Goldman Sachs acquired additional shares in RCE

High profile foreign investment fund, Goldman Sachs acquired another 2,200,000 shares of RCE Capital Berhad. Goldman acquired the shares after RCE announced another good quarter result on 22 May. Filing to Bursa Malaysia shows that they acquired on 23 May (1.40mil units), 24 May (1.13mil units) and 25 May (0.67mil units). After these acquisitions, Goldman Sachs holds 54mil shares of RCE. This represents a total of 8.35% of total paid-up shares of the company.
The trading price range of the above 3 days is from RM0.82 to RM0.89. Goldman is comfortable to add weight in this company at the mentioned range. Once again, looking at the investment track records of Golman, I am very confident that RCE stock price will grow to another higher level. It closed at RM0.81 today and this should be a very attractive price for value investors to buy in now.
Will RCE stock price increase like E&O or AsiaEp?

Mahsing Q107 result

There is no surprise from Mahsing for their Q107 result. The recorded revenue is RM141mil and the net profit is RM17.9mil, with EPS of 10.61 for the quarter ended 31 March.

Below is the performance review that found in the announcement to Bursa Malaysia:

The Group recorded profit after tax after minority interest of RM17.9 million for the financial period ended 31 March 2007, a 20% improvement compared to RM14.9 million for the previous corresponding financial period ended 31 March 2006. The
improvement in profit after tax was attributed to contribution from more projects, especially when the Company has grown from 4 launched projects in the 1st quarter of 2006 to 8 launched projects in the 1st quarter of 2007. In the Klang Valley, all the Group’s properties are located within an 18km radius of Petaling Jaya which is the Klang Valley’s growth corridor, whereas all the projects in Johor Bahru are located in the southern tip of the Iskandar Development Region. The good response received by all the projects bears strong testament to the market’s confidence in the promise that the Mah Sing brand name holds.

The Board of Directors is confident that the Group’s focus in the lifestyle medium to high end residential market and commercial segment would result in continued good performance in 2007. This is in view that the property market is expected to enjoy a positive run especially in the medium to high-end segment, with improved sentiments due to several factors, including the spillover from the Ninth Malaysia Plan, a stronger ringgit, flattening interest rates, sustained economic growth momentum, growing income per capita and wealth creation from the stock market. The Group's strong track record, premium branding and innovative offerings will continue to attract good take up with the new projects coming on board in 2007, namely Kemuning Residence in Shah Alam, One Residence and Hijauan Residence in Cheras, Duta Perdana
in Puchong, The Icon@Jalan Tun Razak, The Icon@Mont' Kiara and Sierra Perdana in Tebrau-Plentong, Johor Bahru.

E&O - Proposed disposal of equity in E&O Prop and P Perdana

There is no surprise from E&O latest quarterly result. It has recorded revenue of RM320mil for the quarter ended 31 March 07. The net profit of the quarter is RM31mil and EPS is 7.39 sen. Higher dividend is proposed as well (4 sen vs 2 sen). Everything is in line with the expectation.
The only surprise that I got is E&O proposed to dispose 13.8% of their holding in E&O Prop and the entire holdings in Putrajaya Perdana. As an estimation, E&O will get a proceed of RM500mil from the disposals.
About a year ago, E&O MD, Datuk Terry stated that E&O will be a complete property company where it has property development, construction and hotel operations. However, E&O came out with this proposal just after the restructuring being completed.
It is a good chance for E&O to cash out their investment. Should capital repayment takes place after the disposal? Where and what is the growth for E&O in the future?
How the proceed will be utilised?
A bit confusing about E&O future ....

Nasioncom - Telco founder charged

Personally, I think it is a must to avoid in investing in this company as the management is not honest. There is no point to put your money in the company where it is run by a dishonest management team.

