having 4 major holdings in 1 portfolio...
2 not doing well due to the cyclical characteristic of its own biz...
and also due to the weak USD...
2 major holding shown 10% losses...
another stay still on its foot even its cost of operating increased due to higher material cost...
net profit also decreased due to the weak USD...
1 showing good result which involve in food industry...
putting order to sell off the S'pore stock...
need cash to pay some fee...
and its the worse performer and having bad biz environment...
in conclusion...
will be more concentrated with 3 major stock...
and quite hard to hit my 2011 target...
a 30k portfolio...
2nd target still possible...
15% grow...
which mean 25k portfolio...
gogogo
NOT all IPO is good to speculate...
Lesson behind JCY listing story
Corporate Portrait by Jeeva Arulanpalam
Monday May 30, 2011
Vital to assess risks when investing in highly cyclical sector
THINK twice before buying shares of a company that will not include the issuance of new shares but the sale of existing shares by its original shareholder(s) during the company's initial public offering (IPO) exercise.
A common piece of advice parted to investors when fishing for new stock investments is if a company that is to be listed offers a great growth story, why would the original shareholder(s) look to reduce his stake significantly? No doubt the original shareholder(s) will want to make a profit during the IPO exercise, but why not have a combination of an offer for sale and issuance of fresh shares to continue enjoying the potential upside the stock will have once listed?
One company that comes to mind is Malaysian hard disk-drive component maker JCY International Bhd, which was listed on the Main Market over a year ago. The company promised a good growth story and was touted at one point during its fund raising exercise as potentially being South-East Asia's largest technology IPO exercise since 2000.
Based on previous news report, YKY Investment Ltd, controlled by Malaysian businessman Y.K. Yong, had originally wanted to sell some 530.2 million existing shares, or 25.9%, of the company to institutional and non-institutional investors at RM1.60 to RM2.20 per share.
Several analysts had then said that the company's indicative IPO price of RM2 per share for retail investors was fairly valued and offered minimum upside. ECM Libra Investment said in a report then that the IPO was priced at a historical earnings multiple of 19.7 times while a smaller peer like Notion VTec Bhd traded at a historical multiple of 11.8 times, making JCY very expensive.
Shortly after, the company slashed its offer size for institutional investors (some reports attributed this to weak demand) and finally sold a total of 443 million existing shares at RM1.60 to institutional investors and RM1.52 to retail buyers. Some analysts had said that the RM1.60 price tag valued the company at nine times 2010 estimated earnings.
Since listing in late February 2010, the company has seen its share price take a beating, losing 62% of its listing price value and ending at 61 sen as at last Friday. The lacklustre appeal in the stock has been mainly due to declining profits although analysts had said then that the company was likely to do well on the back of the technology industry having a bright future.
Many of the “buy” calls recommended by research houses covering the stock have been switched as of late last year to a “sell” or “hold” due to the company's poor earnings. From the six quarterly results announced by the company after its listing in February last year, two quarters reported growth in revenue and earnings, one quarter saw revenue and net profit somewhat plateau while the last three quarters recorded a decline in revenue and earnings.
For the fourth quarter ended Sept 30, 2010, the company posted a net loss of RM22.6mil against a net profit of RM73.5mil a year ago while revenue slipped to RM486mil from RM501.2mil a year ago.
For the first quarter ended Dec 31, 2010, the company made a net profit of RM7.5mil against RM77.5mil a year ago while revenue was down to RM438.9mil from RM528.2mil posted for Dec 31 2009.
More recently, the company announced middle of this month that its second quarter ended March 31 saw net profit slide 81% to RM12.5mil on the back of lower revenue by 28% at RM397.4mil from a year ago.
The reason for lower second quarter revenue was due to the depreciating US dollar against the ringgit and lower volume of components sold for the current quarter as a result of weakening global demand for HDDs. It added that lower pre-tax profits was due to higher cost of production as cost of raw materials such as aluminium and stainless steel as well as labour cost have gone up.
