Andy Xie: SSE Should Be 2000 Or Less!

Worried about the current correction in the Chinese Stock Markets? Chinese Stocks Plunge 6.7%; Japan Ends Down




On Bloomberg News: China Stocks ‘In Deep Bubble,’ May Drop 25%, Xie Says

• China Stocks ‘In Deep Bubble,’ May Drop 25%, Xie Says
  By Erik Schatzker and Allen Wan
  
  Aug. 31 (Bloomberg) -- China’s economy isn’t “sustainable” and the benchmark Shanghai Composite Index may fall another 25 percent, former Morgan Stanley Asian economist Andy Xie said in an interview.
  
  “The market is in deep bubble territory,” Xie, who correctly predicted in April 2007 that China’s equities would tumble, told Bloomberg Television.
  
  The Shanghai index plunged 6.7 percent to 2,667.75 today, the most since June 2008 and entering a bear market, on concern a slowdown in lending growth may derail a recovery in the world’s third-largest economy. Xie said the index “should be 2000 or less.”
  
  The Shanghai gauge slumped 22 percent this month, the worst performer among 89 benchmark indexes tracked by Bloomberg, as banks reined in lending to avert asset bubbles and policy makers advised industries such as steel and cement to curb overcapacity. The decline stopped a rally that had sent the measure up 103 percent from a November low on prospects the government’s 4 trillion yuan ($586 billion) stimulus program and a record amount of new credit would ensure the economy grows at least 8 percent this year.
  
  “The local market bears are convinced that tightening is already underway,” said Howard Wang, head of the Greater China team at JF Asset Management, which oversees $50 billion. Only “a very strong set of macro numbers in August” or “stronger statements from central authorities” would change this trend, Wang said.
  
  Global Tumble
  
  The tumble in China stocks send the MSCI World Index of 23 developed nations down 1 percent at 10:17 a.m. New York time. The Bank of New York Mellon China ADR Index, tracking American depositary receipts, lost 2.6 percent, led by commodity producers.
  
  At least 150 stocks on the 898-member Shanghai index dropped by the daily 10 percent limit. Industrial Bank Co. and Aluminum Corp. of China Ltd. tumbled by the permitted cap after Caijing magazine reported new loan growth this month may be almost half that of July. Lower profits dragged Baoshan Iron & Steel Co., the nation’s biggest steelmaker, and China Southern Airlines Co. down at least 7 percent.
  
  Chinese stocks are trading at the steepest discount in the world compared with analysts’ price targets after this month’s slump in the benchmark index.
  
  ‘Bright Spot’
  
  Equities in China remain “a bright spot” among global stocks because of the nation’s strong growth potential, Goldman Sachs Group Inc. said today.
  
  “We think the market concerns about a near-term ‘exit strategy’ appear premature as the government remains pro- growth,” Thomas Deng and Kinger Lau, analysts at Goldman Sachs, wrote in a research note.
  
  China may have 200 billion yuan of new loans in August, the Beijing-based Caijing reported today on its Web site. That compares with 7.4 trillion yuan for the first half of 2009 and 355.9 billion yuan in July alone. The government plans to tighten capital requirements for financial institutions, three people familiar with the matter said this month.
  
  An estimated 1.16 trillion yuan of loans were invested in stocks in the first five months of this year, China Business News reported June 29, citing Wei Jianing, a deputy director at the Development and Research Center under the State Council.
  

MNRB Talks About Revenue Growth

Was reading some articles. On Business Times, the following caught my attention.

• MNRB expects 8.5pc revenue growth
  
  By Rupinder Singh Published: 2009/08/29
  
  REINSURANCE group MNRB Holdings Bhd (6459) expects revenue growth this financial year to be lower than last year's, underpinned by the soft reinsurance market and slow economic conditions.
  
  However, it remains confident of posting 8.5 per cent revenue growth although it grew 20 per cent in the year to March 31 2009.
  
  Its chairman Sharkawi Alis said the group will be cautious this year as the global financial crisis has yet to pass.
  
  Its subsidiary, Malaysian Reinsurance Bhd (Malaysia Re), is expected to spearhead MNRB's growth, but will be selective in its overseas ventures due to its limited capital.
  
  After registering 20 per cent growth in gross premium last year, Malaysian Re is expecting growth of between 15 per cent and 20 per cent this year.
  
  "Growth will be there, but it won't be as good as last year's. It will be a controlled growth," Malaysian Re chief executive officer Hashim Harun said.
  
  The unit is expecting overseas business to constitute 25 per cent of its total gross premium this year as compared to about 23 per cent last year.
  
  Meanwhile, Islamic insurer Takaful Ikhlas Sdn Bhd is said to be in a consolidation phase this year. However, it still expects to grow its gross contributions to RM600 million for 2010.
  
  MNRB Retakaful Bhd is hoping to grow its overseas business by 30 per cent. It aims to strengthen its share of existing markets and expand into new ones such as Saudi Arabia, Syria and other emerging markets.

I was bemused and lost by the first two sentences.

• REINSURANCE group MNRB Holdings Bhd (6459) expects revenue growth this financial year to be lower than last year's, underpinned by the soft reinsurance market and slow economic conditions.
  
  However, it remains confident of posting 8.5 per cent revenue growth although it grew 20 per cent in the year to March 31 2009.

???

Is that a typo? I do not know.

Anyway, when a company speaks only about revenue growth, I always tend to be suspicious.

And true enough when I was not impressed at all when I saw MNRB financial earnings snapshot posted on Friday

So next time, when you hear a company talking about revenue growth, do get your supply of salt ready!

=======================

Edit: 31st Aug 2009.

The following posted on Star Business.

• Monday August 31, 2009
  
  MNRB sees modest growth on selective underwriting
  
  KUALA LUMPUR: MNRB Holdings Bhd sees a modest growth of 8.5% in revenue in its fiscal year ending March 31, 2010 (FY10) due to selective underwriting, overseas expansion and a higher claims ratio.
  
  The reinsurance company posted a 20% growth in revenue to RM1.2bil but net profit plunged 86.7% to RM22.7mil in FY09 against FY08.
  
  Chairman Sharkawi Alis said profitability in the industry might not be in tandem with the revenue achieved.
  
  “We may do well in increasing the premiums growth but higher claims could pull down profit likewise in FY09. The large difference in net profit in FY09 was also contributed by the RM75mil proceeds from MNRB’s disposal of a 3.24% direct equity interest in Malaysian Oxygen Bhd in FY08,” Sharkawi said after the company’s AGM on Friday last week.
  
  He added that under the current economic climate and what the company had experienced last year, nobody could conclude that the worst was over, hence the modest projection. Sharkawi said Malaysian Reinsurance (MNRB’s wholly-owned subsidiary) would be selective in the industry that it underwrites and not just underwrite for the sake of premiums growth.
  
