Friday, December 30, 2011
Jcorp/KFC/QSR
Jcorp/KFC/QSR: Sources say Felda is said to be among those considering to bid for KFC Holdings Bhd (KFCH) and QSR Brands Bhd should Johor Corporation (JCorp) make available its stakes. However, Felda has yet to table the offer and planned to discuss with JCorp regarding the proposal. Felda chairman, Tan Sri Mohd Isa Abd Samad, earlier 2011 expressed interest in buying these two companies as Felda has the experience and strength to manage big entities. However, while Felda may be interested, the chance of it happening is slim as JCorp is unlikely to be willing to part with cash cow. Going forward, Lembaga Tabung Haji (LTH), the largest single minority shareholder of KFC Holdings (M) Bhd with a 23% stake, is likely to hold the key to the proposed privatisation deal of the fried chicken retailer.
Thursday, December 29, 2011
PetGas
The company enjoys steady earnings from the gas processing and transmission agreement (GPTA) it signed with Petronas. But it doe not offer much excitement in terms of growth.
Going forward, things could be different for PetGas and its business model may not longer just constitute the processing and transmission fees it receives under the GPTA. The government’s measures to liberalize the import of gas, as well as the rising demand for gas as fuel, will augur well for the company’s future earnings.
The re-gastification terminal will enable the import of gas by third parties, something currently monopolized by Petronas. With more parties involved in the import of gas, it will mean more users for PetGas’s Peninsular Gas Utilization (PGU) pipeline, which links to about 20 power generation plants, including those IPPs, along the coast.
The first re-gastification terminal in Melaka is ecpectedt o start operations in July 2012, while two more terminals will be constructed in Johor and Dabah.
The commencement of operations at the Melaka terminal will redefine PetGas business model. Expecting the plant to enhance PetGas’ FY2012 and FY2013 net earnings.
Its officials said that the re-gastification plant in Melaka will enhance the companh’s enhance the company’s capability beyond gas processing and transmission of utilities. Revenue will be generated from processing and handling fees, and this addtional reevnue stream will further enhance PetGas’ profitability.
The re-gastification terminal will enable the import of LNG from various sources into Malaysia , and will help to resolve Malaysia ’s acute shortage of gas. With the LNG re-gastification facilities, PetGas and others will be able to import LNG and re-gastify it in Melaka before piping the gas into the PGU pipeline.
Besides Petronas, other companies could also make use of the re-gastification terminal to import gas from the international market. Third parties shippers would be to import LNG, re-gastify it and transport it to the customers in the peninsula Malaysia through the PGU pipeline operated by PetGas.
Indeed the government;s move to liberalize the natural gas market would help fuel PetGas’s earnings growth as the company currently only serves Petronas which is PetGas major shareholders with 60.66% stake.
Given the sentiment and efforts towards gas market liberalization, PetGas recognizes the gas transport business, through the PGU pipeline, as a potential growth area.
In anticipation of the increase in usage of the PGU pipeline, PetGas has developed a club rule called PetGas Network Code, which provides a set of guidelines on, among others, access to PGU, services provided by PetGas and tariff and transport fees.
PetGas will sign on Gas Transport Agreement (GTA) with third parties that want to subscribe to the group’s gas transport servicves. The GTA is standard for all parties, ensuring nin-discriminatory, non preferential treatment.
The group’s assets, especially the PGU pipeline, to grow to cater for additional volume from more re-gastification terminals. Thus, PetGas is indeed a proxy to the rising demand for natural gas.
PetGas’ priority is to expand within Malaysia due to the wider domestic growth parameters attributed to the rising demand for natural gas. This increase in demand for gas requires the company to seek new sources to complement the depleting local supply.
Apart from the gas processing and transmission, PetGas wants to diversify into the power generation business to cultivate future growth. To this end, PetGas has formed a JV company with Yayasan Sabah to develop a 300MW gas power plant in Sabah . PetGas holds a 60% stake. The power plant is expected to be completed and start operating by 2013.
The prospect of higher profitability under the 4th GPTA has fuelled the company’s earnings prospects and on top of that, the group has an earnings catalyst in the commission of the re-gastification terminal and power plant in Sabah .
67% of its revenue are from fixed under agreement with Petronas.
Going forward, things could be different for PetGas and its business model may not longer just constitute the processing and transmission fees it receives under the GPTA. The government’s measures to liberalize the import of gas, as well as the rising demand for gas as fuel, will augur well for the company’s future earnings.
The re-gastification terminal will enable the import of gas by third parties, something currently monopolized by Petronas. With more parties involved in the import of gas, it will mean more users for PetGas’s Peninsular Gas Utilization (PGU) pipeline, which links to about 20 power generation plants, including those IPPs, along the coast.
The first re-gastification terminal in Melaka is ecpectedt o start operations in July 2012, while two more terminals will be constructed in Johor and Dabah.
The commencement of operations at the Melaka terminal will redefine PetGas business model. Expecting the plant to enhance PetGas’ FY2012 and FY2013 net earnings.
Its officials said that the re-gastification plant in Melaka will enhance the companh’s enhance the company’s capability beyond gas processing and transmission of utilities. Revenue will be generated from processing and handling fees, and this addtional reevnue stream will further enhance PetGas’ profitability.
The re-gastification terminal will enable the import of LNG from various sources into Malaysia , and will help to resolve Malaysia ’s acute shortage of gas. With the LNG re-gastification facilities, PetGas and others will be able to import LNG and re-gastify it in Melaka before piping the gas into the PGU pipeline.
Besides Petronas, other companies could also make use of the re-gastification terminal to import gas from the international market. Third parties shippers would be to import LNG, re-gastify it and transport it to the customers in the peninsula Malaysia through the PGU pipeline operated by PetGas.
Indeed the government;s move to liberalize the natural gas market would help fuel PetGas’s earnings growth as the company currently only serves Petronas which is PetGas major shareholders with 60.66% stake.
