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Posted by L. C. Chong on October 15, 2013

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如何從災難中搵著數〈宏觀散打〉2014-08-01

Posted by L. C. Chong on August 1, 2014

In the last workshop I did with WCC, I shared the sector (or a specific counter) may be beneficial from plane crash. The expert in the video shared the same opinion. Unfortunate, this video is in Cantonese.

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PBBANK – Fundamental Analysis (29 Jul 2014)

Posted by L. C. Chong on July 29, 2014

PBBANK Analysis:-

Excel – http://1drv.ms/1kkqxpg

My View:-

- Fair values/Market Timing:
  – 5Y DCF: 15.46 – 18.12 (MOS: -29% – 10%)
  – Absolute EY%:
    – FY13 (EPS: 1.161): Buy below 15.08, sell above 18.67 (MOS: -6.48%)
    – R4Q (EPS: 1.175): Buy below 15.27, sell above 18.90 (MOS: -5.19%)
    – FY14 (EPS: 1.178): Buy below 15.30, sell above 18.93 (MOS: -5%)
    – FY15 (EPS: 1.266): Buy below 16.45, sell above 20.36 (MOS: -2.4%)
  – By looking at the fair values, I think PBBANK is now over valued.
- PBBANK has been climbing up since Jul 2012 with couple of small corrections. As I forecasted in few months, PBBANK has been ranging somewhere around 20.00.
- In FY14-FY15, intense competition amongst financial institutions for market share as well as the need for higher capital conservation due to the requirements of Basel III capital framework, will continue to put pressure on pricing of products and return on equity. PBBANK growth will be slowing down, and this is proven from the declining ROE in the past 5 years.
  – Besides, growth in the profit from its retail operations has been subdued at 0.03% due to pressures on margin while its hire purchase segment’s profit for 1HFY14 declined 8.2%yoy to higher impairment allowance and NIM compression.
- With no near term catalyst,I will continue to hold and monitor PBBANK, but will not accumulate PBBANK at this moment. After holding PBBANK for almost 15 years, the dividend gains covered almost 95% of my cost. I will just let it float with so called "cost free".
- For latest Banking sector analysis, please visit http://www.midf.com.my/images/pdf/research-Report/Equity-Beat/2014/Banking%20Sector-1QCY14%20Results%20Wrap%20Up-MIDF-090614.pdf

Latest Financial – Q2 2014 Financial Report (24 Jul 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1693657

At the time of writing, I owned shares of PBBANK.

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DIGI – Fundamental Analysis (21 Jul 2014)

Posted by L. C. Chong on July 21, 2014

DIGI Analysis:-

Excel – http://1drv.ms/1nMWGAx

My View:-

- Fair values:
  – 5Y DCF: 6.12 – 6.98 (MOS: 8% – 20%)
  – Absolute EY%:
    – FY13 (EPS: 0.219) Buy below 4.89, sell above 5.87
    – R4Q (EPS: 0.255) Buy below 5.67, sell above 6.82
    – FY14 (EPS: 0.247) Buy below 5.51, sell above 6.62
  – Both models indicate that DIGI is slighly undervalued.
- The modernised network has improved the network quality and customer experience scorecard. This is evident with the 89% reduction in customer complaint.
- Data monetisation continue to be Digi’s trump card as shown in the strong data revenue growth.
- Operating margin also continues to improve as the company efficiently manages its expenses.
- Digi’s practise of paying out almost all of its earnings serve as another sweetener to the stock.
- The last time I accumulated DIGI was in Jul 2013 at 4.66. I will continue to hold, and accumulate DIGI whenever possible.

Latest Financial – Q2 2014 Financial Report (17 Jul 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1686869

At the time of writing, I owned shares of DIGI.

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TENAGA – Fundamental Analysis (21 Jul 2014)

Posted by L. C. Chong on July 21, 2014

TENAGA Analysis:-

Excel – http://1drv.ms/1ptIQWd

My View:-

- Fair value:
  – Absolute EY%
    – FY13 (EPS: 0.828): Buy below 9.57, sell above 12.02 (MOS: -2.15%)
    – R4Q (EPS: 0.945): Buy below 10.93, sell above 13.72 (MOS: 10.53%)
    – FY14 (EPS: 0.914): Buy below 10.57, sell above 13.28 (MOS: 7.51%)
    – FY15 (EPS: 0.960): Buy below 11.11, sell above 13.94 (MOS: 12%)
- The optimistic outlook on electricity demand growth in Malaysia would be a booster to TNB’s revenue going forward but however, the following risks will discount the growth:
  i) the rising generation costs
  ii) expect a drag on its earnings should the hiccup in FCPT implementation continues.
- The FCPT mechanism as a long-term catalyst for TNB and its uninterrupted implementation would send a positive signal to the market as it would provide a greater clarity on TNB’s long-term
earnings.
- I will continue to hold TENAGA, and may accumulate TENAGA in the future.

