2006 to facilitate planned capital improvements to widen the demographic appeal of the resort. However, revenues and earnings have benefited from measures taken to improve average visitor spend and reduce overall operating expenses. The preceding measures together with the recognition of RM16 million of government grants have contributed to a lower operating loss of RM59 million as compared to the RM69 million loss in the previous year.

Ahem, a lower operating loss of rm59 mil compared to the rm69 million loss. (Loss would have been greater if not for the rm16 million of government grants).

So total losses till end of last fiscal year was rm59 + rm69 mil = rm128 million. And if you add in yesterday's earnings note which Tanjong said it had operating losses of rm29 mil, this would mean that total operating losses now total rm157 million!

So is an operating loss of rm157 million not significant?

So I do wonder... how difficult is it for Tanjong to acknowledge that a Tropical Island business in Germany simply makes no cow sense!

Englotechs Trade Receivables

Saw this article on the Edge Daily on Englotechs: 24-09-2007: MARC downgrades Englotechs rating on rising trade receivables

• MARC said for FY2006, Englotechs registered a negative RM4.4 million CFO, while trade receivables rose to RM56.6 million in FY06 (FY05: RM38 million) due to an easing in credit terms by the company to boost revenue.

Let's do some simple comparisons to see if what MARC is saying is reasonable on this trade receivables issue for Englotechs.

Quarterly rpt on consolidated results for the financial period ended 31/12/2004 - trade receivables as at fy 2004 Q4 = 27.104 million. (A year ago it was at 20.963 million)

Quarterly rpt on consolidated results for the financial period ended 31/12/2005 - trade receivables as at fy 2005 Q4 = 37.968 million.

Quarterly rpt on consolidated results for the financial period ended 31/12/2006 - trade receivables as at fy 2006 Q4 = 56.998 million!

So if one use fy 2003 trade receivables of 20.963 million as a guide, Englotech's trade receivables has been compounding at an annual rate of 39.6%!

Now this is certainly a cause of concern.

More so when the statement reads " trade receivables rose to RM56.6 million in FY06 (FY05: RM38 million) due to an easing in credit terms by the company to boost revenue".

To boost revenue by easing credit term? That sounds suicidal when the company has to incur more borrowings! In business, boosting revenue by offering easier credit is simply suicidal when the company itself is not on a firm financial footing.

Now Consider this issue also.

For its fy 2004 Q4 earnings, Englotechs was in a nett debt of 27.738 million.

For its fy 2006 Q4 earnings, Englotechs was in a nett debt of 98.907 million!!!

WOW! Company nett debt has increased by some 71 million!!!

Here is Englotech's latest earnings reported in Aug 2007. Quarterly rpt on consolidated results for the financial period ended 30/6/2007

Total cash equivalents is at 11.988 million, while total loans is at 137.689 million!!!!!! Which means Englotech is now at a nett debt 125.701 million!!!!!!!!!

Englotech's trade receivables is now at 67.628 million!!!!!!!!!

WOW!!!

Yet another incredible situation!!

And DID the company says it has gone on a exercise to boost sales revenue by offering easier credit terms?

Company is so financially weak, loans keep increasing and the company offers easier credit terms??!!

Is it Christmas everyday?

Uchi and its ESOS

Some interesting comments posted on Review Of Uchi Again.

ywt06 said:

• The greatest investor, warren buffett said esos is not good for the shareholders as it has dilution effect.
  
  In the other hands, esos is a way to motivate the employees to work hard for the company?
  
  share buy back is essential if a company continues to issue new shares under esos ....
  

My reply:

• Motivation?This issue got me wondering at times. Why do employees of plc needs so much monetary motivation for them to perform?
  
  Uchi ESOS. Isn't the size of the ESOS simply too excessive?

And regarding the issue of share buyback being essential if a company continues to issue new shares.

Sorry, I for one strongly disagree.

The danger here is clear. The share buyback could be easily be abused. Share buyback could be made to support the share price. Which ultimately could be abused to benefit the ESOS being granted listing during the same period.

In general, share buybacks and listing of ESOS occurring at the same period is simply a big no no for me.

ywt06 continues:

• well, we need to face the fact. salary and benefits are always the most important factor you work for a company. how many people are working for job satisfaction without considering compensation?it is another way to retain the employees as well ...however, from a shareholder stand point, i disagree ESOS ...

And this probably states exactly the delicate issue of motivation and looking after the well being of the shareholders of company.

I do strongly agree that employees of a company needs to be taken well care. No doubt about it. A happy employee is probably the better foundation of a strong business.

However, let's look at this ESOS again or rather Uchi's ESOS again since it's our focus. ( Click here for the announcement: ESOS ). And they say a picture says a thousand words. If one opens the wordfile attached to the announcement, one would have seen the following table.

Before the ESOS, Uchi has 372.392 million shares.
After the ESOS, Uchi will have 455.213 million shares.

An increase of around 22% new shares in Uchi.

