Monday, February 28, 2011

SAAG's Earnings

SAAG reported its earnings. Here's the updated numbers.

Some comments.

1. The decline in sales revenue since fy 2007.

2. The diminishing cash.

3. The incredible increase in debt.

4. The increase in receivables.

Lastly, as mentioned before, in its balance sheet, there's an entry called 'Amount due from customers for contract works'. That amount is now 361.686 million. ( LOL! SAAG do business without collecting from its customers ah?)

How Was JCY's Earnings?

I had posted on JCY a couple of times before.

On Aug 2010, I posted: Regarding JCY International ( recommended reading. :) )

** made the following remark then: =>

And on this Monday, 23 Aug 2010, CIMB writes again on JCY.
JCY has fallen to just 1.17. (Will it be a penny stock soon? :P )

JCY is now trading below 0.65

On Dec 2010, I made the following update. Quick Update on JCY's Earnings

I was amused by CIMB's numbers. These numbers, the earnings forecasts does play an important part. On one hand, some might argue that earnings forecasts is an impossible task but then if that's the case, why is the stock valued based on earnings forecasts which are super over optimistic?

  1. During IPO or April 2010: JCY earned some 207 million for its fy 2009. CIMB says times are good in 2010, so JCY should earn some 359 million. And 2011, JCY earnings will be even more super. JCY should earn some 441 million by then!
  2. 21 May 2010 - Target price lowered! fy 2010 earnings is now lowered to 297.3 million and fy 2011 earnings is now lowered to 370.8 million
  3. Monday, 23 Aug 2010 - CIMB to earn some 263 million for its fy 2010. And ....... for fy 2011, JCY is now projected to earn only 304.7 million

They marketed the stock based on an earnings estimate of 441 million. Yes, that's the IPO fair value projection. During IPO, April 2010, CIMB valued JCY target price of 2.68 based on 2011 earnings estimate of 441 million.

It's now only Dec 2010. CIMB has slashed JCY target price to just 0.92 based on 2011 earnings of just 168.8 million.

Now JCY announced its earnings last Friday.

Here's the very brief earnings numbers.

A first quarter earnings of only 7.512 million????


(Based on the above numbers and assuming that you did not know it was JCY, how would rate such a company?)

And what did CIMB project for JCY on Dec 2010? CIMB Research thought JCY could be earning some 168.8 million (despite 10 Q4 loss of 22.5 million) for fy 2011.

And this way below estimates.

This is what CIMB said in its report today..

  • Below; maintain NEUTRAL. JCY’s core net profit for 1QFY9/11, which excludes
    RM2.3m forex loss, tumbled 88% yoy to RM9.9m or just 4% of our full-year forecast
    and 6% of consensus estimates.
    It was 64% below our expectations, with the key
    variance being the slower-than-expected recovery of sales and margin. Although
    our estimates are already the lowest in the market,
    we are scaling back our FY11-13 forecasts by 22-34% as its performance suggests a slower recovery in sales and margins. Still applying 8x CY12 P/E, which we think is a fair P/E for HDD component suppliers, we cut our target price from RM0.92 to RM0.72.
    The stock remains a NEUTRAL until we see evidence of a gradual recovery in earnings.

An neutral call?

If you refer to Dec posting. Quick Update on JCY's Earnings
  • Yesterday, 1 Dec 2010, CIMB gave it a huge downgrade!
    JCY's target price which was 1.88 on 25 Nov 2010 was lowered to just 0.92!!!!!!!!!

JCY today is a neutral at 0.66 sen???

And for the info.. CIMB adjusted its fy 2011 earnings for JCY to just 112 million.


Remember during its IPO, CIMB boldly projected JCY's earnings for fy 2011 to be 441 million. That was just in April 2010.


And it was funny how CIMB said its estimates are already the lowest in the market!

Are CIMB Research serious? Are they reviewing the company or are they trying desperately to sell themselves?

And then I saw RHB's report (LOL! I knew right there and then, I need to make this posting).

*the couple of arrows drawn onto the report says it all*

Thursday, February 24, 2011

What Do You Thnk Of AirAsia's Earnings?

Let me try something new.

I have blogged too many times on AirAsia's earnings. ( Refer postings here: )

AirAsia reported its earnings tonight.

How now Brown Cow?

What do you think? Do you like what you see?

