Thursday, 27 November 2014

Nicorp - A Tale of 3

Nicorp had finally saw an even solid development with the emergence of Ar. Hud bin Abu Bakar as the executive director of Nicorp.

So who is Hud Abu Bakar actually?

Nicorp - Foraging into Properties?

Ar. Hud Bin Abu Bakar is one of the core principal for the well known architecture firm - RSP Group. A UC Berkeley graduate with Master of Architecture in 1988, Hud Abu Bakar had been putting in different taste of designs and creativity into the masterpieces and land marks in Kuala Lumpur.

Under his belt, he had proven his abilities through spectacular landmarks like Felda Tower, Miti HQ, Menara BIMB, Matrade Center, Paradigm Mall, KL Hilton, Le Meridian Hotel, Great Eastern Mall, Platinum Park KLCC and many other top notch development that had been undertaken by reputable developer.

His work recognition had earned him distinguish awards such as FIABCI award, Asia Pacific Property Awards, PAM Award and The Edge Dream Home Award.

With his current appointment as the Executive Director of Nicorp, bringing his expertise of architecture and designs with him, Nicorp will be marking for a remarkable come back. After a series of rife speculation on Nicorp which might possibly run into the oil and gas sector, the emergence of Hud Abu Bakar had definitely turn the game around and this time around, Nicorp will have a higher chance of foraying into the property market.

In the big property market with a lot of different players, a strong and above the par position will definitely put you ahead of any other competitor. While Tan Sri Liew Kee Sin will be always regarded as the life and heartbeat of SPSetia back then, his departure from SPSetia into EcoWorld had definitely left SPSetia as a company without the kind of vision that it used to have for a moment.

Hud Abu Bakar had been spending 24 years putting up stylish end into his artwork for big developers and government, and this could be a good time for Hud Abu Bakar to come out with another masterpiece, however, this time should be selling under his own flagship should Nicorp had become the intended vehicle for Hud Abu Bakar to take off his plans.

As one of the top notch architect in Malaysia, Hud Abu Bakar is highly sought after because of his inspirational and creative designs which had been never failed to deliver.

Now with the latest appointment as the executive director of Nicorp, Nicorp vague direction had just becoming clearer after a series of top management reshuffling. With a team that comprises of Dato Siaw Swee Hin, Dato Abdel Aziz and Hud Abu Bakar in the executive position in Nicorp, what will Nicorp become in the coming days had just became more and more interesting, while the current stakes are high that Nicorp might foray into the property development.

Looking at the development that had been happening in Nicorp, no doubt that Nicorp future development will be an interesting with big and bigger names appearing in the management level of Nicorp. At the level of RM 0.12, Nicorp will be a good price to lock into as the same price of private placement exercise that was placed out 3 months ago, while most of the accumulation from Dato Siaw and Dato Abdel Aziz had also been at the range of RM 0.115 to RM 0.125.

Deciding whether to buy a ticket for a Nicorp mega show down? You decide.

Bone's short term TP : RM 0.25 (Maintained)

Cheers and have a nice day.


Tuesday, 25 November 2014

Nicorp - Unveiling The Truth

Naim Indah Corporation Berhad (Nicorp - 4464) had finally started to unveil more solid corporate development in the public scene.

To recap, Nicorp had been slated to see a series of corporate exercise to restructure the company. After the fiasco from Raymond Chan in Nicorp, the company had finally seen a more solid direction under the lead of Dato Siaw Swee Hin now.

Dato Siaw Swee Hin had earlier buyout partial of the stakes from Raymond Chan on his disposal, while another small portion had been taken up by Quantum Discovery Sdn Bhd, which was then owned by Datin Khoo Lay Wah.

The latest development on 11th November 2014 had saw Dato Siaw Swee Hin, along with his brother, Siaw Sween Woon, taking over Quantum Discovery Sdn Bhd after buying out from Datin Khoo Lay Wah and her partners.

The buy out will see Dato Siaw having a direct stake of 39,172,600 shares and indirect stake of 67,847,976 shares from Quantum Discovery Sdn Bhd, totaling almost 14% in a short period of time.

While doing so, Siaw Swee Woon had also started to accumulate shares from the open market as to add up his interest from the indirect stakes that he owned at Quantum Discovery Sdn Bhd.