Now, from an investor perspective, this ESOS will see by earnings diluted by some 22% once all these ESOS are exercised. Now surely, as an investor, I would ask why does this company, Uchi, needs a whopping 22% ESOS as motivation?

Would you think that it is simply excessive?

Review Of Uchi Again.

Back in 2005, I wrote some notes on Uchi. I used the investing from a business perspective on Uchi.

• From a business perspective, that is, if i were to be approached by someone and offered a stake or a partnership in a business, one of the very first thing, I would like to know is how profitable this company is.

The following table highlights what Uchi has done since listing.

Back then in 2005, I wrote the following notes.

• Over the years, profit margin was increased despite the increase in sales. Look at 1999. Uchi had a net profit margin of 38.7% with a sales turnover of 51.5 million. Fast forward to fy 2004. Uchi sales is now 115.352 million. Sales have doubled since 1999. And the net profit for fy 2004 is now 54.4%. So despite doubling its sales, i would dare say that Uchi had not compromised on its profit margins. Uchi had not taken any shortcut to success. They did not do any sales pumping to achieve these good results. (Yes ... no artificial engineering of sales/profit growth!)
  
  What kind of business product/services can achieve such result? Doesn't it show that Uchi has a strong competitive product to achieve such result (we are talking about a 6 years track record!)?
  
  And if Uchi's product was a fly-by-night product... there was no way it could last so long, rite?
  
  Considering the issue where bees are so attracted where ever there is honey, in business, with Uchi enjoying such grand profitability, one would surely imagine that some competitor would come and challenge Uchi for the honey, rite?
  
  Again by comparing with the end financial results, we can see that it would appear that with Uchi's profitability remaining so strong, it would suggest that no competitor has managed to break Uchi's stranglehold. Am i wrong to make such assumption?

So was I wrong to make such an assumption? The table above has shown that Uchi performance since fy 2005 has still been as impressive. Uchi earned some 83 million for its fy 2006, which works out to an extremely impressive annual compounded earnings growth (CAGR) of over 23% since its fy 2000, where it only earned some 23 million.

However, I would not get too overly engrossed with numbers. Numbers can be represented in many different ways. Take the simple CAGR issue. If the initial comparison point used was 2003, the CAGR would have been different. Back in fy 2003, Uchi earned some 58 million. Uchi's earnings in fy 2006 was some 83 million. This would work to a CAGR of only some 12.6%!

See the different interpretation?

And yes, some numbers lovers would proclaimed that perhaps Uchi's earnings growth is showing some clear signs of slowing down the recent years.

Is there a right or wrong here?

Not really. For me it's mere interpretation of numbers.

And I still recall this fantastic set of comments made to me from a friend on this growth issue which was mentioned in this blog posting: ROI on Uchi: Part II

• Altho' earnings growth has peaked and no more returning 12% per annum BUT financials and margins are still great, is there a problem? Wouldnt it come a time when every biz would have to go thru a consolidation cycle? The fact that growth has slowed but if amply compensated by higher revenue translating into better financials, isnt it a stock worth holding?An analogy from a trader's perspective, after a spike in price, a stock usually consolidates at a certain range - this is a price range where an equilibrium of buyers and sellers can agree to trade. Now, the next phase of movement will then be dictated by whether the buying or selling is greater than the other and u then take appropriate action. Do i sell into a consolidation? No, I dont. Any similarities here?

How? Is Uchi going through a consolidation cycle?

Take these comments from CIMB research published on Aug 2007 on Uchi's quarterly earnings.

• Below expectations. Uchi’s annualised 1H07 earnings missed our forecast by 8% and were 12% short of consensus. 2Q net profit edged up just 2.1% yoy and 2.5% qoq because of revenue growth of only 4% yoy and 3.1% qoq. While we acknowledge that 3Q is the peak earnings period due to higher billings for coffee makers ahead of the 4Q festive season, we believe that full-year earnings will fall short of our estimate. As expected, the company did not declare any dividends.

See? The yoy and qoq growth is still there BUT according to the folks at CIMB, the recent earnings simply isn't impressive!

As it is, for me, from a business perspective, the main question I will ask is, "Does it pass or fail to meet your assessment that Uchi remains a good business investment?". Yes, growth appears to be slowing down. And perhaps the issue is it going thru the consolidation cycle? Would this be a concern? For me, I would prefer to look at the bigger picture and my view would remain. Uchi earnings track record indicates that Uchi business does have a strong competitive advantage of others. What it has achieved over the years does indicate that it has a strong product and that the management has done extremely well to achieve these results.

Now if you look at the table again, currently Uchi number of shares in the market is some 375 million.

However, my main concern remains with its ESOS issue mentioned here: ROI on Uchi: Part III - the ESOS issue

As mentioned by the great, late Philip Fisher:

• The management of a company is always for closer to its assets than its shareholders. And without even breaking any laws, there are number of ways that the management can benefit themselves and their families at the expense of the minority shareholders, for example employing their relatives, buy-and-selling of properties between relatives at above market rates or the issuing common stock options.

