Sunday, July 31, 2016

RGB eyeing new business in Europe, South America

GEORGE TOWN: Electronic gaming machine and equipment maker RGB International Bhd is eyeing new businesses in Europe and South America, as the company seeks to expand its market reach.
RGB derives 95% of its sales from the Asia-Pacific region.

“We want to move away from our traditional markets to broaden the revenue base for the group,” said group managing director Datuk Chuah Kim Seah (pic).

The company, he said had secured orders for 700 units of gaming machines valued at RM80mil for the first half 2016.

About 500 units had been delivered to customers.

“The remaining 200 will be delivered in the third quarter. With the delivery of the 700 units, we are projecting double-digit percentage growth over last year’s net profit,” he told StarBiz.

The sales of gaming machines made up about 70% of the group’s revenue, while the remainder was contributed by the RGB’s gaming concession programme, which included the leasing of machines and equipment.

Chuah said the group was targeting to sell more machines than last year’s 1,300 units, which generated RM145mil in revenue.

For the second half, the group had 400 more gaming machines with an estimated market value RM45mil to deliver before the end of the year.

“The total undelivered units to date is 600, which includes the 200 yet to be delivered units secured in the first half.

“To surpass last year’s goal, we need to secure sales for 300 more units,” he said.

On RGB’s concession business, the leasing of the machines in the Asia region is expected to generate RM7.6mil per month for 2016, compared with RM7mil in 2015.

RGB leases its gaming machines to customers in Indochina, the Philippines, Timor Leste and Nepal.

“The Philippines is one of the largest markets for us,” he said.

Chuah said the group would be leasing machines soon under its concession programme to Kathmandu, which is a new market for the group.

“The machines are ready to be shipped out and should be operational by the fourth quarter,” he said.

RGB reported a 37% increase in net profit to RM5.9mil in the first quarter ended March 31, as revenue improved 45% to RM56mil.

Meanwhile, the group has settled the remaining RM27mil debts owed under the Commercial Papers Medium Term Notes (CPMTN) programme ahead of the scheduled final payment due in 2019.

“The group has more than RM60mil cash in hand, after settling the CPMTN debts,” Chuah said.

This cashpile will come in handy as the group explores opportunities in new markets.



Holistic View of SKP Resources with Fundamental Analysis & iVolume Spread Analysis (iVSAChart)

Background and Core Business

SKP Resources Bhd was listed on Bursa Malaysia in 2000 and is categorised under the Miscellaneous Manufacturing industry. It belongs to the Industrial Product, FBM Small Cap and FBM Emas Indices. SKP Resources Bhd is an integrated plastic manufacturer, with 3 wholly owned subsidiaries: SKP (Syarikat Sin Kwang Plastic Industries Sdn Bhd), GHI (Goodhart Industries Sdn Bhd) and GHL (Goodhart Land Sdn Bhd). They also own 63% of another subsidiary known as GHT (Goodhart Technology Sdn Bhd). They are based in Batu Pahat, Johor.
Essentially, all the subsidiaries work synergistically from design and fabrication of high precision plastic molds to the manufacturing of plastic parts and components, sub-assembly and other secondary processes. Each subsidiary specialises in the manufacturing of distinct products for different clients. These parts are finally used as casings of media players, printers/scanners, video game console peripherals and also TV cabinets.
SKP Resources proudly lists their clients (both direct and indirect) from MNCs such as Apple, Fujitsu, Sharp, Pioneer, Dyson, HP, Flextronics, Microsoft and Sony.
The FY ended on 31st March 2016 and they are in their 1st quarter for FY 2017. The next quarterly results should be due sometime in August 2016. Market capitalisation stands at around RM1.4 billion.

Financial Brief and Ratios (Historical)
SKP Resources (7155.KL)
FY 2016
Revenue (RM’000)
Net Earnings (RM’000)
Net Profit Margin (%)
PE Ratio (PER)
Dividend Yield (%)
ROE (%)
Cash Ratio
Current Ratio
Total Debt to Equity Ratio

