Bank of America (BAC)

Above are some data retrieved from annual report BAC, all the figure are in million except percentage.
As we can see the no. of  outstanding shares grow from initial 3.3 billion (year 2000) to 7.6 billion (year 2009), which is more than 2 times.
As at record on the last quarter report, BAC number of outstanding shares stand at around slightly more 10 billion, this is more than 3 times of number of shares in year 2000.

Non-performing Assets still record at high level, latest quarter report shows Non-performing assets still registered at 3.74%.

Lets us do some assumption,
Assume earning is back to normal, lets say 16 million and assume number of outstanding share maintain at 10 billion, so we will get EPS USD 1.60

Assume US economy back to normal, then taking PE 15, which will give you target price USD 24

Current BAC share price is USD 13, so its share price still have 85% room to grow.

The point now is how long does it take for US economy back to normal? 3 years or 5 years?
85% in 5 years will give you annual compound rate 13%, or 22% in 3 years.

It should be a safe bet, as US economy sure will definitely go back to normal or even better. And do not forget stock performance normally will ahead half year to one year in front of economy performance.

Today top 3 highest trading volume stocks

 Compugates Holdings

Maxbiz Corporation

Tejari Technologies

Above are top 3 highest trading volume stocks of today.

Look at their quarterly result.

Erm.. No comment.

Padini Holdings Bhd 7052

Padini is success with the brand Vincci, Vincci+, Vincci Accessories, Padini Authentics, PDI, Padini, Seed, Miki, and P&Co.

I think most of you are familiar with those brands especially girls~ :p
There is one thing I cannot understand, why girls need so much clothes and shoes.. -_-"

Based on year 2010 annual report, its domestic operation accounted for 91.3% of the group's consolidated revenues. But domestic operation contributed 89.0% at year 2009. There is a slight decrease on the oversea market shares.

Padini is a cash rich company, no major capex need to expand, the capex normally go for shop lot renovation only~

Profit margin is around 50% (this figure is improving since year 1999, from around 38% to 50% now)
Selling and distribution costs is around 24% to 28%
Administrative expenses is around 8.6% (this category is also improving from around 10% to 8.6% now)

The management is doing a good job until now, its finance is healthy also. At the moment, Padini is holding cash around 135 million with around 36 million in debt.
However the growth of revenue of Padini is much more depending on the growth of number of shop lot or merchants.

Three major shareholders are holding around 74.4% shares, this inclusive Icapital, one of the major shareholder which hold around 3.45%.

Current share price RM 5.40, latest 4 quarters EPS stood at 44.79 cents, which gives PE around 12.

Pantech Group Holding Bhd 5125

Pantech Group Holding Bhd (Pantech) principally supplies steel pipes, fittings and flow control products (PFF) to a broad range of industries - major in oil & gas sector.

Pantech can be regarded as a major player in the PFF industry which has only 14 direct competitors in the country. Pantech claims to have captured some 40% of the market and is the only listed player in the industry.

Previously Pantech was facing a selling pressure due to the bonus, ICULS and warrants issues.
Before those issues, Pantech outstanding shares were 386 million.
After issued, Pantech's outstanding shares are 463.3 million with another 748.4 million ICULS and 74.8 million warrants.

748.4 million ICULS can be converted to 124.7 million Pantech mother share with the ratio 6 to 1
74.8 million warrants exercise price is RM 0.60

If all the ICULS and warrants are converted to mother share, then total Pantech outstanding shares will be 662.8 million

Last 4 quarters earning was 40 million, which gives EPS 6 cents.
Current share price RM 0.60, which equal to PE 10

MYEG 0138 annual report 2010

Year 2010

• New customer service centre was set up in Bandar Utama in June 2010

Introduction of  2 new online services:-

• Online application of MyKad Replacement in March 2010
• Online renewal of Foreign Maid Work Permit in June 2010

Development and Research

• Online renewal of foreign workers
• Online road tax and auto insurance renewal services available in Sabah and Sarawak
• Online transfer of vehicle ownership
• Online bidding application

Future Outlook

i) Maintain our focus on introducing new e-Government services, both for Government departments in our existing portfolio, as well as those who have yet to adopt the online approach

ii) Expand our geographical reach to make e-Government services more accessible in Peninsular and East Malaysia

iii) Continue our high-impact marketing campaign to achieve strong ‘brand recall’ amongst our target markets, and be synonymous with highly efficient e-Government services in Malaysia


MYEG the prospect is still looking good and there is no competitors in this market. I believe it will do well in future.
Cash rich with net cash in hand. Major capex is on development costs and advertisement.

