PETGAS Updates – 18 Oct 2017

PETGAS Analysis File –

In the foreseeable future, I think PETGAS is expected to remain stable. You won’t find any WOW factor in short term though.

However, with existing Gas Processing Agreement, Gas Transportation Agreements and Regasification Service Agreement signed with PETRONAS, I believe that PETGAS income is sustainable. Besides, PETGAS will allocate around RM4.5 billion capex to cater for the growth projects, such as the LNG Regasification Terminal (RGT) and the Air Separation Unit (ASU) project, both of which are located in Pengerang.

The RGT project is now at 25% progress on ground and the first storage tank should be commissioned before the end of 2017 while the second tank, which will complete the whole project, will be commissioned by the first quarter of 2018. Its Pengerang Gas Pipeline Project is also on track and expected to be completed this year, which will enable the initial supply of gas from the existing Peninsular Gas Utilisation (PGU) pipeline network to Pengerang and vice versa.

Thus, with the above catalysts, I believe PETGAS will continue to grow in long term.

In my opinion, its fair value is range 19.5-22.31 (base scenario), and 17.98-20.68 (bad scenario). At 18.50, PETGAS is undervalued. Because my average price of PETGAS was 8.9, I have accumulated some PETGAS shares recently.




This is a share investment related book I bought few days ago when I was having vacation in Taiwan.

I highly recommend this book to investors, no matter you are beginner or veteran.This book is not meant to share a winning formula with you (like those 7 step or 10 step kind of things), but to share observation of the author and what works for him in share investment.

In my opinion, this is a high quality book.

APOLLO Updates – 2 Oct 2017

APOLLO Analysis File –

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?

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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 –

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.

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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:

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

BURSA Updates – 26 Aug 2017

BURSA Analysis File – FY17 Q2

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.

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