On its outlook for the remaining year, the company has cautioned that a stronger ringgit and shortage of local labour coupled with higher raw material prices will continue to affect the profitability of the HDD component manufacturers. Also, a shortage of HDD components due to the natural disaster in Japan could affect its output.
This paints a bleak outlook for the company, as seen with OSK Research revising its forecast for the company.
“Taking an increasingly conservative stance as a result of the poor showing in the first half of financial year ending Sept 30, 2011 (FY11), we cut our FY11 topline estimate by 9.1% to RM1.9bil. Correspondingly, our FY11 earnings per share dropped by 29.4% to 4.6 sen,” it said in a report this month.
Due to the earnings downgrade and having pegged the stock at a nine times FY11 PER, OSK Research said the company's fair value for its share price was 41 sen, not too far away from its current net tangible asset per share of 43 sen.
“At nine times FY11 PER, it will be trading close to the 10x historical peak PER valuation of Notion and Engtek (Eng Teknologi Holdings Bhd) over the last 5 years and 11 years respectively. We believe the slight discount to its peers is more than justified given JCY's earnings volatility,” it said.
Based on Bloomberg data, three out of the seven analysts covering the stock have recommended a “sell” or “underperform” on the stock with the target price ranging between 41 sen and 64 sen.
The question that begs asking now is what happens to the investors who bought into the company's growth story one year ago and paid either RM1.60 (institutional) or RM1.52 (retail), only to sit on hefty paper losses a year later? Do they cash out at a loss now or wait on the hope that the company will see better days down the line?
A key take-away from all this is that the next time a new company is to be listed, equal importance should be given to the key risks attached to the company's business, especially if its business operates in a highly cyclical sector.
Corporate Portrait by Jeeva Arulanpalam
Monday May 30, 2011
Vital to assess risks when investing in highly cyclical sector
THINK twice before buying shares of a company that will not include the issuance of new shares but the sale of existing shares by its original shareholder(s) during the company's initial public offering (IPO) exercise.
A common piece of advice parted to investors when fishing for new stock investments is if a company that is to be listed offers a great growth story, why would the original shareholder(s) look to reduce his stake significantly? No doubt the original shareholder(s) will want to make a profit during the IPO exercise, but why not have a combination of an offer for sale and issuance of fresh shares to continue enjoying the potential upside the stock will have once listed?
One company that comes to mind is Malaysian hard disk-drive component maker JCY International Bhd, which was listed on the Main Market over a year ago. The company promised a good growth story and was touted at one point during its fund raising exercise as potentially being South-East Asia's largest technology IPO exercise since 2000.
Based on previous news report, YKY Investment Ltd, controlled by Malaysian businessman Y.K. Yong, had originally wanted to sell some 530.2 million existing shares, or 25.9%, of the company to institutional and non-institutional investors at RM1.60 to RM2.20 per share.
Several analysts had then said that the company's indicative IPO price of RM2 per share for retail investors was fairly valued and offered minimum upside. ECM Libra Investment said in a report then that the IPO was priced at a historical earnings multiple of 19.7 times while a smaller peer like Notion VTec Bhd traded at a historical multiple of 11.8 times, making JCY very expensive.
Shortly after, the company slashed its offer size for institutional investors (some reports attributed this to weak demand) and finally sold a total of 443 million existing shares at RM1.60 to institutional investors and RM1.52 to retail buyers. Some analysts had said that the RM1.60 price tag valued the company at nine times 2010 estimated earnings.
Since listing in late February 2010, the company has seen its share price take a beating, losing 62% of its listing price value and ending at 61 sen as at last Friday. The lacklustre appeal in the stock has been mainly due to declining profits although analysts had said then that the company was likely to do well on the back of the technology industry having a bright future.
Many of the “buy” calls recommended by research houses covering the stock have been switched as of late last year to a “sell” or “hold” due to the company's poor earnings. From the six quarterly results announced by the company after its listing in February last year, two quarters reported growth in revenue and earnings, one quarter saw revenue and net profit somewhat plateau while the last three quarters recorded a decline in revenue and earnings.