Make no mistake, I view this stock option as a massive issue. I simply do not like what I see!

This issue can be seen here: ESOS

The Enlarged issued and paid-up share capital after the Proposed New ESOS would ultimately see Uchi's share base enlarge to 455.213 million shares.

Look at the above table in this posting. TTM earnings shows a share base of 375 million shares. Uchi's current earnings is some 86 million or an EPS of 23 sen. Uchi last traded at 3.02 or an PEx of 13x.

But when all these ESOS is granted listing, Uchi's share base will enlarge to 455 million. Which means an earnings of 86 million would only equate to an EPS of just 19 sen. And using a same PE multiple of 13x, then Uchi could be trading as low as 2.47!!

See the extreme dilutive effect caused by Uchi's massive ESOS?

If I own this stock, I would be deeply concerned.

And what about perspective investors? Surely they would be worried too. No?

Why would they want to invest in a business knowing very well that the future earnings will be diluted by so much?

Here is an interesting note. That ROI on Uchi: Part III - the ESOS issue was blogged on Feb 28th 2006. Look at the very last sentence.

• just for the record... Uchi is now trading at 3.30.

Uchi today's trade at 3.02.

So despite Uchi's extremely impressive set of earnings, Uchi's stock price has under performed the market greatly.

Yes, recent quarterly earnings indicated that its earnings growth is no longer as impressive but I, for one, reckon that the share overhang caused by the potential ESOS listing as the main factor for the stock under performance.

How?

What say you?

EB Capital

Saw this news article published on Business Times on EB Capital. ( article link )

• eB Capital sees profit in two years
  By Chong Pooi Koon
  pooikoon@nstp.com.my
  
  September 21 2007
  
  LOSS-MAKING wireless broadband service provider, eB Capital Bhd, says that after raising fresh capital to stay afloat it can break even this financial year.

EB Capital was listed on Mess-Daq on July 2005. Yes, till today, EB Capital is a loss making venture! Aren't you disappointed on how these companies could be listed?

Now get this. For a loss making company, at its peak in 2006, EB Capital was worth some 48.8 million(based on a price of 1.90+ back in 2006)

EB now trades at around 0.155! It's market capital has plunged to only some 12 million!

Not helping is this announcement, EB CAPITAL BERHAD (“EBCAP” OR “THE COMPANY”) ANNOUNCEMENT PURSUANT TO GUIDANCE NOTE 5/2006 ("GN5/2006") OF THE MESDAQ MARKET LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD ("LISTING REQUIREMENTS")

• eBTech is unable to service the facilities to the lenders as the group has been facing tight cash flow since 2006 when the company incurred a loss before tax of approximately RM13.9 million for the financial period ended 30 June 2007 (“FPE 2007”). For FPE 2007, eBCap recorded a turnover of approximately RM4.8 million as compared to a turnover of approximately RM10.1 million and loss before tax of approximately RM0.3 million in the preceding year ended 31 December 2005. The sharp increased in losses is due to provision for doubtful receivable, write-down of inventories and equipments of approximately RM7.1 million and decreased in sales.

Incredible eh?

Anyway in today's publications, the company chairman is saying on record that EB Capital can go on to make profit in two years.

• It can then go on to make profit in two years, its chairman Shaifubahrim Mohd Saleh said.
  
  Prospects are more promising now, given the government's plan to widen broadband coverage to the rural poor.
  
  In addition, a rights issue that raised RM8.1 million also eases its cashflow problems and will allow it to focus on growth, he told reporters after a shareholders meeting in Kuala Lumpur yesterday.
  
  The company has also scaled down business by being highly selective with its customers and slashed costs substantially, he said.
  
  It currently has RM4 million worth of projects, including a RM2 million job to provide broadband services in Kepala Batas in Penang.
  
  It will also ride on a virtual network provider arrangement with Redtone Group to give it recurring income in royalty payments.
  
  eB Capital chalked up a RM13.3 million net loss in the 18 months to June 2007, on revenue of RM4.8 million.
  
  The losses arose from sharply lower revenue and a RM6 million provision for doubtful debts.
  
  Shaifubahrim blamed the weak performance on the delay in the government award of new projects and stiff competition from other broadband service providers.
  
  "eB Capital actually owns assets with very good potential. It has the 2.5 GHz and 3.5 GHz spectrums and has traditionally good projects like the smart schools," said non-executive director Zainal Amanshah Zainal Arshad.
  
  "The take-up (of services provided) among commercial and residential customers was poor," he added.
  
  eB will now target more profitable segments like schools, universities and corporate clients.

And how about China Again?

Here is a fantastic article written by David Webb on the Chinese stock market.

• What else can you call a US$3.2tn market which has gained 358% in 20 months and trades on a historic P/E of over 60, which is probably closer to 80-100 excluding stock-market and real-estate revaluations from "E". We look at the bubble, the impact on HK, the thru-train, the calls in HK for an A-H arbitrage mechanism, and how the bursting may affect the socio-political system. The absence of a free media is itself contributing to the bubble.