 The recent most encouraging moves in Nicorp had been the appointment of Dato Siaw Swee Hin as the Managing Director of Nicorp, and the complete exiting of Datuk Raymond Chan in Nicorp, paving way for an even solid development.

Let's take a look at the past and current price chart of Nicorp.

In fact, a quick look at Nicorp will suggest that Nicorp had a certain degree of corporate development that had been in the process to materialize back then at May 2013. Nicorp shares had been heavily traded in the month of May 2013, with daily transacted volume reaching more than 160 millions of shares exchanging hands, and touched RM 0.25.

However, due to the delay in the private placement process in which had just went through at RM 0.12 a share, Nicorp is now geared up for a mega change under the new lead of Dato Siaw Swee Hin.

The share price had been trading at a fairly rock bottom price at the range RM 0.12, considering the insider accumulation at the range of RM 0.115 to RM 0.125, and private placement exercise being placed at RM 0.12 as well.

Should Nicorp be able to hit above RM 0.145 with a strong breaking volume, then Nicorp will be heading to challenge the psychological barrier of RM 0.20, then RM 0.25.

I believe Nicorp is a worthwhile mid-long term investment. Despite it's pitiful fundamental outlook at the current scene, notable development and changes had been seen in the top level management and a visible white knight - Dato Siaw Swee Hin, who is a low profile businessman that had establish business in Malaysia, Singapore and Vietnam will be the main core driver in Nicorp.

Nicorp will be a good consideration based on
- Dato Siaw Swee Hin appointment as Managing Director of Nicorp
- Dato Siaw Swee Hin and brother, Siaw Swee Woon buying over Quantum Discovery Sdn Bhd, increasing indirect stakes to 8.78%
- Complete exit of Datuk Raymond Chan in Nicorp
- Executive Chairman, Dato Abdel Aziz's increasing interest in Nicorp and intention to deal with Nicorp shares at closed period.
- Private placement priced at RM 0.12 fully subscribed.
- Insider and director's accumulation being at RM 0.115 to RM 0.125.
- Potential RTO target for Alltrust International Berhad.

Nicorp will be looking good to challenge a short term TP of RM 0.20, while a longer term TP will be able to see Nicorp trading at RM 0.30 to RM 0.50 should there be more solid development.

Bone's short term TP: RM 0.25 (upgrade)

Nicorp - Throttle Forward

Cheers and have a nice day


Wednesday, 19 November 2014

SUCCESS - Lighting the Way Up

While global market had been in an upbeat mode, Malaysia had been trailing behind most of the party after foreign investor view Malaysia outlook as "a lack of catalyst" as foreign funds pared down holdings. However, with the month of November that is full of quarterly reports, would there be something that will be interesting to look out at?

It had came to me on Success Transformer Corp Berhad (SUCCESS - 7207), which is dealing with lighting and transformer will be a good company to be vested in with their bright business prospectus.

Let's have a look at their latest chart

SUCCESS had been in a gradual uptrend. SUCCESS had been consolidating at the range of RM 1.85 to RM 2.00 in a lower volume manner. However, with the tight consolidation focused at the range of RM 1.95, SUCCESS could be pending upon a break above RM 2.00 in the coming days with a strong anticipation on a stronger quarterly performance.

SUCCESS - Lighting the LED way

The latest trend had been going the LED way for cost saving and environmental friendly. Success Transformer Corp Berhad, being the largest LED Lightning manufacturer in Malaysia would be looking to see this trend as a booming prospect for it's business.

LED had been in a strong trend as of lately, and it's widely supported in the European countries as it consumes lesser energy while providing a brighter light, which in turn, reducing green house gases that had been a cause of global warming.

SUCCESS had been seeing steady growth in it's revenue since 2009.

According to the latest Q2 FYE 2014 performance, Success had been seeing a cumulative revenue of RM 189.6 million.

A quick simple calculation will see SUCCESS maintaining their 2014 performance will be seeing a possible revenue around RM 380 million, as EPS can hit a potential 28 to 29 cents. A quick valuation based on PER x10 will easily see SUCCESS being valued at the range of RM 2.80.

Currently, SUCCESS had been aggressively expanding it's network and production to Thailand and Singapore. SUCCESS is currently catering to more than 60 countries and will be looking to see more demand coming in to their door.

Based on the current outlook, SUCCESS will be looking to see a 15% to 20% growth in their revenue for the next 3 years, which could potentially hit up to RM 500 million revenue in FYE 2016.

