Sunway woos REIT cornerstone investors

Largest REIT in Malaysia, save some money for it IPO....:)

KUALA LUMPUR: Sunway City may place out about a fifth of its planned IPO of a real estate investment trust (REIT) to cornerstone investors who have greater holding power for the shares, sources with direct knowledge of the deal said.

The country's sixth-biggest property company by market value is in talks with seven local funds in the hopes of getting some of them to become cornerstone investors in the IPO which is expected to raise around $500 million, Reuters reported on Monday, May 24, quoting the sources.

The Sunway REIT, with a fund size of 2.78 billion units, is set to become Malaysia's largest when it is listed in the third quarter of this year.

Sunway's planned REIT offering has received positive response from investors so far due to its size, steady income source and good growth prospects, a source said.

"This is something significant that investors would not want to miss. The interest is definitely there, the question is pricing," said the source.

The sources could not be named because they were not authorised to speak to the media.

The Sunway REIT will feature some 1.65 billion units for public subscription, of which 1.5 billion are for institutional and selected investors, the company said earlier this month.

"They are talking to seven funds, which consist of insurance funds, unit trust funds, government-linked investment companies, and a few pension funds," said a second source.

Sunway is looking to place out about one-fifth of the offering to cornerstone investors, one of the sources said.

Cornerstone investors normally commit to buy shares before a public listing and promise to hold them until a later date.

Sunway City declined comment.

The issue price of the Sunway REIT will be determined in a book-building process.

Earlier this month, Sunway City said it would receive 2.7 billion ringgit in cash and about 1.0 billion units in the REIT for the eight PROPERTIES it will inject into the unit.

The properties, comprise of shopping malls, office towers, and hotels, have a combined market value of about 3.7 billion ringgit.

Sunway City Group, controlled by Malaysian businessman Jeffery Cheah, will own about 38 percent of Sunway REIT after the listing, which the company said may be completed mid-July. -Reuters

Adverlets Has Finally Paid Me

For once, i've given up hope on Advertlets and decided to withdraw their advertisement but today i finally received the cash out payment from them which have been long waited for. The only thing that they need to do is to beef up the payment process, as it is just take far too long for that. Many has deemed feel cheated including me for once. They protrait the picture that they are non-paying advertising network by delaying payment, i am not sure for what reason. This will drive publisher away. Somehow i think it is not a good sign to company image if this delaying payment keep on remain an issue and unresolved over a long period of time. Hopefully future payment is a smooth one.

EON Capital's board accepts Hong Leong offer

As what i've expected earlier in my post that, the take over would likely to go through between HLBANK & EONCAP. HLBANK would likely to offer right issue to raise fund for the acquisition, in my opinion RI for such an exercise is worth taking up for those existing HLBANK shareholders.

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KUALA LUMPUR: EON Capital Bhd's board of directors has accepted Hong Leong Bank Bhd's offer to acquire the former's assets and liabilities for a cash consideration of RM5.06bil or RM7.30 per share.

MIMB Investment Bank Bhd said on behalf of the board that this was after taking into consideration Credit Suisse Securities (M) Sdn Bhd's opinion that the offer was not fair from a financial perspective.

Credit Suisse was appointed as the independent adviser for the deal.

MIMB also said EON Capital's board member Ng Wing Fai's views would also be included in a circular to shareholders for the upcoming EGM.

Ng, whose Primus Pacific Partners (HK) Ltd held a 20.2% stake in EON Capital, has expressed disagreement with the board over the offer.

The investment bank said after taking into consideration Credit Suisse's opinion, the advice of the international adviser Goldman Sachs and all relevant aspects of the offer, the board has resolved that the proposed disposal was in the best interest of the bank.

It said the board would table a resolution at the EGM on the proposed disposal as well as the proposed distribution of the cash proceeds to shareholders.

MIMB said the proposed distribution of the cash proceeds arising from the disposal would be done in two parts - a special dividend estimated to be about RM3.30 billion based on EON Capital's audited financial statements as at December 31, 2009 and, a capital reduction exercise amounting to RM1.76bil.

Free Seats From AIRASIA

Million of free seats given by AirAsia but the problem is this is what i get while trying to search for information.