For previous annual report analysis, please visit here http://hongwei85.blogspot.com/search/label/MYEG

Stemlife 0137 - Do you store your kid's cord blood already?

StemLife is a fully licensed cord blood and peripheral blood stem cell banking facility, under the PHFS Act 1998, Ministry of Health Malaysia.


At the moment, there are more than 32,000 clients have already stored their stem cells with StemLife.

What is the potential of this industry? Are this industry making money?

Lets see the growth of StemLife over these few years

Year - clients
2002 -      600
2003 -   1,100
2004 -   2,000
2005 -   5,000
2006 - 11,000
2007 - 18,000
2008 - 25,000
2009 - 32,000

Every year the clients base is growing, but however the rate seems slowing down after year 2007. From year 2007 to year 2008 and to year 2009, it only grow 7,000 clients constantly. It is not a healthy sign~

Base on the annual report 2010, the growth rate slow down is due to the war price fighting among the stem cell banking.

Currently market has around 3 to 4 stem cell banking offer the storage of stem cell. The price is around RM 4,000 plus.

Stem cell banking seems like a new business recently, but people are lacking of awareness of it. I believe this sector still need to take some time or promoting to boost up the sales.

Buying high, Selling low!

Every person know that for if you want to earn money in the share market, you must buy low and sell high.

Can we make money if we buy high sell low??

The answer is YES, you might surprise how does it work??

Actually there are some companies out there doing so, those companies buy back company's shares from the market at higher price but they sell the shares to the company executives by lower price by offering ESOS (Employees’ Share Option Scheme).

This is what I mean by buying high, selling low!! This is the way they are earning money.

This type of companies definately will not help any shareholders to create value, what is in their mind is how to create a way to steal the money from shareholder's fund.

This is some sort of legally stealing, use shareholder's money to full their own pocket.

HELP International corporation Bhd. 7236

Help International Corporation (HELP) is involved in the provision of education programmes at pre-university, undergraduate and postgraduate levels.

Recently it just proposed a bonus issue at 3 bonus shares for every five existing shares at 1st Oct 2010. After bonus issue, the total outstanding shares will be 142 million shares. Last 4 quarters registered a net profit 18.6 million which convert to EPS is 13 cents.

Based on market share price RM 2.30, it gives PE around 17.7

There are some projects are running currently:
1. Help@Fraser Park, located in Metropolis Kuala Lumpur and it will be completed by Sept 2010.
2. Help@Subang 2, a 24 acre Eco-Campus which will be ompleted at end of 2012.
3. Investing RM 50 million 21 story residence in Damansara Height which can accommodate 900 students.

Nestle is offering free Milo drink for the whole life!

Do you want to know to get it??

Here is the way,

By investing RM 4,300 in Nestle share (current price is RM 43),

then you will get 100 shares,

Nestle dividend for this year is RM 1.50

So you will get RM 150.

assuming you consume 5 packs of 2kg milo every year,

each pack of milo cost RM 27,

so total is only RM 135 for the whole year.

and you still able to receive RM 15 to buy maggie~!

Do not forget Nestle's dividend will up along together with milo price,

so you are actually drink milo for the whole life by just buying a 100 shares of Nestle.

lol~
by the way, I am not promoting Nestle,
I just want to let you know the power of investment.
Just to make some joke here~ :p

Have a nice day!