  “Overseas market expansion, which had been rapid for the past couple of years, will be done cautiously this year to make sure we will invest only in profitable business. Our takaful operation under Takaful Ikhlas, which had enjoyed growth 30% to 40% over the last couple of years, will also consolidate this year. We only target gross contribution income of RM600mil compared with RM580.5mil last year,” he said.
  

A Quick Look At Lion Corp And Lion Diversified's Earnings

Posted early this month: Megasteel And Lion Corp And Lion Diversified

I had a look at Lion Corp's earnings. Tonight Lion Corp reported its earnings. It wasn't good. Losses were huge. It lost some 400 million this quarter and losses this year totalled a massive one billion ringgit

I had a look at the balance sheet. It's inventories shrank. Worse still its cash balances fell to just 98 million compared to 141 million a quarter ago!



And their loans?

Ahh... there's one silver lining her. Loans declined to 'just' 2.989 billion.

ps.. the other Lion wasn't too good either.

Posted on the Edge Financialy Daily:

• LionDiv, Lion Corp sink further into the red
  Written by Joseph Chin
  Thursday, 27 August 2009 20:26
  
  KUALA LUMPUR: LION DIVERSIFIED HOLDINGS BHD [] (LionDiv) sunk deeper into the red in the fourth quarter ended June 30, 2009 with a net loss of RM361.49 million compared with net loss of RM1.98 million a year earlier, due mainly to losses at its associates.
  
  In its statement to Bursa Malaysia, Lion Diversified said its 4Q revenue rose to RM254.14 million from RM140.72 million. Loss per share widened to 25.97 sen from 0.27 sen.
  
  LionDiv said it was impacted by losses of RM345.58 million from associates in the quarter, compared with gains of RM16.24 million a year earlier. However, there was an unrealised foreign exchange (forex) gain of RM17.83 million in the 4Q09.
  
  For the FY09, net losses totalled RM627.78 million, compared with net profits of RM52.75 million for FY08. However, it registered a marginally higher profit from operations of RM204 million even though revenue fell to RM1.25 billion from RM1.61 billion.
  
  The full-year contribution from the new direct reduced iron operation, which commenced in June 2008, had partially mitigated the dilution impact from the divestment of the retail business in the previous year.
  
  "Our associates recorded substantial losses for the year as a result of the sudden and sharp drop in international steel prices. Demand weakened considerably as major economies begin to fall into recessionary conditions. After accounting for unrealised forex losses resulting from the translation of US dollar bonds, a loss before taxation of RM585 million was posted for the year under review," it said.
  
  Meanwhile, its 59.04% owned subsidiary Lion Corp Bhd also posted higher net loss of RM406.38 million for its fourth quarter ended June 30, compared with a net loss of RM44.57 million a year earlier.
  
  Its revenue plunged 74.5% to RM408.38 million from RM1.60 billion in the previous corresponding period.
  
  "The results of the group continued to be affected by the global recession and uncertainties surrounding the global economic recovery. For the quarter under review, the group has further recognised a provision for diminution in value of its steel inventories amounting to RM159.3 million," Lion Corp said in notes to its quarterly results.
  
  It anticipated results to be better in the next financial year on the back of an improved operating environment.
  
  
  

Quick Look At LCL's Earnings

Last blogged LCL Hit By Arabtec Claims!

LCL reported its earnings today.

What's more worrying is when we compare the balance sheet as posted in the earlier posting LCL Hit By Arabtec Claims!, LCL's balance got even weaker.

Cash balances is now only 16.4mil and receivables has increased to 270.501 million. (Given the massive issues in Dubai housing market, should one discount this issue? Perhaps a chunk of these receivables might be doubtful? ) (Compare the previous balance sheet table shown here: here )

And loans had increased too!

Temasek Holdings: Once Bitten Not Shy!

Saw this article on Temasek. Temasek to invest in Western banks 'if opportunity comes'

• SINGAPORE: Singapore investment firm Temasek Holdings said yesterday it had not been put off investing in Western financial institutions despite suffering massive losses from the global financial crisis.
  
  It would invest in such banks "if the opportunity comes and it looks attractive, yes," Ho Ching, chief executive of the state-linked firm, said, adding that the fund was also interested in resources as an asset class and saw opportunities in Asian infrastructure.
  
  She, however, ruled out investing in overseas land for agriculture, as firms linked to South Korea and Middle Eastern firms have done in recent years.
  
  Ho was speaking at the launch yesterday of Temasek's updated charter that described the fund as an investment firm managed on commercial principles, dropping a reference to its role to improve the city-state's economic base.
  
  Temasek suffered massive losses after pumping billions into Western financial companies that were in need of a capital injection as the economic crisis unfolded.
  
  It took a stake in Wall Street icon Merrill Lynch but when the US firm was bought by Bank of America, Temsek divested its interest. It also bought into British lender Barclays but later also offloaded that stake.
  
  It is estimated Temasek lost more than US$5.4 billion (US$1 = RM3.51) from the sale of its holdings in the two banks, Dow Jones Newswires quoted sources as saying.
  
  Temasek made its divestments just before the global markets made a recovery at the start of the year.
  
  Ho, the wife of Prime Minister Lee Hsien Loong, said last month that by the end of March Temasek's portfolio had lost more than S$40 billion (S$1 = RM2.44) compared with a year ago.
  
  Temasek and the Government of Singapore Investment Corp (GIC) are the city-state's main investment vehicles.
  
  GIC also invested massively in US banking giant Citigroup and Swiss bank UBS as the global financial crisis unfolded.
  
  Temasek downplayed its links to government policy or strategic interests in its revised charter.
  
  "Temasek felt the need to emphasise its independence, or perhaps it is preparing to spin itself off as a truly independent unit... countries are resistant to investments by politically-linked entities," said David Cohen, director of Asian economic forecasting at Action Economics here.
  
  Temasek, which has published annual reports since 2004, now describes itself as an investment firm creating long-term value for its shareholder, after being set up in 1974 to hold investments in state firms.
  
  The updated charter did not include the notes accompanying the first 2002 version stating the government - through Temasek - needed to own and control firms deemed critical to the city-state's security, economic well-being or public policy.
  
  "There are very few of these companies left in our stable," said Ho. "We are an investor that is prepared to invest and divest." - Agencies

Waaaa..... isn't this such bold talk?

I wonder if she remembers some of these... One Of The Worst Investments In This Period!

Or how about Barclays: A Tale Of Two Investors - Temasek Holdings and Sheikh Mansour?

Other postings: here

Baltic Dry Index Continues To Fall As China Continues To Cut Back Its Commodity Purchases

On CNBC News: Japan Exports Dip, Stimulus Effect May Be Waning

• Japan's exports fell in July from the previous month for the first decline in two months, in a possible sign that the impact of stimulus measures in major economies worldwide is starting to wane

The Baltic Dry Index closed lower yet again at 2388.