The response is just overwhelming from the Free Seats Promotion, i've tried since the 1st day on the 18/5/2010 but all i get is above page. :(

Giving a try again today thinking that the traffic could be slowed down but in actual fact the overwhelming response just don't seem to subside. I was just wondering, by time you get to access the site, the good dates & free seats would have gone and grabbed. !! ha ha

Was told by one of my friend, he weaks up as early as 5am in the morning to get to AirAsia site and obviously the traffic is much lesser compare to normal hours. He got it done within minutes. Wow, i don't think i want to do that as i just don't like sacrificing my sleeping time for that coz i hardly have enough sleep already. ha ha

HLBANK to takeover EONCAP ?

My gut feeling telling me that the deal will go through eventually no matter how. The reasons are simple, there being no other bidder on the table and the big boys are eagerly wanting to liquidate.

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Credit Suisse says HLB's offer price for EON Cap too low

PETALING JAYA: Credit Suisse Securities (M) Sdn Bhd has deemed Hong Leong Bank Bhd's (HLB) offer price for the assets and liabilities of EON Capital Bhd (EON Cap) too low.

This has put the board of directors of EON Cap in a quandary, sources said. EON Cap's board met yesterday to discuss Credit Suisse's opinion on the offer.

The board had requested for its shares to be suspended from trading, pending an announcement related to the offer.

EON Cap said late yesterday evening that its board meeting had been adjourned “pending further clarification from independent financial adviser Credit Suisse.”

But a party familiar with the deal said with Credit Suisse telling the board that the offer was too low, the board has been put in a tough spot as to what to tell shareholders.

“The board had already said it was going to present the offer to shareholders. Does it now also tell shareholders not to accept the offer?” Sources say the situation is tenuous because HLB has no intention of raising its bid.

From its due diligence of EON Cap, HLB may be inclined to ask EON Cap to make some additional provisioning as a condition to the deal, stemming from what it (HLB) deems as unrecoverable loans.

This could mean that the price HLB is willing to pay for EON Cap may be lower than the RM7.20 per share it last made.

EON Cap is said to be disappointed that HLB has not recognised certain deferred tax assets in its valuation of the former, sources say.

HLB's offer is also priced at around 1.4 times the book value of EON Bank, which some analysts deem as low in light of other banking merger and acquisitions done at higher multiples.

The bottom line is that at present, HLB's offer is the only one on the table for EON Cap's shareholders.

Current market conditions are likely to make it difficult for other bidders, such as Affin Bank Bhd, to raise funds to acquire EON Cap.

If this deal falls through, the next bidder for EON Cap may no longer have the luxury of having a lower threshold of shareholder approval for the deal to go through.

Advertlets Is A Scam !!!

Picture Source from : imDavidLee.com

I wonder is this Ads carry weight? "make more with your blog"

BEWARE bloggers out there. You may end up with a non-paying advertising company if you’ve signed up with Advertlets. All your advertisement effort in your blog may well ran into vain. Obviously, whoever dealing with Adverlets has really found their doom destination and decided to call it quit. All you need to do is simply perform a mere google search of “Adverlets Scam”, you may well serve with ton of complaints from blogger out there crying out for non-paying issue. Of course, a click fraud blog site is deserved to be punished for non-paying but punishing the innocent one for their hard work is way too much to swallow unless they did it ONLY for one reason, Advertlets existence is to Scam advertising money from genuine companies making advertisement through them.

“Payments are processed 30-45 days from the end of the month which you cashed out”.

Yeah yeah !! Clear and understood. So, cash out being make on Feb 2010, waited for another 2 months but no payment made. Sent numerous emails unanswered until a recent one asking for Bank Account details. Furnished the information on the same day but no response after that.

Have finally giving up hope and treat this as a lesson learned, however, decide to blog it up here to warn those that dealing with Advertlets in anyway either by advertising their ads in your blog or direct business dealing with them.

My same advice goes to you from imdavidlee.com :-

“

My Point of View

If you’re still feel hardly to make decision whether to continue displaying Advertlets ads or remove them. Then, please take my last advice: Quit It Now !!! Go For Nuffnang !!! Reason: Will you stay with a company where the boss doesn’t pay for the 1-year work you have done?