Given the sentiment and efforts towards gas market liberalization, PetGas recognizes the gas transport business, through the PGU pipeline, as a potential growth area.
In anticipation of the increase in usage of the PGU pipeline, PetGas has developed a club rule called PetGas Network Code, which provides a set of guidelines on, among others, access to PGU, services provided by PetGas and tariff and transport fees.
PetGas will sign on Gas Transport Agreement (GTA) with third parties that want to subscribe to the group’s gas transport servicves. The GTA is standard for all parties, ensuring nin-discriminatory, non preferential treatment.
The group’s assets, especially the PGU pipeline, to grow to cater for additional volume from more re-gastification terminals. Thus, PetGas is indeed a proxy to the rising demand for natural gas.
PetGas’ priority is to expand within Malaysia due to the wider domestic growth parameters attributed to the rising demand for natural gas. This increase in demand for gas requires the company to seek new sources to complement the depleting local supply.
Apart from the gas processing and transmission, PetGas wants to diversify into the power generation business to cultivate future growth. To this end, PetGas has formed a JV company with Yayasan Sabah to develop a 300MW gas power plant in Sabah . PetGas holds a 60% stake. The power plant is expected to be completed and start operating by 2013.
The prospect of higher profitability under the 4th GPTA has fuelled the company’s earnings prospects and on top of that, the group has an earnings catalyst in the commission of the re-gastification terminal and power plant in Sabah .
67% of its revenue are from fixed under agreement with Petronas.
Wednesday, December 28, 2011
JCorp/KFC/QSR
KFC is one of JCorp’s better assets with growing operating cash flow and dividend payouts to shareholders. It generates more than rm300 million in gross operating cash f low per year.
So it is easy to see why JCorp, with some rm3.2 billion of debts to pay off in 2012, wants to bring KFC closer to the mother ship.
The Johor state government is teaming up with CVC Capital Partners via a special purpose vehicles called Massive Equity Sdn Bhd to carry out the exercise.
It will cost Massive Equity some rm2.2 billion of its bids to acquire the assets and liabilities of QSR is successful. The bid will also trigger a general offer in KFC as QSR has more than a 50% stake in the former. The success of the general offer in KFC will cost Massive Equity a further rm3.2 billion.
The exercise will add to JCorp’s debt burden considering that it holds 51% equity interest in Massive Equity. JCorp has yet to strengthen balance sheet and firm up plans to meet its rm3.2 billion debt obligation. Will this exercise the help JCorp with the debt restructuring in anyway? Should not the group focus on asset disposal and resolving the rm3.2 billion bond issue instead of taking on more debt?
However, officials from Massive Equity say the exercise to streamline the structure will add value to the JCorp group of companies as whole. JCorp could have partnered any local funds, such as the EPF, to take over QSR and KFC. However, JCorp preferred CVC Capital Partners because of the value proposition that it brings to the business and there will something left on the table for JCorp to take back after paying the cost of acquiring the assets and liabilities of QSR.
But naysayers believe otherwise. They say the growth in KFC’s business cannot outpace the cost of carrying out the transaction. The growth will no doubt come from KFC’s chains as Pizza Hut and Ayamas chains are not generating the kind of growth that would motivate a private equity firm to undertake a privatization.
The deal values the assets and liabilities of QSR and KFC at rm5.5 billion. Assume that the outlay of the deal is rm5 billion after stripping the cash from the companies. If the amount is divided on a 30% equity and 70% debt basis, the equity portion would come up to rm1.5 billion to be shared by JCorp and CVC. This means JCorp’s portion would be rm750 million. The debt which probably be financed by a local bank, would be r,3.5 billion.
At a conservative interest rate of 7% it would cost the JV almost rm250 million per annum. KFC’s gross operating cash flow in FY2010 ended Dec 31 was rm318 million. But after stripping out of the cash flow for operations, the amount left would probably be just enough to service the debts. It would not be much left on the table for JCORP even if KFC improves its operations and stops the leakages to improve cash flow.
The upside will come in the next few years when both companies (QSR and KFC) are re listed, probably as one entity. And then JCorp would certainly continue to have a majority stake in QSR and KFC. But would it need to fork out a hefty amount to buy back CVC Capital? Would CVC Capital exit post listing?
In the immediate term, the bigger concern is if the deal will go through.
The offer for KFC still seems to be on the low side. At r,4.00 for the shares and rm1 for the warrants, it is lower than its all time high price of rm.4.11. The offer values KFC at more than 22 times earnings in FY2013 ended Dec 31 and more than 20 times earnings for the current year of operations ending Dec 2012. The offer for QSR is almost 17 times its earnings for the current year of operations.
While the valuations for QSR is generous, KFC is different and minorities may demand a higher valuation.
What happens when minorities do not approve the KFC offer but accept deal for QSR. Then the deal will not happen as the takeover of the assets and liabilities of QSR is subject to the KFC transaction going past the shareholders.
There has been speculation that other parties will come into Massive Equity at a larger stage. This is on the basis of JCorp not having the financial muscle to undertake the exercise at this juncture.
Some of the names being bandied about include businessmen with extensive interests in Johor and strong links with the state and the palace. However, Massive Equity denies such a notion.
Massive Equity is a venture between JCorp and CVC Capital Partners. Where CVC Capital gets its money is unknown. But JCorp holds the majority stake in the venture, and its is something that will add value for the longer term.
So it is easy to see why JCorp, with some rm3.2 billion of debts to pay off in 2012, wants to bring KFC closer to the mother ship.
The Johor state government is teaming up with CVC Capital Partners via a special purpose vehicles called Massive Equity Sdn Bhd to carry out the exercise.
It will cost Massive Equity some rm2.2 billion of its bids to acquire the assets and liabilities of QSR is successful. The bid will also trigger a general offer in KFC as QSR has more than a 50% stake in the former. The success of the general offer in KFC will cost Massive Equity a further rm3.2 billion.