On Monday, 24 Aug, on WSJ journal : Shipping-Cost Index Drops

• By ART PATNAUDE and NEENA RAI
  LONDON -- The Baltic Dry Index, already down 26% this month, is likely to fall further during the rest of the quarter as China continues to cut back on commodity purchases.
  
  The BDI, a barometer of shipping costs for commodities such as iron ore, coal and grain, may rise in the fourth quarter as other major world economies are expected to increase imports. However, a record number of ships scheduled to come on line this year and in 2010 will keep freight rates under pressure even as the global economy recovers, analysts say.
  
  The BDI is often seen as a key leading indicator for global economic growth and production, and the August decline has been the sharpest since October's 72% skid, when freight rates were heading below break-even levels and the shipping industry was gripped with uncertainty.
  
  Friday, the index fell 2.6% to 2468, capping a 10% decline for the week and leaving it at a three-month low. The volatile index, which surged in the first half of the year on Chinese demand for iron ore and coal, is still about four times higher than December's 22-year low.
  
  Iron-ore imports to China were driven by the country's economic-stimulus package, in turn increasing demand for Capesize ships, the largest of the four vessel classes calculated into the BDI and the primary transport method for iron ore. In July, China imported nearly 55% of globally traded iron ore and about 10% of coal. This demand, as well as huge lines outside major ports that crimped the supply of available ships, helped elevate freight rates.
  
  "There is no doubt the last few months have been unprecedented and unsustainable when it comes to China's appetite for iron-ore imports," said Peter Hickson, UBS AG's managing director of global materials strategy.
  
  Some say that while forward prices already are pricing in a further slowdown in Chinese demand, they aren't taking sufficiently into account easing port congestion and the mass of new ships scheduled to roll onto the oceans this year and next. Some 1,000 dry bulk ships are expected to be launched this year, and another 1,000 are due in 2010, said Amrita Sen, a London-based analyst at Barclays Capital. In the past five years, the average has been 300 new ships.
  
  Forward rates for Capesize vessels are $37,000 a day for the fourth quarter and $29,250 for 2010. Friday, average daily rates for Capesize vessels fell below $40,000 a day for the first time since May. They had shot up to nearly $90,000 a day in June, from about $9,000 a day in January.
  
  "If anything, the forward curve is being a touch overoptimistic," said Richard Bowler, Citigroup director of commodities.
  
  Analysts say stronger growth from developed nations will be a key factor for rates next year. "For me, the next leg up is demand [from members of the Organization for Economic Cooperation and Development]," Barclays Capital's Ms. Sen said. "Unless you see that, [freight] rates will fall."
  
  Currently, there are few signs that demand for iron ore and other shipped bulk goods is turning around. In Rotterdam, Europe's largest port by volume handled, the volume of iron ore, also called throughput, was down 76% in the second quarter from a year earlier. Iron-ore throughput at Antwerp, Europe's second-largest port, collapsed 97% in the second quarter from a year earlier.
  
  "The situation [for iron-ore shipments here] could not get any worse," said Michel Moons, commercial manager of bulk at the Antwerp port.
  
  Port officials said that could change as steel mills rebuild stocks late this year in anticipation of economic recovery. Hugo du Mez, business developer of bulk goods in Rotterdam, said, "I do expect activity to pick up in the fourth quarter."

Hmmm... if economic recovery is to be believed why is China cutting back on its commidity purchases? Does China matter?

This Stock Called Mangotone (FTec)

Did you notice this stock called Mangotone Group?

Sounds so rather funky eh?

Well, it used to be TecAsia and TecAsia used to be FTec Resources Bhd.

Let's travel back.... how about May 30th 2007?

• FTec plans transfer to main board by 2008
  By Zaidi Isham Ismail
  bt@nstp.com.my
  
  May 30 2007
  
  FTEC Resources Bhd (FTec), which was listed on the Mesdaq market of Bursa Malaysia in 2003, plans a transfer to the main board by 2008.
  
  FTec founder and president Kenneth Vun said the company is all set to transfer its stocks once its private placement exercise of shares to identified Bumiputera investors receives authorities' approval by end-July.
  
  "We are waiting approval from the International Trade and Industry Ministry. Once we receive the go-ahead, the company is set to transfer to the main board by next year," Vun told a news conference to announce its first quarter results in Petaling Jaya yesterday.
  
  Once transferred, FTec, a maker of laptop and personal computer accessories, will become the third information technology (IT)-related company to transfer to the main board, after Symphony House Bhd and GHL Systems Bhd.
  
  "FTec has met all the requirements set out by the authorities to transfer to the main board. Revenue and the money raised (from the private placement) will be used to to finance our expansion plans as well as working capital," said Vun.
  
  FTec executive director (finance and corporate) Lee Jyh Kiong said under the private placement, FTec will issue 73 million new shares of RM0.10 each, representing 30 per cent of its enlarged paid-up capital, raising proceeds of RM24.3 million.
  
  For the first quarter ended March 2007, FTec's net profit surged 33 per cent to over RM3 million from RM2.2 million in the same period a year ago. Revenue almost doubled to RM84.3 million.
  
  Vun said the revenue growth was in line with the company's average growth of 30 per cent for the past four years.
  
  FTec opened its first IT concept retail store under the brand name, TecAsia Sdn Bhd, in Kota Kinabalu last year, the biggest store of its kind in Malaysia.
  
  Vun said the store registered a sales volume of RM40 million for the nine months ended September 2006. The company plans to open a similar store in Kuala Lumpur at a shopping centre by September with a revenue target of RM80 million.
  
  It plans to open 10 TecAsia stores over the next five years, each with an investment of between RM5 million and RM10 million, depending on location and floor space.
  
  The stores will sell every major brands such as Sony, Acer Hewlett-Packard, Aiwa, Apple, Canon, Intel, Sony and Samsung devices alonside Ftec's own products.
  
  FTec plans to spend RM1.5 million on research and development activities in 2007 compared with RM500,000 in 2006.

This company sounds so happening eh?

From Mesdaq to Mainboard, and 30% average growth for past four years. (ps. what's average growth ah? And what growth is he talking about? Sales growth or profit growth?)

Anyway a few months later, it reported its earnings. Quarterly rpt on consolidated results for the financial period ended 30/6/2007

Company had 118 million sales, net profit of 3.371 million. Cash 31.657 million, receivables 44.183 million and total loans at 57.103 million.

Oct 1 2007 Securities Commission scores a first!