SKP Resources had seen stellar growth in their revenue for the past 5 years, with the highest turnover recorded in FY 2016.  This translated into a profit of RM 82 million for its shareholders last year, while profit margin increased only slightly from 6.8% to 7.8% y-o-y. This is due to the increase in cost of revenue, reported at a figure of RM 902 million.
Although the PE ratio is not low, it has reduced over the years from the 40s to less than 20 today. ROE is relatively on the low end. No dividends were declared for FY2016. It is worth mentioning that the company had managed to reduce their current liabilities by nearly half from RM 410 million to RM 200 million during FY 2016.
In terms of cash flow, it has recorded its highest operating cash flow in 2015 at around RM 221 million, at the same time using up to RM 149 million for investing activities in the same year. In line with the increase in cost of revenue during FY2016, do take cautionary note that operating cash flow has turned negative to -RM 37 million from RM 221 million just a year ago. Similarly, Free Cash Flow has turned negative to -RM 70 million for FY 2016.

iVolume Spread Analysis (iVSA) & comments based on iVSAChart software – SKP Resources

·      Above is SKP Resources weekly chart showing price & volume action for the last 6 months
·      Prices were ranging sideways with some Signs of Strength (green arrows) seen around pivot lows
·      Although the bulls had their chance, there were unsuccessful attempts to break beyond RM 1.40 level
·      Instead its’ prices drifted lower after the Sign of Weakness (red arrow) appeared in May 2016 culminating in breaking of support level around RM 1.23 in June 2016
·      Strong hands emerged when prices hit around the level RM 1.14 to RM 1.12 and the down move has temporarily ceased
·      For a sustainable new uptrend, not only do we need to see prices reacting favorably to the Signs of Strength (green arrow) that have appeared in July 2016 but also bullish attempts to rally and break above the RM 1.40 level

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This article only serves as reference information and does not constitute a buy or sell call. Conduct your own research and assessment before deciding to buy or sell any stock. If you decide to buy or sell any stock, you are responsible for your own decision and associated risks.

Dear Investor Quarterly report on investment: kcchongnz

Dear Investor,
From the beginning of this year, the US stock market have proven to be exceptionally resilient in the face of market volatility, despite being on many measures the most expensive. The broad S&P500 Index has risen by 6.4% from 2044 points from the beginning of the year to close at all-time high of 2174 at the end of July 2016. The S&P 500 Index has gone above a PE ratio of 20.
Most bourses in the matured markets follow the trend of Wall Street. However, Bursa bucked the trend with the KLCI Index dropped by 2.4% year to date to 1653 at the close on 30th July 2016.
As at 30th July 2016, I have purchased a diversified portfolio of 15 stocks for you as shown in the attached Excel file. Focus Lumber was cut loss and sold off after a drop of 18.5%. I am afraid there is something I do not know as a major shareholder has been selling the stocks relentlessly. Furthermore, if the share price drops further, I am afraid heavy margin calls for some traders will come into play, which can be quite scary. Otherwise, I still think at this price now at RM1.70, the downside is limited, considering its good fundamentals; consistent earnings and cash flows and healthy balance sheet.
The proceeds of the sales were used to purchase KESM and Stock O, which proved to be a very good move as their share prices have moved up by about 20% since purchased.
Your net gain for this quarter is +7.37% against the loss of the broad market of 3.9% during the same period, or for a positive alpha of 11.27%. This includes ex-dated dividend you have received, or to be received for some stocks as shown in the spreadsheet attached.
The good performers are SAM (+27.4%), Thong Guan Holding (+23.3%), Stock H (+22.5%), and Stock O (+21.4%), KESM (+19.2%), Stock G (+14.4%) and Padini (+13.1%). Not too bad relatively for this short-term period of just three months, when the broad market has actually declined by 3.9%. 
Note that except for Focus Lumber which incurred substantial loss, the loss of those few underperforming stocks are generally very minimal, all with low single digit losses, whereas the gains are generally outsized as shown above. This fits my investing philosophy below perfectly,
Take care of the downside, and the upside will take care of itself.”
It is still too early to conclude anything as the return is only for a short-term of just three months’ period as investing is a long-term endeavour. I am sure there are many others out there who have done better, or much better. However, I believe if we follow the “correct” philosophy, “right” methodologies, “well-proven” strategies, and a “well-thought of” process in investing, I believe one should be able to earn reasonable and satisfactory return over a long period of time. And most of all, with lower risks.
Before I stop, I would like to address some issues raised by one of your course mates.