Do give it a read: http://webb-site.com/articles/incredibubble.htm

• By definition, bubbles are markets whose valuations are unsupported by fundamentals. There is nothing to fall back on. Bubbles never just plateau and go sideways - because that would not satisfy investors who bought in expectation of continued rapid gains. As soon as the momentum runs out, those investors head for the exit, and with nobody willing to take their place, the market crashes, usually overshooting fundamental value on the downside. Just a return to the index level of 20 months ago, when valuations of some stocks were beginning to look reasonable, would be a drop of 78%.
  
  Like avalanches and other non-linear phenomena, nobody can exactly predict when a bubble will burst. All they can do is look at the accumulating snow on the mountain, and decide that it is not a good time to go skiing. By staying indoors, they might miss out on some great skiing, but they can be certain of avoiding burial in an avalanche.
  

Where is the OIL?

I was looking at Naim Indah performance since March 2006.

1. Quarterly rpt on consolidated results for the financial period ended 31/3/2006 (May 2006)

Sales Turnover 1.280 million (yes, do click on that link! Naim's turnover was a mere 1.280 million!). Naim reported a loss of 167k.

2. Quarterly rpt on consolidated results for the financial period ended 30/6/2006 (Aug 2006)

Sales Turnover 2.106 million. Loss 868k.

3. Quarterly rpt on consolidated results for the financial period ended 30/9/2006 (Nov 2006)

Sales Turnover 7.361 million. Profit 2.073 million! (Saw some disposal of property!)

4. Quarterly rpt on consolidated results for the financial period ended 31/12/2006 ( Feb 2007)

Sales Turnover 5.597 million. Profit 580k! (Full year net profit of 656k!)

5. Quarterly rpt on consolidated results for the financial period ended 31/3/2007 ( May 2007)

Sales Turnover 1.899 million. Loss 496k.

6. Quarterly rpt on consolidated results for the financial period ended 30/6/2007 (Aug 2007)

Sales Turnover 905k!!!!!!!!!! Loss 278k.

WOW!!!!!!!

Half year sales turnover was only 2.80 million!

And this company is listed on Bursa Malaysia Main Board??????!!!

So why I am blogging on this stock?

Well, the recent surging high crude oil got me thinking of an old blog posting on Naim Indah: NiCorp and Ze Sauce: Part II

Let me reproduce what was written back then.

Last Friday, Oct 7th 2005, there was an article on Star Biz on Nicorp. See: Nicorp bids for contracts in O&G Sector

• “Naim Indah is very happy with its performance. The company's plans to venture into the oil and gas sector is a diversification strategy,” said a source close to the company.
  
  He said that venturing into this sector was a right move following the surge of oil prices.
  
  Naim Indah is believed to be close to securing local contracts worth several hundred million ringgit.
  
  As of end March this year, Naim Indah posted a net profit of RM6mil on the back of RM22.3mil in revenue. Its debts stood at RM2.8mil with RM137,000 in finance costs. Securing any contracts in this sector is expected to be significant for Naim Indah as it can mark a turning point for the company.

Ok, I was appalled with the 'Naim Indah is very happy with its performance' statement.

Why?

Back then, Naim only has a sales revenue of around 3.71 million for the first half of the year. And a loss of 709k for the first half of the year!

How could anyone be happy with such a performance?

And then the issue of oil!

• Naim Indah is believed to be close to securing local contracts worth several hundred million ringgit.

Where's the oil contracts?

And the following comments were taken from Naim's recent earnings notes.

• For the current financial period ended 30 June 2007, the Group’s revenue was RM2.80 million compared to RM3.39 million in the preceding financial period ended 30 June 2006. The decrease in revenue was mainly due to the Group’s inability to extract any round timber logs, as the Group was still waiting for the final issuance of permit prior to logging.
  
  The Group recorded a loss before tax of approximately RM0.67 million compared to a loss before tax of approximately RM1.95 million for the corresponding preceding financial period ended 30 June 2006, which was mainly due to the recognition of loss from property development segment during the corresponding preceding period ended 30 June 2006.

No traces of oil contracts to be seen!

And the local press even decided to highlight this oil issue back then!

• Saturday August 27, 2005
  
  Naim Indah's wise choice in oil and gas
  
  BY JOSE BARROCK
  
  NOBODY had bat an eyelid when little-known timber concession holder and property development company Naim Indah Corp Bhd announced recently that it has acquired a company with the intention of venturing into the oil and gas sector.
  
  What was then largely dismissed as a company jumping into the oil and gas bandwagon may just turn out to be a strategic move as sources say Naim Indah is close to inking a RM500mil contract for value added services in the sector in the Middle East. Industry sources say the announcement will be made mid September.

And the following snapshot of Naim's stock price performance back in 2005, showed how nicely Naim moved up thanks to this rm500 contract report BASED ON SOURCES!

See how Naim stock price surged thanks to such reports?

ps. back in Dec 2006, another oil article was published! No kidding!