As a result of the findings, in the suit filed on 26 September 2007, the SC is seeking the following court orders:

• that Kenneth Vun personally make restitution of the sum of RM2.496 million to FRB;


• that Kenneth Vun be restrained from directly or indirectly managing funds of FRB and/or any of the companies in the FTEC Group of Companies in the absence of proper controls being put in place by the said companies including but not limited to external supervision by the SC;


• that Kenneth Vun to cause FRB to properly disclose in its audited report for the next financial year, the manner in which the sum of RM2.496 million had been utilised; and


• that Kenneth Vun be made personally accountable for the return of any sum of interest or profit made from the utilisation of the sum of RM2.496 million to FRB.

.... This action against Kenneth Vun is one of the numerous civil enforcement actions undertaken by the SC recently against directors of public listed companies for corporate governance misdeeds. These actions serve as a reminder that it is the responsibility of directors to act in an honest and accountable manner in discharging their duties, and especially when dealing with public funds. (On the side note, it makes me wonder on Megan Media: Megan: Are You Shocked By The Light Sentence For The Accounting Fraud Commited? )

Here is a press coverage.

• FTEC Resources chief and founder resigns
  By Zaidi Isham Ismail
  bt@nstp.com.my
  
  October 3 2007
  
  FTEC Resources Bhd chief and founder Kenneth Vun, who has been sued by the Securities Commission (SC) for allegedly using company money for his own gain, resigned yesterday.
  
  In a statement to Bursa Malaysia yesterday, the company said Vun, a major shareholder of FTEC, also resigned from the audit committee with immediate effect.
  
  Efforts to contact Vun and other directors were unsuccessful.
  
  Shares of the computer hardware maker, which dived to a seven-month low on Monday to 31 sen, fell further to close at 29 sen.
  
  The SC filed a landmark civil suit against Vun on September 26 2007 to make him pay back RM2.5 million to the company that was allegedly used for his own benefit.
  
  The money was raised in FTEC's initial public offering in 2003.
  
  Meanwhile, in a separate announcement, the Malaysian Institute of Chartered Secretaries and Administrators (MAICSA) lauded the SC's action.
  
  However, it said that the SC could have moved faster.
  
  "It is hoped that directors are more vigilant in monitoring use of funds be it from IPO proceeds or loans or placements."
  
  MAICSA also expressed surprise that the misuse was not discovered earlier despite existing checks like the audit committee.

WOW!

SC charges, CEO quit, company sounds like in a mess, yes? And if one is into long term investing, surely this is a massive get out signal, no?

Anyway... not much news on FTec after that until Feb 2008.

• Saturday February 9, 2008
  
  FTEC to spend RM40m on new concept stores
  
  BY EILEEN HEE
  
  KUALA LUMPUR: Local IT company FTEC Resources Bhd will spend about RM40mil on two more concept stores this year.
  
  According to managing director Tang Boon Koon, the company had already identified the locations for the two stores but not the commercial area.
  
  “Plans have been laid out to establish TecAsia stores in the northern and central regions,” he told StarBiz.
  
  On Feb 1, the company marked its entry into the IT retail market in Peninsular Malaysia with the opening of its flagship IT concept store, TecAsia, at Low Yat Plaza in Kuala Lumpur.
  
  The 27,000-sq-ft store is set to introduce consumers to the integrated “4C” concept of computers, communications, consumer electronics and content.
  
  Tang said the company had allocated some RM20mil for the store, which included the set-up, renovation and inventory.
  
  “One of the key features of the store is that customers can walk into TecAsia and be exposed to all the big brands. Customers do not have to walk into different stores to make price comparisons,” he said.
  
  Tang said the store would carry a full range of products from vendors such as Hewlett-Packard, Sony and Apple besides the FTEC brand.
  
  “In this sense, we are trying to offer a complete ICT digital lifestyle to the consumers,” he added.
  
  Tang said the store would also carry Dell products. He said this demonstrated Dell's confidence in the company, adding that in the past, Dell only sold its products online.
  
  Tang said TecAsia's emphasis would be to enhance the experience value for its consumers.
  
  “The store will encompass a lifestyle corner, kids corner, virtual digital office and game zone, where customers can touch and feel, and experience the products, before they make up their minds on a purchase,” he said.
  
  It will also have a training centre to provide educational programmes for customers.
  
  “There will be weekly workshops on different products and devices at the store, so that the public can learn about the products,'' he said.
  
  As one of the largest IT concept stores in Malaysia, Tang said, TecAsia was targeting to achieve monthly sales of RM10mil.
  
  He said he was confident of achieving the target given the availability of a complete range of principal products at its stores and the projected growth of ICT spending in the country.
  
  “The first TecAsia store, which opened in Kota Kinabalu in March 2006, turned profitable just nine months into operations,'' Tang said.
  
  According to Tang, ICT spending was expected to increase by 10% to RM44.8bil in 2008 from RM40bil last year.
  
  “ICT spending is still increasing and the demand is still there,” he said, adding that the trend justified the company's investment in TecAsia.
  
  “We are optimistic of society’s growing appetite for ICT products, given the increasing capabilities and functions of IT gadgets,” he said.

And more optimistic stories appeared.

• FTEC expects double-digit growth
  
  Published: 2008/04/01
  
  FTEC Resources Bhd, which manufactures and markets computer products and accessories, is aiming for double-digit growth this year with the opening of two new stores — one in Penang and the other in the Klang Valley — by year-end.
  
  Managing director B.K. Tang said he was confident the target could be achieved based on the good sales at the existing stores at Low Yat Plaza in Kuala Lumpur under its subsidiary TecAsia Sdn Bhd.
  
  FTEC recorded a profit of RM9.4 million last year.
  
  “The growth for the Low Yat Plaza stores will be at a very fast pace. We expect revenue about RM10 million per month within a very short timeframe,” Tang told reporters after the company’s extraordinary general meeting in Kuala Lumpur yesterday.
  
  On market share, Tang said FTEC expects its share to increase after having captured three to four per cent market share in competition against multinational companies like Acer and Dell.
  
  He said the biggest contribution to revenue came from the company’s retail business, with about 60 per cent from FTEC notebook computer products while other contributors included accessories, and security and surveillance systems.
  
  Tang said the retail business will contribute significantly to the overall growth of the group.
  “If you look at the IT industry in Malaysia the potential growth is in double digit despite possible recession in the United States. Furthermore, our business is not dependent on US market,” he said.
  
  FTEC is also looking at venturing into overseas markets like the Middle East and China, and the possibility of setting up TecAsia operations in the two countries, Tang said. — Bernama

And in May 2008, it proposed to change the name.

• 07-05-2008: FTEC proposes name change to TecAsia
  
  KUALA LUMPUR: FTEC Resources Bhd has proposed to change its name to TecAsia Group Bhd, subject to the approval of its shareholders at the forthcoming AGM.
  
  FTEC said yesterday the Companies Commission of Malaysia had approved the reservation of the new name. It said the circular to shareholders which set out the details of the proposed change of name would be issued in due course.