“

Be more extra careful, you may get CON. Ha ha.

 

P/S - I have received payment from Advertlets finally. Here

A quick look at GENTING SP

The result for GEN SP 1Q has just been announced yesterday.

I have briefly glanced through the GEN SP financial statements for the 1Q ended March 2010. Lets briefly works out the figures :-

1Q Revenue = S$460 millions

1Q Gross profit = S$180 millions

Est. 1Q Net profit = S$82 millions (Omit the impairment loss on intangible assets and comprehensive loss for time being)

Let’s forecast that the coming growth would remain unchanged for the rest of the Qs.

So, just simply multiply the figures above by 4, that will work out as bellows :-

Full year Est. Net profit = S$82 X 4 = S$328 millions

Total number of issued share = 12,161,880,457

EPS = 328/12161 = 0.027sen

PE = 1/0.027 = 37sen (wow, relatively high!!!)

If you were to factor the impairment loss in, the figure is damn ugly for GEN SP but impairment loss is something worked out base on market value, the accuracy is always questionable. So, over the long run this impairment loss will be recovered over time no matter how either by ways of external or internal sources. Giving the brand name of “GENTING”, recoverable of impairment loss within a year or two is just that easy.

If the forecast figures are what were turned out to be, then, GEN SP 1Q result is indeed a moderate figures overall. Also note that this 3 months quarterly earnings is not a full Q as its actual operation only started on 14 February 2010.

Lets assume the full operation is what it should work out for eventually, then, the calculation will have improved a lot as follows:-

Assuming 1Q 82million profit cover only half of 1Q, then rightfully this figure will need to multiply 2.
Estimated 1Q net profit = 82 x 2 = S$164 millions

Full year Est. Net profit = S$164 x 4 = S$656 millions

EPS = 656/12161 = 0.054sen

PE = 1/0.054 = 18.52sen (wow, this is far much better !!)

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Genting Singapore reports 12-fold loss in Q1


Genting Singapore, which operates one of the city-state’s two mega casinos, reported its losses rose 12-fold in the three months to March, hurt by impairment losses on its UK casino operations.


Genting Singapore, a unit of Malaysia’s Genting Bhd, reported late on Thursday a net loss of S$396 million (US$286.5 million) for the first quarter, widening from S$32 million a year ago.


Resorts World at Sentosa, its US$4.8 billion Singapore casino resort which opened on February 14, achieved earnings before interest, tax, depreciation and amortisation (EBITDA) of S$109 million.


Resorts World is being opened in stages and currently comprises a casino, four hotels, a few restaurants and shops, and a Universal Studios theme park. When fully completed, the complex will have another two hotels, spas and a maritime park with one of the world’s largest aquaria.


Rival Marina Bay Sands, owned by U.S. casino firm Las Vegas Sands, opened partially on April 27.


Las Vegas Sands CEO Sheldon Adelson has said he expects the US$5.5 billion Singapore property to generate EBITDA of over US$1 billion in its first full year of operations. -- Reuters

BToto earnings could rise 10.4pc: OSK

Assuming earnings rise 10.4pc in year 2011, what would this represent to BJTOTO ?

Current Estimated earnings = 410 millions

With 10.4% rise in 2011 = 410 X 10.4% = 452 millions

Estimated EPS = 33.5sen

Estimated PE in 2011 = 13.67

Simple FV would be = 15 X 33.5 = RM5.02 (almost 10% discount from current price)

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BToto earnings could rise 10.4pc: OSK

Gaming company Berjaya Sports Toto Bhd (BToto) could expect to see a 10.4 per cent rise in earnings in 2011 with the possibility of a sports betting licence on board.

 

In its research note, OSK Research Sdn Bhd said the earnings projection was based on the legal sports betting market which was equivalent to 50 per cent of the upper end of the unofficial estimate of RM20 billion for the illegal sports betting market.

 

The earnings projection premised on BToto gaining from a realistic 0.5 per cent agency commission rate, said OSK Research Sdn Bhd.

