A planned show?

Suddenly, I recalled that toll operators will raise the toll rate. Then, the government came in and said no.
Is this all planned for the coming by elections?

From best to worst?

It has been a long time I did not follow Malaysia stock market. Gave up after the tsunami election. Almost everything went worst from the best. 2007 was a superb year. Simply pick one of the top 10 and high possibility you will make a gain.

Well, let me recap - current financial crisis was a snowball effect from the the issue unveiled in 2007. But many people were so positive that it would not create any big crisis like this. Ok, 2007 was the best year . Q1 of 2008 was acceptable. I still remember Intel CEO said that he does not see any impact to the demand due to recession. Then, all gone wrong in Sept and Oct. Banks collapsed, US government provided funds to help so many companies in US ... and many many more.

When I looked at the quarterly results at Bursa Malaysia website, almost all Mesdaq gone. The champion should be Viztel? I am not sure I read it correctly or not. Revenue recorded in the quarter is RM3,000. Even N2N, Titan, TongHer are also in red. Can you believe? A listed company has only RM3k revenue in a quarter? I wonder when the auditor will raise the on-going concern for the company.

Back to US market, it is happening too. Citi is trading at $1++ only, which is cheaper than Public Bank or Bursa. Dell, Amd, Intel and the rest are on sales too.

Should we start buying now? Perhaps the bottom is yet to come?

More terrible Q1'09 result will be released in April?

Oh no ... AUD

What happened to AUD which has dropped so much since it's high in last year?
If not mistaken, it was MYR 1 = AUD 3.3. However, it is now MYR 1 = AUD 2.2. Any idea?

Meanwhile, US market is hit badly by credit crisis and yet USD has started to climb up. Why is it so?

Please leave your comments.

Bursa Malaysia

It was reported in a few newspapers that some foreign parties are interested to buy a stake in Bursa, with the price of around RM20. Closing price for Bursa on last friday is RM14.20.

Is it a good time to buy in?

Award for Mah Sing

Below is the article from The Star:

KUALA LUMPUR: Mah Sing Group Bhd has bagged the Best Development Malaysia Award at the 13th International Property Awards 2007 in London.

It was awarded for its gated and guarded high-end residential development of Damansara Legenda in Petaling Jaya.

The results of the world's largest property competition were announced on Sept 14, and the awards were presented at a gala dinner in London's Grosvenor Square.

About 400 property professionals, representing 56 different countries, gathered in eager anticipation of winning one of the highly prestigious awards.

Mah Sing managing director Datuk Leong Hoy Kum said in a statement that the group was gratified to be recognised at an international level for its development.

"Awards and recognition like the International Property Awards, and the Forbes Best Under A Billion award, which we have won for the third year running in 2007, serves to encourage us and allow us to stand out in the crowded market place.

"We shall certainly be bringing more quality homes to discerning home buyers soon," he said.

The International Property Awards in association with CNBC is aimed to identify the very best in the residential property market.

Nextnation: Weak Q1 result

As expected, nX posted a very weak Q1 result. Below is the article from The Edge:


KUALA LUMPUR: Nextnation Communication Bhd’s net profit for its first quarter (1Q) ended July 31, 2007 fell sharply to RM611,000 from RM4.8 million a year ago mainly due to the rising operating costs for its wider geographical regions participation coupled with the higher technical expenses incurred from its restructuring process.

In an announcement yesterday, the company said its revenue was 24.1% lower at RM17.79 million against RM23.45 million a year earlier because of the delay in business transactions and projects as a result of the on-going restructuring process. Its basic earnings per share was 0.16 sen.

Going forward, Nextnation said the group would continue to focus on its technology, products development, service enhancement, market expansion, and maintaining strategic partnerships.

“The board expects increasing positive contribution from the group’s overseas operations in order to support business expansion,” it said, adding that the board expects a satisfactory performance for the remaining financial year barring any unforeseen circumstances.