In my opinion, SUCCESS will be a good fundamental company to be vested in for the long run, with good business prospectus, good management team, and good financial control within the company. A long term outlook will place SUCCESS at RM 3.00.

Bone's short term TP : RM 2.20

Cheers and have a nice day


Friday, 7 November 2014

Rsawit - On Diesel Boost

The economy outlook in the US continue to be fed with positive data after a lesser than forecast on unemployment figure that was released earlier. With Japan putting a surprising easing in it's market and the anticipation of the ECB to pull in a full blast stimulus, it looks like the bull will have no time to rest anytime soon yet.

While locally, industry that had been of hot focus lately includes semiconductor industry as well as plantation. With the current CPO price at around RM 2300 per ton, it will be great to lock into some position in the plantation company at the current price as anticipation of CPO price going higher  towards the end of year and beginning of next year.

Let's have a quick look at Rimbunan Sawit Berhad (Rsawit - 5113)

Rsawit had been trading at the RM 0.80 range before seeing a volatile CPO price and a sudden market correction that had brought the price down to the range of RM 0.67. However, with CPO anticipated to challenge higher in the coming days, Rsawit will be looking to challenge higher and retest the psychological resistance line at RM 0.80.

Rsawit - A Diesel Tale

Rsawit is a palm oil player that operates in Sarawak. The company is mainly controlled by low profile tycoon Tan Sri Datuk Sri Tiong Hiew King, in which he is holding more than 50% of the stakes in the company.

Rsawit had been in the red for the past few financial years, which is partially due to the aggressive expansion and expenditure in buildings of palm oil mills. Rsawit had a massive amount of plantation land bank in Sarawak, which is good enough to see them focusing on their existing land bank for new planting and replanting for the next 3 to 5 years.

Last year, Rsawit had around 31% of immature trees from it's total planted area of 54,659 hectares. This year, Rsawit will be seeing approximately 10% (Around 5400 hectares) of the young trees starting to contribute to the company's revenue.

Beside that, Rsawit will be seeing it's new palm oil mill in Miri that had commenced construction since December 2013 to be operational in the early first quarter of 2015, which will continue to contribute positively towards the company revenue.

The palm oil had taken a hit earlier in the end of August 2014, hitting a lowly RM 1914 per ton (In early September) as the government put initiative to put palm export duty free for 2 months to raise demand for the palm oil, a move that which had been successful. During the 2 months period, palm oil shipments to China soar by 121.7% while India imported 25.8% more, scaling down the growing worries of increasing inventories of the palm.

Current Catalyst

The government had approved the B7 biodiesel program faster than the expected. The B7 biodiesel program will officially starts on November 2014 for Peninsula Malaysia and December 2014 for Sabah and Sarawak. B7 biodiesel program means a mixture of 7% biodiesel and 93% diesel for the diesel that is being retailed in the petrol station.

The implementation of B7 biodiesel will be seeing at least 600,000 tonnes of biodiesel consumption a year.

On the global note, Oil World executive director Thomas Mielke had quoted that the palm oil industry will be facing a major challenge in meeting the global demand for oil and fats by 2018. Thomas Mielke estimates that a total of 32m tonnes of palm oil will have to be produced to satisfy the global demand by 2025, and that the world will be facing shortages by 2018 if there are no acceleration in planting and replanting in the Southeast Asia.

Examples of others plantation leaders starting to move upwards in accordance to the CPO outlook in the coming days.

1. FGV

2. Genting Plantation

3. HapSeng Plantation

In short, CPO will be seeing a good demand in the future outloo. Rsawit will be a good option to be invested into given the current price based on
- B7 biodiesel program kick off in November 2014 for Peninsula Malaysia and December 2014 for East Malaysia
- Rsawit Palm Oil Mill to be operational in early quarter of 2015
- Rsawit to see approximate 10% of young trees to contribute to the productions
- Rsawit huge land bank will be good to occupy them for another 3 to 5 years in new plants and replanting activities
- Upcoming festival events (Christmas, New Year and Chinese New Year) to boost consumption
- Rising demand of CPO from global demands

Bone's short term TP: RM 0.80

Cheers and have a nice day


Wednesday, 5 November 2014

Syscorp - Rising with Cheap Oil

The latest hot topic in the market will be the on going oil price that had been sliding cheaper and cheaper as prices hit below the production cost for some of the oil companies. Currently, WTI Crude for December is trading at USD 76 per barrel, putting more pressure on the oil and gas companies.