( haha.. this something new... a rather lazy new way, eh? :P )


  • bullbear said...
    I like your posts when YOU provide the answers. I absolutely rank this post your worst so far. :-) Cheers. ;-)

Alamak! Worst post ever?

Are you sure?

Hehe... guess what? I do agree! :P (ps: I have no answers on how the moo moo cow jumped over the moon! )

  • K C said...
    “Never invest in anything that eats or needs painting.” Billy Rose

    AirAsia made an EPS of 38 sen and with its share at 2.35, it is selling at a PER of only 6. It has 1.5 b in cash. Great?

    No it sucks to the bone! It borrows 7.86 b! this leaves it with negative cash of 6.36 b! Are they required to pay the 720m deferred tax which is classified as an asset too? Cash flows from operations of 1.9b but how much has to plough back for capex? It has been negative free cash flow in terms of billions for the past years. Scary, isn't that? That is the peril of just looking at earnings.

Errr.... extremely valid points but....

I am not too motivated to talk about eps and per. Sorry.

However, as most would know, I am not a fan of AirAsia but.... sometimes I do have to give credit when credit was due.

Let's see, when AirAsia was listed, I did not like how they marketed their stock. It was all talk and most important issue to the investing public was 'did AirAsia live up to their IPO proforma promises?' My answer is a flat no.

The company made extremely optimistic forecasts during their IPO. They boldly told the investing public that it would triple its earnings within a year after listing and needless to say, some would argue that by having such optimistic earnings forecasts, the company would able to market their shares much higher. And AirAsia failed to deliver what it had promised during its IPO. ( Do refer to this old posting AirAsia. )

And then it made losses when they gambled with their hedging. Yes, I understand by using the word gamble, it's a rather big word but one can refer to this 2009 posting Regarding AirAsia Fuel Hedges Again where AirAsia mentioned in the local media 'No more bets on oil price'.


I was less than impressed.

And neither was I impressed with their bold buyout saga back in 2008. ( see Huh? AirAsia Buyout Still An Option????? - it failed because Tune Air Says Unable To Secure Financing !!! )

Anyway ... the extreme weakness in AirAsia balance sheet was well documented many times. So was the deferred tax issue and how AirAsia declared it to be an asset but what do I know since I am not an accountant and I never studied it before. :)

It was scary the size of AirAsia debts and the size of the capital commitment for new aircrafts. How on earth did AirAsia manage to make such a gutsy order for new aircrafts given the weakness in their balance sheet? It was unreal.

Things however did change.

Should one call it great business hindsight? Or should one call it pure luck?

First they managed to get the big boost when they managed to do a share sale and from that placement of shares, they managed to raise some 500 million in 2009. That was crucial in my flawed opinion.

And then... the USD weakened and the oil prices fell.

It was a double booster.

Their borrowings was predominantly denominated in USD. With the weaker USD, it meant they now owed less in RM and I do understand that some would say it's a silly reasoning because AirAsia still needs to pay it and who knows by the time they actually pay, the USD could rise. However, as it is, what matters to the financial markets is that at the moment, AirAsia now owes less.

Anyway my previous posting on AirAsia was A Look At AirAsia Stellar Earnings. In that posting I had updated AirAsia main financial numbers.

Compare that to yesterday earnings.

Earnings was actually flat. The previous year same quarter comparison is NOT meaningful in my opinion.

Cash actually improved a lot compared to the previous quarter.

And debt increased slightly.

But the capital commitment... there was a huge improvement, yes?

And as mentioned before in August 2010, I thought it was a Positive Move That AirAsia Defers Their AirBus Order.

Seriously... it's giving AirAsia a fighting chance to survive!!!

And I still hold those remarks from that posting.

  • However, let me say this, I have to give AirAsia some credit for eating the humble pie and for successfully persuading AirBus to allow them to defer the delivery of the air crafts and more so, this move really gives them a fighting chance to survive and to overcome their insanity of building a company which was clearly over burdened by the immense corporate debts they took upon to finance the building of their business.

    Yeah.. AirAsia should be ok for the next one year or so... yeah.. this is a POSITIVE CORPORATE exercise... it's certainly extremely crucial that AirAsia made this postponement of delivery.... but... deferring is only a postponement.... and in regardless, these air crafts order still needs to be delivered!
  • Anyway... a postponement is a postponement is a postponement. Come 2014 (last August AirAsia deferred 8 AirBus to 2014) and 2015, these air crafts still needs to be delivered. Which means, from now till then, AirAsia still needs to ensure that it builds up its cash flow to ensure it can accept delivery of these air crafts that they had ordered. Unless of course, AirAsia can pull off another miracle by asking AirBus to allow them to defer yet once more. :P
    ps: yeah, AirAsia X listing would indeed help AirAsia financials. It too is required. And it is the ONLY OTHER logical and sensible option for AirAsia to rescue its dire balance sheet.