Comment: I am wondering how long do they need for the restructuring? Once again, if it is well managed, restructuring should not be the reason for the extremely weak result. I also wonder what excuse they will use for the coming quarter. Restructure for a few years?

Oil & Gas Sector

The above sector is another sector that could be benefited from the high crude oil price recently, where it is still trading at above USD81 per barrel.


EPIC is among the O&G stocks that attracts my attention. Strong balance sheet and monopoly of services in Terengganu are the main factors. However, the ability of the management is still a big question mark. You may refer to Whereiszemoola blog for details analysis. From buying a business perspective for mid-term, EPIC should be a good bet. It is set to enjoy Eastern Corridor as well, which will be launched by PM by end of October.


Another attractive O&G stock would be Petra Perdana. With the acquisition of additional 4 vessels, almost all research houses released reports that give a BUY call to Petra Perdana. Averagely, the target price for Petra is above RM6. As a result, it has 20% upside potential conservatively. Everything looks correct now and the emerge of high profile substantial shareholder should be able to push the stock to higher level quicker. Petra has strong support at RM5 at the moment.

Property Sector

Personally, I believe the above sector will be the winner during the year end rally. By the way, let us hope there is no huge crash from now until year end. Otherwise, we may need to change our strategy again.

Property sector has been a hot topic since the waiver of RGPT, back in somewhere in April. However, quarterly results from the main players are not impressive enough. Perhaps it may take some times for the developers to enjoy better result from the incentive introduced by the Gov? Or maybe the cycle in Malaysia is not correct where HK and Singapore have been enjoying the great development in this sector since 2 years ago?

With the uncertainty of global economic and market at the moment, do the effort from Malaysia Goverment will be enough to support property sector? What will happen to all the high-end projects if economic crisis hits the global market in next 2 years?

Base on historical data, it shows that the crisis hits every 10-12 years. It is 2007 now and the crisis may come the latest by 2009? How many of the high-end projects can be completed by 2009?

Anyway, I believe Mah Sing offers good buying oppurtunity now. The stock price has been in huge selling pressure after the substantial shareholders, Felda continues to dispose their holdings in recent weeks. Perhaps they need the money to buy the en-bloc of The Icon @ Tun Razak? From another prespective, Capital Group is still holding tightly and the price is still below some of the acquisitions done by them. It should be a great value to buy with current price.

Meanwhile, according to Oriental Biz, d7 - a project by YTLLand is selling like a hot cake in the pre-launch. Within an hour, a total of 100 units were 'swept way' by the buyers. YTL Land should be another good bargain hunting stock at currect price as the prospect of Sentul area is good. YTL Land has huge landbanks in Sentul.


Lastly, if you prefer to bet in Northern area, E&O, Asas Dunia and Equine should be in the shortlist. Asas Dunia have landbanks in the mainland while Equine will be enjoying their 20% stake in the company which will be developing PGCC. Even though both Asas Dunia and Equine do not have strong financial results in the past, they have big potential in the future ...

Nextnation - Q1 result

It is the time for Nextnation to release their Q1 result in this month, September. As I mentioned before, I have sold all of my holdings in the company a day after their Q4 result, back in June.

I also noticed that some of the investors still holding it as they believe there is nothing wrong with the business model of the company.

I went through some of the websites of nX and found that there are not much changes or progress to the company. They even removed their release where the CEO, Mr Tey comments about their Q4 result - where everyone can remember that the company incurred net loss for the first time(I think it should be around RM0.4mil?). Prior to this, nX has recorded net profit of RM4mil consistently every quarter.

I believe their venture into China is a failure as well. If I can remember correctly, the JV in China has been called off. Furthermore, I never see any progress and development over there. The mobile game portal - mostar should be considered as a failure too. You hardly see any development and the forum is really cold, with not much gamers having discussion there.

What do you expect from the coming Q1 result? Amid our mistake early before too late?