Let's see how Ftec was doing. Quarterly rpt on consolidated results for the financial period ended 31/3/2008

I use the earlier earnings note a year ago and will add in the numbers from this earnings report in blue font.

Company had 55.001 million (118 million sales), net profit 2.056 million (3.371 million). Cash 21.767 million (31.657 million) , receivables 49.138 million (44.183 million) and total loans at 73.170 million (57.103 million).

Declining sales, declining profit, increasing receivables and increasing loans! The four deadly warning signals!

October 2008.

• 22-10-2008: New shareholder likely to emerge at TecAsia
  by Jose Barrock
  
  KUALA LUMPUR: Over the last two days 9.5% of TecAsia Group Bhd shares have crossed in off-market block trades at between 4 sen and 4.5 sen.
  
  A total of 36.5 million shares were transacted on Monday and another six million done yesterday.
  
  It is not clear who the buyers or sellers are at press time. According to the company’s latest annual report the only substantial shareholder is Tradelink Global Investments Ltd, the vehicle of Tang Boon Koon the managing director of the company.
  
  Both Tradelink and Tan emerged as substantial shareholders in TecAsia in December last year, with 5.9% equity or 10 million shares, but upped the shareholding to above the 8% level.
  
  FTEC was a company linked to entrepreneur Kenneth Vun @ Vun Yun Liun and his family. Vun, however, has kept a low profile for some time now, after the Securities Commission filed a RM2.5 million restitution suit against him in October last year. After this Vun resigned as managing director of FTEC and sold down his stake.
  
  It was alleged that Vun had utilised the funds from FTEC for his personal use but this remains unsubstantiated.
  
  TecAsia has its mainstay in the production, distribution and marketing of computer and information technology systems.
  
  For the six months ended June this year, TecAsia posted a net profit of RM3 million on the back of RM112.9 million in revenue. For the period in review TecAsia’s net asset per share stood at about 14.4 sen.
  
  In contrast to a year ago, the company’s net profits were down 53% while revenue was slashed by 44.3%.
  
  TecAsia ended trading yesterday unchanged at 4.5 sen with 8.2 million shares done.

December 12th 2008.

• 12-12-2008: Tecasia to go Main Board
  
  KUALA LUMPUR: Tecasia Group Bhd, formerly FTEC Resources Bhd, has proposed a transfer to the Main Board by the first half of 2009, five years after it was first listed on the Mesdaq Market.
  
  Tecasia said yesterday it posted a net profit of RM9.45 million in its year ended Dec 31, 2007 and an aggregate net profit of about RM34.71 million for the past five financial years up to FY07.
  
  The company also announced that the size of its earlier proposed special issue would be increased to 189.8 million new shares from the earlier 73 million shares.

How nice that statement that it posted a net profit of 9.45 million.

It's December 2008, and Ftec decided to highlight and focus on its earnings reported in Feb. Yeah, it did make 9.45 million for the year. See: Quarterly rpt on consolidated results for the financial period ended 31/12/2007

Now in a way, it was factually correct but it does the tell the accurate story about what was actually happening. You see the statement was made in December 2008. And the past 2 quarterly earnings from TecAsia were terrible. It was hardly profitable!

This was their earnings reported in Aug 2008: Quarterly rpt on consolidated results for the financial period ended 30/6/2008 (it made only 999k!)

This was their earnings in Nov 2008:Quarterly rpt on consolidated results for the financial period ended 30/6/2008 (it made only 417k!)

Now with the last earnings so poor, why did the company used earnings reported 10 months ago in Feb 2008? Was there any intent to deceive?

And guess what?

The next following quarter, TecAsia lost money. Quarterly rpt on consolidated results for the financial period ended 31/12/2008

And in May 2009, TecAsia reported it lost some 10.9 million! Quarterly rpt on consolidated results for the financial period ended 31/3/2009

Let's look at some key balance sheet items. Cash at 15.251 million. Receivables at 48.946 million. Loans were at 65.008 million.

In July 2009, it changed its name to Mangotone!

A month later, Mangotone was listed as a GN3 stock! ( here is klse explanation on what Guidance Note No.3 is here )

• Mangotone tumbles after declared listed issuer
  Written by The Edge Financial Daily
  Friday, 14 August 2009 13:59
  
  KUALA LUMPUR: Mangotone Group Bhd's share price tumbled in late afternoon trade on Aug 14 after Bursa Malaysia Securities Bhd announced the company was an affected listed issuer pursuant to Guidance Note No. 3.
  
  At 3.29pm, it was down two sen to three sen with 32.3 million shares done.
  
  Bursa Malaysia Securities Bhd has announced that Mangotone Group Bhd is an affected listed issuer pursuant to Guidance Note No. 3.
  
  Bursa Securities said the announcement followed the statement issued by Mangotone on Aug 12 that it was an affected listed issuer pursuant to paragraph 8.04(2) of GN3.
  
  Bursa Securities said it would continue to monitor the progress of Mangotone over its compliance with the listing requirements of Bursa Securities.

Here is another article

• Saturday August 15, 2009
  
  Mangotone slips into Bursa's GN3
  
  PETALING JAYA: Mangotone Group Bhd is now an affected issuer of Bursa Malaysia’s Guidance Note 3 (GN3) and required to submit a regularisation plan to the stock exchange regulator for approval in the next 12 months.
  
  In a filing to Bursa on Tuesday, the company said it had defaulted on debt and interest payments due to operational difficulties in the past two quarters, lower trade facilities, decline in sales and low margins.
  
  Further in an announcement on Wednesday, Mangotone said its cash reserves and collections from receivables and sales would be prioritised to sustain operations, replenish fast moving stocks and to pay essential overheads.

Yeah.. one thing most would like to ask now is where was all the growth story???

Last night Mangotone reported its earnings. Net losses increased to 16 million!

A Quick Look At Uchi's Earnings.

I last wrote on Uchi's earnings in May 2009: A Quick Look At Uchi's Latest Earnings

On the broader picture, things not looking good eh?

However, on the q-q basis, let me give credit. There are some improvement. ( comparison table is here )

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

update: the local press just loves to highlight the 'improvement'. :)

Uchi Tech 2Q earnings improve from previous quarter

• Uchi Tech 2Q earnings improve from previous quarter
  Written by Jenny Ng
  Tuesday, 25 August 2009 20:55
  
  KUALA LUMPUR: Penang-based UCHI TECHNOLOGIES BHD saw earnings and sales pick up in the second quarter ended June 30, 2009, from the preceding quarter although compared to last year, the group still experienced a contraction.
  
  Compared to the previous corresponding quarter, revenue and net profit declined by 33.4% and 71.6% to RM22.4 million and RM4.7 million, respectively, in the second quarter. Meanwhile, profit before tax contracted 71.2% to RM4.9 million.
  