Back in early 2009, I certainly thought AirAsia was doomed. I really thought there was a 90% chance it go into deep trouble but now I have changed my opinion. It's doing all the right things to survive.

They got their placement of shares. They deferred their aricraft order and their current plans to list AirAsia Thailand would help a lot!

But then the main issue or risk is... 2014 and 2015.

That's when AirAsia would have to take deliveries of all the aircrafts orders they have postponed. Will they survive? Or will they not?

ps: I have no idea what the stock would do. :/

  • tklaw said...
    Hi Moolah,

    Most investors would ignore dividend or debt level during bull runs.

    What they care is profit level...Capex? too far to think of it. Making good profit will boost share price. short term profit is more important..haha

Hope you understand that this is NOT a posting suggesting AirAsia would go up or down.

You do undertstand that, don't you?

Quote: "Most investors would ignore dividend or debt level during bull runs." ..... err... most investors? I am sure some investors would strongly disagree about such a statement.

But what do I know? :=)

Tuesday, February 22, 2011

Alibaba Shares Plunges!

From Bloomberg:

  • Alibaba Shares Plunge After Chief Executive Officer, COO Quit Amid Fraud Ltd. shares fell the most in more than a year after the company said an internal probe found more than 2,300 vendors used its website to defraud global buyers, prompting the chief executive officer to quit.

    Some Alibaba employees were responsible for allowing sellers to create bogus storefronts, China’s biggest electronic- commerce company said yesterday. CEO David Wei and Chief Operating Officer Elvis Lee, who weren’t accused of wrongdoing, resigned to take responsibility for the "systemic breakdown" of integrity, it said.

    Alibaba, controlled by billionaire Jack Ma, slumped as much as 9.6 percent in Hong Kong trading on concern the frauds and management shakeup will erode customer confidence and sales. Analysts at Morgan Stanley, Mizuho Financial Group Inc. and Mirae Asset Securities Co. cut their investment ratings on the company, which matches Chinese suppliers with global companies such as Wal-Mart Stores Inc. and Procter & Gamble Co.

    “For Alibaba, the reputation of their website and service is all-important,” said Jake Li, who rates the stock “neutral” at Guotai Junan Securities in Shenzhen. “The scale of the problem doesn’t seem to merit such a high-level reshuffle, but Alibaba is taking quite decisive action to shore up the confidence of its users.”

    The flagship unit of Alibaba Group Holding Ltd., which counts Yahoo! Inc. as its biggest shareholder, traded at HK$15.32, down 8.2 percent, at the midday break in Hong Kong.

    ‘Attractive Prices’
    The frauds would typically involve vendors offering small quantities of electronics at attractive prices, with payments settled using “less reliable” methods, Alibaba spokesman John Spelich said. The company created a fund in 2009 to compensate buyers who were defrauded, he said.

    Executive changes at the company may slow customer additions, Richard Ji, an analyst at Morgan Stanley, said in a report today. The bank cut its investment recommendation for Alibaba’s stock to “equal-weight” from “overweight.” Mizuho lowered its rating to “hold” from “buy.”

    Jonathan Lu, who heads the online retailing affiliate, was named Wei’s replacement.

    ‘Gold’ Suppliers

    Lu, 41, joined Alibaba in 2000 and led the team that formed Alipay, an online payment service, in 2004, according to the company. Lu, who holds a master’s degree in business administration from China Europe International Business School, served as Alipay’s president before moving to Taobao in 2008.

    The frauds, noticed by senior management from late 2009, won’t have a “material financial impact” and the value of the average claim was below $1,200, Alibaba said. The company found 1,219 of its “gold” suppliers in 2009 and 1,107 in 2010 engaged in fraud, according to the statement.

    The investigation found that about 100 of the company’s 5,000 salespeople, as well as some supervisors and managers, were either intentionally or negligently allowing the vendors to evade the company’s authentication and verification measures to form “fraudulent storefronts” for international customers.

    The fraudulent vendors represented about 1.1 percent of the company’s “China Gold Supplier” subscribers in 2009 and 0.8 percent in 2010, the company said. Alibaba has terminated all of the fraudulent storefronts, it said.