Alam Maritim Chairman disposed 100,000 shares back to market

Still remember DATO' CAPT AHMAD SUFIAN BIN QURNAIN @ABDUL RASHID acquired Alam Maritim 100,000 shares on 10 Dec 2010 at my previous post??
http://hongwei85.blogspot.com/2010/12/alam-maritim-chairman-acquired-100000.html

Now he disposed back all the 100,000 shares to open market again~ sign -_-"

On 10 Dec 2010, he acquired 100,000 shares at the price RM 0.89
On 14 Dec 2010, he disposed 30,000 shares at the price RM 1.04
On 16 Dec 2010, he disposed 25,000 shares at the price RM 1.04
On 17 Dec 2010, he disposed 45,000 shares at the price RM 1.056

Just in one week, Dato earned about RM 15k in open market.

Hartalega 5168

These are extracted from annual report Hartalega

• 83% sales is nitrile gloves
• Increase 43 fold in 6 years
• Creating switching mementum in the market from natural rubber to nitile gloves
• Share of USA increased from 2% to 22% in 5 years
• World's most efficient glove manufacturer
• One of the lowest overhead cost per glove without having increase main power needs
• Malaysia lowest cost producer of gloves
• Selling at 28 countries and 130 customer base

Current price RM 4.97, Last 4 quarteres EPS 47.4
PE 10.42

What is the best indicator to show the company is worth buying?

There are many indicators to show if a company is worth buying in the market.
Fundamental people may use ROE, PE, earning growth, NTA and so on.
Technical analysis people may use candle chart, volume, theme and others.

I was used to ROE, PE before. But now I will include another indicator that is insider movement, which is share buy back by its own company or director buy the shares themselves.

Normally, company execute share buy back is to support company share price and no much emotion inside. But if the directors start to buy up the company shares, then it shows he/she is very confidence in this company future and he is ready to growth with this company. Human is born to be greedy. He/she knows something is worth in the company and he/she wants more from the company so he/she buy the company shares.

How well KNM finance statement is?? beware..

KNM recently is back to hot topic now and speculators are playing with this counter. But beware..

Based on quarter result 30 Sept 2010. (all figure are in million)

Contracts work in progress   RM 456.8
Trade and other receivables  RM 381.5
Cash and equivalents            RM 296.3 (this include advance payment from customer RM 122.6)

Long term borrowings          RM 490.0
Short term borrowings         RM 575.6
Payables and accruals          RM 349.5

Balance                            - RM 280.5  <--- see the sign there.. It is negative RM 280.5 million

How KNM is going to do with this? and how KNM is going to pay its debt??

There is one more thing need to be highlighted, which is KNM's intangible assets and goodwill, both represent RM 645.8 million and RM 820.4 million.. These two figures actually is worth nothing and can be write off anytime for now. If I assume to write off those both figures, then its shareholder's equity only worth RM 296.3 million.

Current outstanding shares is around 1 billion, if shareholder's equity divide with outstanding shares, then it only worth RM 0.293, but you are paying RM 2.67 for it. It is about 9 times of it. It is same like buying a Kancil with BMW price.

Maybe I am wrong here, and maybe there is somemore "insider" news out there, I am not sure, but please play smart with your hard earn money.

XINGQUAN EXPANDING IN TANDEM WITH CHINA’S GROWING MIDDLE CLASS

Xingquan reports store growth, revenue up 51.1% and PAT up 22.2% at 2nd Annual General Meeting in Kuala Lumpur
XingQuan's result is within my expection. I expect next year XingQuan revenue will at least increase at least 20% by increase the retails shops and expanding of the middle class people.

Alam Maritim Chairman acquired 100,000 shares.

DATO' CAPT AHMAD SUFIAN BIN QURNAIN @ABDUL RASHID acquired Alam Maritim 100,000 shares at 10 Dec 2010.

Why he bought it? He has too much cash and do not know where to spend?
No no! He knows somwthing is worth by putting his money in this company. Nobody know how the company is running other than chairman.

Kencanan petroleum Bhd financial health check

Based on quarter result 31 Oct 2010,

Receivables registered at                       RM 265 million
Cash and equivalent registered at           RM 225 million
Long term borrowing registered at         RM   41 million
Short term borrowing registered at         RM 287 million
Payable and accruals registered at        RM 438 million

What do you see from here?
Receivables and total cash is just slightly enough to cover payable and accruals and with a extra cash flow RM 52 million.