Below is the aricle from a local newspaper:

SHARES of Nasioncom Holdings Bhd declined by 11.76 per cent after three individuals were charged yesterday for providing misleading information about the company to the Securities Commission.
Former managing director Datuk Chee Kok Wing and former director Shamsul Khalid Ismail were accused of inflating the revenue figure of RM194.98 million shown in the company's 2005 Annual Report.

SC's investigation revealed that the financial statement contained a total of RM143.12 million of sales that were not transacted.

Both Chee and Shamsul pleaded not guilty and were allowed bail at RM200,000 and RM100,000 respectively. They were also ordered to surrender their passports to the court.

Mah Soon Chai, a shareholder of Express Top-Up Sdn Bhd, a unit of NasionCom, was also charged.

Nasioncom shares on Bursa Malaysia closed 1 sen lower at 7.5 sen yesterday. More than 13.9 million shares changed hands.

Value of its shares have gone down by 57 per cent so far this year. It has a market capital of RM60 million.

Mobile Content Developer of the Year - Frost & Sullivan

Nextnation Communication Berhad (Nextnation) was awarded the prestigious Mobile Content Developer of the Year at the annual Frost & Sullivan Malaysia Telecoms Awards Banquet, held yesterday. Fifteen titles were conferred at the event which was officiated by Deputy Minister of Energy, Water and Communications, Datuk Shaziman Abu Mansor.

The Frost & Sullivan Awards are presented to companies that demonstrate best practices in their industry, commending the diligence, commitment, and innovative business strategies required to advance in the global marketplace. The awards recognise companies which have pushed the boundaries of excellence and demonstrated outstanding performance in the telecommunications, information and communications technology industry.

In his acceptance speech, Group CEO and MD, Mr. PY Tey noted that the award is a validation and recognition of Nextnation's efforts and contribution in building a dynamic and viable mobile content industry in Malaysia. He noted that, "The company has been aggressively pursuing opportunities outside of the country, and to a large extent have been quite successful at replicating our home-grown business model in various countries in the region. I do not think it impossible, that in 3 to 5 years, Nextnation will become the leading mobile applications service provider in the Asia Pacific region, joining the ranks of many of our Malaysian peers."

He also thanked the judges, customers and employees of the group, "I wish to thank the distinguished panel of judges for selecting us as the Award recipient, our customers who have supported us towards greater synergy within the industry, and I personally would like to thank team Nextnation for journeying with me in making this company what it is today."

Winners were evaluated on revenue growth, market share and growth in market share, leadership in product innovation, breadth of products and solutions, and various actual market performance indicators. Frost & Sullivan's analysts short listed, researched and evaluated the top contenders in each category. The findings of the detailed evaluation were then presented to an independent panel of judges comprising representatives from the telecommunications sector, industry leaders and the media.

Article from The Star

Just in case if you have missed out an article from The Star:

Nextnation Communication Bhd was not a tiny fledgling company. It came to the market with a net profit of RM12.5mil in its financial year (FY) ended April 30, 2005. It was listed on Mesdaq in August that year.

Its net profit expanded 33% to RM16.7mil in FY06 and it completes its FY07 this month. For the first nine months of FY07, its earnings rose a further 33% to RM16.4mil, almost as much as the earnings for the whole of FY06.

In terms of revenue, it grew 60% to RM28mil for the first nine months of FY07 from the same period in FY06, which indicates it is successfully replicating its business model overseas. Nextnation, as its name suggests, is going places.

Its earnings growth, however, did not keep pace with its swift rise in revenue because additional costs were incurred in its expansion into Indonesia, Thailand and China. Even so, its net profit for the third quarter (Q3) ended Jan 31, 2007, rose 49% to RM6.4mil.

The acceleration of earnings growth in Q3 is believed to be attributable to contribution from its overseas markets.

Nextnation is set to post a net profit of over RM20mil in FY07, which would make it among the top five most profitable Mesdaq companies.

Maintaining its rate of annual growth, which looks achievable, the shares would be valued at a prospective price/earnings ratio (PE) of just about 6 times, which is a low price for a growth stock.