Quote [Hi Kc,
Good day to you.
Would like to ask you about the current economic climate.
I have been very cautious lately about stocks in general as US S&P index is at an all time high, fueled mainly by cheap money. Therefore I am just buying REITs and also some property developers stocks at the moment. 
Am I right in my assessment to say if the US market crash, it will bring the world down with it? Including Bursa, SGX and HKEX? Or would it depend, if we buy the right company, which are not too richly valued now, a crash will not affect these companies much?
Also, would it not better to preserve cash now?
BUT, I do know no one can forecast this and how severe it will crash, but my concern is - would all countries be affected similarly?
Also I am thinking if it is a good idea to be holding ringgit now? On one hand I see it is undervalued, but on the other hand, our economy do not look healthy.
Would you recommend that we keep some other currencies (If so, what currencies? SGD?) or even gold/silver as a way to diversify our wealth?] Unquote

Robert Shiller, in his book “Irrational Exuberance” shows that the average historical PE ratio of S&P is 15.6. At S&P PE ratio above 20 now, the US market is not cheap any more. But is it expensive?
In today’s Business headlines in Yahoo Finance, “Sell everything”, said DoubleLine’s Gundlach, when S&P 500 touched an all-time high of 2177. He advises investors to hold gold instead. We have also constantly heard from one well-known fund manager singing the same tune, over and over again every year, and already for many years.
I personally really have no ability to predict what the US stock market will crash or not, and if but if it does, it will definitely affect the other markets in the world, including Bursa, SGX and HKX. I do not think anyone else can confidently predict that. But if you are really that scared about it, maybe it is advisable for you to preserve cash, but maybe not purely in Ringgit which I will elaborate later. Note when market crashes, Reits and property stocks will also not be exempted from the fall.
What is the use of holding gold or silver when there is no convenient yield from them? You may even have to pay for their storage if it is physical gold or silver. Historically, the real return of gold is insignificantly different from zero.
What are you going to do with the cash when the real return after inflation is negative? With the low interest environment and many countries pumping liquidity into the financial system, where will those cash end up to, into the bonds where yields are so low or even negative, or likely into the equity market where the earnings yield is 5% (inverse of PE of 20)?
I have no concrete answer, nor any prediction to the above as there are many factors affecting the capital markets and investment. Hence although I take heed about all these macro news, I try not to let them rule on my investment decisions.

I will continue to focus on scouting for good companies at cheap prices to invest in, with good investment principles, following the principle that investing in a stock is investing in part of a business. And never forget about risk; the risk of paying too much for a business which may turn out to be wrong in our decision.
I will also never forget about diversification, asset allocation and including geographical diversification, and hence diversification into SGX and HKEX, for example. Remember, diversification is the only free lunch in investing.
There are some clear problems in our beloved country, with some rampant corrupt practices, political risk, currency depreciation risk etc. Hence it pays to diversify into other currencies if you have substantial wealth, and those who have the intention to send their children to study overseas later. Investing in overseas bourses such as SGX and HKEX present a better option as diversification than putting there in cash which produces very low yield.
More importantly, the stock markets in Singapore and Hong Kong are much more attractive valuation wise, with PE ratio of 12+ and 10+ respectively, compared to the 18+ in Bursa. I can find many more companies fitting very well with the Joel Greenblatt Magic Formula, Dr Neoh Soon Kean’s dividend yield, and Graham net net investing strategies which I have been propagating to you in your online course in these countries. Besides, the corporate governance in those countries seem to be better and they are more transparent.
Anyway, the above is just my personal view. You have been taught to be independently thinking.
Please do not hesitate to contact me at the following email address if there if you need any help.
Happy investing. Investing is a long-term endeavour.

KC Chong

Wednesday, July 27, 2016

MQ Research: AirAsia’s air traffic beats estimates

AirAsia reported its operating numbers for the second quarter of 2016, reflecting the performance of its Malaysian, Thai, Indonesian, Indian, and Philippine entities. In terms of air traffic, AirAsia unveiled a better-than-expected performance, beating Macquarie Equities Research’s (MQ Research) estimates by 7.8%, which translated to a better than expected load factor. In its report, MQ Research reiterated an ‘Outperform’ rating on AirAsia, with a 12-month target price of RM3.50.
  • AirAsia (AIRA MK) released a good set of 2Q16 operating statistics on late Tuesday.
  • In terms of air traffic (RPK), its Malaysian entity, the major contributor to MQ Research’s sum-of-parts target price, is tracking 8% ahead of MQ Research’s estimates and its India entity is tracking marginally above expectations (4%), while its Thai and Indonesia entities are tracking in line with MQ Research’s estimates. However, its Philippine entity is tracking marginally below MQ Research’s estimates due to an unexpected capacity reduction.