Fundamentally, I believe this stock is at the end of the era. But who knows speculators may push up the price in the future?

In conclusion, I think it is not worthwhile to keep holding it as they are many other attractive oppurtinities outside there. Property sector? Oil and Gas sector?

Just to share a meaningful quote from my friend - 'Not all good counters make you money, but those make you money counters are good counters' It is the fact, isn't? Happy investing ....

Petra Perdana Bhd

Below is the daily report from HBDS:

Petra Perdana: Better earnings visibility with newly acquired
vessels
(Buy; PETR MK; RM4.94)

􀂾 Story: Petra is acquiring five new vessels for RM323.5m. The
new vessels provide better earnings visibility and they are well
positioned to benefit from the growing demand for offshore
vessels and rising vessel charter rates.

􀂾 Point: The new vessels will be placed under the sale and
leaseback arrangement. Assuming an average charter rate of
US$1.8/bhp for FY08-09, we estimate an average EBIT margin of
31% from the new vessels. We have upgraded our FY08-09 net
profit forecast by 8% and 7%, respectively to factor in the
contribution from the new vessels.

􀂾 Relevance: We expect Petra’s gearing to remain stable at 1.3x
for FY07 and 1.2x for FY08. We reiterate our BUY rating for
Petra with an SOP-derived target price of RM6.40/share based on
targeted 20x FY08 PER for marine services. The key re-rating
catalysts for Petra are:- (i) rising charter rates, (ii) expanding fleet
size; and

Budget .. Property sector .. Global Market ...

EPF withdrawal

With the approval to withdraw money from EPF Account II for purchasing property, would it push the property sector to a higher level? Personally, I believe the demand for property will be higher as the potential buyers will have higher purchasing power by utilizing the money available in their EPF Account II.

2k?

However, the 50% discount for the stamp duty of property with value not more than RM250k is pretty immaterial in my opinion. With reference to the article in local newspaper, the discount represents a total of max 2k and it is only eligible for 1 property each individual. Is 2k that significant to a buyer who can buy a 250k property? I am not able to see the importance and I believe this has no major impact to the property sector.

Higher brokerage fee in 2008

Meanwhile, the min brokerage fee will be RM40 per transaction, starting Jan'08. I have no idea why the gov decided to increase it. Retails investors may be reluctant to pay for the higher brokerage fee where it has a direct impact to the net profit/loss for each investestment/trade.

Global Market

US market market gave up ~250 pts after the release of not impressive payroll data on Friday. China market dropped as well on Friday. Osama video clip may appear on 11 Sept? Will Fed cut the interest rate on 18 Sept? What will be the direction for global stock markets? We can deny that Malaysia market continues to be influenced by the global market at the moment.

The collapse

Personally, I believe the real huge correction will come after next year Beijing Olympic. Meanwhile, I am discovering and learning to join US stock market and options. You may visit optionXpress to look around. US market is more volatile and easier to make money? In the other way, it would be easier to lose money as well.

No Sin Tax

It is the first tax the gov did not raise the sin tax in Budget presentation? hooray for drinkers and smokers ....

Titan Chemicals: Q207 result

Titan Chemicals net profit in Q2 is sharply lower as compared to Q1 result. The net profit for the company has been declining consistently from a high of RM241mil in Q406, to a lower net profit of RM156mil in Q107. With reference to the latest quarterly result from Titan, the net profit is RM80mil - which represents a drop of ~50% from Q107.


Nevertheless, Titan has declared a dividend of 3 sen (tax exempt).

The financial performance is still very depending on the difference between the cost of raw material and the selling price of finished goods.

I believe it is not worthwhile to hold this stock in the current stock market condition as the possibility to enjoy capital appreciatation is not high. The fluctuation of the stock price remains small and it is hard to see a surprise from them at the moment.

Uncertainty is the best word to describe Titan's financial performance ...

E&O: Q107 result

Good quarterly result posted by E&O ..