    “Although the management claimed that there is no material impact to company financials, we are concerned that the clean-up of fraudulent accounts puts near-term revenue growth under pressure,” Muzhi Li, a Hong Kong-based analyst at Mizuho, wrote in a note today. “We believe the company could benefit from this shake-up in the longer term.”

Friday, February 18, 2011

Review Of Xingquan's Earnings

Blogged several times before:

Xingquan announced its earnings.

Here's the updated numbers.

  1. Yeah, there's visible growth in sales revenue....
  2. but where's the profit???
  3. Cash... yeah... capex.... but... it shrank so much????
  4. And then.... the ..... increase in receivables .... is simply .... crazy!!!

What's up?????

Here's how Xingquan the stock is performing...

Thursday, February 17, 2011

Very Quick Look At Petronas Dagangan's Earnings

Posted last Aug 2010: Petronas Dagangan: Investing In A Petrol Kiosk

Petdag announced its earnings last night.

Here's the updated numbers.

* ttm stands for trailing twelve month earnings.
* cash at ttm row represents current cash.
* dividends at ttm row represents current dividends paid so far.

Rather impressive, yes?

And here's how Petdag had performed since then.

Green Packet Makes More Promises.... again.

Despite's Green Packet's 12th Consecutive Quarters Of Losses, 36 Month Of Losses ... , Green Packet continued its promises to the local investing market.

On today's Business Times:

  • Green Packet Bhd, which recorded a revenue of RM394 million for financial year 2010, expects a 25 per cent increase this year. Its group managing director, CC Puan, said the revenue growth reflected the company's continuous efforts to expand network and market share locally and abroad.

25 per cent increase in sales revenue for current fiscal year?

Just for the record, for its fiscal year 2009, Green Packet had sales revenue of 217 million. Last night, Green Packet announced that its sales revenue soared to 394 million.

Yeah, mighty impressive growth with its sales revenue.

And what good has it done to its bottom line?


Can someome ask Green Packet what is their losses after tax this fiscal year????

And it continued to burn money drastically again despite of its 322 million Convertible Preference Share issuance to SK Telekom.

On Star Business: P1 confident of 450,000 subscribers

  • Thus, it is also deferring its target of being EBITDA (earnings before interest, taxation, depreciation and amortisation) positive to end-2011, as it focuses to aggressively acquire nomadic customers from the mobile broadband segment.
    The nomadic segment refers to the mobile broadband services. Prior to this, P1 was focused on capturing market share from the fixed broadband segment.
    Previously, Green Packet had mentioned that it would be EBITDA positive in the first quarter of its financial year ending Dec 31, 2011.


This is getting seriously embarrassing!

Why continue make such empty promise when you can't deliver?

Let me add this new entry to the list of promises made previously. From the posting Green Packet: 11th Consecutive Quarters Of Losses, 33 Months Of Losses And....

  • Feb 2008: we expect the WiMAX business to be ebitda (earnings before interest, taxes, depreciation and amortisation ) break-even this year,"
  • May 2008: we are targeting EBITDA positive by end of next year.
  • May 2009: P1 will be EBITDA will break-even from next year.
  • Feb 2010: concurred that will be EBITDA positive in the second half of this year.
  • May 10: the company remained optimistic that it will be able to achieve an Ebitda break even
  • June 2010: Green Packet Bhd’s target to turn earnings before interest, tax, depreciation and amortisation (Ebitda) positive by year-end may be delayed to next year
  • Sep 2010: Puan added that Green Packet is maintaining that its Ebitda (earnings before interest, tax, depreciation and amortisation) will break even by the end of this year.
  • Nov 2010: "We're confident of breaking even no later than the first quarter. Ebitda (earnings before interest, tax depreciation and amortisation) turnaround is really at the corner," chief executive officer C.C. Puan said at a press conference in Petaling Jaya, Selangor, yesterday.
  • Feb 2011: defers its target of being EBITDA (earnings before interest, taxation, depreciation and amortisation) positive to end-2011.

Yeah.. Nov 2010: "We're confident of breaking even no later than the first quarter. Ebitda (earnings before interest, tax depreciation and amortisation) turnaround is really at the corner," chief executive officer C.C. Puan said at a press conference

Seriously eh?

Talk is really cheap with such abundance of supply!