The exercise will add to JCorp’s debt burden considering that it holds 51% equity interest in Massive Equity. JCorp has yet to strengthen balance sheet and firm up plans to meet its rm3.2 billion debt obligation. Will this exercise the help JCorp with the debt restructuring in anyway? Should not the group focus on asset disposal and resolving the rm3.2 billion bond issue instead of taking on more debt?
However, officials from Massive Equity say the exercise to streamline the structure will add value to the JCorp group of companies as whole. JCorp could have partnered any local funds, such as the EPF, to take over QSR and KFC. However, JCorp preferred CVC Capital Partners because of the value proposition that it brings to the business and there will something left on the table for JCorp to take back after paying the cost of acquiring the assets and liabilities of QSR.
But naysayers believe otherwise. They say the growth in KFC’s business cannot outpace the cost of carrying out the transaction. The growth will no doubt come from KFC’s chains as Pizza Hut and Ayamas chains are not generating the kind of growth that would motivate a private equity firm to undertake a privatization.
The deal values the assets and liabilities of QSR and KFC at rm5.5 billion. Assume that the outlay of the deal is rm5 billion after stripping the cash from the companies. If the amount is divided on a 30% equity and 70% debt basis, the equity portion would come up to rm1.5 billion to be shared by JCorp and CVC. This means JCorp’s portion would be rm750 million. The debt which probably be financed by a local bank, would be r,3.5 billion.
At a conservative interest rate of 7% it would cost the JV almost rm250 million per annum. KFC’s gross operating cash flow in FY2010 ended Dec 31 was rm318 million. But after stripping out of the cash flow for operations, the amount left would probably be just enough to service the debts. It would not be much left on the table for JCORP even if KFC improves its operations and stops the leakages to improve cash flow.
The upside will come in the next few years when both companies (QSR and KFC) are re listed, probably as one entity. And then JCorp would certainly continue to have a majority stake in QSR and KFC. But would it need to fork out a hefty amount to buy back CVC Capital? Would CVC Capital exit post listing?
In the immediate term, the bigger concern is if the deal will go through.
The offer for KFC still seems to be on the low side. At r,4.00 for the shares and rm1 for the warrants, it is lower than its all time high price of rm.4.11. The offer values KFC at more than 22 times earnings in FY2013 ended Dec 31 and more than 20 times earnings for the current year of operations ending Dec 2012. The offer for QSR is almost 17 times its earnings for the current year of operations.
While the valuations for QSR is generous, KFC is different and minorities may demand a higher valuation.
What happens when minorities do not approve the KFC offer but accept deal for QSR. Then the deal will not happen as the takeover of the assets and liabilities of QSR is subject to the KFC transaction going past the shareholders.
There has been speculation that other parties will come into Massive Equity at a larger stage. This is on the basis of JCorp not having the financial muscle to undertake the exercise at this juncture.
Some of the names being bandied about include businessmen with extensive interests in Johor and strong links with the state and the palace. However, Massive Equity denies such a notion.
Massive Equity is a venture between JCorp and CVC Capital Partners. Where CVC Capital gets its money is unknown. But JCorp holds the majority stake in the venture, and its is something that will add value for the longer term.
Monday, December 26, 2011
JCY
Its Prospects
According to WD and Seagate, the floods in Thailand will cause a shortage of at least 50 million HDDs in 4QFy2011 compared with a demand for 180 million. The facilities of HDD component markers such as Notion and Eng were also flooded.
Production can only return to pre-flood levels at the end of 2012.
The floods have been a blessing in disguise. Before that, the average selling price of HDDs was dropping by around 2% to 3% every quarter. But the floods caused a shortage, which pushed up the ASP. HDD prices have risen by as much as 20% since the floods.
JCY is in a better position than other component makers because of its product mix. The company produces four types of components used in a HDD – the base plate, cover plate, actuator and antidiscs.
Some of its competitors produce single components but their machines were submerged by floodwater. Thus, JCY is the only supplier of some of the components for its vendors. It is the biggest supplier of base plates and cover plates to WD and is a top supplier of antidiscs to Seagate.
Since the floods, these vendors have requested bigger supply of components due to shortage and has also led to higher ASP while its costs remains the same. HDD demand will continue to be strong and a higher ASP will persist until 2012 as it will take about 6 to 12 months for the other component makers to resume operations.
Observers note that it will take about six months for the affected manufacturers to assess the flood damage receive payment on insurance claims. The companies will also need to reinvest in new machines and obtain quality approval from the vendors.
They also need to decide whether they will continue to run operations in Thailand in cas of floods in the future.
JCY CEO reckoned that HDD will not be replaced by SDDs. The usage and applications of SDDs and HDDs are distinct. SDD are used for gadgets such as tablets and netbooks while HDDs are used in desktop computers and laptops. SDDs will not replace HDDs in computers anytime soon as the former lacks the capacity HDD will continue to be the cost efficient drive used for mass date stoage.
With the advent of digitalization and cloud computing, massive media files will continue to be stored in media centres that use HDDs. While Ipads are used to view photos and watch movies, users will download and store their pictures and motives in HDDs. In addition, as cloud computing flourishes, media files will be stored in servers that demand large capacity at competitive prices. Thus the demand for HDDs will continue to grow in the future.
In 4QFY2012 ended Sept, JCY returned to the black with rm20.44 million in net profit. The improved earnings were also due to favorable exchange rates and improvement in operational efficiency.
JCY will also able to increase its capacity by another 20% to meet demand.
Given that the floods, increased orders and strong US dollar, JCY is optimistic about better results in the future.
As at Sept 30, JCY had rm93.56 million in cash and bank balances while short term borrowings stood at rm225 million. Based on its shareholders’ funds of rm512 million, it has a net gearing of 0.26 times.
Production can only return to pre-flood levels at the end of 2012.
The floods have been a blessing in disguise. Before that, the average selling price of HDDs was dropping by around 2% to 3% every quarter. But the floods caused a shortage, which pushed up the ASP. HDD prices have risen by as much as 20% since the floods.