Is this RM 52 million enough to pay the short term borrowing RM 287 million? It seems like Kencana is facing some cash flow problem temporary, but however management is preparing to convert this short term borrowing to long term borrowing. If they manage to do so, then Kencana will be safe.

Always be careful of its cash flow and market environment. Either one will destroy its financial statement. If everything goes fine, then it is a goose that lays golden egg with high petroleum price and incoming projects.

XiDeLang Holdings 5156

Xi De Lang is proposed a private placement recently to raise fund RM 20 million by issuing another 40 million new shares. Currently, it has 400 million shares, after the private placement, the total number of shares to be 440 million.

Based on the last quarter, 30 Sept 2010. It registered a net profit RMB 47 million, which roughly equal to RM 22 million. If we divide RM 22 million to 440 million shares, it gives EPS 5 cents. Assuming next 4 quarters deliver with the same result, then we can expect the whole year to get EPS 20 cents.

Current stock price is trading at 47 cents, which equal to PE 2.35

I have checked through its last few quarters result. Gross profit margin is increasing from around 30.5% to 34.0%. However selling and distribution expenses is also increasing from 2.0% to 8.0%, this is due to company advertisement strategy. I think the advertisement strategy is working as you can see from the increasing gross profit margin.

Administrative expenses stands around 2.1% and finance costs is below 1.0%. Both are showing healthy at the moment.

Recent private placement might due to tight cash flow as XDL is constructing the new plant and need to use a lot of cash and at the mean time need to expand its business.

Freight Management

I did mention Freight Management before at my previous blog: http://hongwei85.blogspot.com/search/label/Freight

Now I will go more details for it.
Revenue was improving from time to time from RM 83 million (year 2005) to RM 229 million (2009)
Gross profit was improving from 17.9% (year 2005) to 24.1% (year 2009)
Administrative expenses is about 15% if compare with revenue
Financial cost is very low, which is less than 1% compare with revenue
Net profit margin is improving from 4.3% (year 2005) to 6.6% (year 2009) ~ a bit low

Trade receivables turnover rate is highest among all the logistic player, this mean that Freight Management operates on a cash basic, receive cash other than give extension of credit.

Beside that, receivable period and payable period are getting less, this also shows that management is doing the business with cash basic, they receive cash from client and then pay faster to their contractors.

I think this is the reason why their net profit margin can stand so low but yet is still surviving and improving.

Century Logistics Holdings Bhd. 7117

Just same as other logistic provider, Century Logistics Holding Bhd. (Century) is providing logistics services such as freight forwarding, transportation, distribution and warehousing. Other than that, it also provides some value-added services such as sorting and packaging, bar coding, labeling, assembling and the distribution of goods.

Revenue of Century showed improving from RM 96 million (year 2004) to RM 211 million (year 2009). Gross profit margin stood around 31% and above.

Administrative expenses was showing some reducing in cost from 22.8% (year 2004) to 13.9% (year 2009).
Finance cost was showing in a manageable level at around 2%.
Net profit margin is improving from 2.1% (year 2004) to 9.9% (year 2009).

Other part on the balance sheet seems healthy and nothing no worry about it.

Not a bad company. :p

Konsortium Logistik Bhd. 6157

Konsortium Logistik Berhad (Konsort) is now principally an asset light logistics service provider.

Initially, Konsortium Logistik Berhad gross profit margin do impress me with around 28% to 33%. However its administrative expenses eat out almost all the profit margin around 15% to 17%. Both figures are the highest among all the Logistic players in this region. But at the end, it only manage to register net profit around 8% to 9%.

From its annual report 2009, there are several statement attract my interest and I really cannot figure what is happening on this company.

Firstly, Management execute a share buy back exercise, this should be a good news but however they resold back some shares after they bought in. What is the reason of doing this? Buy low sell high?? NO!! They are buy high sell low. This I cannot accept.

Secondly, As stated in the annual report, trade receivables and trade payables duration is 30days, so thats mean there are at least 12 times turnover can make it during one financial year. BUT!! The revenue show us some weird number with only around 2  to 3 times turnover. Where is the other revenue go?