The Edge

KUALA LUMPUR: Eastern & Oriental Bhd (E&O) posted a 50.21% rise in net profit to RM15.24 million for the first quarter (1Q) ended June 30, 2007 from RM10.14 million a year earlier mainly from the contribution of its on-going projects.

Its revenue also rose by almost 50% to RM171.49 million. Earnings per share was 2.97 sen.

Announcing its 1Q results yesterday, E&O said the improved results were mainly due to the higher revenue from its on-going property development projects including Dua Residency, Idamansara and Seri Tanjung Pinang.

It said revenue generated by the hotel division had improved by 19.5% compared to the previous corresponding quarter.

Meanwhile, E & O Property Development Bhd's net profit for the 1Q ended June 30, 2007 jumped 75% to RM35.49 million from RM20.35 million on a 50.58% increase in revenue to RM163.98.
Earnings per share was 5.42 sen.

The company said that the better earnings reflected significantly higher contributions from its property division on the back of higher profit margin.

Top Property Developers honoured by The Edge

The top 10 are:

Bandar Raya Developments Bhd
Boustead Properties Bhd
E&O Property Development Bhd
IGB Corporation Bhd
IOI Properties Bhd
Island & Peninsular Bhd
SP Setia Bhd
Sime UEP Properties Bhd
Sunrise Bhd
Sunway City

Selangor Dredging Berhad

Kenanga has given very high target price for SDRED in a research report from them - RM1.84. Below are the important notes from the report:


1Q08 net profit of RM8.7m was within our expectations at 23% of our full year forecast of RM37.6m. 1Q08 net profit mainly attributed by stronger recognition of earnings from Park Seven which is fully sold and having completed the basement level is progressing rapidly above ground level. In addition, there was also the recognition from the sale of Ameera condominium units launched in January 2007 which are more than 70% sold.


QoQ, 1Q08 net profit was 19.8% lower than 4Q07 where one off gain and write back of accrued tax of RM6.1m and RM3.2m respectively was recognised. In comparison, 1Q08 operating profit of RM12.1m was 252.9% higher than 4Q07’s RM3.4m. 4Q07 is seasonally slower quarter given the shorter working days accounting for the festive holidays. In addition, the construction cost incurred at Ameera was not matched by progressive claims being ground clearing, piling and basement work. Marketing expenses for the launch in January 2007 was also expensed when incurred.

YoY, 1Q08 net profit was 280% higher! In 1Q07, Selangor Dredging only had Amansari and Park Seven projects to rely on. The progress of work for Park Seven was still at basement levels where progress billings were limited. In addition, the hotel made RM2.2m pre-tax loss compared to RM889,000 pre-tax loss in 1Q08. 1Q07 income tax rate was 42% due to unavailability of group relief for losses incurred by a subsidiary company.Tax rate was 11% in 1Q08 due to non-taxable income and tax losses brought forward. We expect tax rate to normalise to statutory rate in succeeding quarters.

We are maintaining FY08 and FY09 net profit forecast. The slated projects for launches are still on schedule. The RM230m 20 Trees will be launched this Saturday while the two Singapore projects worth RM620m will be launched in November and second half of 2008.


Maintain BUY with target price of RM1.84 based on sum of parts RNAV. We remain positive that the company is on the right track as the future development pipeline remains exciting and their projects have been well received. FY08E and FY09E PER multiples of 11.1x and 7.5x remains attractive.

Genting Berhad

Genting has released their quarterly result in this week and below is the comment from HDBS. HDBS is upgrading their call from HOLD to BUY with a target price of RM8.60.