JCY is in a better position than other component makers because of its product mix. The company produces four types of components used in a HDD – the base plate, cover plate, actuator and antidiscs.
Some of its competitors produce single components but their machines were submerged by floodwater. Thus, JCY is the only supplier of some of the components for its vendors. It is the biggest supplier of base plates and cover plates to WD and is a top supplier of antidiscs to Seagate.
Since the floods, these vendors have requested bigger supply of components due to shortage and has also led to higher ASP while its costs remains the same. HDD demand will continue to be strong and a higher ASP will persist until 2012 as it will take about 6 to 12 months for the other component makers to resume operations.
Observers note that it will take about six months for the affected manufacturers to assess the flood damage receive payment on insurance claims. The companies will also need to reinvest in new machines and obtain quality approval from the vendors.
They also need to decide whether they will continue to run operations in Thailand in cas of floods in the future.
JCY CEO reckoned that HDD will not be replaced by SDDs. The usage and applications of SDDs and HDDs are distinct. SDD are used for gadgets such as tablets and netbooks while HDDs are used in desktop computers and laptops. SDDs will not replace HDDs in computers anytime soon as the former lacks the capacity HDD will continue to be the cost efficient drive used for mass date stoage.
With the advent of digitalization and cloud computing, massive media files will continue to be stored in media centres that use HDDs. While Ipads are used to view photos and watch movies, users will download and store their pictures and motives in HDDs. In addition, as cloud computing flourishes, media files will be stored in servers that demand large capacity at competitive prices. Thus the demand for HDDs will continue to grow in the future.
In 4QFY2012 ended Sept, JCY returned to the black with rm20.44 million in net profit. The improved earnings were also due to favorable exchange rates and improvement in operational efficiency.
JCY will also able to increase its capacity by another 20% to meet demand.
Given that the floods, increased orders and strong US dollar, JCY is optimistic about better results in the future.
As at Sept 30, JCY had rm93.56 million in cash and bank balances while short term borrowings stood at rm225 million. Based on its shareholders’ funds of rm512 million, it has a net gearing of 0.26 times.
Saturday, December 24, 2011
Watch this video to see how government improve our transportation system
Tired of long waits and congestion for LRTs and buses in the city? See how things have improved...
Watch this infomercial video on Improving Urban Public Transport NKRA by GTP Government Transformation Programme.
Tuesday, December 20, 2011
Golden chance to accumulate Bank of American
Current share price around USD 5
The shares have not closed so low since March 2009
Lowest price during financial crisis is USD 3.14
Most of the fund managers are holding and buying this share
Warren Buffett purchased 5 billion of the bank's preferred shares
Warren Buffett average purchased price for common stock is USD 7.14
Do you think Warren Buffett make a wrong move? :)
Saturday, December 17, 2011
XingQuan new factory construction progress~
Below are the pictures copy from Xingquan International company website. The whole construction just took about one year (you can check the progress date there).
These pictures do give you some confidence on Xing Quan share? Which now is trading at PE around 1.
Check out on its website HERE
Can you see its brand GERTOP?
They have put so much money into the business, can china stock be trusted?
Friday, December 16, 2011
TNB no enough money~
KUALA LUMPUR: TNB expects to record losses in the first quarter of 2012 as long as it has not yet received the cash from Petronas and the government.
lol~ sound like they still no enough money after raises up the electrical tariff. So when TNB need to raise up the tariff again? I think no so fast, should be after government election. When that time remember to buy TNB if its price still at low level.
lol~ sound like they still no enough money after raises up the electrical tariff. So when TNB need to raise up the tariff again? I think no so fast, should be after government election. When that time remember to buy TNB if its price still at low level.
Thursday, December 15, 2011
Proton
Sources say Lotus Group Intl Ltd is being courted by a Chinese suitor interested in a possible stake in the US based automobile.
Sources say China-based Shanghai Automotive Industry Corp has expressed interest in Lotus and visited the plant in England . If the talks are successful, the purchase will give Lotus’ turnaround plan a much needed boost.
SAIC is one of the top auto corporations in China and produces passenger cars, commercial vehicles and auto components.
Lotus has been dragged on Proton of late. This is mainly due to Lotus’ turnaround plan, which utilizes Proton’s financial muscle. Lotus has taken a 270 million pound loan from a consortium of six banks for a five year turnaround plan while the entire turnaround is expected to cost Proton some 480 million pound.
The Lotus turnaround plan came about as the loss making auto manufacturer had begun to impact Proton’s balance sheet.
One of the suggestions to put Lotus on a sound financial footing was to divest a portion of its equity to a strategic investor that is able to market Lotus cars. The proceeds could then be used to develop future car models.
In Oct 2011, Proton denied reports that it might be looking to sell a stake in Lotus to Luxembourg-based investment firm. However SAIC has a presence in China , where Lotus has a following.
Lotus already has large orders despite not having a branch in China . It would be a smart move for Proton to sell a stake in Lotus to the Chinese party if it is indeed interested.
As at Sept 30, 2011, Proton had rm1.31 billion in cash, bank balances and deposits. Its short and long term borrowings grew to rm960 million.
A major concern is that Proton is only in the second year of a five year turnaround plan for Lotus. Proton expects Lotus to reach break even by 2014.
The repayment of the 270 million pound syndicated loan is due from March 31, 2015, and the maturity date is six years from the first drawdown.
SAIC has an existing tie up with GM, which has also rumored to be talks with Proton. GM had previously been keen on a JV with Proton to utilize its manufacturing facilities in Tanjong Malim when the national carmaker was still under Petronas. The deal fell through.
SAIC also has ties with VW.
Sources say China-based Shanghai Automotive Industry Corp has expressed interest in Lotus and visited the plant in England . If the talks are successful, the purchase will give Lotus’ turnaround plan a much needed boost.