Wednesday, February 16, 2011

Green Packet: 12th Consecutive Quarters Of Losses, 36 Month Of Losses And ...

Green Packet announced its earnings tonight.

Some facts.

Fact. It lost some 100.112 million for the quarter.

Fact. This is the 12th consecutive quarter of losses. 36 month of losses.

. Green Packet's total losses for last 36 months equals some 439.924 million!

Green Packet raised some 98 million via rights issue last Aug. 2009.

Fact, Jan 2010. Green Packet raised some 69.176 million from a share placement.

Fact, Green Packet recently raised 322.910 million from issuance of Convertible Preference Share to SK Telekoms. ( see Sep 2010 posting: Update on Green Packet )

Fact. After tonight's earnings, Green Packet said it had some 171.962 million and some 238.190 million in borrowings.

Compare these facts to the posting made on Nov 2010: Green Packet: 11th Consecutive Quarters Of Losses, 33 Months Of Losses And....


Thursday, February 10, 2011

Regarding UMW Oil and Gas Listing

Posted last year:

From the 18 June 2010 posting: All Talk And No Action From UMW Holdings On Its Listing Of Its Oil and Gas Unit

  • It utterly shambolical!

    As one of the bigger listed corporate in the stock exchange, you simply can NOT be making wishy washy announcements to the investing public.

    Issue this morning is UMW's proposed listing of its oil and gas unit.

    Yeah, it's a listing of a subsidiary and if judged by past recent history, such investing does carries a huge risk for the minority investor because the holding company does have an option of delisting it by take it private via a general offer.

    Anyway, in regards to UMW's proposed listing of its subsidiary.

    Last month I highlighted this issue: UMW Holdings Talks About Listing Its Oil And Gas Division ... Again
    As stated, UMW stated it wants to list its subsidiary by year-end.

    And as stated by that blog posting, UMW made this listing proposal way back on 28th Feb 2008!!

    Yes it was that long ago!

    And it kept saying they want to see "market conditions show sustained levels of improvement" before listing.

    Yes, the want to get the best possible price and profits from the listing of its subsidiary!

    And today, UMW struck once more!

    It's now saying it wants to wait until the second half of the year before deciding!!!! ......

On today's Business Times

  • UMW's new drive

    By Zuraimi Abdullah Published: 2011/02/10

    UMW Holdings Bhd (4588)will consolidate and rationalise some of its core businesses to become leaner and meaner, its managing director Datuk Syed Hisham Syed Wazir said

    Consolidation is under way for its manufacturing and engineering and equipment divisions as UMW, among Malaysia's top five most admired companies according to the Asian Wall Street Journal, looks to leverage on its vast range of products and services.

    The oil and gas (O&G) division may also be restructured, but Syed Hisham said UMW Oil & Gas Bhd's listing plan remains on the cards once it returns to profitability.

    "We are looking at consolidating our businesses wherever possible so that UMW can become a strong and lean group. We should be able to leverage on the group's wide range of products and services in our international presence and also on the strength of each of our operations," Syed Hisham said in an interview to mark his first 100 days in Shah Alam, Selangor, recently.

    "Right now, our operations are managed independently. Each SBU (strategic business unit) needs to help the others so that we can all reap maximum benefits. For example, we should be able to cross-sell our products and services effectively and achieve cost-savings through volume procurement of common items, etc," he added.

    UMW's O&G division, which began in 2002, posted a net loss of RM48 million for the nine-month period ended September 30 last year.

    This was due to the imposition of countervailing and anti-dumping duties by the US government on Chinese pipe importers.

    The move had affected UMW group's major profit-contributing associate company, Wuxi Seamless Oil Pipe Co (WSP), Syed Hisham said.

    However, WSP had secured new customers in world markets like Venezuela and should return to profit this year.

    "Our O&G business segment has expanded rapidly since its establishment in 2002. I believe we need to take a good look at all our O&G businesses and see if we can restructure or rationalise some of our investments."

    Syed Hisham said the group's jack-up rig Naga 2 was already working and will generate full-year revenue in 2011.

    "We are now in negotiation stage with potential partners for the leasing of Naga 3 and we expect it to be in operation in the first quarter of 2011."

    He added that its associate company in India, United Seamless Tubular Pte Ltd, had last August started commercial production of seamless pipes for the oil gas sector.

    "This company will also be revenue-generating in 2011. The plant has a capacity of 300,000 metric tonnes per year," Syed Hisham said.

    The year 2011 will also be a good year for its equipment business.