While the cheaper oil prices is definitely a double blow to the high capex nature of the oil and gas industry, it would be another part of the story for industry that are using high amount of fuel and oil for their daily business activities.

Of course, the easiest to come into mind will be airlines industry, but the party will not be completed without the shipping companies celebrating as well. With this in line, SYSCORP is a favorite target after seeing it's subdue prices prior to the previous sell down with much upper growth for capital appreciation in the coming days.

Let's have a quick look at SYSCORP price chart.

SYSCORP had been consolidating at a wide range around RM 0.50. While most of the accumulation of the shares is being done above the price of RM 0.55 and RM 0.65 back then at July, SYSCORP will be seeing a better come back with a stronger volume in the coming days. A quick outlook will place SYSCORP into challenging RM 0.65 before breaking into higher grounds.

SYCORP - Greater with cheaper oil

SYSCORP had been known for it's ship building, maintenance, repair and overhaul, shipyard building and also shipping services. SYSCORP is currently the only logistic company that had the greatest exposure in the booming economy in the Samalaju industrial area in Sarawak.

A quick recap, SYSCORP had already started their services in the Samalaju Port with 2 barge berths and a roll-on, roll-off ramp. The facilities is able to cater for 450,000 tonnes of cargo for this year. While doing so, SYSCORP had secured 2 major building packages for the port project, propelling them to have the first mover advantage at the port, which will be expected to be fully operational by 2016.

SYSCORP also provide freight forwarding services in Indonesia through a 49% stake in freight forwarder PT Baruna Adipras for a good cut at RM 1.35 million. Currently, SYSCORP is seeing commodities such as animal feeds and related food products trading between Indonesian ports. However, SYSCORP will move into the iron ore trade which will be more lucrative.

With the sliding oil prices, it is significant enough to see major cost saving in the daily operation of the shipping activities. Shipping companies are benefiting from the cheaper oil that will put a stronger quarterly in the coming days.

1. Harrisons Holdings (M) Berhad (Harison - 5008)

2. MISC Berhad (MISC - 3816)

3. TASCO Berhad (Tasco - 5140)

While at the Airlines Industry, AirAsia had definitely reflect the opportunity from the falling oil prices in their share price.

SYSCORP had seen growing demand in the freight forwarding sector, ship building as well as a growing demand in the maintenance division.

With a strong growing revenue in the freight forwarding division, growing business in shipbuilding and ship repairs and maintenance, coupled with a series of cheaper oil, SYSCORP is killing 4 birds with a stone now.

I believe SYSCORP will be a good company to be vested in at the current level. With a strong growing revenue, almost 40% towards is NTA, SYSCORP will be coming under investment house radar in the coming days after it's huge exposure towards the booming economy of Samalaju and the growing demand of MRO in shipping.

Syscorp - Rising Sea Dragon
Syscorp - Sizzling On Samalaju

Boarding SYSCORP? You decide.
Bone's short term TP : RM 0.65 (Maintained)

Cheers and have a nice day


Monday, 3 November 2014

November Highlight - KFM - A New Season

The global equity sentiment had taken another solid step after seeing a series of encouraging economic data from the US and a huge 80 trillion yen (USD 726billion) monetary easing from Japan. With the European Zone likely to announce the European stimulus in the coming days, the bears are likely to see no chance for the coming period of time. On the Halloween Friday, DJIA climbed another 195 points to end at a record high of 17390.52 while S&P 500 conquer above the 2000 mark, putting a notch at 2018 points as Nasdaq took a foothold at 4630.

With the bullish state of economy, the equity market confidence is back stronger now after seeing the previous plunge as a correction in the midst of a bullish run. While most of the company are going to report in their 3rd quarter earnings, it is definitely another interesting journey to hunt on company with on going corporate development, for this month - Kuantan Flour Mills (KFM - 8303)

Am I going to talk about Flour market? Let's see.

Let's have a quick look at the latest price chart of KFM.
KFM had recently saw some noticeable volume with more than 8m shares exchanging hand in a single day back then in the period of March to April 2014. However, KFM had took a 6 months consolidation which had saw a lower transacted volume during that period. As the consolidation came to a saturation, KFM is now on the way to test the new heights in the coming days. A quick resistant at RM 0.60, once broken, will see KFM trading into the uncharted territory.