Results
Genting’s 2Q07 NI included EI amounting to RM298.1m. Stripping this out, pretax profit from continuing operations came in at RM618.3m (+13% y-o-y; -2% q-o-q). Revenue surged 42% y-o-y given the inclusion of Stanley Leisure effective Oct
2006.
Nevertheless, operating profit was crimped by losses from Genting International (GIL SP) arising from fair valuation losses and impairment losses on intangible assets
totaling S$43.3m. This saw a 10ppt contraction in gaming EBIT margin to 28% (2Q06: 43%). Also, finance cost rose 2x to RM100.5m. 1H07 NI included EI amounting to RM872m. Stripping this out, pretax profit from continuing operations came in at RM1.2b (+20% y-o-y), in line with house and market expectation.

Outlook
We maintain our core pretax profit for continuing operations of RM2.5b for FY07
and RM3.0b for FY08. Core net profit is projected to come in at RM1.4b for FY07 and RM1.5b (+12% y-o-y), driven by higher gaming contribution from Resorts World and Stanley Leisure. Also, non-core earnings from plantation, oil and gas is expected to rise on the back of higher selling prices for the plantation sector and higher production output for the oil and gas division. The power division will also continue to provide firm operating
cashflow.

Dijaya Corporation

Most of the people from KL and Selangor know about Tropicana, which is among the most luxury residential area. However, most of them may not aware of the developer for this area. Tropicana is a project from Dijaya Corp.

It appears that this developer is out of the radar of most of the investors and analysts at this moment. The company feels that it is not the time to call analysts for a briefing untiil it has built up its landbank, according to its MD Tong Kien Oon in an interview.

Its share price is no trading significantly lower its net book value and estimated RNAV. It closed at RM1.42 last Friday and ths stock is trading at about 34% discount to its book value of RM2.16.

InsiderAsia believes the value of land owned by Dijaya is severely understated -Tropicana: cost RM10.54 psf vs market value of about RM150 psf; and
Damansara Indah: cost RM10.15 psf vs market value of about RM130psf.


In Tropicana, the company will be launching 400 units of low-rise condo with an indicative pricing of RM300 psf. The GDV is RM500mil.

In Damansara Indah, Dijaya launched 88 units of 3-storey semi-d with built up of about 6,200 sq ft and priced from RM2mil each. Two blocks of low-rise condo in the same area will be launched soon.

'Based on the upcoming launches, we expect Dijaya's profit too see a huge jump in the next 2 to 3 years' says an analyst.


Dijaya is also developing Tropicana City, valued at RM600mil in SS2 - 3-storey Tropicana Mall, a 24-storey block of serviced apartments and a 12-storey office tower.

The mall and office tower will be ready in 3Q of 2008 and the apartment block in 2009. The mall is expected to bring in rental income of between RM20mil to RM30mil per annum.

Lastly, Dijaya also has a stake in a JV company in India. It is developing a 25 acres land in Hyderabad, India and it is scheduled for launch in the 1H of 2008. Base on the stake in the JV company, the project is expected to bring in revenue of RM400mil.

Mah Sing - The Icon @ Jalan Tun Razak

Once again, article from The Edge:


KUALA LUMPUR: Mah Sing Group Bhd subsidiary Star Residence Sdn Bhd is selling one of two wings of The Icon Jalan Tun Razak, a grade A office development, to Koperasi Permodalan Felda Bhd for RM174.4 million in an en bloc deal.

In a statement yesterday, Mah Sing said Star Residence had entered into a sale and purchase agreement (SPA) with Felda for the proposed sale of the 20-storey West Wing of The Icon.

It said the transaction value for the wing, which had a total floor area of 243,830 sq ft, worked out to be RM715 per sq ft. Included in the purchase price are 301 carpark bays.

Upon the execution of the SPA, Felda will pay RM17.44 million or 10% of the purchase price, with the balance 90% to be paid progressively according to the stage of works completed.

Mah Sing’s group managing director Datuk Leong Hoy Kum said: “With the strong demand for commercial developments, we will continue to target more prime commercial land in Kuala Lumpur and the Klang Valley for our Icon series of commercial developments.”

