Mah Sing eyes Penang market

Mah Sing is eager to make its presence felt in the robust Penang property market. “We
will consider developing a Legenda residential series if we venture to land-scarce markets like Penang island,” president and CEO Datuk Leong Hoy Kum said.
• This year, the company is looking to purchase two to three pieces of land in high growth markets in the Klang Valley, Johor Baru and Penang.
• On its commercial ventures, Datuk said “We are looking at building more Grade A offices that have retail and shop lots to meet the strong demand for such properties now. The occupancy rates for such property have reached 85% to 90%.Our aim is to maintain a 70% earnings contribution from sales of residential properties, with commercial property making up the balance.”

Property Sector

Below is the research report from HDBS Investment Bank:

The Business Times reported that the government is expected to announce a project to turn Malaysia into an international property destination. The project is believed to be able to bring in RM20b in foreign direct investment within 10 years and help create more jobs.Prime Minister Datuk Seri Abdullah Ahmad Badawi will announce the details soon.
The plan is expected to boost the demand of properties in the country. We are seeing all the positive signals from the government to improve the property sector in the country. Within a space of five months, the government has announced the abolishment of RPGT, relaxation of FIC requirements and improvement the overall efficiency
of the delivery system. We maintain our overweight rating on the sector. We continue to like property developers with a strong brand name that would ensure pricing power and sizable prime landbank focusing on mid to high end properties. Sunrise (TP RM4.65) remains our top pick of the property sector.

Latest Press Release from Ozura

Below is the latest press release from Ozura. FunlogiX, a mobile games platform developed by Ozura is a big achievement in the industry as it has been picked by many companies to run their respective mobile games portals.

World's First Mobile Trading Card Game "Master of Maya" Lands in MaxGames

Kuala Lumpur – Ozura Mobile ("Ozura"), a leading international publisher and developer of mobile entertainment, and Maxis Communication Berhad ("Maxis") jointly launched the world's first mobile trading card game, "Master of Maya" in MaxGames, a tournament based mobile gaming and community portal.

Master of Maya, a real time multiplayer game published by Nokia Siemens Networks, collaborates the classic trading card game concept with MaxGames which is powered by Ozura's FunlogiX™ to enhance mobile users' experience i.e. users can play with each other wherever and whenever they like.

"Maxis is very proud to launch this first in the world in Malaysia. It will take our innovative Games Unlimited proposition to the next level. In the world of Master of Maya, players will be faced with epic battles full of dramatic action to take them places they have never experienced before. It features a trading card RPG element and a story about the ancient community of the Mayan people with magical skills challenging their mysterious opponents." states Kee Saik Meng, Head of Games & Entertainment at Maxis.

In Master of Maya, the player takes the role of a Mayan ruler and combines a variety of characters to form a powerful team with which he or she can go up against other players. Special mutation cards enable the characters to be evolved and their fighting and sorcery skills improved. In the multiplayer mode, not only the players can play with theirs friends – regardless of where the players are situated, they also can challenge any player from the Maya community.


Lion Peh, Ozura's Chief Executive Officer recommended that the game has skillfully united the perception of trading cards with the technologies of the current mobile phones.

"We are confident that Master of Maya and our MaxGames portal will pave the way for future mobile games with high-production values. It has real mass market appeal and even people who haven't yet discovered the trading cards will enjoy this gameplay," said Lion.

Master of Maya was launched on 1st of June 2007. Players who are interested can log on to MaxGames via WAP. To learn more about Master of Maya, please visit MaxGames at www.maxgames.com.my to instantly commence familiarizing and acknowledging its contents.

Tong Herr Resources Berhad

Tong Herr is involved in manufacturing and sale of nuts bolts and screws of all types of iron and steel. They are among the biggest manufacturer in the world for these products.
It is another strong fundamental company that still worth of bargain hunting. Below is the quarterly results:


The revenue has been increasing significantly (Q1'06: 47mil vs Q1'07: 111mil). Net profit has been flying high as well, from 5mil in Q1'06 to 19mil in Q1'07. Its dividend payout is considered high as well, with a total of 24 sen for financial year ended 31 Dec 2007.
I believe it can be another Top Glove which can continue to grow steadily in the next 3-5 years.

Audit Fees Issue?

This issue has been brought out as a result of Transmile case. Some argues that the low audit fee in the country has prevented the external auditor to carry out entended auditing procedures.
I think it is very unfair statement from investor's prespective. As the external auditor, their job is to ensure the financial statment is true and fair view when they signed of the report. This is nothing to do how much audit fee does the company is paying to the auditor. If the above arguement is valid, should we assume that higher audit fee indicates the report is more reliable?


With reference to the interim report from Moores Rowland Risk Managament Sdn Bhd, Transmile's 2005 result is in doubt too. In order words, partner from Deloitte & Touche who signed off last year report should be responsible as well? Should investors take action against the external auditor?
Let us wait and read more upcoming report from Moores Rowland ...

Target price for E&O

Kenanga gives a 'buy' call with a target price of RM4.10 based on its sum of parts revised RNAV. Meanwhile, HDBS continue their 'buy' call with a RM3.80 target price, also based on its RNAV calculation.
Personally, I think this stock should be trading within the current range, with no major fluctuation from its closing price at RM2.96 last Friday. I always use the price of E&O Prop as the 'yardstick' for E&O as E&O Prop is the major income driver for E&O. E&O Prop closed at RM3.54 last Friday.
I shall look into E&O again once there is a big gap between the share prices of E&O and E&o Prop.

Inappropriate billing from content providers

I read about the above issue again this morning. This round it is in one of the chinese newspaper, Oriental Daily. Both Macro Kiosk and Nextnation were mentioned in the article. It is stated that both content providers have breached the rules but still managed to continue their business with the provided short codes.
Macro Kiosk (a subsidiary of listed company, Goldis Berhad) is in the highlight in the article. A customer lodged a complain to Screenshots (a blog site) and the blogger uploaded the customer's statement to the blog. After that, the innocent customer was charged RM200++ by Macro Kiosk for being the charges of mobile contents provided.
The article also shows that Telcos (Maxis, DiGi and Celcom) are actually getting 30%-40% from the content price charged to customers. I believe the body in charged should do something as the percentage is too high and this may create unhealthy environment in this industry.
I am not sure about Nextnation case as they have released press statement about this. I have no idea whether this issue continues to happen after the release of press statement or it was actually before this. Anyhow, nX was awarded the prestigious Mobile Content Developer of the Year at the annual Frost & Sullivan Malaysia Telecoms Awards Banque. This indicates that they are actually doing the right things.
Perhaps nX should issue another press statement to make thing clearer?

Upcoming mobile games from Ozura

Nextnation wholly owned subsidiary, Ozura is set to release another 3 new mobile games - Burnee The Cook, Journey to Olympus and Counter Smash.
I believe Counter Smash will receive a hot response from the gamers in Malaysia as badminton is the No.2 sport in Malaysia.
Let's try it out when the mobile games have been released officially ...

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.