Green Packet: High Receivables

It is not the first time GPacket's CEO, Puan Chan Cheong comes out and explains about the company high receivables. FY2006 receivables jumped 155% year on year when the revenue jumped by 151%. It is contributed by the high growth rate GPacket enjoys, which means that receivables would rise accordingly.
Puan also mentions that the major receivables for the group are from the big names like China Telekom, Hewlett-Packard, Lenovo, Dell, Sony, RHB Bank and Samsung. Looking at the profile of its trade debtors, it is almost impossible they will not pay to GPacket for the services rendered and goods sold. It should be a another relief for the investors as Puan has came out and explained further about the high receivables.
Meanwhile, four out of five analysts polled on Bloomberg are still calling a 'buy', with target prices raning from RM4.90 to RM6.40. At last Friday's RM4 close, the lower range of analysts' target prices implies a potential upside of 22.5% at least.

Green Packet Berhad

Green Packet's stock price has decreased consistenly from RM5.00 until today's RM4.00. With reference to today closing price, it has almost hit the lowest end of day price in the last 3 months.


It's stock price has increased sharply from the lowest price at RM4 to RM5 recently before it drops back to RM4 again today. The previous decrease is mainly due to the below expectation Q1 result. After that, there was speculation that DiGi may buy into Green Packet and they will work together to roll out WiMax facility. It has pushed the stock price went back to RM5. However, there was nothing happened and the stock price has been dropping back to RM4 level recently.
I believe Green Packet needs to release some positive news or developments in order to make the stock price goes up again.

Nextnation

Finally, the stock price of nX has increased 2 cents after it has been dropping into the down trend zone for a few weeks.
nX is due to release its Q4 result by next week. I hope this is an indicator where nX will post another impressive quarterly result.


While I am waiting for the Q4 result, I will continue to monitor the substandial shareholders changes in Bursa Malaysia website. With reference to Megan and Transmile cases, the founders and major shareholders disposed their stakes before the issues came out. As a result, I would think any movement made by the major shareholders would be another important and major indirect indicator in nX.

YTL Land

Below is the research report from HDBS:

YTL Land: The third leg of luxury condominium golden triangle (Initiating with Buy; RM1.56; YTLL MK)


􀂾 Story: YTL Land & Development Bhd (YTLL) has the largest tract of prime land near KLCC and Mont’ Kiara. Measuring 294 acres, it is a self-contained enclave that is divided into two unique but distinctive areas named Sentul West and Sentul East. In its masterplan, YTLL plans to build 4,000 luxury condominiums in Sentul West and 3,000 condominiums in Sentul East.

􀂾 Point: We believe YTLL’s Sentul development is the up and coming address in Kuala Lumpur. Recent positive measures by the government have already seen property prices rise in Mont’ Kiara and KLCC. Sentul, which is located smack in between Mont’ Kiara
and KLCC, should generate more interest and price appreciation in time.

􀂾 Relevance: We are initiating coverage on YLLL with a Buy recommendation, ascribing a RNAV-based TP of RM3.30. YTLL’s focus on high-end properties will benefit from recent positive measures by the government. We believe the stage is set for YTLL
to leverage on and be more aggressive project launches, especially its Sentul projects.

Nextnation: Relief .. Positive News from Ozura

Nextnation's wholly owned subsidiary, Ozura has released a positive press with the title - Breaking into the Chinese Mobile Space.

Ozura has managed to enter China mobile market, which has more than the populations of Japan and U.S combined. The entry was done by parterning with Chinabyte. Both companies are working together in running MOSTAR, China's first and exclusive tournament based mobile gaming community portal.
Ozura is now working with Chinatec, Inc, a Chinese based mobile content provider engaged in multi-lateral mobile game licensing authorizing across Asia, in order to acquire more licenses to launch branded content in MOSTAR. Chinatec has lined up numerous celebrities activities throughout the years and we have geared up ourselves to launch these branded games in conjunction with their advertisement and promotion.
Moving on, Ozura is scheduled to release FunlogiXT 2.0 in the fourth quarter this year with more added features that scalable, adaptable, distributed, self-dependent and performance.

E&O vs E&O Prop

Finally, the major gap between E&O and E&O Prop has appeared in these few days. E&O closed at RM3.08 while E&OP closed at RM4.20 today.
E&OP has surged from RM3.60 to today’s closing price in recent weeks while E&O continues to trade at RM3.00 range. Besides that, Putra Perdana (another E&O 51% owned subsidiary) is closed at RM2.11 today.
As E&OP has increased about another RM0.60, I believe E&O should be following the uptrend which enjoyed by E&OP soon. Looking at current situation, E&O remains undervalued with the investors do not value any single cent for E&O’s holding in Putra Perdana and its hotel operations.
The trading volumes of E&O for the last few days have increased as well. While the sellers remained high, there were parties bought in aggressively as well where it hit the highest point at RM3.12 today.