SAIC is one of the top auto corporations in China and produces passenger cars, commercial vehicles and auto components.
Lotus has been dragged on Proton of late. This is mainly due to Lotus’ turnaround plan, which utilizes Proton’s financial muscle. Lotus has taken a 270 million pound loan from a consortium of six banks for a five year turnaround plan while the entire turnaround is expected to cost Proton some 480 million pound.
The Lotus turnaround plan came about as the loss making auto manufacturer had begun to impact Proton’s balance sheet.
One of the suggestions to put Lotus on a sound financial footing was to divest a portion of its equity to a strategic investor that is able to market Lotus cars. The proceeds could then be used to develop future car models.
In Oct 2011, Proton denied reports that it might be looking to sell a stake in Lotus to Luxembourg-based investment firm. However SAIC has a presence in China , where Lotus has a following.
Lotus already has large orders despite not having a branch in China . It would be a smart move for Proton to sell a stake in Lotus to the Chinese party if it is indeed interested.
As at Sept 30, 2011, Proton had rm1.31 billion in cash, bank balances and deposits. Its short and long term borrowings grew to rm960 million.
A major concern is that Proton is only in the second year of a five year turnaround plan for Lotus. Proton expects Lotus to reach break even by 2014.
The repayment of the 270 million pound syndicated loan is due from March 31, 2015, and the maturity date is six years from the first drawdown.
SAIC has an existing tie up with GM, which has also rumored to be talks with Proton. GM had previously been keen on a JV with Proton to utilize its manufacturing facilities in Tanjong Malim when the national carmaker was still under Petronas. The deal fell through.
SAIC also has ties with VW.
Wednesday, December 14, 2011
Greek crisis
Why Greek bankrupt?
1. Government is trying to cover country financial problem.
2. Government is spending money like nobody business.
3. Government is hiring too much government servants and pay them high salary.
Do you find that above 3 points are sound familiar?
Monday, December 12, 2011
My view on EURO crisis
why EURO crisis so hard to solve? why US dollar can be solved so easily? For me, it is as simple as that, EURO dollar is used by 23 countries from the European. Every country has their own economy, their own diplomatic and their own culture and so on.. When everyone is making money and the wealth separate fairly, everyone is living with happy and no arguments and problems. But now, some of the countries is facing financial problem, do you think other countries will use their money to help the countries who face financial problem? The answer is NO! come on, human are greedy.. They are neither going to use their own money to help the rest nor print more money to dilute their money value. So, that's why EURO crisis is so hard to solve.
Unlike US, US can print US dollar as much as they like, because US dollar is own by US, they need not to see other countries face. It is same as Ringgit Malaysia. Malaysia will not bankrupt but only will dilute the value of the RM only if Malaysia start to print money.
The theory is as simple as that.
Saturday, December 10, 2011
About KrissAssets/IGB
(Dated Nov 2011)
Speculation KrissAssets is mulling a REIT following its completion of its purchase of the The Gardens shopping mall in July 2011 from parent IGB Corp Bhd.
KrisAssets’ current property asset is the 10-year-old Mid Valley Megamall. With the completion of the purchase of The Gardens, there is the possibility of a REIT being set up to take advantage of the tax benefits.
To qualify as a REIT, a fund must have most of its assets and income tied to a portfolio of real estate. In Malaysia , a REIT is exempt from corporate tax if it distributes at least 90% of its total annual income, and unit holders enjoy a lower 10% withholding tax on distribution.
Another point favouring a REIT is that it is an asset class that is not affected by market sentiments as its share price is backed by assets. The assets that KrisAssets holds, solely retail malls, command better demand due to higher returns. Compared to office spaces, retail REIT are supported by high occupancy rates and strong rental income. The local buying sentiment is also going strong at the moment.
The yields of the assets in KrisAssets of between 6% and 7% are comparable to other local REIT such as Sunway REIT, CapitaMalls Malaysia Trust REIT and the soon-to-be listed Pavillion REIT.
The retail space in Mid Valley Megamall and The Gardens saw an increase in rental income.
However, KrisAssets REIT might not take off so soon as it does not have enough funds to purchase the remaining assets from IGB Corp. IGB Corp’s remaining assets consisting of Mid Valley and The Gardens’ office towers have an estimated combined value of RM2 billion to RM3 billion. However, market observers do not discount a possible corporate exercise to raise funds for the acquisition of the other assets.
Speculation on the establishment of a KrisAssets REIT surfaced in February 2011 when KrisAssets agreed to buy the entire stake in The Gardens at an indicative price of RM820 million. To fund the acquisition, KrisAssets issued RM300 million in convertible secured bonds.
As at Sept 30, KrisAssets had RM72.8 million in cash and bank deposits. KrisAssets is 75.66% owned by IGB Corp.
The group also saw a recognition of revaluation surplus of RM25 million for Mid Valley Megamall .
Excluding the fair value gain on investment property, the group recorded pre-tax profit of RM55.1 million, representing a 20.6% increase, compared with pre-tax profit of RM45.7 million in the corresponding quarter [last year].
For 9MFY11, KrisAssets’ net profit grew 27.6% to RM170.8 million, on the back of RM273.1 million in revenue.
Speculation KrissAssets is mulling a REIT following its completion of its purchase of the The Gardens shopping mall in July 2011 from parent IGB Corp Bhd.
KrisAssets’ current property asset is the 10-year-old Mid Valley Megamall. With the completion of the purchase of The Gardens, there is the possibility of a REIT being set up to take advantage of the tax benefits.
To qualify as a REIT, a fund must have most of its assets and income tied to a portfolio of real estate. In Malaysia , a REIT is exempt from corporate tax if it distributes at least 90% of its total annual income, and unit holders enjoy a lower 10% withholding tax on distribution.
Another point favouring a REIT is that it is an asset class that is not affected by market sentiments as its share price is backed by assets. The assets that KrisAssets holds, solely retail malls, command better demand due to higher returns. Compared to office spaces, retail REIT are supported by high occupancy rates and strong rental income. The local buying sentiment is also going strong at the moment.