Additionally, there is a perception it is mainly engaged in developing games content which is channelled through mobile phone networks. Actually, the company develops software and invests in servers for data, including games, which are accessed on mobile phones.

It operates a tollgate for mobile data, and that lends it a higher level of business stability than companies that have to constantly develop popular new games.

Putrajaya Perdana Berhad

Construction arm of EnO posted another impressive quarterly result. By making a fast quarterly between quarter ended Mar'07 and Mar'06, revenue is increased from RM152mil to RM180mil. Net profit has increased ~RM4mil, from RM9.3mil to RM13.3mil.

Below are the notes found in the announcement to Bursa Malaysia:

Performace Review

The Group achieved a revenue of RM537.3mil for the financial year ended 31 Mar 07, representing an increase of 23% compared to the preceding financial year.
At the back of higher revenue recorded, the Group achieved a higher pre-tax profit of RM52.7mil representing an increase of RM7.3mil or 16% oer the pre-tax profit of RM45.5mil achieved in the preceding financial year.

Comment On The Results of Current Quarter Compared To Immediate Preceding Quarter

For the current quarter ended 31 Mar 07, the Group recorded a revenue of RM108.8mil and a profit before tax of RM18mil which represented an increase of 25% and 32% respectively as compared to the revenue of RM144.7mil and profit before taxation of RM13.6mil in the immediate preceding quarter.

Lastly, a final dividend in respect of the financial year ended 31 Mar 07, of 6.0 sen per share less 27 percent income tax will be proposed for shareholders' approval at the forthcoming AGM. This translates into a dividend of 11.0 sen for this financial year (interim dividend of 5.0 were paid).

The dividend payment looks interesting. However, the trading volume for this company remains very low with no major fluctuation to the share price, where it is traded within the range of RM1.90 to RM2.00 for the past few weeks.

Better result from P Perdana will surely contribute positively to EnO where it holds ~50% of P Perdana. Quarterly result of EnO will be due for release in this month as well. As EnO Prop will be recording higher revenue certainly, it should be a very good year for EnO.

GPacket: High receivable manageable

There is an article in this week The Edge where Green Packet CEO Puan Chan Cheong explained and confident that all its receivable will be collected. He pointed out, "That is the norm in the telecommunications business we are in."
Hopefully nX trade receivables is in the same situation where all of them will be collected eventually. Should nX, the winner of Mobile Content Developer of the Year, CEO Tey Por Yee (the below picture) comes out to do the same thing? I would think it is very unlikely where nX is a low profile company where you hardly find any research or article on them. However, it's financial performance talks about all their success stories. Unless we see or discover any negetive news about them, I have high level of confident with them and hope their overseas operations will start contributing to the bottom line positively in the near future.

RCE Capital Berhad

RCE received a strong buy call from Standard & Poor. PM has finally unveiled a much-anticipated and much-deservered pay rise for the civil service.
This move is positive for RCE, which provides financing to the civil service. Its loan book has grown by leaps and bounds, increasing from just RM69mil as at end-June 2005 to RM366mil as at end-Dec 2006. S&P expects this rapid pace to continue, aided in part by the increase in disposable income for the civil service.
The target price is RM1.05. S&P also project strong earnings growth over the next few years.

It is Nextnation again ...