    "We plan to maintain and possibly even expand our market share and performance. There will be a consolidation exercise in our Papua New Guinea operations," Syed Hisham said.

    He said the manufacturing and engineering division had performed well last year and should sustain the performance this year.

    "We are looking at some consolidation and some possible new areas for investment," he added.

    UMW will continue to thrive more with its automotive business, though.

    "The automotive industry is expected to show strong growth and that will benefit us," Syed Hisham said.

    UMW controls about half of the country's new vehicle sales volume, thanks to its Toyota and Perodua business, and expects to maintain its market share this year.

    About 78 per cent of the group's revenue for the nine months ended September last year came from automotive division. Earnings- wise, the division accounted for more than 90 per cent.

    Syed Hisham said UMW was aiming to have equal revenue contribution from its automotive and non-automotive divisions over the next five years.

    The group reported a 22 per cent rise in group revenue to RM9.4 billion for the nine months to September last year against RM7.3 billion a year ago.

The whole picture changes eh?

  • UMW's O&G division, which began in 2002, posted a net loss of RM48 million for the nine-month period ended September 30 last year

Err... most Oil and Gas companies are raking in mega bucks! Why is UMW Oil and Gas division losing so much money?

Flashback to the two postings made last year. Then UMW president and group chief executive officer Datuk Abdul Halim Harun said "We've decided to wait for a while so that we can have a bigger IPO and everybody can have a bigger share of the cake..... We would like to see it (proposed listing) happen, but it will depend on several factors, which include the economic condition.... Everything is about timing. It must be right before we can list..."

Now? Syed Hisham, the MD, says "UMW Oil & Gas Bhd's listing plan remains on the cards once it returns to profitability."

Tuesday, February 08, 2011

Ramunia Fabrication Yard Deal With Oilcorp

On the Edge Financial: One day too late for Oilcorp?

  • .... According to a filing with Bursa by Ramunia, Oilcorp’s 51% indirectly owned subisidiary Oilfab Sdn Bhd had accepted a letter of offer from Ramunia to acquire its Pulau Indah fabrication yard assets located on it for RM83.8 million on Jan 25.

    According to Ramunia, RM80 million of the purchase price would be satisfied via the issuance of 156.86 million new Ramunia shares to Oilfab at an issue price of 51 sen each while RM3.8 million would be paid for in cash.

    What is interesting about the deal is that Oilcorp was also delisted from Bursa on the same day. This certainly raised questions on the timing of the deal. Could the deal have saved Oilcorp from delisting had it sold the asset earlier?

And since it's now delisted... what will happen to this money?????

Such a huge asset sale... the timing of it ... yeah.. could the deal save OilCorp from being delisted?

  • ... The acquisition may be a boon for Ramunia which found itself without a core business when it sold off its fabrication yard in Teluk Ramunia for RM515 million cash to Sime Darby Bhd last year.

    It was cash-rich after the disposal and was on the lookout to acquire other yards.

    Ramunia recently confirmed that it is in talks to acquire Syarikat Borcos Shipping Sdn Bhd which has a common shareholder in pilgrim fund Lembaga Tabung Haji (LTH). LTH holds 84% and 25.17% stakes in Borcos and Ramunia respectively.

    It has also signed a deal with Pleasant Engineering Sdn Bhd to utilise the latter’s yard, and expects to commence operations at the Pulau Indah fabrication yard next month via a tenancy agreement with Oilcorp.

    For FY10 ended Oct 31, Ramunia posted a net profit of RM65.79 million from RM34.86 million in revenue. For FY09, it had suffered a net loss of RM52.72 million on the back of RM296.67 million in revenue.

    Its cash and bank balances stood at RM27.8 million with an additional RM103.75 million in short terms deposits, and no bank borrowings.

Yeah... I also find the chain of events to be truly remarkable.

Ramunia... used to own a fabrication yard. ( Could someone tell me why they sold to Sime Darby? :P ). So it has zero business left. And what does Ramunia do? Buy back a smaller fabrication yard?

I am confused.

So confused.


Wednesday, February 02, 2011

Green Packet Downgraded From 1.40 To 0.80

On the Edge: HDBSVR downgrades Green Packet to Hold, cuts TP to 80c from RM1.40

  • HDBSVR downgrades Green Packet to Hold, cuts TP to 80c from RM1.40
    Written by
    Wednesday, 02 February 2011 09:25

    KUALA LUMPUR: Hwang DBS Vickers Research said the recovery for Green Packet has been delayed and it expects weak 4Q2010 results.