Article in the New Straits Times - "Naim Indah eyes oil, gas trade"

• The Board of Directors of Naim Indah Corporation Berhad ("Nicorp or the Company") would like to announce, in response to Bursa Malaysia Berhad’s query dated 8 December 2006 (Ref: MN-061208-37750), that the company received a proposal on 6 December 2006 from one Encik Nasir Bin Abdul Rahman, the Chief Planning Officer of Mycorp Oil & Gas Sdn Bhd inviting Nicorp to jointly acquire a stake in Ifatech Global (M) Sdn Bhd whose principal activity is that of petroleum products trading and to jointly set-up with Mycorp Oil & Gas Sdn Bhd a fuel blending plant in Batam, Indonesia.
  
  Nicorp on 8 December 2006 has assembled an in-house evaluation team to perform an in-depth study of the above proposal, and the study is expected to take at least twelve (12) weeks before a report can be tabled for Nicorp’s Board consideration.
  
  Further announcements on any material developments on this matter shall be announced as and when they fall due.
  
  This announcement is dated 11 December 2006.

So where is the oil?

Fully Transparent Directors Renumeration

Full and Proper disclosure of all directors renumeration is the very first step and it's extremely paramount to all investors of Bursa Malaysia and also paramount to the nation.

Everyone can have their own views on what is justifiable renumeration and what is grossly obscene renumeration. (You can read some blog postings here: CEO Pay Excesses AT Our Door Step , Lets compare with sph , Straits Times CEO Pay Talk , Value CEO Overpaid.. )

For me, this is NOT the issue yet.

What we need to do is to ensure that the directors renumeration is truly transparent for everyone to see!

This is the very first step.

Without it, how can us form any rational opinion on what is fair and what isn't?

We will need the full without the support and the campaigning of this issue from everyone to ensure that this campaign takes off.

So what's the very first step we can do and why is it so important?

CEOs getting excessive paychecks eats into the profitability of our listed companies and it's a burden to our economy.

And the least we can do is to make our voices heard and show our support on this issue!

How about contacting MSWG?

Show them your support!

Show them as investors, we do care!

Everyone can contact MSWG here: http://mswg.org.my/contact.html

Also some details can be read here: http://mswg.org.my/mswg_events.html

Ranhill: Privatization of a Listed Subsidairy

Delisting of a LISTED subsidiary is bad enough but the intent from the holding company to relist it again in the future is simply disgusting.

I was so disgusted to read this article.

• Ranhill not ruling out relisting power unit
  By Sharen Kaur
  sharen@nstp.com.my
  
  September 13 2007
  
  RANHILL Bhd has not ruled out the possibility that Ranhill Power Bhd could be relisted in the future, following plans to add value to the company after taking it private this year.
  
  Ranhill Power is expected to be de-listed from the official list of Bursa Malaysia Securities by October or November this year.
  
  Executive director Datuk Chandrasekar Suppiah said Ranhill plans to take Ranhill Power private to consolidate the company under the Ranhill group to maximise returns. ( article source: here )

If every listed company have such attitude, don't you reckon that it simply makes a total mockery of our stock market?

Sigh!

The Current Libor Issue

Read this posting by Financial Sense market commentator, Frank Barbera, The View From 30,000 Feet

• “It’s a matter of trust” says Robert Kessler, head of Kesslet Investment Advisors, a Denver based manager of Treasury Securities. While Libor rates are based on the rates between some of the world's largest banks, shaky confidence has led the market to demand higher yields on inter-bank lending versus the Fed Funds Rate and Treasuries, which are seen as risk free. The widening yield spreads in recent days have been quite dramatic, and have served to strengthened overseas currencies. Yet the big downside risk ahead still resides in the US Credit Market where the long march of “resetting” adjustable rate mortgages has just begun. Looking out over the next 12 months, the US is facing a monumental series of ‘resets’ to its pile of Adjustable Rate Mortgages on the order of $50 to $60 Billion dollars per month, with some months north of $70 billion. In this light, the surge in recent weeks in overseas Libor Rates is potentially devastating news for the US Homeowner because within the US, increases on Adjustable Rate Mortgages are tied to the LIBOR Rate, and NOT the Fed Funds Rate. In fact, a recent article by Randall Forsyth in Barron’s pointed out that most resets will take place at several points ABOVE LIBOR. “This means that some of those borrowers may face mortgage rates of close to 10%, with the recent rise in Libor rates exacerbating this squeeze.” Consequently, even if the Fed lowers the Fed Funds rate by 25 basis points, the offsetting rise in Libor Rate imply that for most borrowers, there will be no benefit whatsoever.

Do give the rest of the article a good read: The View From 30,000 Feet

Review on Yi-Lai

Track Record.



The above table represents what Yilai has achieved since listing. As can seen from the above table, it would appear that fy 2004 was a peak for Yilai and the decline in earnings margins clearly indicates the current extreme competitive market for the tiles industry.