Recently, there are a few of Nextnat (nX) shareholders are complaining about the weak performance of it's stock price. It closed at RM0.305 last friday (note: the price is adjusted after bonus issue [1:2]). This translates to the closing price of about RM0.46 prior to the bonus issue.
I tend not to write anything about the technique, skill, plan or any know how. This is because I believe everyone has their own way and belief. This only important point is to gain and win money from the stock market.
However, I would like to take this oppurtunity to write something about what I had read in a book about the greatest investor - Warren Buffett. According to the book, investors should not sell or dispose even though the price has dropped 50% from the purchase price. Investors should see the situation as the chance to accumulate more units at cheap/lower price. Of course, this is provided that you have picked up a good counter.
This makes sense to me if you have the holding power. For example, if you bought Genting @ RM20+ before the financial crisis and sold it @ RM10+. Then, you have lost almost 50% of your money. If you hold it and sell it today, I am sure you have made a very good profit as it touched RM40 this year. Furthermore, you will be able to gain more if you bought more @ RM10+.
In the other hand, if you bought a speculation counter or a counter without financial performance support, such as PSCI, Fountain and Karensoft, you should take necessary to cut loss as soon as you can.
In nX case, I do not see any bad or negetive development in the company at the moment. So, I think it is not necessary to dispose nX now. Of course, if you know something else out there which can give you better return, you may go ahead to dispose nX.
Personally, I would see this is a good oppurtunity for me to buy more. Cretainly, I hope there is nothing wrong with their high balances of Trade Receivables and Trade Paybles.

KEURO

According to my friend, it is worthwhile to key an eye on KEURO due to the following news:

Kumpulan Europlus Bhd. (KEUR MK): The Malaysian construction company said its unit signed a concession agreement with the government to build a 3.02 billion ringgit ($891 million) highway on the country's west coast. The concession period is 33 years. The shares added 3 sen, or 3.7 percent, to 85 sen.

Perhaps it is a good trading buy? Good luck ...

mTouche Technology Bhd

As I do not have any positive news about Nexnat, it would be a better way to write about their main competitor - mTouche Technology Bhd.

The important points from comment by TA Securities:

- mTouche 1Q07 result is below analyst expectation, accounting only for 11% TA Securities full year estimates;

- QoQ, revenue declined 21% while net profit was also lowered by 46%; and

- TA Securities is lowering their expectation of contributions from associate companies to zero for FY07.

I also notice that HSBC also dispose their stake in mTouche consistenly recently.

Is it the industry is in the downtrend as consumers have lost their confident over mobile contents services? I would say yes since so many issues with short code owners recently. Of course, Nextnation has been involved too. I think they have to do something to fix this problem.

However, I believe there will be no significant impact to them. They are platforms provider and they are acting like a hypermarket where they provide the services to many other smaller players/customers. Looking at current entertainment programs available in Malaysia, everything is about voting by SMS. I am not sure which program is using their platform but there must be a few. Nextnation is among the dominant players in the market for mobile application services.

If Nextnation Q4 result continues to surge higher, everything would be clear - Nextnation is the mobile application services industry leader in Malaysia.

RCE Capital Berhad

As expected, RCE posted another good quarterly result. Revenue is increased from 19mil to 31mil while net profit went up to 16mil from 7mil (comparing Mar'07 vs Mar'06). A final dividend of 1 sen is proposed as well, pending the approval of shareholders in the coming AGM.
For the financial year ended Mar 07, total revenue is 98mil as compared to 57mil, recorded in last financial year. Net profit is increased from 20mil to 63mil as well. However, there is a gain on disposal of investment [~20mil] in this financial year. By ignoring this gain, the net profit is actually increased about 100%.
As company closely linked to Am Group, I believe RCE is set for another higher level in medium term. The company profile is further brought up by the emergences of high profile substantial shareholders, both HSBC and Goldman.
I believe RCE has a very good prospect in the coming year.

.... Nextnation ....

Please visit nexttrade for some information about Nextnation.
The blogger pointed out the main concern that we have - very high trade receivables.
Any bad debt to be written off will hit the financial badly.
Meanwhile, most of the main competitors are not performing that well. For example, mtouche and MNC Wireless which posted not really good quarterly results recently. Does this indicate the downtrend of this industry? Or Nextnation will stand out from them and continue to post impressive result?
Let us wait for Q4 result which is due in June ...