The yields of the assets in KrisAssets of between 6% and 7% are comparable to other local REIT such as Sunway REIT, CapitaMalls Malaysia Trust REIT and the soon-to-be listed Pavillion REIT.
The retail space in Mid Valley Megamall and The Gardens saw an increase in rental income.
However, KrisAssets REIT might not take off so soon as it does not have enough funds to purchase the remaining assets from IGB Corp. IGB Corp’s remaining assets consisting of Mid Valley and The Gardens’ office towers have an estimated combined value of RM2 billion to RM3 billion. However, market observers do not discount a possible corporate exercise to raise funds for the acquisition of the other assets.
Speculation on the establishment of a KrisAssets REIT surfaced in February 2011 when KrisAssets agreed to buy the entire stake in The Gardens at an indicative price of RM820 million. To fund the acquisition, KrisAssets issued RM300 million in convertible secured bonds.
As at Sept 30, KrisAssets had RM72.8 million in cash and bank deposits. KrisAssets is 75.66% owned by IGB Corp.
The group also saw a recognition of revaluation surplus of RM25 million for Mid Valley Megamall .
Excluding the fair value gain on investment property, the group recorded pre-tax profit of RM55.1 million, representing a 20.6% increase, compared with pre-tax profit of RM45.7 million in the corresponding quarter [last year].
For 9MFY11, KrisAssets’ net profit grew 27.6% to RM170.8 million, on the back of RM273.1 million in revenue.
Thursday, December 8, 2011
About Rsawit
(Dated Sept 2011)
A pure plantation player run by Chiong Hoo’s (Tan Sri Tiong Hiew King’s son) older brother Chiong Ong.
It offers plenty of upside, stemming from their large unplanted areas and young palm profiles. Its appeal is its full exposure in the palm oil sector.
It would seem that Tiong is turning Rsawit into the family’s plantation flagship by rapidly expanding its landbank via acquisitions and the injection of family landbank.
Nonetheless, the group’s aggressive building up of plantation landbank resulted in huge net total borrowings of rm427 million against its shareholders funds of rm467 million as at June 30, 2011.
It is proposing a rights issue to pare down its borrowings and for capex needs. The rights issue will keep Tiong’s interest in Raswit at 57.17% stake assuming the rest of the shares are fully subscribed by the other shareholders. Such a move would entitle him to rights and bonus issue. It would also increase his shareholding.
A pure plantation player run by Chiong Hoo’s (Tan Sri Tiong Hiew King’s son) older brother Chiong Ong.
It offers plenty of upside, stemming from their large unplanted areas and young palm profiles. Its appeal is its full exposure in the palm oil sector.
It would seem that Tiong is turning Rsawit into the family’s plantation flagship by rapidly expanding its landbank via acquisitions and the injection of family landbank.
Nonetheless, the group’s aggressive building up of plantation landbank resulted in huge net total borrowings of rm427 million against its shareholders funds of rm467 million as at June 30, 2011.
It is proposing a rights issue to pare down its borrowings and for capex needs. The rights issue will keep Tiong’s interest in Raswit at 57.17% stake assuming the rest of the shares are fully subscribed by the other shareholders. Such a move would entitle him to rights and bonus issue. It would also increase his shareholding.
My view on Citigroup
Citi group is cutting 4,500 jobs worldwide after Bank of American announced planning to cut 30,000 jobs earlier of this year. It seems like the worldwide economy is still doing bad~ by the way, is it a good chance now to collect Citi's shares? Citi now is trading at USD 29 something and it went up to max USD 502 before at May 2007 which is before the prime crisis.
Let us use USD 502 divide with USD 29, that is 17 times different! too much!? then we divide 2 again, it still 8.5 times different! how many years do u think it can recover back to the half of USD 502? 5 years? too short!? How about 10 years? it is very likely..
10 years give you 8.5 times return is it enough for you?
Some might think Citigroup will bankrupt, but I can very sure to tell you, Citi will not bankrupt, if she bankrupt, then whole world are in deep shit, same as if Maybank bankrupt, Malaysia also will deep shit~
Let us use USD 502 divide with USD 29, that is 17 times different! too much!? then we divide 2 again, it still 8.5 times different! how many years do u think it can recover back to the half of USD 502? 5 years? too short!? How about 10 years? it is very likely..
10 years give you 8.5 times return is it enough for you?
Some might think Citigroup will bankrupt, but I can very sure to tell you, Citi will not bankrupt, if she bankrupt, then whole world are in deep shit, same as if Maybank bankrupt, Malaysia also will deep shit~
Tuesday, December 6, 2011
About Wijaya
It has to get shareholders’ approval for its proposed US$80 million investment in two companies with timber extraction rights in Indonesia ’s Papua province. The 80000 ha are slated for oil palm cultivation.
The Papua oil palm is still some years as it takes about three to four years away for oil palm trees to start bearing fruit. Moreover, the group would first need to obtain the final go head from Indonesia ’s Forestry Ministry before extracting timber and clearing the land for planting.
In any case, the group’s borrowings will go up substantially following the US$80 million purchase. Currently it has almost zero borrowings. The company could borrow against its 379 acres in Pulau Indah, Klang carried a rm163 million in its book.
Assuming 80% of the purchase considering is funded by borrowings, the group‘s gearing will increase to 0.86 times (rm215 million). Net assets per share are expected to fall to 0.89 sen.
The purchase will be funded by internally generated funds, bank borrowings and/or a fundraising exercise.
Its cash and bank balances stood at about rm1.5 million as at June 31, 201. Besides the USS$80 million purchase price, Wijaya will need about rm20 million to rm30 million to get the project off the ground.
The new shares cannot be issued below their par value of rm1 apiece unless they are offered to all shareholders in a rights issue. A shareholder placement is unlikely to happen unless the stock appreciates further.