Last month, YiLai announced its 07 Q2 earnings. Quarterly rpt on consolidated results for the financial period ended 30/6/2007.

The following table shows YiLai's most recent quarterly earnings.



Couple of points to note.

1. First half 2 quarters earnings totals only 9.602 million, which is significantly lower than its previous year, fy 2006 first half earnings total of 11.311 million.

2. Inventory level is up a lot for the current quarter.

Dividends. Yilai just announced another interim dividend.

Here is Yilai's dividend track record.



Yes, YiLai pays fantastic dividend yearly and based at current traded market price of 1.20, the dividend yield for Yilai is certainly interesting.

However, let's be honest with ourselves, have a look at the above table. As can be clearly seen, the total dividend received shows a decline and the decline in dividend clearly corresponds with the decline in yearly earnings. So the current risk is such. Although Yilai dividend yield is fantastic now but if the earnings continues to slump, the investor should be realize that future dividends to decline as per the decline in earnings.

Now since I had made several blog postings on YiLai before, I would like to review past blog postings.

1. ROI on Yi-Lai - posted on March 13th 2006.

Review of Earnings.

The decline of earnings was noted back then!

• How do you rate such performance? Yes, total ytd net profit dropped from 29 mil to 27.8 mil. Is there a concern?
  
  Its profit margins. Did it deliver or not?
  
  Or are you worried about the slump in earnings?

2. ROI on Yi-Lai: Part II

Review of Balance Sheet.

The issue of inventory again.

• While I was told that the tiles do not deteriorate over time, however, the design of tiles is important. A good fashionable tile helps boost sales, while poorly designed tiles could get outdated and turn into dead stock. So when a tile manufacturer reports a rising inventory, the concern is that the inventory could consist of out-dated tiles. So when you consider that yi-Lai's inventory increased from 22.023 million a year ago to 32.690 million, how concerned would one be? The concern is that although the tiles have a long life-span since it does not deteriorate, an out-dated, out-fashioned tile is a dead stock which could not be sold. Is this a non-issue?

And the depleting cash issue or rather YiLai's aggressive capital expansion.

• Back in Nov 2005, RHB had a report which stated the following:
  
  Yi-Lai’s new line that boasts a production capacity of 5,500-6,500 sq m/day is now ready for commercial production but practically left idle due to the weak demand condition. The line may be activated over the next six months. Originally designed to produce multi-effect tiles that yield higher margins, the line may be switched to produce glazed tiles or other tiles that are in demand. Given that we expect the weak demand condition to persist over the longer term, it make sense for Yi-Lai to switch its existing production from some of the smaller, older and less cost effective lines to the new line
  
  
  Although the funding of this capex was done without any bank borrowings, a whole new production left practically idle does not bode well. All dressed-up but no where to go! How? What if the production continues to be left idle? Who is paying for the bills?

3. ROI on Yi-Lai: Part III

Outlook.

• I reckon that there are three issues to consider.
  (1) Economic impact on the building materials market.
  (2) Massive capacity expansion by tiles manufacturers.
  (3) Competition from importation of cheap ceramic tiles.
  
  For the investor, would one be comfortable holding a stock in a sluggish industry?
  Is the company's product really durable and competitive enough to sustain a sluggish industry?
  And what if the sluggishness continues for a prolong period?

4. ROI on Yi-Lai: Part IV

The dividend issue.

5. ROI on Yi-Lai: Part V

Reviewing the whole Review Of Investment on Yilai.

• How? Are the reasons still valid to justify one to stay invested in the stock?
  
  Oh.. and some invested in the stock because of the dividend issue. And how would one evaluate their reasoning to stay invested in Yi-Lai since Yi-Lai has decreased their dividend payout this year?

Other postings made: ROI on Yi-Lai: Part VI and ROI on YiLai: Part VII

For the record, Yilai price at 31st March 2006 was 1.32 and currently Yilai is traded at 1.20.

So despite the fantastic dividend yield, the lack of earnings growth or rather the slump in Yilai's earnings has probably been the main factor for the current lackluster performance of YiLai's stock price.

Retirees and the Single Tier Tax Dividend

Here is an interesting note regarding the single tier tax structure announced on the recent Buget. In the announcement it states that dividends at shareholders' are tax exempted.

It has been pointed out that this is rather misleading.

Commentaries has been made to suggest that this is a plus point for the man-in-the-street since the dividends are no longer subject to tax.

However, some opinions differs.

And according to several folks, this new structure will result in a loss to the public; retirees in particular and low income minority shareholders generally.

Let me quote what has ben said:

• What is being said is that dividend income received by shareholders will not be subject to tax. However, at the same time, shareholders will also not be eligible to claim back a rebate in the event that the shareholders tax bracket is lower than the the corporate tax rate.
  
  In truth, at the shareholders level, dividend income has never been subject to tax. Tax has always been paid at the corporate level. So to say that "dividends at shareholders' level are tax-exempted" is utterly confusing, and I am not surprised that most people are happy with this new tax structure, blissfully unaware that they would actually be out of pocket as a result of it.
  
