APOLLO Updates – 2 Oct 2017

APOLLO Analysis File – http://wp.me/a17Hxk-2J0

In the foreseeable future, I think APOLLO won’t have significant catalysts to boost up its growth. In view of inflation on key raw material prices and the volatility of MYR against foreign currencies, raw material prices are expected to be unstable in the forthcoming year. Coupled with the uncertainties in the global economy, the forthcoming year will become tougher and challenging for APOLLO.

Having said that, I expect APOLLO will still be able to achieve stable performance. In my projection, I factored in declining growth in its revenue and slightly higher COGS. Besides, I also considered that APOLLO won’t be able to maintain its dividend payout like previous years.

Its fair value is from 4.4 to 4.7, and I forecast its dividend yield will be around 4.8%.

At 4.98 (30 Sep 2017), its valuation is still not really attractive. Its dividend yield is 5.02%, but I anticipated that APOLLO may not be able to maintain its dividend payout like previous years.

I am currently in consideration whether I should buy some units of APOLLO for dividends, but the issue is “Is Apollo worth the premium?”. Perhaps, I should wait for the 2nd quarter results?

Join my FB group: https://www.facebook.com/groups/285121298359919 for more collaboration.

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HIBISCS – Example of Valuation on Anasuria Cluster

Recently, I came across an article Sensitivity Analysis for Oil Price Impact to Hibiscus.

I hereby shared my example of valuation on Anasuria Cluster which presented in my “Investment Analysis – Oil and Gas” training on 4 Sep 2016.

 

KAREX Preliminary Study – 26 Sep 2017

Analysis file – https://lcchong.files.wordpress.com/2017/09/karex-fy17-q4.xlsx

In short, despite Karex prices dropped from 2.60 to 1.48 (taking bonus shares into consideration), in my opinion, Karex is still overvalued. DCF is not really suitable for KAREX.

  1. EBITDA Multiple – Referring to the following EBITDA multiple, if compare to manufacturing companies in Malaysia and US, KAREX’s EBITDA multiple is very high. This is an indication of overvalue.
    1. My estimation – 32x
    2. WSJ’s estimation – 30x
  2. If you can’t comprehend EBITDA Multiple, then you check out KAREX’s P/E which is 53x. If we convert this to Earning Yield, 53x is equivalent to 1.9%.

I have been toying some high growth rates, but I just couldn’t “make Karex undervalued”. Therefore, I will pass KAREX for the time being, but I will keep it in my watch list.

I want to thank my relative who shares EquitiesTracker’s study on Karex with me. This saves my time a lot.

If you ever open my analysis file, you will see quick and dirty assumptions for many items, such as:

  1. Segregation of debts for FY2017
  2. Interest rates for cash balances
  3. Interest rates for debts
  4. And others….

Anyway, all of these quick and dirty assumptions won’t impact the valuation a lot (thus won’t change my view) unless their 2017 Annual Report releases something extremely off from my assumptions.

Join my FB group: https://www.facebook.com/groups/285121298359919 for more collaboration.

Survey – Financial Analysis for Commercial Banks

I have been receiving requests for financial analysis for commercial banks.

To set your expectation right, analyzing financial statements of a commercial bank is totally different from other industries. I observe that a lot of people use the normal way to analyze financial statements of a commercial bank, and they ended up missing the chance to accumulate bank shares. Sometimes, on the surface, it looks like a potential disaster, but if you know how to analyze bank properly, actually it could be a great opportunity. This happened to PBBANK and MAYBANK so many times.

As a benchmark, if you can’t comprehend what I taught in 302, I suggest you don’t take up this. If you can’t bear to hear about *regulations (Basel I, II, III)*, I suggest you don’t take up this too. I hope no one leaves the class before lunch.

After all, in Malaysia, there are only handful of public listed banks, you still can invest in banks by knowing their names…

If you really serious of learning this, please register your interest here:
https://www.surveymonkey.com/r/5B7VFD9

I will consider to conduct the class if there are sufficient responses.

BURSA Updates – 26 Aug 2017

BURSA Analysis File – FY17 Q2http://wp.me/a17Hxk-2IN

In the foreseeable future, I think BURSA won’t have significant catalysts to boost up its growth. This year may have higher market activities due to the coming general election.

Having said that, BURSA will still be able to achieve steady performance. Also, BURSA dividend payout is more than 90%. At 10.12, valuation of BURSA is not really attractive where I believe its fair value is around 11.20 (±0.50). The uncertainty risk of buying at the current level is more towards medium.

Besides, if you buy BURSA now, dividend yield is less than 4%.

I will continue to accumulate BURSA if there is any significant correction.

Join my FB group: https://www.facebook.com/groups/285121298359919 for more collaboration.

PADINI Updates – 21 Aug 2017

PADINI Analysis File – http://wp.me/a17Hxk-2IK

I have updated analysis file of PADINI based on FY17 Q3 results.

In this release, I have made some further fine tuning to the modelling.

At 4.23, in my opinion, PADINI almost fully valued where its fair value around 4.45. I will continue to hold and won’t accumulate PADINI for the time being.

Join my FB group: https://www.facebook.com/groups/285121298359919 for more collaboration.

Investalks 302 – Advanced Financial Statement Analysis @ Penang

Overview

This course aims to provide participants with a thorough understanding of how to perform advanced analysis on financial statement. This course brings together the key elements of financial statement analysis to help participants develop their skills in this area and enable them to ask the right questions to really get under the skin and see the real risks facing businesses and investors in these challenging times. The reference reporting framework used will be IFRS.

During the course, participants also gain an insight into how to interpret warning signals in financial statement and identify many of the creative accounting techniques used by companies.

Duration: Two days

Date: 9-10 Sep 2017, 9am to 5pm

Course Fee:

  1. Investalks Student: RM680.00
  2. Public: RM750.00

Registration:

  1. Bank in
    • Bank: Maybank
    • Account No.: 514383562062
    • Account Name: Ivestalks Enterprise
  2. Send the payment receipt to investalksacademy@gmail.com or Whatsapp to +6016-773 9114

Location: Somewhere in George Town, Penang

Program Level

Program Level: Advanced

Prerequisites: As an “advanced” course, a reasonable grounding in the fundamental concepts of financial accounting and some experience of having carried out or reviewed financial analysis will be assumed. Participants are expected to understand concepts such how the key financial statements (Profit and Loss, Balance Sheet and Cash Flow Statement) link together, how they are structured, how to analyse financial statements using simple ratios and accounting principles such as accruals and provisions.

This training assumes a sound grasp of fundamental finance concepts and analysis. Although the analysis will be structured around key aspects such as “Liquidity” and “Gearing”, these principles are assumed to be familiar to participants, thereby enabling this session to focus on analysis and interpretation rather than definition and calculation.

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