For the fourth quarter ended Sept 30, 2010, the company posted a net loss of RM22.6mil against a net profit of RM73.5mil a year ago while revenue slipped to RM486mil from RM501.2mil a year ago.
For the first quarter ended Dec 31, 2010, the company made a net profit of RM7.5mil against RM77.5mil a year ago while revenue was down to RM438.9mil from RM528.2mil posted for Dec 31 2009.
More recently, the company announced middle of this month that its second quarter ended March 31 saw net profit slide 81% to RM12.5mil on the back of lower revenue by 28% at RM397.4mil from a year ago.
The reason for lower second quarter revenue was due to the depreciating US dollar against the ringgit and lower volume of components sold for the current quarter as a result of weakening global demand for HDDs. It added that lower pre-tax profits was due to higher cost of production as cost of raw materials such as aluminium and stainless steel as well as labour cost have gone up.
On its outlook for the remaining year, the company has cautioned that a stronger ringgit and shortage of local labour coupled with higher raw material prices will continue to affect the profitability of the HDD component manufacturers. Also, a shortage of HDD components due to the natural disaster in Japan could affect its output.
This paints a bleak outlook for the company, as seen with OSK Research revising its forecast for the company.
“Taking an increasingly conservative stance as a result of the poor showing in the first half of financial year ending Sept 30, 2011 (FY11), we cut our FY11 topline estimate by 9.1% to RM1.9bil. Correspondingly, our FY11 earnings per share dropped by 29.4% to 4.6 sen,” it said in a report this month.
Due to the earnings downgrade and having pegged the stock at a nine times FY11 PER, OSK Research said the company's fair value for its share price was 41 sen, not too far away from its current net tangible asset per share of 43 sen.
“At nine times FY11 PER, it will be trading close to the 10x historical peak PER valuation of Notion and Engtek (Eng Teknologi Holdings Bhd) over the last 5 years and 11 years respectively. We believe the slight discount to its peers is more than justified given JCY's earnings volatility,” it said.
Based on Bloomberg data, three out of the seven analysts covering the stock have recommended a “sell” or “underperform” on the stock with the target price ranging between 41 sen and 64 sen.
The question that begs asking now is what happens to the investors who bought into the company's growth story one year ago and paid either RM1.60 (institutional) or RM1.52 (retail), only to sit on hefty paper losses a year later? Do they cash out at a loss now or wait on the hope that the company will see better days down the line?
A key take-away from all this is that the next time a new company is to be listed, equal importance should be given to the key risks attached to the company's business, especially if its business operates in a highly cyclical sector.
Future Plan
work in S'pore...
stay in JB...
so can gain SGD and spend in RM...
trying to maximize RM income...
Invest in stock...
invest in property...
get my CFA then MBA...
can do some part time lecturing...
do some small biz...
car renting...
seafood biz...
see what kind of other things i can do to gain some extra $$...
having 1 aim...
financial freedom when i'm 35 years old..
financial freedom means
"passive income>expenses"
expenses included all basic expenses and some holiday expenses...
and plus a little bit more on extra purchasing...
i will roughly 3 times of the basic expenses...
once i reach there...
i can choose what i like to do dy...
stay in JB...
so can gain SGD and spend in RM...
trying to maximize RM income...
Invest in stock...
invest in property...
get my CFA then MBA...
can do some part time lecturing...
do some small biz...
car renting...
seafood biz...
see what kind of other things i can do to gain some extra $$...
having 1 aim...
financial freedom when i'm 35 years old..
financial freedom means
"passive income>expenses"
expenses included all basic expenses and some holiday expenses...
and plus a little bit more on extra purchasing...
i will roughly 3 times of the basic expenses...
once i reach there...
i can choose what i like to do dy...