KFM - A Brewing Season

KFM had been involved in the manufacturing, milling and trading of flour products. However, due to the intense competition in the flour market due to the product being a controlled item by the government, KFM will need to look out of the box for the on going prospect of the company in the future. KFM, currently a listed company with a market capitalization of RM 31 million with 67,229,084 shares and 21,299,926 warrants with almost no noticeable long term debts notes in the company balance sheet could be just another interesting target that is being eyed upon from tycoon to make a quick debut into the listed market.

The emergence of Dennis Tow Jun Fye as one of the substantial shareholder in KFM with 9.251 million shares (14.2%) is a confirmation that will see KFM looking to expand into other sector in the coming days. Dennis Tow Jun Fye is the son of Mr Tow Kong Liang (right inset), who owns and operate the well known Seasons Apartment Hotel Group under the listed entity IEQ which is listed in the Australian Stock Exchange.

Mr Dennis Tow Jun Fye, young and vibrant graduate from Deakin University with a bachelor degree majoring accounting and finance, he currently held various directorship and senior management position in Seasons Apartment Hotel Group and IEQ (International Equities Corporation Ltd).

With the latest stint of open market purchases of KFM shares, Dennis Tow had certainly ready to bring his expertise of property development and hotel management into KFM.

Brewing the Warrants
The latest conversion of KFM-WA warrant with an exercise price of RM 0.51 had put the game into an even exciting manner.

The massive conversion of the warrant (Currently 2,082,500 warrants converted) with an exercise price of RM 0.51 with an average purchase price of RM 0.125 on the warrants had put a total acquisition cost of RM 0.635 for KFM mother share, which is around 25% premium from the market price of the mother share.

To recap, KFM had earlier noted that the company will be placing out 10% of the total issued share for private placement in a Fund Raising Exercise. In order to get the maximum effect of the 10% private placement, KFM must increase it's total shares issued through the conversion of the warrants. Should all the warrants be converted, KFM will be able to place out 10% private placement based on 88,529,010 issued shares, which will be issuing 8,852,900 of private placement shares, enabling the company to raise more fund with more shares issued.

Now, one might be wondering what will be the fund raising activities lead to in the coming days? To expand their current business dealing with flour, or a new business direction in the coming days?

According the the prospectus of the private placement, KFM will be changing their business direction and to be largely dependent on it's future corporate exercise which will include the undertaking of new potential business venture.
The emergence of the Tow family member (Dennis Tow) in the KFM shareholding is going to earmark KFM into future business prospectus which will be looking at
- Property Development
- Hotel Operation and Management

Apparently, IEQ had recently saw some activities in their recent share price which had jump more than 400%, putting the possibilities of IEQ joint venture with KFM into property development and or hotel operation and management.

The Upcoming Event

KFM will be going to conclude and finalize the fund size to be raised, and hence will be putting a price tag for the private placement.

According to familiar sources, KFM will be looking to raise around RM 7million, which will be looking to see the group acquiring new assets and also to strengthen the balance sheet in order to secure a bigger financial lending in the coming days.

Should KFM be looking to raise RM 7 million from the maximum placement of 8,852,900 shares, KFM private placement will be going to see at least RM 0.80 in order to reflect the fund raising amount.

Private placement price = RM 7,000,000 / 8,852,900 shares
                                          = RM 0.79

I believe KFM will be a very interesting company to look at in the coming days with more corporate exercise that is to be unfolding soon. With the bullish sentiment, entry of strategic shareholder, KFM will be worth to be invested for a medium to long term based on :
- Emergence of Dennis Tow Jun Fye as substantial shareholder in KFM, which is related to the famous and well known Seasons Apartment Hotel Group in Australia
-  Massive conversion of KFM-WA with exercise price of RM 0.51, and average collection cost of RM 0.125, putting up the insider accumulation price at RM 0.635
- KFM indicated for a change in business direction in the coming future
- Familiar sources indicating KFM to be looking to raise RM 7 million for new asset purchase and reinforcing the balance sheet, hence reworking to a placement price of approx RM 0.80.

Limit with KFM ? You decide!
Bone's short term TP: RM 0.80 (Potential Limit Up)

Cheers and have a nice day.