 

It said that the payout structure for sports betting is much higher at about 90 per cent versus traditional numbers forecast operations (NFOs) games' 64 per cent to 66 per cent.

 

"This, coupled with a similarly high tax structure, indicates that the agency commission rate charged by BToto is unlikely to be too lucrative in order to maintain the profitability of the sports betting business which is expected to reside at Ascot Sports Sdn Bhd (potential 51 per cent subsidiary of Berjaya Corp Bhd)," it said.

 

Earlier, Berjaya Corp had requested for a halt in trading today pending an announcement of an acquisition from a related party of the company and a capital-raising exercise.

 

With the acquisition of Ascot Sports, Berjaya Corp will gain if the government decides to legalise sports betting in the country as Ascot Sports will become one of the beneficiaries of the move.

 

Over the longer term, it said all the NFOs will benefit if the government eventually liberalises the sector by leveraging on all the NFOs to expand the distribution network for sports betting to take away market share from illegal operators.

 

"This will be positive for the industry as it will provide a strong leg up on earnings growth given the relatively mature legal NFO gaming market in Malaysia," it said.

 

The research firm said given the limited distribution channels and the fact that the illegal market will continue to thrive given its key advantages of convenience and credit facilities granted, the legal market is unlikely to overtake the illegal market, at least over the immediate to medium term. -- Bernama

 

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Berjaya Sports raised to ‘Buy’ at HwangDBS

Berjaya Sports Toto Bhd had its stock rating raised to “buy” from “hold” at HwangDBS Vickers Research Sdn Bhd after the company’s parent agreed to buy a 70 per cent stake in a sports betting company.

Berjaya Sports will benefit because its outlets will be used for the sports betting game, according to HwangDBS, which set its price estimate for Berjaya Sports shares at RM5.20. - Bloomberg

GUINNESS vs CARLSBERG

GUINNESS

1Q EPS = 8.85

2Q EPS = 14.5

3Q EPS = 15.38

4Q EPS = ?? take previous 4Q as guide = 9.07

Estimated total EPS = 47.8sen

Estimated PE = 14.47sen

Div Yield = 6%

Div Payout Ratio = 41/47 = 87%

CARLSBERG

1Q EPS = 7.00

2Q EPS = 4.28
3Q EPS = 7.1
4Q EPS = 6.57
Total EPS = 25.02sen
Estimated PE = 19.58sen
Div Yield = 5%
Div Payout Ratio = 92%

Obviously on paper, GAB provide a better deal than CARLBG. GAB give a better earnings as well as DY, probably due to its better market shares captured in Malaysia but certainly we cannot discount CARLSBG's potential in catching up especially we have yet to see the actual synergies contribution from CARLBG (S) as yet. Further development on both would be very interesting on the coming World Cup 2010 as i believed not only GAB will get a lift on this event. CARLSBG would also benefited from it. After all preferences & flavour still lie on individual interest no mater how.

World Cup 2010 to give Guinness Anchor a lift, says OSK Research

KUALA LUMPUR: OSK Investment Research has maintained its buy call on GUINNESS ANCHOR BHD [] (GAB) at RM6.91 with target price RM7.35, and said the company's earnings were within expectations, with the bottom line figures to date accounting for 76.5% and 78.3% of OSK Research's and consensus estimates.

 

Moving into 4Q10 (April-June), it said sales would remain firm on intensified promotion activities in view of the 2010 World Cup Soccer season.

Since the Malaysian brewery industry rides on seasonal and event factors, the World Cup has been a positive factor for the industry every four years, it said.

The research house expects GAB to see robust numbers in the next quarter, although strong competition from its closest competitor means the risk of downside to earnings will persist.

"We see the stronger earnings on the 2010 World Cup soccer season lifting earnings in 4Q and meeting our earnings forecast.

"As we are making no changes to our earnings estimates or valuation parameters, we maintain our discounted cash flow-derived target price for GAB at RM7.35, with our buy recommendation intact," it said.

Excellent Customer Service

Yesterday just make a call to Dell technical support reporting my faulty USB port on my laptop which still under warranty and today engineer came to my door step to get the whole motherboard replaced. Wow superb & speedy service. This is the kind of customer service i like. Thumb up !!