CFO summit 2011
this is my 2nd CFO summit!!
thanks to ASLI...
they offer us student price for this event...
i appreciate every chances to expose myself to the real world...
keep myself to the real world as much as possible...
graduates have no experience, skills and even the knowledge about the industry...
with this CFO summit, i can know what going on recently in the finance's world!!
can know what CFOs and CEOs think!!!
2nd will be networking...
get ourselves known by others...
didnt manage to do wide networking yet...
hope to do it better next time...
this time i learnt how important is the social media...
where generation Y booming up now...
i also learnt that CFO has more thing to do...
finance knowledge is important...but there are some other crucial task too...
communicate the numbers to others...
Investor relation...
something interesting this time is...
fraud investing
motive of people committing fraud...
ways to avoid...
but in my opinion, ethic is important...
segregation of duties wouldn't works without having ethical employees...
there is a guy from AIRASIA-->>zaman in short...
talk about cultures of AIRASIA and many more...
he also mentioned about the recent big sales...
AIRASIA handles more than 70k of transaction per hour in 23 of may 2011!!
there are more another 1.4 million of users on its web site ready for the SALES!!!
what a huge number of users!!!
they are trying to implement the cloud computing...
to scale up their server capacity...
last year they are emphasize more on the ASEAN view...
this year is much more specific on company...
enjoy the summit very much...
UPDATED myself...
cool...
Learnt something from my AUNTs
let's me intro my 2 aunts 1st...
1st is my dad's sister...
they own a hotel~seafest hotel (3 star...you can check in goolge)
they sold out more than 50 fishery boat and concentrate on the seafood processing and export...
they also own a machinery shop...
2nd is my big uncle's wife...
they have a huge palm oil farm!!!
all their children graduated in oversea's uni and stay oversea dy..
they loan me the UK's fees d....
so i consider both of them are RICH...
btw they are damn RICH...
who say RICH people need to be LCLY??
who say RICH people cannot walk??
who say RICH people cannot take bus to town??
who say RICH people must eat "GOOD" food??
who say RICH people must stay in aircond room d??
both of my aunts take bus to town...
both of them can eat MAGGIE d leh...
both of them look like normal aunties wearing aunties wear...
both of them are so humble and polite...
OH...btw my dad's sister is a DATIN...lolx...
both of them can take bus from KK to lahad datu
or just take AIRASIA...
we should learn how to be humble...
sometime...
taking bus and doing what poor people do are a kind of life enjoyment...
my new zealand uncle go to sarawak and stay in normal wood house...
no aircond d...no electricity after 12am...
all of them never scare of kidnapping...
cuz they live like normal people..
and enjoy everything of the life...
must remind myself to enjoy life from the bottom until the top...
dont stay at the top forever..
we should enjoy life fully...from top to bottom...
1st is my dad's sister...
they own a hotel~seafest hotel (3 star...you can check in goolge)
they sold out more than 50 fishery boat and concentrate on the seafood processing and export...
they also own a machinery shop...
2nd is my big uncle's wife...
they have a huge palm oil farm!!!
all their children graduated in oversea's uni and stay oversea dy..
they loan me the UK's fees d....
so i consider both of them are RICH...
btw they are damn RICH...
who say RICH people need to be LCLY??
who say RICH people cannot walk??
who say RICH people cannot take bus to town??
who say RICH people must eat "GOOD" food??
who say RICH people must stay in aircond room d??
both of my aunts take bus to town...
both of them can eat MAGGIE d leh...
both of them look like normal aunties wearing aunties wear...
both of them are so humble and polite...
OH...btw my dad's sister is a DATIN...lolx...
both of them can take bus from KK to lahad datu
or just take AIRASIA...
we should learn how to be humble...
sometime...
taking bus and doing what poor people do are a kind of life enjoyment...
my new zealand uncle go to sarawak and stay in normal wood house...
no aircond d...no electricity after 12am...
all of them never scare of kidnapping...
cuz they live like normal people..
and enjoy everything of the life...
must remind myself to enjoy life from the bottom until the top...
dont stay at the top forever..
we should enjoy life fully...from top to bottom...
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