  • Load factor improvements across its five entities in Malaysia, Thailand, Indonesia, Philippines and India.
  • Malaysia AirAsia improved load factors by 6.7% to 87% and delivered a 10% passenger growth in an industry that had zero growth in 2Q16.  Traffic beat MQ Research’s expectations by 7.8% and capacity was in line with MQ Research’s expectations, leading to the positive surprise in load factors
  • Thai AirAsia delivered double-digit passenger growth in 2Q16, carrying 18% more passengers in 2Q16. Its three-year compound annual growth rate (CAGR) stands at 20%, a commendable performance, in MQ Research’s view. Capacity and traffic figures for Thai AirAsia were in line with MQ Research’s expectations.
  • Indonesia AirAsia, in line with its restructuring plans, carried 2% more passengers. Load factors were 83%, an increase from 73% in 2Q15. Capacity and traffic figures for Indonesia AirAsia were in line with MQ Research’s expectations.
  • Philippines AirAsia surprisingly reduced 7% year-on-year (YoY) capacity in 2Q16, thus leading to traffic figures marginally below MQ Research’s expectations. Load factor received a boost, at 91% for 2Q16 vs MQ Research’s expectations of 85%.

Action and recommendation
  • Reiterate Outperform with a target price of RM3.50 (+25.8% TSR).
Source: Macquarie Research - 28 Jul 2016

Monday, July 25, 2016

在过去十年里,乐高 (LEGO) 都做了什么使得净利润增长 32 倍,每年营收也长时间保持两位数增长?


看到 2005 年财报的 net profit 是 2.14 亿丹麦克朗,而 2014 年这个数字是 70 亿克朗。









Monday, July 18, 2016

Genting - Are you ready to place your bets?

Genting - Are you ready to place your bets?
Genting "GENT" (pronounced as, definitely not pronounced using the Queen’s English otherwise will sound like you need to use the Gent.) is a household name mainly known for their leisure themeparks, casinos, cruise, plantation, and property.  To understand Genting, one would need to take a look at Genting Singapore (GENS), Genting Malaysia (GENM) and Genting Plantation (GENP).
You will find a lot of pictures and charts in this note. They say a picture tells a thousand words. Much easier to understand IMO.
For GENT the following 4 catalysts to drive the share price. Namely. 1) Turnaround in GENS, 2) The launch of Twenty Century Theme Park at Genting Highlands Malaysia, 3) TauRx, the potential blockbuster drug getting FDA approval. 4) GENP's leverage to CPO.
Catalyst 1. We expect GENS to turnaround. This following the recent 1Q results which saw GGR stabilizing as of 1Q16 while bad debt provision has stayed flat at 35%.

The share price of GENS has started to stabilized too.  Earnings expectations already all time low!

If tourist arrival start to improve,  the gaming and theme park of GENS will improve.

Catalyst 2. We move on to 52.9% owned GENM which operates the highland theme park.  This was what it look like in the good old days of 90s.

Come 2017, the theme park should be ready and look like this...

That’s right folks. Twenty Century Fox is opening a theme park in partneship with Genting Highlands. This is part of Genting Integrated Tourism Plan (GITP). For GITP, GENM is spending a total MYR8.1 bn and 2.3bn in capex for phase 1 and 2 respectively. In the past, the local theme park is big ROIC generator.

As someone who hasn’t been to the highland for ages, I can’t hide the excitement. Haha.
The theme park is expected to be ready by end 2017. Management however has hinted July 2017 to the investment community.  For the latest photos on their status, please refer to
20th Century Fox World Genting Theme Park Rides
• Rio
• Ice Age
• Titanic
• Life of Pi
• Planet of the Apes
• Alien vs. Predator
• Night at the Museum

As the theme park is being build as we speak, the financial numbers for GENM is of course not exciting. For 2016, GENM’s revenue will be driven by its UK business.  The recent Brexit should not affect much on its UK operation. DB estimated about c1% decline in  core profit for every 10% depeciation in the pound. UK assets comprises 19% of GENM of total assets in the form of casino property.

Similar to GENS, GENM’s earnings has already bottomed, how low can it go?

History doesn't repeat itself but it often rhymes,”  Mark Twain
The timeline on GENS from start construction to finish/opening of thempark and share price during the same period. I believe the same could happen for GENM.