N2N Connect Berhad

N2N Connect Berhad has announced it quarterly result today. The company is doing really well - they leap high!
Revenue is increased from 2.7mil from 9.9mil. (By comparing last year Q vs this year Q). Net profit is increased from 1.3mil to 7.2mil. It is very hard to find a mesdaq company with this set of impressive result. Well, I have to say they are doing better than my favourite, Nextnation.
According to the release, better result are mainly due to:

- increase in matched trade fees generated from eBrokerConnectTM as more transactions were being matched in the online stock trading as evidenced by increased market volume and market value of equities traded on Bursa Malaysia Securities Berhad;

- the continuous increase in MobileConnectTM and PDAConnectTM subscribers;

- increase in number of broking houses implementing the Company's financial solution systems, i.e. eBrokerConnect™, MobileConnect™, SMSConnect™ and GlobalConnect, from seven to nine;

- additional income from developing and licensing the Online Trading Game on Singapore Exchange Securities Trading Limited's website; and
- additional income from software development of financial solutions in e-commerce and m-commerce sector in Saudi Arabia.

It is worth to keep an eye on this company. If they manage to go abroad succesfully, by doing the same thing in Malaysia, it has huge potential.

Free Messenger from Ozura

This is nothing related to stock market.
I discovered a useful mobile phone application, published by Ozura. Basically, it is a tool where you can connect to 3 different types of messenger at the same time, at low cost as well. They are ICQ, MSN, and Yahoo!.
Please go to this website for further info - http://www.mobeep.com

Quarterly result

Quaterly result for companies with quarter end at 31 Mar will be due soon - by end of May 2007.
'Branded' companies continue to deliver impressive result. As a result, I expect EnO, EnO Prop and Mah Sing Group to announce higher result - both q-to-q and y-to-y.
Sri Tanjung Pinang of EnO continues to be one of the hottest project in Penang Island. I had a look at the other projects in Penang Island and found that the designs of STP units are the most unique and attractive (my personal oppinion). Yet, they are priced at a very competition price. The main advantage of STP is it is located at the prime area - just about 5 minutes drive from Penang Gurney Drive (I guess everyone knows this place). Considering EnO Porp is highly geared, I do not expect any dividend payment from them. However, looking at the track record, I believe EnO will declare at least dividend of 2 sen for the financial year ended 2006. Both companies stock price are holding well at RM3 and RM3.50 respectively. I am still waiting for another 'Easy Money Oppurtunity' where there is a big gap between EnO Prop and EnO. At this moment, the gap is not big enough for me to buy more easily - not comfortable for the margin of safety.
Meanwhile, Mah Sing stock price has been sliding in recently weeks - from the highest of RM5.70 to RM5.30. One of the driver that I could think of is the conversion of warrants where it resulted more shares in the market and we are going through the dilution effect. With it's special management and operation style, I will say that Mah Sing is a must buy counter in property sector. Right Issue, shares split and bonus issue are expected to be completed by July 2007.
Lastly, Sunrise has been trading steadily within the range of RM3.70 to RM4.00 recently. It has announced its impressive quarterly result. Projects at Mont Kiara continue to contribute positively to the company with high sales recorded.

whereiszeemola - Nextnation

The blogger did a very good research on Nextnat after receiving my request.
Thank you so much!
Please visit the site in order to get more useful information about Nextnation.

Candidates for going private

Read this from The Edge:

1. AmInvestment
2. Batu Kawan Bhd
3. Berjaya Land Bhd
4. Dijaya Corp Bhd
5. Goldis Bhd

Personally, I think Goldis is very attractive as it is still trading below the worth of its stake in IGB. Is this another 'Easy money oppurtunity' like E&O?

Happy Investing ....

The Greatest Investor - Warren Buffett

Received this forwarded mail from my friend:

> There was a one hour interview on CNBC with Warren Buffet, the second richest man who has donated $31 billion to charity. Here are some very interesting aspects of his life:

> 1. He bought his first share at age 11 and he now regrets that he started too late!
> 2. He bought a small farm at age 14 with savings from delivering newspapers.
> 3. He still lives in the same small 3-bedroom house in mid-town Omaha,
> that he bought after he got married 50 years ago. He says that he has everything he needs in that house. His house does not have a wall or a fence.