1. Make a report to dell center and she ask for a thorough diagnostic check over the phone. Confirmed it is faulty and assigned with case number.

2. Engineer call me the next day and arrange a time to get my laptop fit.

As simple as just 1, 2 and done !

When come to stock tradings, there are five things that every successful trader needs to know how to do:

1. Have a method to trade.

2. Have the discipline to follow your method.

3. Have the mental fortitude to accept the fact that losses are part of the game.

4. Have the mental fortitude to accept huge gains.

5. Find a mentor.

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.

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.

HOW TO SET STOCK TRADING GOALS AND REACHING THEM

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.

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.

Abraham Lincoln's Advice

You Cannot keep out of trouble by spending more than you earn.

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

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.

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.

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 :-

1) EMIVEST
2) KHIND
3) GOPENG
4) KFIMA
5) TOMEI

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.

A Gem Stock - LONBISC

Take a simple look at Lonbisc. A company main business on manufacturing and marketing cakes and snack food.

Use to be classified under one of the high dividend yielding stock in my list but not anymore since year 2008. Recently Lonbisc has just been given 3% TE dividend, that represent a 3% DY based on current price. EPS has step up further in 1H to 9.16sen inline with the grow on revenue for 1H where a 20% increase in tandem.

Assuming, the current momentum stay on, we would expect the EPS to reach 23.58sen for the 2 remaining Q. That will represent a PE of 4.45sen. If the company resume it dividend payout ratio of about 50%, then a minimum 10sen dividend is possible in future.

For a counter to trade in EPS of 23.58sen (in future) and having a strong NTA of RM2, that is 50% discount there basing current price. So my simple way of conservative calculation of fair value for this counter, should be around 5 X 23sen = 1.15.

This could turn out to be a gem stock. At current RM1.04 should be worth buying.

Dividend-paying companies

Personal Investments - By Ooi Kok Hwa

Despite investing in profit-making companies, a lot of investors have been complaining that they are not getting the desired returns from the companies that they have invested in.

One of the main reasons is that these companies usually pay very low dividends or no dividends to their investors.

Hence, even though these companies make good profits from their businesses, they are not sharing the profits with their minority investors.

Companies that pay good dividends to their investors imply that the major shareholders of these companies are willing to share their wealth with minority investors.

Given that minority investors have no control over these companies, they have only two sources of returns from their investments, namely dividend returns and capital gains.

If the companies refuse to reward their investors with good dividends, then investors need to make sure that they buy low and sell high in order to get capital gains.

Warren Buffett proposes one concept, which is called the one-dollar premise - for every dollar profit that a company makes, it either pays one dollar dividend to its shareholders or if that dollar is being retained, it needs to bring additional one dollar market value.

Companies with good management will always try to maximize the wealth of their investors.

The following table will show the importance of dividends to an investor.

Assuming you have invested in Company A with an average cost of RM15.

Company A generates earnings per share (EPS) of RM1.00 with price-earnings ratio (PER) of 15 times and pay out 80% of its profits as dividends or dividend per share of RM0.80.

Hence, with the purchase price of RM15, the dividend yield (DY) is 5.3%.

We also assume that Company A has a constant PER of 15 times and dividend payout ratio of 80% for the next 20 years.

Annual growth rate of EPS is 8% based on our country’s average nominal GDP growth rate of 8%.

For the first 10-year period, given that our original cost of investment is fixed at RM15, our dividend yield will be getting higher and higher.

For example, first year DY of 5.3% is computed based on DPS of RM0.80 divided by RM15.

And second year DY of 5.8% is calculated based on DPS of RM0.86 (RM0.80 x 1.08) divided by the same original purchase price of RM15.0.

As the company’s businesses continue to grow and generate higher profits, as long as the company practices a fixed dividend payout policy (our example is based on a fixed dividend payout ratio of 80%), investors’ DY will increase.

At Year 10, given that our purchase price remains the same at RM15, with a DPS of RM1.60, our DY is 10.7% (1.60/15.0).

Thus, the average DY for the first 10-year period is 7.7%.

Coupled with the annual capital gain of 8% (the share price has grown by annual growth rate of 8% from RM15 to RM29.99), investors will generate an annual total returns rate of 15.7% (7.7% + 8%)!

