Thursday, April 29, 2010

Carlsberg to cost more next month

"the impact of the price increase on Carlsberg’s earnings, if any, would be marginal."
"We don’t foresee earnings being bumped up"
==> It seem earnings would be stagnant/marginal increase.

Asked about prospects, Ravn said the company had a “good feeling” about this year. “We think the industry will grow by about 2% after contracting last year.”
For Carlsberg, it would ride on the synergies it would continue to create with Carlsberg Singapore Pte Ltd as well as further develop new products to capture higher sales,
==> The "good feeling" worth a growth rate of 2%. Huh... finally, new products is the right way to do to capture higher sales. Keep up the good work. !!

Managing director says company playing catch-up with increase in raw material prices
KUALA LUMPUR: Carlsberg Brewery Malaysia Bhd will increase the prices of its beer and stout products by an average of about 3% next month, says managing director Soren Ravn.
“We are trying to play catch-up with the rise (in price) of raw materials such as malt and hops which have increased 10% on average over the past five years,” he told reporters after a shareholders’ meeting yesterday.
Ravn said the company had last year increased prices only “slightly”, taking into consideration the economic downturn of 2008 and its flow-through effect on consumers last year.
It is understood that the average annual increase on Carlsberg products over the past five years is about 2%.
We are trying to play catch-up with the price rise says CARLSBERG BREWERY MALAYSIA BHD MD SOREN RAVN ON THE 3% INCREASE NEXT MONTH

The price increase would be industry wide, according to Ravn.
OSK Research Sdn Bhd analyst Vincent Lim, who covers the company, said the impact of the price increase on Carlsberg’s earnings, if any, would be marginal.
“They have been doing this historically, it’s just simply to pass on costs to consumers. We don’t foresee earnings being bumped up,” he said.
Asked about prospects, Ravn said the company had a “good feeling” about this year. “We think the industry will grow by about 2% after contracting last year.”
For Carlsberg, it would ride on the synergies it would continue to create with Carlsberg Singapore Pte Ltd as well as further develop new products to capture higher sales, Ravn said.
Carlsberg Malaysia, which is a 51%-owned unit of Denmark-based Carlberg AS, acquired Carlsberg Singapore for RM370mil in the fourth quarter last year.
Carlsberg Malaysia has a profit guarantee of S$24mil from the acquisition for the financial years ending Dec 31, 2009 (FY09) and FY10.
Chairman Datuk Lim Say Chong said the company, which enjoys the lion share of the local beer market, was expected to pay out 50% to 70% of distributable profits this financial year.
The group distributed 69% of its FY09 net profit to shareholders.
For FY09, Carlsberg reported a net profit of RM75.9mil against RM76.1mil in FY08.
Among its most popular brands are Carlsberg Green, Skol, Royal Stout, Carlsberg Gold and Carlsberg Special Brew, which accounted for 95% of the company’s total sales last year.

Tuesday, April 27, 2010

A More Detail Look At KFIMA

Most of the time we look at figures and neglected the growth prospect of a company but nevertheless this is the most direct and easiest way to look at as it implies the healthiness of a company, because the figure never lie and is the easiest to obtained.
It is worth mentioning KFIMA again when May 2010 is approaching; because it is the time KFIMA will announce it 4th Q result. Presuming the rolling 4 qtrs will sum up to below :-
4Q EPS (03-2009) = 6.43
1Q EPS (06-2009) = 7.01
2Q EPS (09-2009) = 3.75
3Q EPS (12-2009) = 6.88
4Q EPS (03-2010) = ??

We take 4Qs of above and sum up will give a total EPS of 24.07sen. Wow, this is fantastic figure as mentioned in the previous post. Though, we do not know what will turn out in the coming 4Q result but taking it previous 4Q figure is just good enough as everything work out here is based on estimation and forecast. So, this in turn will represent a PE of 4.28sen. One must think it is low enough to spur the price up ? Yes, indeed it does make sense to trade at higher valuation at a minimum of PE 5X at least. Lets study in-depth other figures to substantiate what I said.

1) Dividend

This is what I most concerned as my first criterion is dividend. KFIMA has a tendency of average dividend payout ratio of 17% of net profit. Estimated dividend to be declared this time round is 24.07 x 17% = 4.1sen. This represent a 4.1/1.03 = 3.98 % on current price @ RM1.03. Much higher compare to FD.

2) ROE

Company has to make money to continue it operation. Judging previous figure, a ratio of ROE is around 13.8%, this is a very good margin so to speak, not many companies can meet that.

3) Gearing

In order to stay healthy with comfortable operation cash flow, my own figure of a company gearing should not go beyond 70% of it total asset. KFIMA at this level only stay around 30% debt which is very healthy in my opinion.

Another good figure for KFIMA is, it is in high ability in meeting interest expense where KFIMA has power to service interest expense on debt easily.