This should be another easy money opportunity as long as E&OP continues to trade at above RM4.00 and Goldman Sachs does not dispose E&O in bulk.

Mah Sing: CIMB - Target Price: RM6.50

Below is the research repot from CIMB:

Mah Sing update – Geographical diversification complete

The recent acquisition of 87 acres of land bank in Penang completes Mah Sing's geographical diversification in all three major property markets in Malaysia. The Penang land comprises only 14% of the group's 650-acre land bank but makes up 37% of the total GDV of RM3.5bn. We have raised FY08-09 earnings forecasts by 3% as contribution from Southbay Penang will offset slower-than-estimated sales from the recently launched Cheras and Johor projects. Our target price, however, has been raised from RM6.00 to RM6.50 as we now value the stock at the sector 2008 P/E of 16x, instead of a 20% discount to the previous target sector P/E of 18x. We maintain our BUY call. Re-rating catalysts include further value-enhancing land bank acquisitions and improved liquidity from the upcoming share split and bonus issues.

Mobile Messaging Service Providers

I found this interesting article in The Edge Daily website. Should Malaysia Goverment do the same thing?

18-06-2007: SPs unhurt by China rule

Four Malaysian mobile messaging service providers (SPs) which have substantial businesses in China do not expect the Chinese government's new ruling for the industry to adversely affect their operations on the mainland.

The new ruling, which comes into effect in November this year, involves the introduction of a unified short message service code (SMS), or short code, for service providers in China, and a more stringent code of conduct for the SPs.

The four companies are Green Packet Bhd, mTouche Technology Bhd, AKN Messaging Technologies Bhd (AKN MTech) and Macro Kiosk Bhd.

mTouche chairman and group chief executive officer Eugene Goh said the use of a new short code would not harm the operations of its 40%-owned associate GMO Global Ltd, as it was just a matter of changing to a new code.

"The greatest impact would be on those (SPs) which brand their short code, such as one with a short code of 8888," he told The Edge Financial Daily via telephone last Friday. GMO Global is also 40% owned by Green Packet.

mTouche chief operating officer Tan Wee Meng said a unified short code would benefit the players in the long run, as it would be easier for them to do marketing and promotions.

China's Ministry of Information Industry (MII) had been planning to take over the management and issuance of short codes from the telecommunications companies (telcos) since 2005.

At present, the four largest telcos in China — China Mobile, China Unicom, China Telecom and China Netcom — issue their own short codes to SPs.

In addition, each province in China has a different short code, which caused considerable inconvenience for the SPs as well as their subscribers.

With a unified short code, these SPs would only need to apply to the MII for their own short code that can be used nationwide.

MII's proposal aims to avoid the problems caused by different codes provided by the various telcos, apart from rationalising the mobile messaging industry by filtering and removing SPs that operate illegally. The SPs have until Oct 31to switch to their new code.

However, there are concerns that the SPs may lose their customer base that use old codes, as there is uncertainty whether customers would be able to migrate to the new code. The transformation process also takes time, which may affect the SPs' revenue and earnings.

AKN MTech managing director Lim Seng Boon said the new ruling would help "clean up" the mobile messaging market in China, referring to spam SMS.

"In the long term, (a regulated market) will reduce consumers' phobia in using the services, and will give confidence to consumers.

"However, there is a possibility that service providers may lose their customer base, and they will have to start all over again to get new customers," he said.

However, mTouche's Tan said losing existing customer base was not definite. "They are still fine-tuning the system to migrate the customers to the new code."

Macro Kiosk CEO Kenny Goh said the unified short code would enable easier marketing and promotions, and mobile users would find it more convenient. "There will be minimal impact on our bottom line as only a small portion of our China revenue comes from subscription-based services. Unified short codes mainly affect subscription-based services," he said.

He added that Macro Kiosk, whose major shareholder is Main Board-listed Goldis Bhd, had been in China for three years, and would expand its presence beyond Beijing and Shanghai with the launch of the unified short code.

"This will indeed be good for the market as Macro Kiosk is poised to roll out more services in the months ahead," he said.

Meanwhile, Green Packet group MD and CEO Puan Chan Cheong said the company was not affected by the new ruling. "But it would be beneficial for our associate company, GMO Global Ltd because they are in this space," he added in an email reply.