“Moving forward, we target to conclude more en-bloc sales for our Icon series of commercial developments, including The Icon Mont’Kiara, where the signature tower will house SoHo units and corporate designer suites.

“With our expertise in lifestyle developments, we will raise the bar for commercial developments in our Icon series, melding trendy features into our practical designs,” he said.

Leong said with a seven-year track record of on-time delivery of quality properties, the group was confident that the Icon series of commercial properties would soon make an impact on the market.

He said construction of The Icon Jalan Tun Razak was scheduled to be completed in 24 months inclusive of the issuance of the certificate of practical completion.

“Besides making The Icon a landmark in the vicinity, we are confident that it will value add in terms of potential capital appreciation in the future as we are looking at total returns instead of just yields,” Leong said.

He said the group was targeting local and international companies which were increasingly active in the central business district.

Leong said with the economy performing well, the demand for grade A offices was growing unabated as there were a trend of companies to locate to high profile locations.

He added that with The Icon Jalan Tun Razak expected to be completed before other purpose-built office buildings in the area, the group was confident of further capital appreciation.

E&O Prop: New launching @ STP

Article from The Edge:


KUALA LUMPUR: E&O Property Development Bhd will be launching an upscale exclusive service apartments in Penang.

Called the Suites at Waterside, the luxurious one- and two-bedroom service apartments are built around the Waterside at Seri Tanjung Pinang, which encompasses a pleasure marina, waterfront promenade, retail marketplace as well as a five-storey lighthouse dubbed The Beacon.

Comprising 160 units, each apartment is priced between RM445,000 and RM1.25million. Prospective buyers can choose from four floor plans, with build-up areas ranging from 853 sq ft to 2,568 sq ft.

Slated to be completed in 2010, the 4.8ha site of the project emulates some of the well-known waterfront destinations in Australia, the Mediterranean and the US.

“This is Penang island’s first service apartment of a truly five-star calibre. Aside from its exquisitely appointed interiors, the Suites at Waterside are unique due to its seafront resort lifestyle concept fronting a vibrant marina,” said E&O Property Development marketing and sales director KC Chong.

He said the Suites at Waterside presents a rare opportunity for those looking for investment in a property, vacation getaway or a retirement home.

Currently, phase one covering 96ha introduces landscaped parks, boulevards and seafront esplanades in a guarded community of terraced, semi-detached and detached homes, condominiums and service apartments, and commercial and retail precincts.

Phase two of the project will consist of 296ha with a cluster of islands emerging offshore, linked via a series of bridges.

Mah Sing - Another commercial project

Below is the article from The Edge:


KUALA LUMPUR: Mah Sing Group Bhd plans to undertake a RM256 million project, called Southgate Commercial Centre, along Jalan Tun Razak.

It announced on July 27 that the project would be build on 1.92-ha freehold land which it was acquiring for RM52 million or RM250.90 per sq ft from Ninchii Fashion Sdn Bhd.

Mah Sing group managing director Datuk Leong Hoy Kum said the company was targeting corporate and high-end customers, including professionals, investors and entrepreneurs for the Southgate Commercial Centre.

“With the prime address and easy accessibility, law firms, consultancies and advertising agencies are just a few of the professions which could set up office here,” he said. It was also seeking to attract niche boutiques and specialty stores.

Southgate Commercial Centre, modelled after the Xintiandi success story in Shanghai, was conceptualised as an integrated commercial and leisure hub and is expected to be completed in three years.

With its Southgate Commercial Centre, Mah Sing has 14 development projects with a total gross development value (GDV) of RM3.726 billion.

Together with its unbilled sales of RM430 million as at March 31, 2007, the total GDV of RM4.156 billion would ensure earnings visibility for the company for over seven years.

Southgate Commercial Centre was the company’s third commercial development in Kuala Lumpur after its Grade A office development in Jalan Tun Razak and its integrated lifestyle development offering office suites enclosed by a resort style plaza in Mont’ Kiara.