The only setback is KFIMA relatively consider under a low cash flow ratio.
4) FV

As usual, my way of FV = 5 x 24.07 = RM1.20. Represent a 20% discount on current price at RM1.03.

Monday, April 26, 2010


The fast moving world of the stock market confuses objectives and targets of investors. It is necessary to devise a plan which is robust and profitable in the testing environments of the stock market. It is imperative that investors set trading goals and strategize their actions accordingly. The following discussion incorporates the

Understand Your Stock Portfolio

“Eat what you can digest”. While building your portfolio choose the stocks preferentially, giving importance to those stocks which you will be to handle comfortably. In order to make some fast bucks picking stocks which are as incomprehensible as Greek is a bad decision. Further, it is of utmost importance that you have wide information about the nature and future prospects of the stocks picked. Randomly picking up stocks just for the sake of it will only cause trouble in the long term.

Advice from Professionals

Though it is a bonus if the investor has some experience in dealing with stocks, investors should look up to professionals who analyze and operate on stocks for a living. A professional would be able to provide a better analysis than a part-timer who meddles in stock market. Now, there is an array of services which are used for information gathering by a stock market investor. The recommendations of professionals should be sought for, even more in a volatile economic market. The stock market is the right place for wealth creation, but going alone in this financial minefield is not prudent.

Be Flexible

In this volatile market investors should be flexible in their outlook. Within a trading session, many times an investor has to take a non-traditional decision. The decision making should still be conforming to the basic concepts of stock trading. But, the investor should be flexible in taking new decisions.

Long term Planning

The stock market is full of manipulations and volatile tactics. The stock investor should review the past performances of the portfolio and take long term decisions in its reflection. The trading of the stock investor should cast a futuristic approach. The planning should account for factors, seen or unforeseen in the future. Taking decisions based on a quick profit in the short term is not advisable.

Decide the time to get out

Sometimes it is advisable to stay put even in a volatile market adhering to a long term plan. But, when the danger is imminent the stock trader should have the guts to cash out.. This remains true for intra day and swing traders in all cases but in some, the long term investor should also decide to find the exit door. Stock market movements are at the most
Irregular. Therefore, planning an exit strategy before the hand burnt is prudent. Moreover as a rule, whatever the trend the stock trading is showing now may reverse unexpectedly.

Prioritize Goals

The stock market pretty much same as life and here to prioritizing goals is fundamental to success. Investors need to do the same and not juggle with too many objectives at once.

Wednesday, April 21, 2010

A Quick Look On TOMEI

Result looking impressive year after year. Have added TOMEI into my portfolio the other day at a price of RM0.52.

Trading at current price of RM0.53, which mean :-

EPS = 14.48sen
PE = 3.67sen
My way of calculate FV = 4.5 X 14.48 = RM0.65

I expect a minimum of 2.5sen dividend to be declared end of this month or early May 2010. That represent a 4.7% at least and 52 week low of Tomei price stood at RM0.435, so the down side should be quite minimum.

Looking at the above it passes all my searching criteria in picking stocks, so should be worth considering.

Friday, April 16, 2010

Monday, April 12, 2010

REIT market to swing upwards in value

More information on REITs.......

KUALA LUMPUR: Malaysia’s real estate investment trust (REIT) market is expected to swing upwards closer to their net asset value (NAV) in the next six months, with the entry of new players that can attract foreign investors, said Hall Chadwick Asia Sdn Bhd chairman Kumar Tharmalingam.

Besides YTL Corp Bhd’s Starhill REIT, he said the bigger ones that could cross the RM4bil threshold include Sunway REIT, which has a stable brand name including Sunway Resort and Monash University.

“The moment an individual REIT achieves a value of RM4bil, it will attract foreign investments.

“Foreigners may put in US$100,000 into the REIT, or maybe buy 5% or 10% of it,” he told reporters after speaking at The Edge Investment Forum on Real Estate 2010 on Saturday.

He said with a bigger local REIT market, foreign investors may even opt to put a large sum in one of the larger REITs and spread the rest of the investments into smaller REITs.

“Right now, with the exception of Axis REIT, most are trading at about 15%-18% below NAV, compared with property stocks, which are trading at 30% below NAV,” he said.

Among those that are expected to trade closer to NAV are Quill Capita Trust, Axis REIT, Starhill REIT and UOA REIT as they have plans to attract foreign investors, he said.