BCT Technology

Below is the reseach report from HDBS:

BCT Technology: Successful 12.2m shares private placement (Buy; MYR1.07; BCTT MK)
BCTT announced last Friday that it had successfully placed out 12.2m new shares at RM1.00 per share, representing 5.6% discount to its 5-day VWAP (volume-weighted average price) of RM1.06.
This is 6.5% discount to its closing price of RM1.07 on Friday. Funds raised from this placement would be used for working capital that would potentially lead to earnings upgrade. Additionally, we expect news flow from BCTT with respect to its growth strategies – organically or via M&A.
As such, we maintain our Buy call on BCTT with a price target of RM1.70, which is based on 8x FY08 EPS.

E&O - RM1b property portfolio

According to The Edge, E&O plans to assemble an array of properties worth RM1bil that it hopes will give it a steady recurring income.
Executive Director, Eric Chan says that this move will reduce the dependence of income generated by E&O Prop. The creation of a property investment portfolio would add more depth and generate returns at E&O level.
E&O remains undervalued due to its status as a holding company. E&O's market value is RM1.11bil while its 64% stake in E&O Prop alone is worth RM1.5bil.
For your information, E&O has proposed to dispose of up to 90mil shares, represents 13.8% stake in E&O Prop and its entire 50.8% stake in Putrajaya Perdana Bhd. The proceed may be used to fund the property investment portfolio.
E&O itself is developing an office tower project on the 1.15-acre site, in downtown KL. The development cost is about RM150mil and the project is not for sales will go into the property investment portfolio.
Adding to this will be a retail component at the marina of STP which will eventually be sold by E&O Prop to E&O. There will be another shopping mall for lease to Tesco near STP project as well. It will be sold to E&O as well.
Eric Chan also says that E&O is expecting a return of RM80mil or more a year and this should be good enough by considering E&O's net profit was RM60.9mil last year.


Meanwhile, E&O closed at RM3.02 with high volume today. E&O Prop hit it historic high at RM4.06 but failed to sustain and closed at RM3.86 today. E&O looks interesting at this point of time. However, there is another factor to consider where Goldman Sachs has disposed some E&O's shares last few days.

In short term, E&O will continue to depend on the income generated from E&O Prop ...

Mah Sing: Hijauan Residence

I saw this advertisement in this week The Edge:


It is the latest project launched by Mah Sing. It looks really nice ....

LCL Corporation Berhad - Goldman Sachs

Filing to Bursa Malaysia shows that Goldman has emerged as the substantial shareholder of LCL. Goldman bought 900,000 shares on 7 June 07. After the purchase, Goldman has 2.3mil shares, represents a total of 5.52% in LCL.


LCL was traded between the range of RM4.66 to RM5.10 on 7 June 07. LCL closed at RM5.95 last Friday. Perhaps we can buy in if there is a correction in LCL where the price will come down a bit?

RCE Capital

Below is the article publised in today's The Star newspaper. Short term target is RM1.20 while the next projection is around RM1.40-RM1.50. Meanwhile, Oriental Business also published an article about RCE and target price is RM1.33 from an unnamed analyst. Base on the short term target price, an investor would be able to enjoy ~20% return. RCE should a rising star for 2007. Goldman Sachs is another important factor that has raised the profile of RCE.


RCE Capital Bhd has been on the steep upward momentum on persistent follow-through buying interest over the past several months, navigating the shares into the unknown territory to establish a fresh all-time high of RM1.01 during intra-day session yesterday.

Based on the daily bar chart, prices had climbed quite substantially since staging a major breakout of the 52 sen level sometime in February, but they show no sign of abating just yet, at least for now.

Perhaps, investors who are already in it can consider holding on to their shares for more capital gains.

Technically, the oscillator per cent K reversed upward from the neutral zone and crossed over the oscillator per cent D of the daily slow-stochastic momentum index to trigger a short-term buy on Thursday.

Similarly, the 14-day relative strength index headed higher towards the bullish territory.

In addition, the moving average convergence/divergence indicator continued to expand positively against the signal line.

On the back of the bullish reading, prices are likely to move forward, targeting the RM1.20 mark in the short-term.

The next upside projection is seen around the RM1.40-RM1.50 band.

As for the downside, initial support is anticipated at 95 sen. An additional floor is pegged at the 90 sen level.

Salary play

WHILE civil servants are celebrating an upcoming salary revision, companies such as RCE Capital Bhd are rejoicing as well. The company, which has its mainstay in the provision of consumer credit facilities for Government servants seems a likely beneficiary of the pay hike.

According to research house Aseambankers, RCE Capital’s loans book has grown substantially over the past few years. As at March this year, RCE Capital’s principal amount of its total loan was about RM500mil, up from less than RM70mil in 2002.