    The research house said on Wednesday, Feb 2 it had slashed the earnings before interest, tax and amortisation (EBITDA) for Green Packet by 56% to 78%.

    “Higher sales and marketing costs and declining average revenue per user could postpone EBITDA turnaround to later this year. Downgrade to Hold, TP cut to 80 sen (from RM1.40) based on sume of the parts,” said Hwang DBS Vickers Research.


This is yet another great mystery for me.

The target price is SLASHED from 1.40 to 0.80.

Ahem.... that's a target revision of close to 43%!!!

Revised down 'so little' and the recommendation is HOLD????

Tuesday, February 01, 2011

Update On Guan Chong's Earnings

So Guan Chong reported its earnings.

On the Edge yesterday.

It was featured last week on the Edge: Cocoa windfall for Guan Chong

On today's Business Times.

  • Guan Chong revenue soars

    By Ooi Tee Ching Published: 2011/02/01

    GUAN Chong Bhd (5102), a cocoa processor from Johor, saw revenue for the financial year ended December 31 2010 surge above the RM1 billion mark, while group level net profit grew by slightly more than seven times.

    The company said that revenue for the financial year under review stood at RM1.16 billion versus RM642.65 million in the year before.

    Net profit, meanwhile, stood at a record RM100.01 million versus RM14.26 million in the same period a year ago.

    In a filing to the stock exchange, Guan Chong attributed the positive results to several factors such as the strong ringgit.

    The company also made strides due to cocoa product sales at higher prices, gains on commodity futures contracts and net fair value gains on foreign exchange derivatives.

    Last year, the Johor-based export-driven company also expanded its annual production capacity to 82,000 tonnes from about 59,000 tonnes in 2009, in anticipation of more business coming its way.

    This year, it is set to expand further in Indonesia.

    Guan Chong managing director and chief executive officer Brandon Tay Hoe Lian, in a statement, said the group's products are in almost every part of the world.

    "The continued strong demand for our cocoa products indicates that global consumer sentiment is still on an uptrend," he said.

    "Our upcoming cocoa grinding facility in Batam, Indonesia, will have an initial capacity of 50,000 tonnes an annum. It will start operations in first quarter of 2011. We're positioned to capture an even-larger market share globally," he added.

    To date, Guan Chong has a global network of more than 70 distributors and exports cocoa ingredients to more than 60 countries worldwide.

Missed on this gem?

Ah ... this stock was posted before.

So we have a BILLION ringgit company making a HUNDRED million ringgit.

And we have a beautiful looking stock chart.


Missed out on the gem?

As posted in the posting, Review Of Guan Chong's Earnings , it was noted that Guan Chong
  • .. gain from commodity future contracts and net fair value gains on foreign exchange derivatives.

Let's have a look at that issue.

From yesterday earnings notes.

This was from the Nov's earnings notes.

And this was from Aug's earnings notes.

And these are the outstanding derivative contracts.

How? Too much?

Let's see what 100 million profit does for Guan Chong's cash flow...

Ok, it bought some property, paid some loans back, paid more dividends but after a 100 million profit, Guan Chong's cash flow showed only minimal improvement.

And the receivables issue..


Of course there's a good chance the market will like what they see but do you?

And earlier last month: Guan Chong expects to raise RM120mil
  • Saturday January 8, 2011

    Guan Chong expects to raise RM120mil

    KUALA LUMPUR: Guan Chong Bhd (GCB) expects to raise up to RM120mil from through its corporate exercise of issuing RM2 for 60 million free warrants.

    “Based on the exercise price of the warrants of RM2 per new GCB share, the company stands to potentially raise up to RM120mil during the tenure of the warrants upon full exercise of the warrants by the holders of the warrants.

    “Such proceeds will be utilised for the day-to-day working capital requirements of the GCB group,” it told Bursa Malaysia yesterday.

    The company said that it had fixed the exercise price for the warrants at RM2, which was 9.29% or 17 sen over the theoretical ex-price after the proposed bonus issue of RM1.83 per share, based on the five-day volume weighted average price of RM2.44.

    The 60 million warrants were issued on the basis of one free warrant for every four existing shares held on the same entitlement date for the proposed bonus issue.

    The corporate exercise also involved the proposed bonus issue of 80 million new shares of 25 sen on a one-for-three basis.