If we keep this stock for another 10-year period, our next 10-year annual total return is 24.7% (16.7% + 8%)!

From here, we can see that if we have invested in good companies that always reward their investors with very high dividend payments, our returns will be huge if we hold it long term.

Normally, consumer-based companies and companies that do not need high capital expenditures will be able to reward shareholders with good dividend payments.

Besides, major shareholders must be willing to share their profits with their investors through good dividend payments.

Ooi Kok Hwa is an investment adviser and managing partner of MRR Consulting.

Useful Information About REITs

Some useful information about REITs.

BJTOTO - Remain a Cash Cow

As expected the earning for 3Q2010 is in-line with my forecast of 97millions. BJTOTO is truely miss out a dividend this time round. Will there be a dividend in 4Q2010 ?? The chances of a dividend is better as compare to 3Q2010 as the earning is expected to be remained for 4Q2010 where it should stood at around 8 - 9sen.

Assuming 4Q2010 contribute 8sen EPS, that will give a total of 30.86sen EPS. As 19sen has been payout as advance dividend, thus, 30.86 - 19 = 11.86sen remaining for a possible dividend in 4Q2010. The introduction of the new game Supreme 6/58 may boost some earning for 4Q2010 but conservatively, would remain my estimation of 8sen EPS for 4Q due to competitive market from other betting operator.

Without clear sign of catalysts such as dividend, BJTOTO would likely to trade side way. Long term holder like me would of course dissapointed with no dividend, however, it provide opportunity of building up your piles while it is on weakness as i believe a cash cow machine would remain as cash cow machine, no matter how hard it fall. After all this is just a minor and temporary set back and recovery should be imminent.

Is Penny Auction Legal ??

A friend approached me & introduced an auctions site "PennyAuction". Wondering what is that ? Googled and found below :-

Site 1 :-

Swoopo is an online entertainment auction (a.k.a. penny auction) where individuals purchase bids to place towards an item that’s up for sale. The cost of the bids are usually $0.75 and once placed they raise the price of the item by either $0.15 or $0.01 depending on the product. A 20-second countdown timer is reset by each time a new bid is placed and when the timer reaches zero, the last bidder wins.

Site 2 :-

[Penny auctions] offer new televisions, computers, game consoles, appliances, handbags, gold bars and more for starting prices of a penny to 15 cents, depending on the site.

To "win" a product, shoppers must first buy a bundle of 10 to 700 bids for 60 cents to $1 each. Shoppers use one each time they place a virtual bid on a product. Each bid raises the price of the item by a penny to 15 cents, depending on the site. Some have automatic bidding functions similar to eBay.

Doing the math and not getting carried away is important: The final price of a product that retails for $100 might be $29, but the total price paid could be much more, depending upon the number of bids used. If a shopper bids 10 times at $1 a bid, for instance, the total price paid would jump to $39. And, there is the real possibility of using all your bids without getting the product.

Auction winners generally get their item for about 65 percent off retail but could save as much as 98 percent if there are few bidders.

Since the sites make the bulk of their revenue from the purchase of bids, they profit most when they feature a product that elicits a bidding war.

Personally, i think this type of business is more like gambling, as bidders may not able to bid successfully even spending all it bids. Secondly, it might link to legality issue where this area may be questionable since there isn't any involvement from the government and has thus far regulated this. Thirdly, the margin profit is just too tremendously huge that lead me to probably think this is a scam to bidders though the successful bidders will get thier product but the majority bidders have failed. I think better avoid this kind of activities.

Keladi Maju Berhad

Accumulate for an upside target to 19sen

Company background

KM’s key businesses are property development and property investment in

Kedah. It specializes in low and medium cost residential projects, commercial

offices, light industrial factory buildings for SMIs. KM has established a name

and solid reputation, especially in developing affordable quality properties,

delivered on timely basis.

KM’s major flagship projects include Taman Mutiara, Taman Mahsuri and

Taman Lagenda. Due to its strong management, it has consistently achieved

an average net profit margin of 21% over the last 10 years.