Thirdly, Konsort has a high debt on its financial statement, which around RM 100 million, but they do not use the cash to settle the debt yet still use the cash to exercute share buy back?? Every year, the debt interest took out 2% to 3% of the profit margin.

The fourth, Allowance of doubtful debts is around 10% of the trade receivable. Do they understand their client well?? How come the allowance is so high?? I think there are something I do not know there.

Lastly, Management buy in some quoted shares, BUT the quoted shares register a loss of RM 158.9 million from a cost of RM 717.9 million, which losses around 22%. It is normal to make some paper loss in the investment but why management still buy in the quoted shares every year and do not fully ultilise the money to expand the business or settle the debt?? For your information, revenue of the company stay constant 5 years already.

There are too many things I cannot understand from konsort.

How much RCECAP worth if it ceases operation??

Hey guy, Lets us do some calculation on RCECAP. See how much it worth if it is ceased operation, since now the rumours are spreading around.

The following figures derived from their 2010 annual report. All are stated in RM.

Non-current Loan receivables: 992,527,064
Current Loan receivables:        146,080,924
Trade receivables:                     30,387,175
Deposits in bank:                     270,935,391
Cash in hand:                             18,775,540
Total assets:                          1,458.706,094

Non-current borrowings:          705,252,716
Current borrowings:                 314,606,265
Current payables:                       71,004,385
Total liabilities:                       1,090,863,366

Outstanding shares:                   782,395,366

If we use total assets minus liabilities, then we get RM 367,395,174
If we divide it with outstanding shares, then we get RM 0.47 per share

Do not forget, above figure are extract from "money figure" only, I am not yet include plant, equipment, investment properties, other receivables. And also above figure are excluding the interest earn and loss from loan receivables and borrowing respectively. Other than that, this figure is based on annual report 2010. So RCECAP should definitely worth more than RM 0.47 if it ceases its operation.

Based on annual report 2010, page 92, if RCECAP manage to collect back all the loan plus interest income, then the figure should be RM 2,311 million, not as the figure stated above loan receivable RM 992 million.

It is interesting to see some of the stock analyst in the market to downgrade its value from RM 1.10 to RM 0.45 just because just some trouble happen on RCECAP. They always upgrade their target price if the market is good, and downgrade when the market is bad. If you are smart enough, look at the rich people around us, did they sell their business, their investment with cheap price when market is bad?? NO! none of them!!

Do not believe all the analyst words, their job is to write news, their job is to help them earn money, their job is NOT helping you earn money!!

Harbour-Link Group Bhd. 2062

Harbour-Link Group Bhd. (Harbour) is also one of the logistic provider company in the region as well as a reputed Engineering, Procurement and Construction entity. Its turnover around 65% to 75% are generated from logistic sector.

Gross profit margin is improving from 8.2% (year 2006) to 16.1% (year 2009). Adminstrative and other expenses stand around 5.0% to 6.5%. Financial cost around 1.3% to 1.7% (still healthy).

Net profit margin is increasing from 1.8% (year 2006) to 7.6% (year 2009).

It has a healthy balance sheet and earning is improving.
Current share price RM 1.00
Latest EPS 2.67 cent, latest 4 quarters 9.07 cents.
Which gives PE 9.37 and PE 11 respectively.

I think this should be a fair price for it.

Why JCY is deep shit?

What can the financial statement tell us about JCY this business?

If you look back to JCY's past financial statement history, you will notice JCY net profit margin is around 10% to 11%. This tell us he is at a very competitive industry environment.

However out of the 10% to 11% net profit margin, JCY need use back its profit to upgrade back its property, plant and equipment. This is not happen in just one year, it happens on every year, almost every quarters. So you will see JCY is growing at the past but however it doesn't generate any cash from the business, what JCY grow is the plant and equipment. It uses most of the shareholder's money to pump in back to upgrade its plant and equipment, in order to keep this company alive.