Catalyst 3. TauRx may provide a blockbuster boost for Genting’s valuation. Its initial investment of MYR450m or USD150m could be worth RM15b if TauRx goes for IPO listing. This would add RM10.4b or 40% to the sum of parts of Genting.
TauRx, founded by Claude Wischik is involved in Alzeheimer research. Its biggest backers include Genting, Singapore Temasek and little known Dundee Corp.
When the Star and bloomberg news reported about this drug. The investors reaction was bullish and share price of Genting soared from MYR7.00 to MYR9.90 in 3 months.

To follow TauRx.
The excitement in TauRx is clearly reflected in the share price of Dundee Corp which has rallied some 58%  YTD.
The key date to watch will be around 27 July 2016 where the company will present results from its third phase of human trial on its experiemental Alzheimer’s drug known as LMTX.
Meanwhile, we can see insiders buying Genting.

Type Announcement
Description Pursuant to Paragraph 14.09(a) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, we set out below details of the dealings in the Company's securities by a Principal Officer.
Name of Principal Officer : Tan Kong Han
Date of Dealing
Consideration per Share
Number of Shares
% of Issued Share Capital
24 June 2016
27 June 2016
Remarks : The percentages are computed based on the total number of issued and paid-up share capital of the Company excluding a total of 26,220,000 shares bought back by the Company and retained as treasury shares as at 24 June 2016 and 27 June 2016 respectively.

Mr. Kong Han Tan has been Deputy Chief Executive Officer of Genting Plantations Berhad since December 2010. Mr. Tan served as President and Chief Operating Officer of Genting Berhad. Mr. Tan served as the Group Chief Operating Officer of Tanjong PLC from March 2003 to June 2007. Mr. Tan has more than 13 years of working experience with an Investment Bank in Malaysia. He has been a Director of TauRx Pharmaceuticals Ltd., since November 20, 2012. He was called to the English Bar (Lincoln's Inn) in 1989 and the Malaysian Bar in 1990. He holds Bachelor of Arts degree in Economics and Law from Cambridge in 1988.
OMG!, insider buying ahead of clinical phase 3 trials.. a signal of confidence?
Catalyst 4. GENP is a company involved in crude palm oil (CPO) production. It has fairly young mature estates with good FFB and CPO volume growth. It also has a property development arm. It is leverage to CPO price movement.

GENP earnings and price has bottomed?

Valuations of GENT

So are you ready to place your bets?

Fyi Investors’ chips are already rolling into Genting.

Sunday, July 17, 2016

AirAsia and Norwegian Air Could Create A Worldwide Low Cost Alliance

Two of the world’s most successful low cost carriers could soon be joining forces.
Norwegian newspaper Dagens Naeringsliv has reported that AirAsia boss Tony Fernandes met with Norwegian Air CEO Bjorn Kjos at the Farnborough International Airshow. The two reportedly want to set up meetings to discuss the possibility of a joint venture.

Friendly competitors or allies? 
Kjos praised AirAsia as he stood next to Fernandes at the World Airline Awards. Speaking of both airlines’ awards for best long haul low cost carrier and best low cost carrier, Kjos said, “These are the world’s two best airlines. [The awards] show that the customers like our product. They’re the ones who voted for us.”
Fernandes, for his part, donned a Norwegian Air pin and told Kjos “If I get the opportunity to come to Oslo, we should sit down and talk. Why not?”

A worldwide low cost carrier alliance
Should such a joint venture come to pass, the two airlines would be able to cover most of the world. AirAsia has more than 200 routes in Asia and the Pacific regions. Norwegian flies extensively in Europe and has been dramatically expanding its international route offerings. The US market has been a major target for Norwegian, though it has met with resistance from American labor unions and regulators.
AirAsia’s low cost long haul wing, AirAsia X, does fly to Europe, but most of its routes are in Asia and Oceania. Sharing passengers with Norwegian would allow it to reach further into Europe and even into North America. Norwegian, likewise, has a limited number of routes to Asia (to Thailand, Hong Kong and India). So, on paper at least, this seems like a perfect match.

Or could they become rivals
AirAsia is looking to expand its route options in Europe through AirAsia X. Fernandes has already teased more flights to the UK. Potentially, he could also opt to open routes into Scandinavia and use Norwegian’s European services as feeders. Norwegian could want to expand in the other direction, using AirAsia as a feeder airline. If the two carriers cannot come to an agreement about which airline flies which route, they could just as easily become competitors instead of partners.