Aseambankers says, “With the regulated personal loan and consumption credit market in Malaysia worth approximately RM25bil, this implies tremendous opportunity for RCE Capital to grow its market share and loans book further. And, given higher consumption power that could be derived from an upcoming salary revision in the civil service, we expect RCE Capital’s position to strengthen significantly.”

Mah Sing: The Icon @ Tun Razak

According to the research report from Aseambankers, The Icon, located along Jalan Tun Razak, which is five minutes away from the Petronas Twin Towers, will comprise two 20-storey office block, is close for sale soon.


The selling price is expected to set a new benchmark around the KLCC area, with an asking price of more than RM600 per sq ft. The costruction work is expected to commence next week. It is the debut for Mah Sing in commercial building. The completion of each tower block is expected to take only 18 to 24 moths as super-structure work can be completed quickly.
The management is expecting good margins of between 30% to 36% for this project. As previously reported in other research report, there is a shortage of Grade A offices at KLCC area and I believe Mah Sing would be able to benefit from the current situation.

SMS Scam

As most of the nX's investors are aware, 2 subsidiaries of nX were in the list MCMC for non-compliance issues.
After doing some surfings in the internet, I found 2 interesting blogs, writting about this issue. The first one is Screenshots and another one is antijeffooi.


Both of the bloggers are having war against each others and you may read them out when you are free. You will gain a lot of knowledge about SMS but I am not sure how true and accurate is for the scam mentioned there.
nX is less being mentioned in the blogs as the main 'agenda' is about MacroKiosk.
Who is right and who is wrong? I have no idea and I will continue to support and believe the management team of nX.

Mah Sing: Rights Issue status

Mah Sing Rights Issue is oversubscipted by a total of 56.24%. You may refer to the below table further information and this can be found in Bursa Malaysia website:


This situation indicates the high confident level that the current shareholders have towards the future of the company. I believe it can go further under the management and leadership of Datuk Leong. This is boost by the efforts from the government in promoting properties sector in Malaysia.
Did you submit for the excess applications? I did and the chances for me to get it is almost impossible now ....

RCE crossed RM1

Finally, RCE broke RM1 level this morning. However, it could not sustain and closed at RM0.965.


With reference to the research reports from S&P and Kenanga, there is a huge potential for RCE in the medium term. They rate RCE as a 'buy' with target price of RM1.05 and RM1.20 respectively.
RCE could reach the target price of Kenanga in the medium term as long as there is no sudden crash in the market.

Mah Sing: Southbay Penang

According to The Edge Daily website, the proposed acquisition of lands by Mah Sing Group is in Batu Maung area. It will be a mixed developement, comprising commercial and residential components. It is expected to be completed in five to seven years.
Managing Director Datuk Leong said it is just 10 minutes from Penang Bridge via the highway and only five minutes from the proposed second Penang Bridge. Mah Sing plans to introduce up-market Lagenda@Southbay and Residence@Southbay. The other major point is the group plans to cooperate with institutional investors to develop hotels which optimise its location.


Personally, I think the proposed second Penang Bridge plays an important role to ensure the first development at Penang by Mah Sing will be successful. I would say Batu Maung area is not that really 'prime' at the moment as there is nothing much major development. There is not major hotspots as compared to E&O's STP (Gurney area) or IJM's condominium projects along Jelutong Express Way and Tesco area.

However, it should be a good move for Mah Sing into Penang market where the land is a scarce resource. The next phase of developments in Penang should be at south area since the town area, Gurney area and Batu Feringghi area are almost developed. SP Setia and IOI Properties have projects at south area as well.

Lastly, Aseambanker is considering to upgrade the target price for Mah Sing ..

Please Welcome Mah Sing To Penang

Finally, Mah Sing has proposed acquisition of Prime Freehold Land measuring approximately 351,251 square metres (86.78 acres) in Penang via its Subsidiary Companies, Vienna View Development Sdn Bhd, Enrich Property Development Sdn Bhd and Vienna Home Sdn Bhd from Kembang Biru Sdn Bhd For Total Cash Consideration of RM115.75 Million or the equivalent of approximately RM30.61 per square foot


The management team is yet again to deliver their promise. People from Penang will be able to enjoy quality homes from Mah Sing. Looking forward for the coming projects at Penang.

Green Packet Berhad

Filing to Bursa Malaysia shows that OSK Ventures International Berhad has disposed off 3,000,000 shares of Green Packet on 6 June and 7 June. However, OSKVI still holds 16% of GPacket after the disposal.
Is there any hidden indicator in the disposal?