This type of company definitely cannot help shareholder generate any wealth. Worse, when technology is suddenly changing, then it might face serious problem because all its existing equipment cannot be used anymore and it needs to use money to upgrade its equipment again. And this is exactly what is happening now.

Now the world technology is changing from previous hard disk technology to mobile tablet devices such as ipad, samsung galaxy tab and others. So you can see its financial statement is facing a big trouble now. Company earn no profit but still need to spend money to keep on upgrade its equipments.

Avoid this type of company unless it can show some economy of scale and no one can compete with it.

Tasco Berhad (formerly Trans-Asia Shiping Corperation Bhd.) 5140

Tasco Bhd. is principally engaged as a total logistics solutions provider while its subsidiary companies are principally involved in the business of truck rental, in-house truck repair and maintenance, insurance agency services and warehouse rental as well as provider of services related to freight forwarding. Our logistics solutions comprises six (6) core business divisions, namely:-


•Ocean Division

•Air Division

•Land Division

•International Freight Division

•Auto Logistics Division

•International Network Solutions Division

From Tasco balance sheet statement, the gross profit margin did show some improvement from year 2006 (18.0%) to year 2009 (22.9%), and with some minor debt. Net profit margin is improving from year 2006 (3.5%) to year 2009 (5.9%).

It show a healthy balance sheet at the moment, but however its revenue is not improving since year 2006 and showed a decreasing in revenue in year 2009 due to global economic slump. This might show that the management cannot cope with the economy downturn. When the economy is good, then it earns; When the economy is bad, then it will be hurt. However since it has a healthy finance, so economy downturn will not cause it troublesome.

Current share price RM 1.37
Latest quarter EPS 5.34, last 4 quarters EPS 20.55
Which equal to PE 6.41 and 6.67

Logistic Sector

When everytime we analysis a stock, we are not just analysis the company itself only, we need to analysis its competitor as well. How well the company can stand in the competitive environment, what is the profit margin of the company, how the exercutive manage the company compare with other companies and so on.

Today I will write something about logistic sector. When come to logistic sector, normally people will think of the companies like Freight Management, Century Logistic, Tasco, Konsortium, Harbour-Link and Integrated Logistic Bhd.

I will do the analysis one by one and after that compare all of them.

RCECAP is facing some difficulty

Rcecap currently is facing a some problem. One of the major borrower (KOWAJA) is ceased to borrow money from RCECAP to lend to civil servant due to new guideline set up by Cooperative Commission of Malaysia.

New guildline GP6, issued at latest November, is a set of guidelines governing co-ops’ lending activities. The guidelines also set out three types of business models practised by co-ops in providing credit facilities to members:



1) The co-operative’s credit activities are funded by internal sources and the lending operations are managed by the co-op.


2) The co-operative’s credit activities are funded by financial institutions and the lending operations are managed by the co-op.


3) The co-operative acts as an agent for banks and lending activities are managed by banks.


Under GP6, model 3 is not allowed.


If this is the reason, I do not see RCECAP will face any difficulty to comply with the new rule. However, there is a major concern over the high interest rate apply on the civil servant. But I do not think this should be a concern too, normally for civil servant to borrow high interest money is because there are lack of credit and bank is not willing to lend to them so RCECAP is the only way for them to borrow money in a legal way.

Actually by borrow money from RCE Capital is better for civil servant to borrow money from Ah Long, which might end up to loss their life in the process.

I am still holding at shares without dispose any one of the shares.

Why Kstar was facing a heavy selldown?

Why Kstar recently was facing a heavy selldown? Does it fundamental change? Or just purely speculative activity?

Humour said the heavy selldown could partly be due to the upcoming lifting of the six-month moratorium imposed on K-Star promoters and other shareholders who had emerged
Well.. It looks like people are losing their mind, the "investor" worry those shareholders who bound by the moratorium will make a heavy selldown to the share, but before the shareholders do it, the "investor" already made it (heavy selldown).

This stock is highly speculative now, and I think there are still some question behind there that we are not able to see it. I think I will avoid it, unless a clear picture is showed.

Maybe now it is a time to look into its balance sheet statement. If it shows it is over undervalue, then I might acquire some.