Following the trend
Such joint venture partnerships have become more common as airlines look to minimize the risks and costs of expansion. United Airlines recently partnered with Air New Zealand, for example, and American Airlines has joined forces with South American super-carrier LATAM on intercontinental routes.
In the current climate, a joint venture between Norwegian and AirAsia does not seem at all far fetched.

Making low cost carriers global
An alliance between Norwegian and AirAsia could signal a new era in the evolution of the low cost carrier phenomenon, which is still mainly focused on regional flights. Carriers like Norwegian and WOW have brought the same low fare model to transcontinental flying, but the trend is still in the very early stages of development. It will be some time before travelers will be able fly anywhere overseas on low cost carriers like they now can on full service airlines.
It is an attractive idea, however. With worldwide networks, low cost carriers could make international travel possible for many people who could not previously afford it (the same way that they have made flying more affordable on the domestic level).
For American fliers, a joint venture between AirAsia and Norwegian could eventually mean low cost flights to both Asia and Europe. As fuel costs start to rise again and airlines start murmuring about raising fares, that would be a very welcome development.
The only reason this is a story is because of the people involved. Both Kjos and Fernandes are shrewd businessmen who have showed a knack for developing the next trend before everyone else. If a long haul low cost revolution is to take place, both their airlines will certainly be a part of it.

Thursday, July 14, 2016

AirAsia-Norwegian Air cooperation in the works

Tony Fernandes and Norwegian Air’s boss discuss possibility of sending passengers into each other’s network routes.
Oslo: More tourists from Scandinavian countries and Europe might be flying into Kuala Lumpur and Asia if a move by AirAsia to tie-up with Norwegian Air materialises.
AirAsia and Norwegian Air are exploring a possible joint venture, according to Norwegian newspaper Dagens Naeringsliv (DN).
AirAsia founder Tony Fernandes met Norwegian Air founder and chief executive Bjorn Kjos for the first time at the Farnborough International Airshow, it said.
The newspaper said they discussed the possibility of sending their passengers into each other’s route networks in Europe and Asia. quoted DN as saying the cooperation could start in about a year and that it would create a new era in route offerings for Norwegian passengers in Asia.
The two airlines, it said, had a lot in common, growing at a rapid pace on the back of relatively cheap airline tickets and creating wide route networks in their respective markets.

AirAsia has more than 200 routes in Asia using mostly Airbus aircraft while Norwegian Air has an extensive route system within Scandinavia and Europe, and is keen on expanding its intercontinental routes as well.
DN reported that Fernandes pointed to a Norwegian Air button he was wearing on his lapel, asked Kjos for his phone number and said he wanted to fly to Oslo for a serious talk.
It quoted Fernandes as telling Kjos at the airshow: “We’ve never had the opportunity to meet each other before now. If I get the opportunity to come to Oslo, we should sit down and talk. Why not?”
The two airlines could soon be competing on intercontinental routes between Europe and Asia as Fernandes intends to re-launch a route between Kuala Lumpur and London.
He had also mentioned flying into one of the Scandinavian capitals as well, feeding passengers into Norwegian Air’s route system for onward travel. Kjos, the report said, didn’t reject the idea.
“We wish him welcome and like competition,” Kjos told DN, calling Fernandes “a great guy” who leads “a very good airline”.
At Farnborough, Norwegian Air won the Skytrax Award as Europe’s best airline for the fourth time, and as the best long-distance low fare airline for the second time. The Skytrax prizes are based on votes from passengers worldwide.
AirAsia, meanwhile, won four prizes including the one for the best low-fare airline in the world.
“These are the world’s two best airlines,” Kjos claimed as he stood with Fernandes at Farnborough, according to DN. The prizes “show that the customers like our product. They’re the ones who voted for us.”