  However, on a sequential basis, the group's revenue and net profit increased 23.3% and 68.4% from respectively, RM18.1 million and RM2.7 million in the first quarter ended March 31, 2009.
  
  For the six-month period, revenue fell 42.4% to RM40.5 million from RM70.4 million a year ago while net profit shrank 78.7% to RM7.4 million from RM35 million.
  
  In notes to the financial statement, the group said it recognised realised foreign exchange losses amounting to RM8.9 million for the two quarters. It added that the recognition of such exchange losses shall not recur in the rest of this year.
  
  According to the group, lower sales volume is expected for the current financial year in line with the global economic slowdown, leading to lower financial results too. No dividends were declared.
  

Featured Report: KN on Swee Joo

This morning I made short notes on Swee Joo's extremely poor earnings results. I just got a copy of KN notes on Swee Joo.

Their recommendation on Swee Joo is 'witheld'!

• Cutting FY09 and FY10 forecasts by 342.9% and 56.8% on weaker than expected tankers performance . Rates recovery for tankers we believe are less likely in the near term given excess vessels supply. Turnaround will now hinge on management’s restructuring efforts for its vessels and borrowings portfolio. Our call and TP are withheld in the exercise of Kenanga 's duties under the applicable laws, rules, regulations, policies and procedures for the time being in force, and is not a reflection of expected returns .

oO

Errr... like this also can???

A Quick Look At Swee Joo's Earnings

Swee Joo announced its earnings last night. It lost some 8.1 million!

Since I had blogged several times on this stock ( see postings here: Swee Joo ), I decided to do an update.

The last I wrote, Swee Joo saw some turnaround in its earnings due to disposal of assets.

I wrote this on the posting iCapital And Swee Joo

• May 2009. Quarterly rpt on consolidated results for the financial period ended 31/3/2009. Earnings turned around. Swee Joo made some 5.135 million. Many thanks to a gain of 3.474 made from disposal of assets (property, plant, equipment) Swee Joo has cash balances of some 32 million (boosted by disposal of assets amounting to 13.272 million) and total debts stands at a huge 476.640 million.

I wondered how it fared this time around.

Cash balances dropped to only 10.237 million!!! (Where did the cash go?)
Total loans stood at 470.062 million.

How?

Chart Update Of FBM KLCI

Chart update of FBM KLCI.

Megan: Are You Shocked By The Light Sentence For The Accounting Fraud Commited?

One of the worst chapter in our local stock market history was the accounting scandal in Megan Media. ( See Accounting Fraud and Megan Media )

On today's papers I am so disappointed to read the following.

• SC files appeal against 'light' sentence on Kok
  Published: 2009/08/22
  
  THE Securities Commission yesterday filed an appeal against the Kuala Lumpur Session Court's "light" sentence on Kok Hen Seng.
  
  Kok pleaded guilty for helping public-listed Megan Media Holdings Bhd submit false revenue figures of over RM1 billion in its 2006 accounts. He also admitted to three other outstanding charges. (Moolah: See.. when the danger in sales revenue growth? These figures can be cooked! )
  
  For the offences, the Session Court fined Kok, who was the personal assistant to MMHB executive chairman then, RM350,000 on August 18 to be paid the next day in default of a year's imprisonment.
  
  The SC had earlier urged the Sessions Court to mete out a deterrent sentence.
  
  In a statement yesterday, the SC said the fraud had a significant impact on MMHB's share price as it dropped 85 per cent over three months after the news of false statements became public.
  
  "Kok had played a key role in the creation of fictitious invoices to support the false revenue figures."
  
  Several financial institutions had also been deceived into giving trade facilities which were then used to resemble payments for fake sales, it added.

Only a rm 350,000 fine?????

OMIGOSH!!!!!

This is simply ludicrous!

Totally unaccecptable given what had happened!

Let's recall... sigh. Posted The Naked Truth in Megan in July 2007.

>>>>>>>>>>>>>>>>>>>>>>>>>>

Ok, Megan posted that Megan Media posts RM1.14b net loss in 4Q.

I have decided to have some fun in spotting the differences between yesterday's Quarterly rpt on consolidated results versus their previous quarterly earnings reported on March 2007.

I will state the current one first followed by the previous quarter.

1. Sales revenue. 21.417 million versus 306.150 million.

2. Property & plant. 101.939 million versus 588.601 million.

3. Investment in associate. Zero versus 67.502 million.

4. Inventories. 26.355 million versus 125.090 million.

5. Trade receivables. 13.601 million versus 430.354 million.

6. Other receivables,deposits and prepayments. 12.891 million versus 260.787 million.

7. Total assets. 163.441 million versus 1.511 billion!

8. Accumulated losses of 1.041 billion versus retained earnings of 262.545 million.

9. Total Equity-(Deficit) of 796.963 million versus total equity of 506.963 million.

10. Net Asset per share of -3.92 versus Net Asset per share of 2.50.

>>>>>>>>>>>>>

Megan Media cooked up their whole book!

Everything!

Let me explain... If you look at the comparison figures as posted, for example, point 2 reads: "2. Property & plant. 101.939 million versus 588.601 million."

This meant that Megan told the investing public their property and plant was worth 588.601 million.

Actual fact was it's only worth some 101.939 million!

Everything on the left, represented the actual audited numbers, while the right showed how insanely high everything was cooked up!

In short, Sales revenue figures was artificially boosted, value of their property and plant, investment amount in associates, stock inventory, trade receivables and deposits, receivables and prepayments were all false!

Yeah, he admitted guilty in submitting false revenue figures of over RM1 billion in its 2006 accounts!

And the fine now? rm 350k????? ( see also Suit Filed Against 2 Megan Officials )

And what about the boss??? Yes what about that Mr. Yeo Wee Siong????!!!!!

Sigh!

Real sad day.

So What Is The Baltic Dry Index Telling US Now?

I last wrote on the baltic dry index was when I featured an article from CIMB on the sector: Featured Report: CIMB Says Dry Bulk Shipping To Fly

The BDI closed at 2534 last night.

And here is how the index is doing this year.



And clearly the index has been retreating since hitting the peak in June.

Now there's this article on the theaustralian called "Froth and bubble: dipping into the commodities rally"

• SO what is it: a bear market rally in commodities and resource stocks or just a temporary pullback in the new bull market run?
  
  It's rather a critical distinction: if it's the former, then late July may have been the peak of the rally and we're in for some difficult trading months; if it's the latter, then these dips are the time to be getting set for the next leg-up. Pick the right way and you'll be seen as a genius but get it wrong and the trading account balance starts looking terminal.
  
  The analysts are generally urging caution when it comes to stock portfolios.
  
  But not panic, or cashing out.
  