Latest Financial – Q3 2014 Financial Report (16 Jul 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1685693

At the time of writing, I owned shares of TENAGA.

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BURSA – Fundamental Analysis (21 Jul 2014)

Posted by L. C. Chong on July 21, 2014

BURSA Analysis:-

Excel – http://1drv.ms/1qtGPyA

My View:-

- Market Timing:
  – EY%:
    – FY13 (EPS: 0.325): Buy below 7.89, sell above 9.85
    – R4Q (EPS: 0.323): Buy below 7.84, sell above 9.78
    – FY14 (EPS: 0.36): Buy below 8.74, sell above 10.90
    – FY15 (EPS: 0.393): Buy below 9.54, sell above 11.90
  – BURSA is still undervalued.
- In my opinion, in FY14, the following risks will outweigh the growth drivers
  – Withdrawal of foreign investors in very large scale.
  – US QE taper will cause higher volatility in the market. This may cause investors stay out of (or monitor) the equity market.
- Despite risks of higher volatility due to QE taper, The 1Q14 earnings results were, in all, a good start to the year for Bursa. The increased interest by retail investors, in particular, is a positive sign. Local institutions remain a steady presence in the market, buffering stocks from the worst of the effects of selling by foreign investors.
- I remain sanguine on the company’s outlook over the longer term, as a proxy for the country’s growth. Its business model is also fairly resilient. As mentioned above, recurring and other incomes, including interest income, is sufficient to cover some 91% of total operating expenses.
- I will continue to hold BURSA, and may accumulate BURSA in the near term. Let see how it goes.

Latest Financial – Q2 2014 Financial Report (17 Jul 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1686933

At the time of writing, I owned shares of BURSA.

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KMLOONG – Fundamental Analysis (20 Jul 2014)

Posted by L. C. Chong on July 20, 2014

KMLOONG Analysis:-

Excel – http://1drv.ms/1mtkLf8

My View:-

- Fair values:
  – 5-Y DCF – 3.36 – 3.76 (MOS: 11% – 20%)
  – Absolute EY%
    – FY14 (EPS: 0.198): Buy below 2.11, sell above 2.47
    – R4Q (EPS: 0.245): Buy below 2.60, sell above 3.05
    – FY15 (EPS: 0.28): Buy below 2.98, sell above 3.49
  – In my opinion, KMLOONG is just slightly above undervalued level.
- The CPO price moves in a cyclical manner. In a worst case scenario, KMLOONG, a net cash company with a low cost of production and an experienced management team would be able to withstand the turbulence and even take up expansion opportunities. Even in the ugly senario, it still worth 2.69.
- Going forward, I expect KMLOONG to perform better in FY15 as it plans to improve production, while benefiting from favourable palm oil prices.
- I will continue to hold KMLOONG, and may accumulate when possible.

Latest Financial – Annual Report 2014 (3 Jul 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1675201

At the time of writing, I owned shares of KMLOONG.

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SUNWAY – Fundamental Analysis (20 Jul 2014)

Posted by L. C. Chong on July 20, 2014

SUNWAY Analysis:-

Excel – http://1drv.ms/1msMz3e

My View:-

- Fair value:
  – Absolute EY%:
    – FY13 (EPS: 0.945): Buy below 6.00, sell above 7.83
    – FY13 (Normalised EPS: 0.45): Buy below 2.85, sell above 3.73
    – R4Q (EPS: 0.874): Buy below 5.54, sell above 7.24
    – FY14 (EPS: 0.279): Buy below 1.77, sell above 2.31
    – FY15 (EPS: 0.303): Buy below 1.92, sell above 2.51
- The spike up of EPS in FY13 was due to "Gain upon former subsidiary becoming an associate" (RM661,254K) and "Gain upon former subsidiary becoming a joint venture" (RM108,370K).
  – If both gains are excluded, the normalised EPS is around 0.45.
- I remain cautious on the increasingly crowded Iskandar Malaysia development and luxury property market which would be hit by the new property cooling measures amid stricter lending rules. However, earnings are well-supported by its MYR2.4bn unbilled sales (MYR2.2bn in 3Q13) and MYR3.9bn construction orderbook.
- Moving forward, I still think that management’s sales target of RM1.8b on the back RM2.3b targeted launches is still highly realistic. Reason being that 82% of its upcoming launches are being priced below RM1.0m/unit which is more palatable for the market’s demand for ‘affordability’. If its upcoming Sunway Iskandar secures strong take-ups, I think stock price will have larger upside. Property unbilled sales of RM2.4b and remaining external orderbook of RM2.9b provides 1-1.5 years visibility.
- I will continue to hold SUNWAY.

