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

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My Facebook page is deactivated by Facebook (hopefully temporary)

Posted by L. C. Chong on August 31, 2014

For some unknown reasons, my Facebook page is deactivated by Facebook. I have escalated this case to Facebook. Hopefully, this is a temporary issue.

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ALLIANZ – Fundamental Analysis (31 Aug 2014)

Posted by L. C. Chong on August 31, 2014

ALLIANZ Analysis:-

Excel – http://1drv.ms/1lBq9DE

My View:-

- Fair Value/Market Timing
  – 5Y DCF:
    – 28.67 – 32.82 (MOS: 55% – 61%)
  – Absolute EY%:
    – Trailing:   
      – FY13 (EPS: 1.492) – Buy below 8.95, fair value 10.9 (MOS: -18.4%)
      – R4Q (EPS: 1.634) – Buy below 9.79, fair value 11.93 (MOS: -8.1%)
    – Forward:   
      – FY14 (EPS: 1.701) – Buy below 10.2, fair value 12.42 (MOS: -3.9%)
      – FY15 (EPS: 1.939) – Buy below 11.62, fair value 14.16 (MOS: 8.9%)
    – EPS applied to reach the current stock price (12.9): 1.767   
  – ALLIANZ is undervalued in long term.
- I think MH370 and MH17 incident will only give negative impact to ALLIANZ in short term.
  – For some people, this is a risk, but I view this as an good opportunity.
- ALLIANZ’s dividend payout is extremely low, so never expect good dividend from them. Reasons:
  – High capital or surplus retained due to nature of industry
  – Stringent regulatory requirement to protect policyholders’ interest
  – Managing stringent capital buffer to withstand adverse or unfavorable experience
- Unlike LPI (general insurance and financing on leases), ALLIANZ is heavily dependence on single segment: motor insurance; and also dependence on agent for life insurance. ALLIANZ requires high capital to grow distribution capabilities, and fund new business growth.
- Balance float of outstanding shares is very low: 4.20%.
- References:
  – https://www.allianz.com.my/web/lna/10074/10064/2014#
  – http://klse.i3investor.com/blogs/rhb/47700.jsp
- I will continue accumulate ALLIANZ along the way.

Latest Financial – Q2 2014 Financial Report (28 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1724785

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

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SUNWAY – Fundamental Analysis (30 Aug 2014)

Posted by L. C. Chong on August 30, 2014

SUNWAY Analysis:-

Excel – http://1drv.ms/VVjUOJ

My View:-

- Fair value:
  – Absolute EY%:
    – Trailing:
      – FY13 (EPS: 0.945) – Buy below 5.91, fair value 7.71 (MOS: 61.1%)
      – R4Q (EPS: 0.881) – Buy below 5.51, fair value 7.19 (MOS: 58.3%)
    – Forward:
      – FY14 (EPS: 0.275) – Buy below 1.72, fair value 2.24 (MOS: -33.8%)
      – FY15 (EPS: 0.3) – Buy below 1.87, fair value 2.44 (MOS: -22.8%)
    – EPS applied to reach the current stock price (3.00): 0.368
- 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.
- Moreover, Sunway’s integrated construction-property business model should give them an edge in terms of execution
- I am considering to sell off SUNWAY.

Latest Financial – Q2 2014 Financial Report (28 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1725445

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

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GENTING – Fundamental Analysis (30 Aug 2014)