  Let's take an example of a retiree who is not subject to income tax. If he owns shares in Company A, and Company A declares a dividend of RM1,000 to him, the retiree will (under current tax regime) receive RM730 from Company A, and then claim back RM270 from the IRB.
  
  So, even though Company A declares a dividend of RM1,000, the company knows that in terms of cashflow, it is only paying out RM730. The retiree has to claim the rebate RM270 back from the IRB.
  
  If we assume that Company A maintains this cashflow payout of RM730 henceforth, then the retiree is now RM270 short under the new structure since he is no longer able to claim back the rebate from the IRB.
  
  Of course, if Company A is generous and decides to still declare a dividend of RM1000, then there is no loss to the retiree who will get the full RM1000, all from the company. This however is because Company A has increased its cashflow payout, and not a result of the new tax structure.
  
  All said, the big winner is the govt who will no longer need to pay back the rebate to taxpayers whose tax bracket is lower than the prevailing corporate tax.

Would you agree with what has been said?

Me?

I rather agree very much that this new single tier tax structure actually becomes a handicap for the retirees.

And I for one, would rather prefer that this whole issue could have been represented in a much more clearer fashion.

Gadang Holdings

My Dearest JL, Doc and Random,

Here is link to Gadang's homepage and from their homepage, Gadang is described as follows:

• The principal activity of Gadang is investment holding while its subsidiary companies' core activities are civil engineering and building construction, property development, manufacturing & trading of decorative & protective paints, mechanical & electrical engineering services.

Here is the recent track record for Gadang.



Here is the link to their latest earnings report (07 Q4) Quarterly rpt on consolidated results for the financial period ended 31/5/2007

Gadang earnings was rather dismal back in 2002 and 2003. However, as can be seen from the earnings table above, its earnings has improved much for the better. The only slight concern is the slight increase in receivables over the past couple of years despite the fact that the balance sheet has improved much for the better.

This company can be seen striving to achieve to be a better company. This can be seen clearly by the corporate developments the past few months.

The below are some noteable corporate exercises, plans and announcements posted at Bursa Website. Do note some are just mere MOU announcements.

1. Memorandum of Understanding between Gadang Holdings Berhad and Qingxiu District Government, Nanning, China - Gadang's plan to participate in the investment of a waste water treatment plant in Qingxiu District, Nanning, Guangxi Province, China.
2. PROPOSED ACQUISITION OF 85% EQUITY INTEREST OF PT. HANARIDA TIRTA BIRAWA ("PROPOSED ACQUISITION") - The Proposed Acquisition will increase Gadang's interests in the treated water supply and concession business in Indonesia. The treated water supply will increase by 600 litres per second in 2008, slightly over twice the capacity of the water treatment plants currently operated by AUPL.
3. Update on the status of the Joint Venture Agreement entered into between Splendid Pavilion Sdn Bhd and Multiforum Sdn Bhd for the development of land in Segambut, Kuala Lumpur
4. Letter of Acceptance For Proposed Construction And Completion Part Of Projek Lebuhraya Kemuning - Shah Alam (LKSA), Highway Stretch From Kota Kemuning Interchange To Alam Impian Township in Shah - The contract sum awarded for the Contract is RM278,880,000 (Ringgit Malaysia: Two Hundred Seventy Eight Million and Eight Hundred Eighty Thousand Only). The construction period of the Contract is twenty-four (24) months from 1 September 2007, the date for possession of site and the date of completion for the whole of the works under the Contract is 31 August 2009.

Some recent news clip

1. Gadang in talks to buy more land
   By Zurinna Raja Adam
   zurinna@nstp.com.my
   
   July 12 2007
   
   PROPERTY developer Gadang Holdings Bhd is in talks to acquire six hectares of land, with an estimated gross development value (GDV) of RM150 million, in Shah Alam and Penang.
   
   Executive director Ling Hock Hing said the group hopes to finalise talks with landowners within the next three months, and plans to start construction work within two years.
   
   Gadang has a total landbank of about 48ha in the Klang Valley, with a total GDV of RM120 million, sustainable until 2012.



2. Gadang may clinch RM300m hospital deal
   By Sharen Kaur
   sharen@nstp.com.my
   
   August 10 2007
   
   CONSTRUCTION and engineering firm Gadang Holdings Bhd may soon clinch a RM300 million deal for a hospital project in Cheras, Kuala Lumpur.
   
   Managing director and chief executive officer Datuk Kok Onn said the group's unit, Gadang Engineering Sdn Bhd, is finalising talks with the Government for the proposed construction of the Lady Templer Rehabilitation Hospital.
   
   "We have tendered for over RM1.5 billion worth of government and private sector jobs where we can expect a success rate of more than 20 per cent. The hospital project is just one of the contracts we are looking at," Kok told Business Times.
   
   The Lady Templer Rehabilitation Hospital will deal with post-road accident cases, stroke victims, brain injury patients and other physically crippling injuries.