A321neo orders good for AirAsia

AirAsia Bhd
June 13 (RM2.75)
Maintain add with an unchanged target price of RM4.15: Investors whom we spoke to on AirAsia Bhd’s order of A321neos have generally been cautious about the potential orders, fearing that AirAsia is once again over expanding. Investors did not like the additional 100 orders which come at a list price of US$125.7 million (RM499 million) each, as they come on top of the undelivered 304 A320neo orders. However, we believe that the orders are good for the AirAsia group, and there is no need to fear.
From an operational perspective, the A321neos are good for AirAsia. A321neos usually seat 220 passengers, but from 2018, a new version with 240 seats will be offered. The A320s currently seat 180, but this can be raised to 186 under a new configuration. So, the new A321neos offer 33% more capacity than AirAsia’s current fleet, and can help AirAsia optimise the service of existing high-density routes.
This will be important for AirAsia on routes such as Kuala Lumpur to Kota Kinabalu, where it had wet leased several of AirAsia X’s A330s this year to cater to the strong demand at specific flight timings. A higher-capacity aircraft can also help AirAsia reduce its unit flying costs, which will improve flight profitability for thick routes.
Airport congestion is also a major issue that is being faced by Asean airports. For instance, Cebu Pacific Air currently has 30 A321neos on order, against a fully delivered fleet of 38 A320s. This is important since the Manila airport is very congested, and also affecting AirAsia Philippines.
Thai AirAsia is facing similar congestion issues at Bangkok Don Muang, and Indonesia AirAsia in Jakarta. So we think a good number of the A321neos may be placed outside Malaysia.
Also, history has shown that AirAsia has significant flexibility to negotiate deferrals with Airbus when needed, so the orders placed today are meant to secure the future delivery slots. Should demand slow in future, we are confident that AirAsia will be able to defer the deliveries to avoid overcapacity.
The A321neo orders may be parked under the leasing arm Asia Aviation Capital (AAC). We expect this to boost the valuation of AAC to above the US$1 billion which is already on the table from a potential Chinese buyer, as it locks in future delivery slots at what we expect to be attractive prices.
A higher valuation for AAC has the potential to boost upcoming special dividends upon the partial sale of AAC.
If and when a formal announcement on the A321neo orders are made, we would look at several details including: i) over how many years the 100 A321neo orders will be delivered; ii) when the A321neo deliveries will start; and iii) whether the 100 new A321neo orders will replace some of the A320neos that are currently on order.
If the orders are spread out over many years and deliveres do not start until several years later, we expect current investors’ concerns to be alleviated. The major risk to AirAsia is if there is a terrorist attack on Malaysian soil, which could impact inbound travel demand into Malaysia, much like the Erawan shrine bombing in August 2015 which affected tourist arrivals into Thailand. — CIMB Research, July 12

Tuesday, July 12, 2016

This Is Why the World’s Most Successful Investors Are Buying Gold Now

Don't make the mistake of ignoring what an all-star roster of the world's richest investors is doing right now. They are buying billions of dollars' worth of gold.
(This is one of many reasons that it makes a lot of sense to have gold in your portfolio. We explain the why and the how in a free 22-page special report you can download here.)
For example, hedge fund legend Stanley Druckenmiller has earned an average of 30% a year for 30 years, without a single negative year. And currently, 18% of Druckenmiller's portfolio is made up of the SPDR Gold Trust  (GLD) , an exchange-traded fund that tracks the price of gold bullion.
George Soros, the man who "broke the bank of England" in the early 1990s, earned $1 billion by shorting the British pound. Along with Jim Rogers, Soros also earned investors a 3,365% return in just 11 years with the Quantum Fund.

Now, Soros owns a $264 million stake in Barrick Gold  (ABX) , the largest gold mining company in the world. It is his fund's second-largest holding. But that's not the only gold Soros owns. He also bought more than 1 million option contracts on the SPDR Gold Trust.
Another well-known investor with a stake in gold is David Einhorn of Greenlight Capital. Einhorn's investors have seen average annual returns of 16.5% since 1996. Now, he has a $165 million stake in VanEck Vectors Gold Miners ETF  (GDX) .
The list goes on with other big names like Paul Singer, Carl Icahn and John Paulson all owning large stakes in gold.
Why are so many big-name investors flocking to gold? As Druckenmiller said about his own large stake in the SPDR Gold Trust, it's because of the "absurd notion of negative interest rates."
Negative interest rate policy (NIRP) has flipped the world of international finance on its head. The concept of negative interest rates does not make theoretical sense. Instead of the borrower paying the lender with interest, the lender pays the borrower to take his money. Even former Federal Reserve Chairman Ben Bernanke didn't think this would happen. In 2009 he said, "No one will lend at a negative interest rate; potential creditors will simply choose to hold cash, which pays zero nominal interest."