  A consensus seems to be building that there will be some sort of correction. But, unlike the generalised slaughter of late 2008 and early 2009, when many investors had their heads handed to them, the next downturn could be more discriminating. Any substantial reversal in metals prices will not only be matched by falls in resource stocks but probably send some sectors into a tailspin. But -- and this is important -- companies with money coming in the door (rather than going out) will withstand the buffeting better than the juniors with nothing more than high hopes and glossy PowerPoint presentations.
  
  The data is, at best, confusing. Take the first week of August as an example.
  
  On the one hand, there was copper selling at a price 90 per cent above what it was on January 2. Nickel set a new 2009 high in late July, as did zinc.
  
  On the other, the Baltic Dry Index -- the shipping index that shows us the health of the seaborne trade in bulk commodities by the prices shipping companies are able to charge -- had its worst week since October. ( Moolah: yes, isn't this very intreresting? For the folks that kept on saying that the bdi is a leading indicator, why is the bdi contradicting the markets? :p2 )
  
  And October 2008 was a very bad time for the BDI. Having risen to a record 11,793 the preceding May, the index plunged as the year ended, bottoming out at 663.
  
  By this month there were signs of some green shoots, but during the first week of August it took a 4.6 per cent hit, falling to 2772. That's a long way back from the December bottom, but even further from the May 2008 high.
  
  No wonder the recent Diggers & Dealers mining forum in Kalgoorlie was dominated by the subject of where this is all going. Delegates spent a good deal of time of fretting about whether this market rally in resource commodities had run too far, too fast. At the same time, scratch an investor and you'll probably find them obsessing about how they should have had the nerve to buy any time between December 2008 and last March, when everything looked like it was going to the dogs, and then subsequently ridden stocks that have doubled or trebled in value since.
  
  To buy now or not: that is the question to which everyone seemingly has a different answer. But it's not just the average punter who missed the bus earlier this year.
  
  David Thurtell, Citigroup's commodity man in London, says the professionals also picked up on the rebound too late.
  
  "It appears that most macro funds have missed the risk rally and are now buying in on the dips," he tells The Australian.
  
  "That's why the dips are so shallow."
  
  Thurtell adds that even in July he was hearing that some funds were still not buying the recovery story; others were in the market not out of conviction that commodities had turned the corner, but in order to retain clients who were bullish.
  
  The last time Wealth looked at commodities was four months ago, and the change of sentiment since then has been nothing short of extraordinary.
  
  Back in April, we were heartened by copper rallying to a six-month high and the firming oil price.
  
  But there were plenty of caveats then.
  
  There were warnings that the economic outlook was still grim, with contraction rather than expansion in the developed countries the more likely scenario.
  
  One analyst said the global outlook was so soggy that commodities were unlikely to catch fire; another tentatively ventured that "it could be a very good time to get in" because of the extraordinary injections of liquidity through central bank stimulus moves. No such chasm between opinions exists any longer.
  
  Analysts tend to agree there will be a pullback in commodity prices sometime later this year, but that 2010 is looking good. Really good.
  
  They differ only on timing for the correction -- sometime between now and December is the range -- and the extent of the retreat.
  
  Thurtell is on the low side, offering the prospect of about a 5 per cent correction in prices, but that is because his predictions for price bounces by 2010 have already come to pass. It is also based on his reading that funds are ready to pounce on any pullback.
  
  Others say it could be between 10 per cent and 20 per cent.
  
  Hartleys resource analyst Andrew Muir is convinced that there is a correction around the corner.
  
  He puts a pullback in the "more than likely category" because of the level of heat generated in the market during the past few months. "I don't see it being sustainable in the short term," he adds.
  
  Muir has also been struck by the fact that even while metal prices have been rising, so has the Australian dollar, a correlation that has taken a good deal of the gloss from those price rises. Gold hit $1546.70 an ounce on February 20, largely because of a decline in the local currency. But, at the time of writing just six months later, it's about $1150 an ounce. While all the base metals have risen in that time, the appreciating Australian dollar has trimmed off a substantial slice of the gains for producers here. ( Moolah: Ahh... the denominating currency is rather crucial when one buy gold, no? )
  
  However, says Muir, not many investors seem concerned about this trend. If that is the case, it's further evidence that a bull market mentality is taking over.
  
  Those who fail to learn from history are doomed to repeat it, goes the old saw. The problem with this ageless piece of advice is that when it comes to financial markets, it usually is "different this time".
  
  A few months ago everyone was googling the 1930s Depression to try to figure out how to prepare for deflation.
  
  You can bin that material because, as National Australia Bank analyst Ben Westmore points out, the commodity buying surge has been driven by renewed inflation expectations in the US.
  
  Commodities were bought as a hedge against currencies losing value.
  
  And Warwick Grigor at BGF Equities says the BDI and shipping rates may not always be a reliable guide to what is going on in the metals markets anyway.
  
  He believes the collapse in the BDI last October was not a reflection of demand for metals but had more to do with Lehman Brothers going to the wall.
  
  And Lehman Brothers was one of the big freight insurers. "For four weeks no one could get shipping insurance, but this was seen as 'no one wants anything'," says Grigor. And many a wrong decision may have been based on this misreading of the situation.

Featured Report: OSK On Perwaja II

Posted last night: A Quick Look At Perwaja Holdings Quarterly Earnings

As mentioned in the posting, Perwaja Holdings lost much more earnings.

Year-to-date losses now stands at a whopping 141 million.

Now guess what's OSK recommendation on a company that lost so much money!

It's a buy... and not only it's a buy .... the buy target had been increased!!!!

Shocked?!

Some might argue that perhaps there is some justification in OSK's reasoning because as argued Perwaja should be boosted by increase in selling prices...

• While stunned with Perwaja’s 2Q net loss that was 50.4% deeper q-o-q, we think the counter may stay under the spotlight being the direct beneficially of various stimulus packages. The 48.3% cut in iron ore pellets price in converse to higher scrap prices that benchmark Direct Reduced Iron (DRI) selling prices, as well as an increase of billets prices prompt us to revise up our FY10 earning by 15.7%. Therefore, our 12-month target price is raised to RM2.06 from RM1.78 derived from 8x FY10 EPS. We reiterate our Trading BUY recommendation.

But.... on the other hand.... some would be deeply puzzled and quick to point out that OSK themselves are 'stunned' by the relative poor earnings performance from Perwaja!

Some would also argue that if one judges Perwaja based on earnings performance this company had been doing really poor since listing.

Here's a simple screen shot.

And here is how Perwaja doing since listing.



And if one takes the stock performance of Perwaja into consideration..

One would have clearly realised that the stock plunged to as low as 59 sen in April 2009 and the price now is 1.59!!! Now despite the increase in selling prices, given the relatively poor earnings performance + the fact the stock had already flew to the moon (from 59 sen to 1.59), what is the justification to buy now?

Buy and hope that the stock can fly some more to 2.06?????

I guess some might be thinking that perhaps it is mad money time in Malaysia!!! lol

Strange also.. the head of OSK research says the general market is "Market ripe for retracement" on the Edge Financial Daily, the other day.