3. Gadang on a high
   
   KUALA LUMPUR: Gadang Holdings Bhd sees buoyant earnings for the financial years ending May 31, 2008 (FY08) to FY10 on the back of a burgeoning order book, said managing director and chief executive officer Datuk Kok Onn.
   
   “We've been working hard. Hopefully, our engineering and construction order book will touch RM1bil by the middle of next year,” he told StarBiz yesterday.
   
   The second board-listed company is involved in civil engineering and building construction, property development, manufacturing and trading in decorative and protective paints, mechanical and electrical engineering (M&E) services as well as treated water supply and concessions.
   
   At present, the engineering division has an order book of some RM600mil, which could sustain earnings for the next two years. Gadang also has submitted proposals and tenders worth some RM1.5bil.
   

Its current property projects can be viewed at iproperty website, Taman Seri Bukit Segambut, Mandy Villa, M.Avenue 3 & 4 storey Retail & Offices and M.Avenue 3 & 4 storey Retail & Offices

Couple of points that needs to be mentioned.

Open the word file attached to Gadang's latest earnings ( http://announcements.bursamalaysia.com/EDMS/annweb.nsf/8b25383a269fcce548256d79001af770/482568ad00295d07482573240037e4c3/$FILE/Notes%20GHB(May-2007)Q4.doc ) and have a look at their segmental reporting.

Its construction and property division are making money however its trading of protective and decorative coatings and its water division are NOT doing well.

Secondly, as can seen, whatever info is all from Bursa website and news articles. Hence there isn't any coverage from any research houses. (Is this that bad?)

How?

Random Musing on the Timber Sector

Hope you do not mind but I decided to make some random musing on the timber sector.

In the timber sector, in my opinion, there are only two investment grade stock, WTK Holdings and Ta Ann. They are the leaders in the sector for their superior earnings performance and this has been reflected perfectly in the stock market.

Let's look at the recent performance of WTK Holdings until June 2007 ( I will show the bigger pix next). Now WTK had a recent stock Bonus Issue and share split ( see Entitlement - Others ). The below chart represents a priced adjusted chart to account for this corporate exercise. Chart is provided by Kenwealth.



I placed two jelly beans on the chart as simple markers. The first lower jelly bean indicates an ADJUSTED price of roughly 1.16 in Jan 2006. And the upper jelly bean indicates a price of 3.90 in April 2007. Hence an investment in WTK HAD BEEN EXTREMELY profitable for an investor despite the fact that WTK belongs to the highly cyclical timber sector.

They say earnings is always the main catalyst for a stock to appreciate much higher.

Back for its fy 2005 earnings, WTK earned some net earnings of 53 million. A year later its fiscal 2006 earnings rocketed to 127 million. ( See Quarterly rpt on consolidated results for the financial period ended 31/12/2006 - do note the extremely impressive cash flow generated for that fiscal year 2006! - and you can see this older blog posting on WTK - About WTK )

However, the recent two earnings, the weakness in earnings was seen. This was their May earnings note, Quarterly rpt on consolidated results for the financial period ended 31/3/2007 and this was their earnings reported recently Quarterly rpt on consolidated results for the financial period ended 30/6/2007 ).

So in May it announced it made 29 mil. Last month, WTK announced it made only 15 mil. Sharp decline in earnings? Remember the last 2 quarters of its last fiscal year, WTK was earning around 46 million plus!

Now for this fiscal year, its half year earnings totals only some 44 mil. At such a pace, WTK would probably be making less than 90 mil this fiscal year. Which would be a massive decline when compared to its fiscal year 2006 earnings.

Now back to the charts. Let me show you the full WTK chart, meaning to say, let's look at how the market is reacting to the current weakness in WTK's earnings.



WOW!

Yes, can you see how WTK share price is plunging?

This chart depicts the clear and precise danger in investing in cyclical stocks. When the cycle turns for either good or bad, the reaction in the market price would be simply drastic.

WTK's sharp increase in earnings saw it enjoyed a truly wonderful life. Its share simply soared. And when its earnings turned, indicating that perhaps the good fortune in the timber cycle has ended, the stock simply plunged.

Now let's look at Ta Ann.

Ta Ann earnings jumped from some 81 million to some 130 million for its fy 2007. Quarterly rpt on consolidated results for the financial period ended 31/12/2006

And its current half year earnings, TA Ann earned only some 50 million. A clear indication that perhaps this year, its fiscal year earnings would disappoint. Quarterly rpt on consolidated results for the financial period ended 30/6/2007

Have a look at the chart for Ta Ann.



WOW! Dejavu?

Anyway, again Ta Ann enjoyed incredible success. One could have purchased Ta Ann for around 4.80 back in June 2006 and a year later, one's investment would have soared to some 11.50! Now this is investment, eh?

But like WTK, the share has taken a drastic turnaround and top be more precise, the share price is plunging just like WTK Holdings!

How?

Would you use market leaders such as WTK Holdings and Ta Ann as an indicator for the timber sector?