Posted by L. C. Chong on August 30, 2014

GENTING Analysis:-

Excel – http://1drv.ms/VT4CKe

My View:-

- Fair Value:
  – Absolute EY%:
    – Trailing:
      – FY13 (EPS: 0.49) – Buy below 8.6, fair value 11.07 (MOS: 13.5%)
      – R4Q (EPS: 0.462) – Buy below 8.11, fair value 10.43 (MOS: 8.2%)
    – Forward:
      – FY14 (EPS: 0.535) – Buy below 9.39, fair value 12.08 (MOS: 20.7%)
      – FY15 (EPS: 0.589) – Buy below 10.34, fair value 13.31 (MOS: 28%)
    – EPS applied to reach the current stock price (9.58): 0.424
- GENTING, as a holding company, should have no problems financing its power division’s capex commitments of US$1bn. The annual cashflow of over RM530m from GENM’s management fees should be sufficient to meet the equity portion of the US$360m, spread over three years. However, if we consider the US$4bn capex for Resorts World Las Vegas (RWLV), the timing of the cashflow could be an issue as the RM7bn cash from the conversion of warrants will be spread out over the next five years. Apparently, work on RWLV will not start until it secures the necessary gaming licence. Analysts expect the licence to be obtained in the next 12-18 months. However, based on the building applications submitted by RWLV on 4 Dec 2013 as found on http://www.clackcountynv.gov, there appears to have been progress. This means construction could start as early as 3Q14.
- GENTING has many new projects on hand, but most of the projects are under development. Besides, it takes long time for GENTING to obtain casino license. And the risk is GENTING may not able to obtain license.
- Higher contributions is expected from RWG and GENUK where driven by normalising VIP win rate to offset lower contributions from GENS due to easing VIP volumes.
- As of now, I won’t add position to GENTING because there are many uncertainties at this moment.

Latest Financial – Q2 2014 Financial Report (28 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1725629

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

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MAYBANK – Fundamental Analysis (29 Aug 2014)

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

MAYBANK Analysis:-

Excel – http://1drv.ms/1rEhRgF

My View:-

- Fair values:
  – 5Y DCF:
    – 11.33 – 13.21 (MOS: 11% – 24%)
  – Absolute EY%:
      – Trailing:
        – FY13 (EPS: 0.758) – Buy below 9.95, fair value 12.03 (MOS: 16%)
        – R4Q (EPS: 0.745) – Buy below 9.78, fair value 11.82 (MOS: 14.6%)
      – Forward:
        – FY14 (EPS: 0.765) – Buy below 10.05, fair value 12.15 (MOS: 16.9%)
        – FY15 (EPS: 0.818) – Buy below 10.74, fair value 12.99 (MOS: 22.2%)
      – EPS applied to reach the current stock price (10.1): 0.636
  – Both models pointed that MAYBANK is still undervalued.
- Loan growth has improved in 2QFY14 contributed strongly by its international operations’ loan expansion.
- Its Singapore operations have performed well despite challenging conditions with strong growth in net fund based and net fee based in income in 1HFY14.
- Net fund based income for Islamic Banking improved significantly in 1HFY14 (+48.5%yoy) on strong loan expansion.
- Furthermore, the Group’s overhead expenses have been well controlled with a decline of 2.7%yoy in 1HFY14.
- Management lowered its ROE guidance from 15.0% to 14.0%. Management highlighted that it lowered its ROE guidance due to :
  i) The growth NOII in 1HFY14 which was not as fast as expected
  ii) even tough loan growth picked up pace in 2QFY14, the slow growth in 1QFY14 resulted in its loans growth in 1HFY14 to be lower than its target
  iii) higher loan impairment in Indonesia.
- I will accumulate MAYBANK a bit without increasing my average price too much.

Latest Financial – Q2 2014 Financial Report (28 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1723605

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

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OCK – Fundamental Analysis (29 Aug 2014)

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

OCK Analysis:-

Excel – http://1drv.ms/1qn7dHm

My View:-

- Fair values:
  – Absolute EY%:
    – Trailing:
      – FY13 (EPS: 0.05) – Buy below 0.81, fair value 1.1 (MOS: -31.4%)
      – R4Q (EPS: 0.049) – Buy below 0.8, fair value 1.08 (MOS: -33.5%)
    – Forward:
      – FY14 (EPS: 0.07) – Buy below 1.14, fair value 1.54 (MOS: 6.2%)
      – FY15 (EPS: 0.09) – Buy below 1.46, fair value 1.97 (MOS: 27.1%)
    – EPS applied to reach the current stock price (1.4): 0.064
- I will place this stock in my Watch List. Thorough study is required.