A shareholders’ meeting to vote on the deal will be called within two weeks from 14 Nov 2011.
The group is also benefiting from its interest in its 45% owned construction associate Wijaya Baru Sdn Bhd which is in the business of implementing flood mitigation projects.
Its CEO said that Wijaya in good stead to vie for more jobs from the rm1 billion slated for flood mitigation works in Perlis, Perak and Johor announced by the PM in Budget 2012.
The Papua oil palm is still some years as it takes about three to four years away for oil palm trees to start bearing fruit. Moreover, the group would first need to obtain the final go head from Indonesia ’s Forestry Ministry before extracting timber and clearing the land for planting.
In any case, the group’s borrowings will go up substantially following the US$80 million purchase. Currently it has almost zero borrowings. The company could borrow against its 379 acres in Pulau Indah, Klang carried a rm163 million in its book.
Assuming 80% of the purchase considering is funded by borrowings, the group‘s gearing will increase to 0.86 times (rm215 million). Net assets per share are expected to fall to 0.89 sen.
The purchase will be funded by internally generated funds, bank borrowings and/or a fundraising exercise.
Its cash and bank balances stood at about rm1.5 million as at June 31, 201. Besides the USS$80 million purchase price, Wijaya will need about rm20 million to rm30 million to get the project off the ground.
The new shares cannot be issued below their par value of rm1 apiece unless they are offered to all shareholders in a rights issue. A shareholder placement is unlikely to happen unless the stock appreciates further.
A shareholders’ meeting to vote on the deal will be called within two weeks from 14 Nov 2011.
The group is also benefiting from its interest in its 45% owned construction associate Wijaya Baru Sdn Bhd which is in the business of implementing flood mitigation projects.
Its CEO said that Wijaya in good stead to vie for more jobs from the rm1 billion slated for flood mitigation works in Perlis, Perak and Johor announced by the PM in Budget 2012.
Sunday, December 4, 2011
OCBC Titanium credit card 5% cash rebate
Nowadays, getting more and more bankers are offering cash rebate credit card to the market.
Like the OCBC, they are offering a 5% cash rebate on the petrol, groceries, bills and dining and 1% on other purchases. Which can give us a good value of money, since those thing we are needed to spend no matter how, why not we use the benefit provided by them for our own good?
I have prepare a table for you to have a look as below: -
As you can see the even they are giving a 5% cash rebate, but the maximum cash rebate per month is capped at RM50.00 and no reward points are given.
If you are big spender, then you might need to consider another cash rebate credit card from other banks.
Maybank 2 cards might be suitable for you, as it offers 5% cash rebate as well and 2.5% points rebate.
You may refer my previous article, Maybank 2 cards
However, OCBC allow us to wave RM50.00 government service tax by spending RM10,000.00 per annum and enjoy annual fee waiver by 12 swipes every year (this can be done easily, just one swipe on petrol every month will do.)
Fore more information, you can go to OCBC official website as HERE, there have a saving bar you can play around also, then you know how the maximum RM50.00 work.
There are some comments from other people as they find out some spending is only giving 1% cash back instead of 5% cash back as below:-
Krispy Kreme - Midvalley Megamall
Carrefour - Tropicana City Mall
Giant - Atria Mall
Geographer Pub & Restaurant - IOI Boulevard
Haagen-Dazs [MCC: 5499]
House + Co (restaurant) - Bangsar Shopping Centre
Maxis Centre - The Gardens [MCC: 4812]
Telekom Malaysia - fixed line, by calling up the call center
Jusco Supermarket - 1 Utama
Jusco Supermarket - IOI Mall
Jusco Kepong (Dept. Store NOT Supermarket)
Jusco Sunway Pyramid (Dept store)
Jusco Tmn Maluri (Dept Store)
Isetan (Supermarket) - Lot 10
MPSJ Counter - Bandar Puteri, Puchong [MCC: 9399]
Zun Express Eu Yan Sang Restaurant - The Gardens
So, as you can see from the above list, how are they define the "GROCERIES"? Is it interesting huh!?..
Saturday, December 3, 2011
About NAIM
Sources say there has been talk of delays in the progress of Petronas Carigali Sdn Bhd’s Sabah Oil and Gas Terminal (SOGT) project that could potentially cast a shadow over the state’s petroleum developing progremmes. However, Petronas Carigali has brushed off talk of any delays on the US$766 million project.
To recap, the award of the SOGT project had raised eyebrows when it was announced in Aug 2010. The job was given to Sawarak based construction and property firm Naim, instead of Dialog and Kencana. Naim holds a 34% stake in Dayang, which is a brown field hookup and commissioning service provider in the O&G industry.
Naim’s subsidiary landed the job to provide engineering, procurement, construction and commissioning EPCC services for the SOGT project.
Naim’s management had guided that the company will have a 30% equity stake in the JV with Samsung Engineering to develop SOGT.
Market talk then was that Naim had secured the job because of its influence at the state and federal government levels. Naim has long seen as linked to Sawawak Chief Minister Tan Sri Abdul Taib.
Taib’s cousin is Naim’s chairman and holds 16% in Naim.
To recap, the award of the SOGT project had raised eyebrows when it was announced in Aug 2010. The job was given to Sawarak based construction and property firm Naim, instead of Dialog and Kencana. Naim holds a 34% stake in Dayang, which is a brown field hookup and commissioning service provider in the O&G industry.
Naim’s subsidiary landed the job to provide engineering, procurement, construction and commissioning EPCC services for the SOGT project.
Naim’s management had guided that the company will have a 30% equity stake in the JV with Samsung Engineering to develop SOGT.
Market talk then was that Naim had secured the job because of its influence at the state and federal government levels. Naim has long seen as linked to Sawawak Chief Minister Tan Sri Abdul Taib.
Taib’s cousin is Naim’s chairman and holds 16% in Naim.