Sunday, July 10, 2016

松下50周年- PANAMY(3719)上市50周年,50年从RM1,350 变成RM1,032,712,

我们都知道PUBLIC BANK的神话,因为它造就了无数的百万富翁。而今天要跟大家分享另外一家消费股神话,那就是松下电器PANAMY。这家公司的产品出现在很多人的家里,例如风扇,冷气,热水器,电饭锅等。而PANAMY的股价都是高于RM10, 是消费大象股。

不过它是一家净现金公司,而且派息非常大方,最近5年的平均派息%高达92.1%。也就是说公司每年平均赚RM100, 其中的RM92.1都会拿来派发股息。所以这家公司是股息投资者的最爱,因为过去几年的周息率介于4 - 7%之间。假设投资者在1966年IPO买进RM1,000股,过后在1975年subscribe RM350的附加股。当时的RM1,350资本在50年后就会变成了RM1,032,712( 7月4日股价 = RM29.82)。以下是计算方式。

上图是在PANAMY的ANNUAL REPORT 获得的计算,假设当初的Initial Capital是RM1,350, 在资金增长+股息收入的成长下,50年的回酬将如上。不过以上的价格计算时RM22.00,所以笔者以最新的股价RM29.82以及加入2015年12月收到的15仙的股息计算,50年的投资将会让你的RM1,350的投资变成RM1,032,712。



19384*29.82 = RM 650,0333


2016年收到15仙的股息 = 19384*0.15=2907.6
Total Dividend = 379,472+2907 = 382,379

Total Wealth as at 4 July 2016 = 650,0333 + 382,379 = RM1,032,712




觀點 - 施永青 黃金會恢復歷史上的功能嗎?








格林斯潘早年曾是艾茵‧蘭德信徒。1966年曾在《The Objectivist》雜誌發表一篇名為“Gold and Economic Freedom”的文章,主張維護黃金的原始功能,並以金本位的方式,去限制政府胡亂發鈔。想不到他後來竟會去當聯儲局主席,並不斷以減息的方法去擴大貨幣供應;次按危機與全球金融海嘯可謂是他有份搞出來的。不過,他的這篇文章仍值得讀者上網一看。 



FROM: 1296.【马股风云榜】- 2016马股上半年涨幅最多的30家公司,10家公司上涨超过100%!!

1. 【上涨%最多】的30家公司
2. 【RM1以上】%上涨最多的20家公司
3. 【股价涨幅】最多的20家公司
4. 【美金出口股】跌幅最惨重的其中15家公司!

以上的RCECAP是因4:1 consolidation,所以不应该上榜,以上失误请大家多对见谅。
  • 今年一共有10家公司的涨幅超过100%,当中最风光的莫过于航空股AAX以及AIRAXIA,在10大涨幅股当中,只有AIRASIA的股价是超过RM1的。
  • 不过从上图的30家【涨幅%】最高的公司来看,大部分的公司都是来自航空,钢铁,消费,科技以及【热炒仙股】
  • 而当中股价超过RM2的只有5家,分别是AIRASIA, PMETAL, TRIPLC,SLP以及AJI.

  • 以上的榜单是股价超过RM1,【涨幅%】最高的20家公司。
  • 这20家公司大部分来自消费服贸,工业以及建筑领域。
  • 当中的大象股就有AJI, F&N以及SCIENTX。借此我们可以看到,只要有【价值】的大象股,股价再贵也是可以上涨的。

  • 而上图20家公司是股价涨幅最高的公司,消费股可说是今年的大赢家,一共有9家入榜,6家工业股,其他就是种植,金融以及服贸股。
  • 而这20家公司当中,2015年有18家的盈利是进步的,2016Q1只有3家盈利退步,分别是LAYHONG, PIE以及UTDPLT。
  • 所以【盈利永远是决定股价】的首要因素,亏钱的公司是很难有这样的表现的。

  • 最后1个榜单就是去年非常火热的出口股,以上15家公司去年平均上涨152.3%,但是今年全部平均下跌了29.49%。【所以说股市欠你的,它一定会还给你。而你欠股市的,它迟早会收回。】
  • 当中大部分来手套,科技以及家私领域。而在2016Q1的业绩当中,超过半数也就是8家的公司盈利YOY是下跌的。所以大家可以看到跌幅比较严重的10家有8家都是盈利下跌,而跌幅比较少的10家公司在2016Q1盈利都是有进步的。
  • 但是在最新的季度当中,COMFORT, VS以及POHUAT的盈利YOY都退步了。