> 4. He drives his own car everywhere and does not have a driver or security people around him.
> 5. He never travels by private jet, although he owns the world's largest private jet company.
> 6. His company, Berkshire Hathaway, owns 63 companies. He writes only
> one letter each year to the CEOs of these companies, giving them goals
> for the year. He never holds meetings or calls them on a regular basis. He has given his CEO's only two rules. Rule number 1: do not lose any of your share holder's money. Rule number 2: Do not forget rule number 1.

> 7. He does not socialize with the high society crowd. His past time after he gets home is to make himself some pop corn and watch Television.

> 8. Bill Gates, the world's richest man met him for the first time only 5 years ago. Bill Gates did not think he had anything in common with Warren Buffet. So he had scheduled his meeting only for half hour. But when Gates met him, the meeting lasted for ten hours and Bill Gates became a devotee of Warren Buffet.

> 9. Warren Buffet does not carry a cell phone, nor has a computer on his desk.
>
> His advice to young people:
> "Stay away from credit cards and invest in yourself and
>
> Remember:
> A. Money doesn't create man but it is the man who created money.
> B. Live your life as simple as you are.
> C. Don't do what others say, just listen them, but do what you feel good.
> D. Don't go on brand name; just wear those things in which u feel comfortable.
> E. Don't waste your money on unnecessary things; just spend on them who really in need rather.
> F. After all it's your life then why give chance to others to rule our life.

Titan - Q107 result

Obviously, Titan posted a disappointed Q1 result. Even though the revenue is higher compares to last quater [Q4'06], the net profit dropped from 200mil++ to 156mil in this quarter.
Looking at current developement in the market, I believe it is not worth to continue parking money in this company. Property counters remain my top priority at this moment.

Updates: Nextnation

Nextnation has incorporated its subsidiary in India - Nextnation Mobitech India Pte Lrd, via its other susididiary Code Wireless. This is in line the group's overseas market expansion strategies to diversify and grow the revenue base.
No doubt, Nextnation has been doing very well in growing overseas revenue with higher revenue recorded from Q to Q. However, the net profit margin of overseas operation remains a big disappointment, with only ~4%. It is totally no match to the net profit margin from Malaysia operation, which is ~30%.
I am not sure the reason and factor behind to low overseas net profit margin. I hope the management will do something to improve it. I hope they will look at the revenue from Malaysia as well, which is decreasing from Q to Q. More attention should be put in Malaysia since it has high net profit margin. Revenue is important, however it is more important to convert the revenue into net profit.

Meanwhile, funlogix has landed China successfully. Ozura has team up with ChinaByte to launch its first and exclusive tournament based mobile gaming community portal. You can see a few Ozura's games in the portal (http://fun.mostar.on).

Nextnation is growing but the share price is not the case. I expect a better performance in term of share price in second half. Private placement should be completed by June and bonus issues should be allocated to the shareholders by this year as well.

Cumulative net profit in this year is RM15.9mil while the full year net profit for last year is RM16.7. With my personal expectation of at least RM6mil net profit for the last quarter, it would translate the full year net profit ~RM22mil. This represents an increase of ~30% in net profit.

It should be a great year for Nextnation ...

Goldman Sachs - RCE Capital

Goldman Sachs made another move in acquiring public company shares in Malaysia.
This time their target is RCE Capital. Filing to Bursa malaysia shows that they acquired 50mil shares or 7.73% stake in the open market on April 18. RCE closed at 81 sen on that day.
Looking at Goldman's track record, I believe RCE share price will easily break RM1 in another 1 or 2 months.

Goldman Sachs is the substantial shareholder for E&O, AsiaEp and StemLife. Look at their share price now ....

It is a golden oppurtunity to buy RCE since it closed at 84 sen which is not far from the price Goldman paid for it.