Friday, December 2, 2011
About SP Setia
PNB is believed to be looking into the possibility of improving its offer to SP Setia shareholders, particularly its CEO Tan Sri Liew.
In this respect, it is learnt that PNB is working out a package for Liew in which he will have the option to divest his interest in SP Setia at a higher price over a period of three to five years provided that the company meets the milestone set. This is to entice hom to stay put at the company.
Sources say there has also been discussion about PNB improving its offer price of rm3.90 per share. Some believe this is unlikely to happen as PNB has maintained that the price is fair. But the deliberations on such matters is one of the reasons why the offer document is still not out yet.
It is learnt that during the period in which Liew has to meet the milestone set, he would continue to run the show. For that period, Liew will oversee the senior management of the company as well as the appointment of contractors.
Speculation is rife that the general offer by PNB for SP Setia had even attracted the attention of the top people at Putrajaya. It is said that an intervention by top officials at Putrajaya led to both PNB and Liew re negotiating the takeover offer.
PNB was supposed to have sent out the offer documents for its general offer to SP Setia shareholders by Oct 19, 2011, but they have yet to release. According to the Malaysian Code on Take-overs and Mergers 2010, the offer documents are to be sent out within 21 days of making the offer. It now has to send out of the offer documents within two days of the SC’s clearance of the offer document.
PNB recognizes that the talent at SP Setia is valuable to the company and is exploring incentive to ensure that they continue to stay on with the company.
It is not surprising that PNB may be considering an incentive package for the senior management, and specially Liew who is credited with building and growing the company to where it is now.
The rm3.90 per share offer values the property company at 2.15 times its price to book value as at July 31, 2011. Its five year historical average is 2.22 times.
Since the MGO was announced, PNB and funds under its management have increased their shareholding over 39% by acquiring shares and warrants on the open market. The offer is conditional upon PNB receiving more than 50% of the voting shares of SP Setia.
In this respect, it is learnt that PNB is working out a package for Liew in which he will have the option to divest his interest in SP Setia at a higher price over a period of three to five years provided that the company meets the milestone set. This is to entice hom to stay put at the company.
Sources say there has also been discussion about PNB improving its offer price of rm3.90 per share. Some believe this is unlikely to happen as PNB has maintained that the price is fair. But the deliberations on such matters is one of the reasons why the offer document is still not out yet.
It is learnt that during the period in which Liew has to meet the milestone set, he would continue to run the show. For that period, Liew will oversee the senior management of the company as well as the appointment of contractors.
Speculation is rife that the general offer by PNB for SP Setia had even attracted the attention of the top people at Putrajaya. It is said that an intervention by top officials at Putrajaya led to both PNB and Liew re negotiating the takeover offer.
PNB was supposed to have sent out the offer documents for its general offer to SP Setia shareholders by Oct 19, 2011, but they have yet to release. According to the Malaysian Code on Take-overs and Mergers 2010, the offer documents are to be sent out within 21 days of making the offer. It now has to send out of the offer documents within two days of the SC’s clearance of the offer document.
PNB recognizes that the talent at SP Setia is valuable to the company and is exploring incentive to ensure that they continue to stay on with the company.
It is not surprising that PNB may be considering an incentive package for the senior management, and specially Liew who is credited with building and growing the company to where it is now.
The rm3.90 per share offer values the property company at 2.15 times its price to book value as at July 31, 2011. Its five year historical average is 2.22 times.
Since the MGO was announced, PNB and funds under its management have increased their shareholding over 39% by acquiring shares and warrants on the open market. The offer is conditional upon PNB receiving more than 50% of the voting shares of SP Setia.
Thursday, December 1, 2011
About Mercury
Mercury is one of the top two car paint manufacturers in Malaysia by market share, is exploring opportunities to diversify and expand its existing business.
It is looking at up to four business proposals from other players in the local industry for a potential diversification, possibly via acquisitions.
It is in net cash position. It had rm6.46 million as at June 2011 comprising rm1.67 million cash and rm4.78 million short term deposits and virtually no borrowings.
Datuk Tiong Kwing Hee is the largest shareholder now with 4.41 million shares or 10.06% equity. Thang Joo Chiet has a 7.56% stake while Liau has a 5.22% stake.
Tiong is also sits on the board of EcoFirst and a substantial shareholder of Meda Inc with 5.78% stake.
While Mercury is busy looking for businesses to acquire, industry sources say the company itself is the potential acquisition target of some of the world’s top paint manufacturers.
AkzoNobel nv is the world largest coatings manufacturer by sales, followed by PPG Industries Inc and DuPont Coastings & Color Technologies Group. One of the top three paint makers in the world is keen on buying the company’s entire assets and retain its management team.
The company has registered continuous annual growth from 2006 to 2010. Its net assets per share stood at RM1.15.
Its shares are tightly held by its major shareholders. The top 30 largest shareholders collectively hold 75%.
It should be noted that the coatings and paint manufacturing business is susceptible to volatile crude oil prices because of its raw materials are petroleum based.
It is looking at up to four business proposals from other players in the local industry for a potential diversification, possibly via acquisitions.
It is in net cash position. It had rm6.46 million as at June 2011 comprising rm1.67 million cash and rm4.78 million short term deposits and virtually no borrowings.
Datuk Tiong Kwing Hee is the largest shareholder now with 4.41 million shares or 10.06% equity. Thang Joo Chiet has a 7.56% stake while Liau has a 5.22% stake.
Tiong is also sits on the board of EcoFirst and a substantial shareholder of Meda Inc with 5.78% stake.
While Mercury is busy looking for businesses to acquire, industry sources say the company itself is the potential acquisition target of some of the world’s top paint manufacturers.
The company has registered continuous annual growth from 2006 to 2010. Its net assets per share stood at RM1.15.
Its shares are tightly held by its major shareholders. The top 30 largest shareholders collectively hold 75%.
It should be noted that the coatings and paint manufacturing business is susceptible to volatile crude oil prices because of its raw materials are petroleum based.