Technical outlook: Oversold, accumulate at 15sen

KM’s share price has surged from 52-wk low of RM0.105 in Mar 09 to 52-wk

high of RM0.19 in May 09 before consolidating range bound between RM0.15

to RM0.175 for the last nine months.

We are optimistic of KM’s mid to long-term technical outlook as share prices

continue to maintain its posture along the RM0.15 (250-d SMA) over the past 9

months. Key support is RM0.14 (61.8%FR from RM0.105-0.19) whilst the

upside resistance levels are RM0.16 (38.2%FR), RM0.17 (23.6% FR) and

RM0.18 (8-month high).

12M target price at RM0.19

Our 12-month target is RM0.19, based on 8.6x FY10 PE (in line with its 5-year

average 9x PE) and 0.83x PBV (5-year average 0.9x). At 8.6x, KM’s target PE

is also trading at 25% discount to its peers historical PE of 11.4x.

At 15.5sen, KM’s 9.7% dividend yield is the highest in the property sector.

Furthermore, its 7.1sen net cash per share is 46% of current share price. On an

ex-cash basis, KM is only trading at 3.8x FY10E P/E. Therefore, we feel that its

downside risk is limited.

13 Years Old Car

I just could not tolerate my 13 years old junk gave too much of jittering noise from the engine. The noise started the moment the engine get ignited. The noise get worst after switching on the aircond. Visited car workshop on Saturday, tauke told to replace timing belt, bearing & fan belt, estimated total cost about RM400.

Visited another workshop to get second opinion, after all this is just an old car no harm getting another qoute. Luckily end up spending just RM83 for a fan belt & alternator belt replacement, that include workmanship as well.

Sometime is good to get second opinion, you might save lots of time, journey & money. Just like shares investment, be sure you know where to look for answer.

A Closer Look at BJTOTO

Taking a closer look at BJTOTO, many have expected a dividend for 3Q including me. Judging the table above, I have to lower my dividend payout for BJTOTO to 3sen to 4sen and wish to call back the 5 to 8sen dividend previously have predicted, if a dividend were to declare. Take a look at below :-

1Q EPS = 7.97sen

2Q EPS = 7.62sen

Assuming 3Q result remain unchanged, in which I presume there isn’t much unexpected result, thus,

3Q EPS = 7.73sen

Total expected EPS = 7.97 + 7.62 + 7.73 = 23.32sen

19sen has been paid out as advance dividend previously. Hence,

23.32 – 19 = 4.32sen

If BJTOTO do not truly want to ‘miss’ out dividend for every Q, they would have to declare at least some dividend, in which I would expect ranging from 3sen to 4sen only.

This is as much as they can do for now I presume.

High Dividend Yield Stocks

Above the latest REIT closing price as at 2/3/2010.

As one should know by now, dividend play an important role in cushioning your share price, it is also serving as a good catalyst driven the share price up when a good result is announced with better dividend payout. Refer to my previous posting for dividend here and assessing REITs here.

Another important factor is “timing”. Yes, the date for REITs dividends to be paid. It is utmost important that any good result couple with higher dividend will somehow spur some excitement on share price. All REITs have a tendency to pay 90% of it net profit to shareholder as dividend or other may call it income distribution in which I find it very attractive, thus, it is worth taking a closer look if one were to opt for long term dividend and steady income "for living". Generally below are the dates of month that we should focus on :-

JAN     Ahp, Alaqar, Arreit, Atrium, Axreit, Bsdreit, Hektar, Qcapita, Stareit, Twrreit, Uoareit

MAY    AMFIRST, ATRIUM, AXREIT, HEKTAR

AUG     Ahp, Alaqar, Arreit, Atrium, Axreit, Bsdreit, Hektar, Qcapita, Stareit, Twrreit, Uoareit

NOV     AMFIRST, ATRIUM, AXREIT, HEKTAR

Knowing the months which draw nearer and REITs that may announce dividend, we may at least gauge when to increase or reduce our stake on them. Preferably holding most of it when the value you think is right and engaging them in long hual for its dividend. So, put a little effort there and enjoy picking your REITs and building up your wealth. Till then happy trading and couple with my favorite quote “May The Best Price be Yours”.