Latest Financial – Q2 2014 Financial Report (28 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1724733

At the time of writing, I did not own shares of OCK.

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PADINI – Fundamental Analysis (28 Aug 2014)

Posted by L. C. Chong on August 28, 2014

PADINI Analysis:-

Excel – http://1drv.ms/1AWoYBY

My View:-

- Fair value/Marketing Timing
  – 5Y DCF:
    – 2.51 – 2.87 (MOS: 25% – 34%)
    – The current price 1.89 assumed 3.8% growth of FCF in 5 years.
  – Absolute EY%:
    – Trailing:   
      – FY14 (EPS: 0.138) – Buy below 1.55, fair value 1.86 (MOS: -1.4%)
      – R4Q (EPS: 0.138) – Buy below 1.55, fair value 1.86 (MOS: -1.4%)
    – Forward:   
      – FY14 (EPS: 0.147) – Buy below 1.65, fair value 1.98 (MOS: 4.4%)
      – FY15 (EPS: 0.165) – Buy below 1.85, fair value 2.23 (MOS: 15.1%)
    – EPS applied to reach the current stock price (1.89): 0.14
- In my opinion, at 1.89, I think PADINI valuation is attractive due to
i) attractive dividend yield of 6%
ii) commendable top line growth backed by aggressive expansion
iii) BO stores targeting the value-for-money segment which will do well in current economic environment
iv) highly experienced management team with a strong local retail market knowledge
v) Expected to regain its Shariah compliant status in November 2014 – It had addressed the issue by reallocating a portion of its cash into Islamic instruments in order to be in compliant with the requirement of the SC’s List.
- For recent sector analysis, please read http://lcchong.files.wordpress.com/2014/03/apparels-the-busy-weekly-15032014.pdf
- Today, I bought additional shares of PADINI. I will continue to hold and accumulate whenever possible.

Latest Financial – Q4 2014 (Interim FY14) Financial Report (27 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1722889

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

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AXIATA – Fundamental Analysis (28 Aug 2014)

Posted by L. C. Chong on August 28, 2014

AXIATA Analysis:-

Excel – http://1drv.ms/1AW9M7U

My View:-

- Fair values:
  – Absolute EY%:
    – Trailing:
      – FY13 (EPS: 0.299) – Buy below 5.01, fair value 6.79 (MOS: -2.2%)
      – R4Q (EPS: 0.275) – Buy below 4.61, fair value 6.25 (MOS: -11.1%)
    – Forward:
      – FY14 (EPS: 0.325) – Buy below 5.44, fair value 7.37 (MOS: 5.9%)
      – FY15 (EPS: 0.362) – Buy below 6.06, fair value 8.22 (MOS: 15.6%)
    – EPS applied to reach the current stock price (6.94): 0.306
  – AXIATA is currently undervalued, and based on Q1FY14 results, it is on track to meet the ancipated EPS (0.328). However, its MOS is lower than my tolerance level (35%).
- I expect Celcom’s earnings to remain stable going forward amid rational competition. XL meanwhile will have to absorb Axis’ losses in the initial years post-merger. The potentially value-accretive tower spin-off exercise is not close to being completed. Besides, AXIATA is still highly leveraged. CROIC and ROIC are just stable, but not improving significantly.
- New acquisition activities are expected, such as Viom Networks Ltd in India. Thus, more funding and gearing will be needed.
- As of now, I do not see new growth catalysts for Axiata in the near term. Earnings growth form the group’s smaller segmenst is expected to compensate for the earnings pressure from its two main segments i.e. Celcom and XL. In addition, sizeable exposure to forex also impacted the group’s bottomline.
- I will continue to hold, but won’t accumulate AXIATA in the near term.