Latest Financial – Annual Report 2013 (4 Jun 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1646921

At the time of writing, I owned shares of SUNWAY.

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GKENT – Fundamental Analysis (20 Jul 2014)

Posted by L. C. Chong on July 20, 2014

GKENT Analysis:-

Excel – http://1drv.ms/1sB4z3J

My View:-

- Fair value:
  – 5Y DCF: 2.91 – 3.26 (MOS: 40% – 47%)
  – Absolute EY%:
    – FY14 (EPS: 0.16) – Buy under 1.78, sell above 2.12
    – R4Q (EPS: 0.164) – Buy under 1.82, sell above 2.17
    – FY15 (EPS: 0.179) – Buy under 1.99, sell above 2.37
  – I think GKENT is still undervalued. If we just looking at the current EY% and FCFY%, the EY% and FCFY% are 9.25% and 10.06%.
- GKENT has very strong competitive advantages where it is in a very good position in building wide economic moats.
- GKENT has been moving in the range from 0.4 to 1.7 since 2004. It couldn’t break 1.7 twice (2004 and 2010). However, since 28 Mar 2014, GKENT has been so bullish (without obvious correction) and closed at 1.7 on 11 Apr 2014. For those investors who spotted and invested GKENT at lower price, thumb up to them.
- The Group is proposing a bonus issue of 75,102,542 new ordinary shares on the basis of 1 bonus share for every 3 existing shares held. Subject to shareholders’ approval, the Proposed Bonus Issue will result in an increase in the Group’s issued and paid up number of shares to 300,410,168 from the existing 225,307,626 shares.
- On 30 May 2014, GKENT completed the construction of the Semantan Intake Pahang-Selangor raw water transfer project, which was delivered on schedule. The completion of the former and the recognition of the tail-end revenue of the latter were the main reasons for the Group’s decline in its quarter-on-quarter revenue.

Latest Financial – Annual Report 2014 (9 Jul 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1680197

At the time of writing, I owned shares of GKENT.

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Investment Analysis on Technology Industry Workshop – Excel

Posted by L. C. Chong on July 19, 2014

On 19 Jul, I conducted “Investment Analysis on Technology Industry”. The following are the excel files that I used for the workshop. I do not include some of my comments and analysis presented in the workshop in most of the excel. This is to be fair to the attendees. In the future, I will update the counters in Watch List and Family List with thorough analysis (like what I did to other counters in my Portfolio/Watch/Family List).

ECS – http://1drv.ms/1kG2Q5t (Study List)

EFORCE – http://1drv.ms/1k1yMXj (Watch List)

MSNIAGA – http://1drv.ms/1k1AyaM (Study List)

MYEG – http://1drv.ms/1kG6FYm (Family List)

SCICOM – http://1drv.ms/1kG7DUx (Study List)

WILLOW – http://1drv.ms/1k1HCUV (Watch List)

GTRONIC – https://lcchong.wordpress.com/2014/07/06/gtronic-fundamental-analysis-6-jul-2014/ (Watch List)

JCY – https://lcchong.wordpress.com/2014/07/02/jcy-fundamental-analysis-2-jul-2014/ (Study List)

KESM – https://lcchong.wordpress.com/2014/07/04/kesm-fundamental-analysis-4-jul-2014/ (Study List)

MPI – https://lcchong.wordpress.com/2014/07/10/mpi-fundamental-analysis-10-jul-2014/ (Study List)

UCHITEC – https://lcchong.wordpress.com/2014/07/08/uchitec-fundamental-analysis-8-jul-2014/ (Watch List)

VITROX – https://lcchong.wordpress.com/2014/07/01/vitrox-fundamental-analysis-1-jul-2014/ (Portfolio)

WCC invited me to do another workshop on 23 Aug: “Investment Analysis on Telco Industry and Utilities Industry”.

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MPI – Fundamental Analysis (10 Jul 2014)

Posted by L. C. Chong on July 10, 2014

MPI Analysis:-

Excel – http://1drv.ms/1n9tCml

My View:-

- Fair value:
  – FY13 (EPS: 0.057): Buy below 1.52, sell above 1.93
  – R4Q (EPS: 0.249): Buy below 6.65, sell above 8.45 (MOS: 28%)
  – FY14 (EPS: 0.284): Buy below 7.58, sell above 9.63 (MOS: 36%)
- MPI has good earnings visibility with the following strength:
  – Technical edge and product exposure that augur well for the current tech upcycle as well as the upcoming tech wave
  – Strategic product mixtures which gives a balanced exposure in cyclicality and defensiveness
- MPI management shows their ability to react timely ahead of the curve of the tech upcycle as well as streamlining its affirmative action strategy for profitable growth.

Latest Financial – Q3 2014 Financial Report (29 Apr 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1608857

At the time of writing, I did not own shares of MPI, and categorized this stock in the Watch List.

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