• Markets overvalued, ripe for a retracement
  Even as OSK anticipates a better set of results, it maintains the view that the market has run ahead of fundamentals.
  
  In fact, across East Asia, markets had rallied to the levels last seen in late 2006 and early 2007. Given that markets are essentially valuing the economy some 12 months forward, it would appear that investors were expecting 2010 to be equivalent to 2007, which will definitely not be the case.
  
  As such, OSK believed that markets were significantly overvalued and ripe for a retracement.

Rather ironic yes?

The head of the research, who signs all daily reports, said publicly that the market has run ahead of its fundamentals. However, the researchers under him, issues out upgrades and buy calls left, right and center. Feeding the fire eh? Isn't this why the market has run way ahead of its fundamentals?

How?

Last but not least... check this out... this is how OSK increases their Target Prices!

On May 19th 2009, OSK wrote this.. (see screen shot.. Perwaja's TP was a mere 1.11 on that day! No joke! see this screen shot )

On May 27th, despite the relative shocking poor result posted by Perwaja in May 2009, OSK sneak in a buy upgrade in their steel sector report! LOL! No joke man!

• Considering that Perwaja is currently trading above our original target price, we have decided to factor in the potential earnings enhancement to our new fair value of RM1.67 and upgrade our recommendation to TRADING BUY.

( LOL! That was a nice reason to upgrade to rm1.67, eh? )

Now on July 24th, OSK did another Long steel report and they sneak in yet another price increase for Perwaja Holdings to 1.78!

Just like that.. Perwaja Holdings target price went from 1.11 to 1.78 and today OSK gave it another price increase (I wonder perhaps they are scared that 'tak cukup'! lol) to 2.06.

Which means from 19th May 2009 to 20th Aug 2009, Perwaja Holdings target price was increased from 1.11 to 2.06!

LMAO!

Nice target price upgrades or what?!

No wonder OSK is crying in the press that the market is ahead of its fundamentals and that the market is so ripe for a retracement!

So how now my dearest?

Like what you see?

A Quick Look At Perwaja Holdings Quarterly Earnings

Posted on May 2009. OSK's Recommendation On Perwaja Holdings

Now what OSK wrote on Perwaja was so amazing. Let me reproduce the whole posting once more!

--------------------------------------
Was reading the following passage from OSK's Steel sector update today.

• Certainly more clarity for steel industry. Other than the positive financial impact for iron makers, we think the settlement of new benchmark prices represents an important milestone for the steel industry as it offers a clearer direction for steel prices a year ahead. The market has been volatile of late as there have been many rumours on the quantum of drop in iron ore and coking coal prices. The settlement will provide some degree of comfort to the industry players in committing their future orders. Although we prefer to take a prudent stance in our earnings estimates for Lion Industries’ HBI plant at Labuan and Perwaja’s DRI plant in Kemaman despite the latest development, our quick back-ofenvelop calculation reveals that every 10% additional reduction in iron ore pellet price may improve a company’s bottom-line for FY10 by approximately RM42m and RM63m respectively, with other key assumptions remaining constant. Considering that Perwaja is currently trading above our original target price, we have decided to factor in the potential earnings enhancement to our new fair value of RM1.67 and upgrade our recommendation to TRADING BUY...

Now on the 15th May 2009, OSK released a long report on the steel sector. On page 31, it had a SELL recommendation on it. It wrote the following.

Now on the 18th May, Perwaja announced it lost some 56.1 million.

OSK wrote the following.

• While Perwaja’s 1Q net loss of RM56.4m exceeded our full year net loss estimate of RM41.7m and consensus’ net profit of RM16.5m, this did not surprise us as we had already cautioned of potential losses for a quarter or two in our last sector update.

So.... the loss exceeded their full year loss estimate. ie. Perwaja did worse than expected! Some call it under performed. :p

But since Perwaja had already fallen to 1.11, OSK decided to upgrade it from SELL to Neutral and gave it a target price of 1.11.

So what do you reckon I was thinking when I read that passage from OSK today? Let me repeat again...

• Considering that Perwaja is currently trading above our original target price, we have decided to factor in the potential earnings enhancement to our new fair value of RM1.67 and upgrade our recommendation to TRADING BUY...

LOL!

And just like this... Perwaja's fair value has been upgraded to rm1.67!

Yeah.. it's a TRADING BUY!

ROFLMAO!

ps. here is a snapshot of Perwaja's latest balance sheet.

And here is a screenshot of Perwaja's stock chart.

How now my dearest Brown Cow?

Money for nothing and steel stocks for free?

LOL! :p2

-----------

ps.. do not forget I know nothing. :D

========================================

Perwaja reported its earnings tonight.

Guess what? Perwaja lost more money!

So how?

Yeah... many would be very quick to point out that Perwaja despite their losses and despite their weak balance sheet, Perwaja Holdings the stock, did surpassed OSK's fair value for the stock.

LOL!

Now that's what most want, yes?

Forget how lame the reasoning to buy the stock but most important is that as long as the stock hits the target price, the research house is good.

Hey... and if this is not a problem for them... should it be a problem for me?

:D

Oooohh... It's Squeaky Bum Time Again!

LOL! Don't you wonder when you see headlines like 'Buy Stocks Now .. if You Can Hold on for 3 Years"

• "Asian markets had a good run, valuations perhaps look a little rich, but if you take a three-to-five year view, I am fairly confident that markets will end on a higher note over that period and investors can make decent returns," said Menon on CNBC Asia's Protect Your Wealth.

Yeah I wondered to myself. "Valuations 'perhaps' look a little rich." Hmm.. the word 'perhaps' is sounding mighty huge now and most of the time, when experts says 'a little rich' I do note that they tend to under-estimate the situation and in such cases, 'perhaps a little rich' could very well mean 'extremely rich'.

LOL!

However since I am not an expert I could be wrong.

Anyway.... where are we?

So if valuations are a little rich... why can't we wait? Is waiting never ever an option for the stocks?

Yeah, Menon did mention 'for the next 12 months by gradually into the market'....

but... but... but.... if valuations is a little rich... why can't I wait?

Let's see, the EPL season has just started, and I could dabble with my fantasy league team, yes? That could be really fun, much fun than buying and praying that this would not be the start of the next big correction. (hey.. who is that bugger that said fbm klci could handle a 50 point drop? :p )

And I know I should be real worried when I see the next article!

Cramer: Is the 'Correction' Over?

Omigosh!

It's mad money time again!

LOL!

I like the last line... "Every argument the bears had for selling,” Cramer said, “has been totally rebutted by this great market."

LOL!

Market is always great when one winning money!

No?

So how now my dearest?

ps: how nice... fbm klci closed down 8.88 pts at 1155. Cantik or what? :P