Latest Financial – Q2 2014 Financial Report (27 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1721705

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

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EFORCE – Fundamental Analysis (27 Aug 2014)

Posted by L. C. Chong on August 27, 2014

EFORCE Analysis:-

Excel – http://1drv.ms/1lw6wN4

My View:-

- Fair values:
  – 5-Y DCF:
    – 1.14 – 1.30 (MOS: 40% – 47%)
    – EFORCE is a rich cash flow company. In long term, EFORCE is very undervalued.
  – Absolute EY%:
      – Trailing:   
        – FY13 (EPS: 0.034) – Buy below 0.38, fair value 0.45 (MOS: -53%)
        – R4Q (EPS: 0.035) – Buy below 0.39, fair value 0.46 (MOS: -48.6%)
      – Forward:   
        – FY14 (EPS: 0.037) – Buy below 0.41, fair value 0.49 (MOS: -41.1%)
        – FY15 (EPS: 0.04) – Buy below 0.45, fair value 0.52 (MOS: -30.6%)
      – EPS applied to reach the current stock price (0.685): 0.052   
      – In short term, EFORCE is probably undervalued.
- EFORCE has been declining from 0.86 to 0.63 since 4 Jul 2014.
- This is another good stock I consider to buy, but I am just not sure about its growth drivers because Malaysia market in stock trading is not as big as US/Europe.

Latest Financial – Q2 2014 Financial Report (26 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1721493

At the time of writing, I did not own shares of EFORCE.

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CARLSBG – Fundamental Analysis (27 Aug 2014)

Posted by L. C. Chong on August 27, 2014

CARLSBG Analysis:-

Excel – http://1drv.ms/1AThtM4

My View:-

- Fair values/Market Timing:
  – 5-Y DCF:
    – 12.80 – 14.71 (MOS:4% – 17%)
  – Absolute EY%:
    – Trailing:
      – FY13 (EPS: 0.602) – Buy below 10.16, fair value 12.5 (MOS: 2.1%)
      – R4Q (EPS: 0.637) – Buy below 10.76, fair value 13.24 (MOS: 7.6%)
    – Forward:
      – FY14 (EPS: 0.626) – Buy below 10.58, fair value 13.02 (MOS: 6%)
      – FY15 (EPS: 0.659) – Buy below 11.13, fair value 13.7 (MOS: 10.6%)
    – EPS applied to reach the current stock price (12.24): 0.589
- Going forward, I remain conservative and skeptical above volume growth in the brewery sector as some reports show that the industry is saturated, coupled with several other external factors such as rising fuel costs, inflation as well as potential exposure to excise duty hike in the near future. However, earnings should be sustainable at current levels.
- 2014 will be a challenging year for brewers due to competition from contrabrand beers and as consumer spending dwindles. Fortunately, this will be partially alleviated by the Visit Malaysia Year 2014 event.
- In my opinion, there is still some downside risk even though the share prices of both stocks have fallen sharply from last year’s peaks (down 30-45%). 10.24 – 11.50 is a good support zone, from technical aspect. Chances of CARLSBG dropping below this zone is low.
- CARLSBG is determined to move away from a single star beer product company to become a star beer portfolio company. Over the past 10 years, CARLSBG has been trying to launch a couple of new products into the market. To date, however, its Carlsberg Green Label is still viewed as the group’s only crown jewel. As such, a reshuffle has been undertaken in its top management team over the last 2 to 3 years with the aim of bringing good changes to the group. Besides, it has also appointed a few brand managers to oversee the brand building efforts across a few main products, whereby premium brands are expected to form a larger proportion of its new product portfolio. While efforts are being made to build market share for its premium products, the Carlsberg Green Label will remain as the bread and butter of the group. Whether or not CARLSBG will be able to return to its former glory, it is still too early to tell, but the good efforts warrant CARLSBG a buy/hold call for the long term. There are downside risks if things do not turn out as expected.
- At the current price (12.24), CARLSBG is slightly under valued. I am considering to accumulate CARLSBG because its DY% maintains at 5%.

Latest Financial – Q2 2014 Financial Report (26 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1720665

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

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