Tharmalingam said the NAV would also rise due to the revaluation of undervalued properties such as those under UOA REIT. — Bernama

Wednesday, April 7, 2010

Sunway City undertakes corporate exercise for multi-billion ringgit REIT

Another REIT for your consideration soon. :)
KUALA LUMPUR: SUNWAY CITY BHD group is undertaking a corporate exercise to unlock the value of its PROPERTIES which will see it injecting its shopping malls, office towers, hotels and hypermarket into its proposed multi-billion ringgit Sunway real estate investment trust (REIT) which will be listed on Bursa Malaysia.
SunCity Group said on Wednesday, April 7 the proposed properties include the Sunway Pyramid shopping mall; 19-storey, five-star Sunway Resort Hotel & Spa; nine-storey Pyramid Tower Hotel; the Menara Sunway office tower block; five-storey Sunway Carnival Mall in Penang; 17-storey Sunway Hotel Seberang Jaya, SunCity Ipoh Hypermarket and the 33-storey Sunway Tower.
The corporate exercise also includes Sunway City disposing of three parcels of leasehold land, measuring 19,406 sq metres in Selangor, to its subsidiary -- Sunway Pyramid Sdn Bhd (SPSB). Sunway City owns a 52% stake of SPSB while the other 48% stake is held by Reco Pyramid Sdn Bhd. The princiapl activity of SPSB is operating a shopping mall.
Sunway City has also proposed to acquire 48 million shares or 48% of SPSB from Reco Pyramid (M) Sdn Bhd (RPSB) and 9.6 million shares or 48% stake in Sunway Resort Hotel Sdn Bhd (SRH) from Reco Resort Hotel (M) Sdn Bhd (RRHSB).
Sunway City said the Sunway REIT's investment objectives is to provide the unitholders with an exposure to a diversified portfolio of authorised investments that will provide stable cash distributions with the potential for sustainable growth of the net asset value per unit.
"Subject to the approvals of the relevant authorities, Sunway REIT proposes to undertake a public issue of units in Sunway REIT and subsequent listing of and quotation for its entire issued and paid-up units on the Main Market of Bursa Malaysia Securities Bhd," it said.
Sunway City said the proposed disposal of SCB land and properties will allow the group to realise their investments in the properties.
The proceeds from the proposed disposal of SCB land and the proposed disposal of properties will be used to acquire land bank, working capital, future business expansion and to repay the group's borrowings.

It added the disposal of the land and properties will also enable the group to enhance the development of the real estate investment market in Malaysia through its proposed holdings in the units in Sunway REIT as well as its involvement in the management of Sunway REIT upon the completion of the proposed listing.
Sunway City said upon disposal of properties to Sunway REIT, RPSB and RRHSB would sell their 48% stake in SPSB and SRH to Sunway City. Sunway City also agreed to acquire their 48% stakes.
This would then see SPSB continueing to operate Sunway Pyramid Shopping Mall as a premier shopping mall with ice rink and bowling facilities. SRH, which will enter into a hotel master lease with Sunway REIT, will continue to operate Sunway Resort Hotel & Spa and Pyramid Tower Hotel.

Tuesday, April 6, 2010

Another Gem Stock - ?????

Ta ta !!! The stock that i mentioned/spotted last month is ...... yes FAVCO !!!
But too bad only managed to grab a small some, not being able to accumulate more. :(
Today this counter has appreciated 25% ever since i first bought, since there isn't much chance for me to buy more, i decide to blog it up here now.

Look at the earning of FAVCO, strengthening every year. Revenue increase every year and go in tandem with profit, EPS and NA. In fact a Marvelous growth.

The Company's subsidiaries include Favelle Favco Cranes (M) Sdn. Bhd., which is engaged in designing, manufacturing, supply , servicing, trading and renting of cranes; Favelle Favco Cranes Pte.

As of today, the EPS has come to 16.2sen (Please refer to latest earning of FAVCO). Would expect a better earning this year as well. FAVCO has so far registered an annual revenue growth of about 25%, assuming this translate to a mere 15% profit that will represent approximately 32millions net profit, which mean, the EPS will further increase to 19sen. For such a growth rate, simple calculation of fair value is 5.5 X 19 = RM1.04.

Furthermore, there is a pending 4sen dividend to be declared sometime end May, that represent a total of 4% DY basing on current price at RM0.945.

When we buy stock, we are buying into future. When we can assure future earnings then we are more or less safeguard over investment.
DY of 4%, steady EPS and low PE, an undervalue stock that fit in my searching criterias. A buy call from me but trade with your own risk.

Thursday, April 1, 2010

Under Value Stocks Under My Radar List

Just briefly list out some of the "undervalue" stocks under my radar board. However only 2 fulfill my criteria, as i always stress that dividend yielding is my main criteria in picking stocks, try see below whether you can spot which one of it is my preference :-


Of the above, I have not listed one of my pick which recently i have just acquired some the other day. That counter has so far appreciated about 14% since i first pick, i am still in the accumulate stage if it ever drop to my target price.

Back to the above, only KFIMA is in my holding, i have yet to venture into any of the above. Of course, the above picked might not serve as save stocks to invest eventhough it is truely undervalue (under my own term) under current circumtances. Stock market changes everyday, no one can truely assured of anything but being "undervalue" certain risk has be diminished. For example it has steady earnings, good EPS, healthy BS and dividend & etc....

The above just serve as reference, so do not follow blindly as this may not fit into your way of pcking stocks.  Till then happy trading.
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