Monday, 30 June 2014

PPHB - A Mega Surprise Package

As of recent, the robust economy outlook in Malaysia had been seeing packaging industry receiving some attention from the eyes of the investor. The domestic and Asian markets are expected to contribute substantially to the revenues of plastic and paper packaging, as well as industry product makers.

While quite a number of the packaging companies like Orna, Muda, Master and SCGM had been seeing strong growth and strong uptrend in their share prices, it had caught my interest in PPHB, a well to do packaging company that had yet to unveil it's true value.

Below is the latest share price for Master, Muda, Orna and SCGM.






While all the above 4 had been showing strong uptrend signs or signs of breaking up further, PPHB had been relatively not on the hot target of the public for the time being. Let's have a quick look at PPHB latest share price movement.


PPHB (Public Packaging Holding Berhad) had been consolidating at the range of RM 0.70 to RM 0.75 for around 6 months period. However, the recent break through above RM 0.75 would suggest that PPHB will be armed forward to a higher challenge ahead after seeing more convincing volume and participation in the counter. PPHB will be looking to challenge above RM 0.80 in the coming days after a series of consolidation.


PPHB - A Rising Star

PPHB primarily involved in the manufacturing and retailing of corrugated cartons, packing materials, gift and display box, and trading of paper products. The robust economy outlook in the local and Asian market had been a promising sign for the packaging industry to see a bullish run. As of the 1st Quarter for FYE 2014, PPHB had recorded an astounding result with 3.31 cents EPS.

The packaging industry outlook for 2014 will be a growing trend, hence will be looking for a growing profit in most of the company. The economy will continue to remain bullish until next year as manufacturer continue to push more sales and production. 2015 will be the year where the implementation of GST will come into picture.

Managing Director Micheal Koay will be targeting the group to see a growth of at least 10% after the group had invested around RM 6 million into new digital printing machines to increase the production capacity. Micheal Koay will also be looking into untapped sector like the services, finance and telecommunication sector to boost the company revenue.

Should we assume that PPHB is able to deliver an average of 3 cents per quarter for the next 3 quarters of FYE 2014, we will be looking for a total of 12 cents EPS for the year ending of 2014.
Shall PPHB be traded at a skeptical PER of x8, PPHB will be easily be value at RM 0.96. The current NTA of RM 1.34 is also resembling a huge discount of approx 41% on it's current price of RM 0.78.


PPHB - A Diversified Package

As of late, PPHB had been eying for a diversification towards hospitality and property sector after seeing a hot demand in the Penang tourism sector. PPHB had in plan to develop a boutique hotel in Penang, dubbed "The Quay" at Pengkalan Weld, Penang.

The Quay will consist of a five storey boutique hotel (approx 18000 sq meter in built up) and retail lots (approx 950 sq meter built up) will see more than 160 guestrooms together with a 2 storey carpark that will be able to host more than 100 car park spaces.
Boutique hotel in Penang had a good track record of good occupancy rate. An occupancy rate of 85% for "The Quay" at an average price of RM160 per night will be drawing approximately RM 0.6 million per month, and an estimation of RM 7.5m in a year, which can contribute a good cash flow for the company. This had not include the commercial leasing income that might be looking to contribute another RM 2m to RM 3m into the whole project.


PPHB will be a good vehicle to be invested in at the current price. We continue to believe in Micheal Koay in delivering better result to the company and guiding the company towards greater heights in the coming days.

PPHB will be a great investment due to:
- Current price of RM 0.78 which is 41% discount towards it's NTA of RM 1.34
- A strong growing trend in the Packaging Industry in Malaysia
- PPHB to see growth of at least 10% in 2014 which new machinery to boost more production
- Leveraging on the strong tourism in Penang and diversify into hospitality industry in Penang
- A forward earning projection of 12 cents EPS, trading at PER x8 will value PPHB at RM 0.96 (18.75% upside)

PPHB will be looking to challenge above RM 0.80 in the coming days. A short term outlook will position PPHB in touching RM 0.85, while a longer term outlook will suggest PPHB to be trading above RM 1.00 should be earning show a larger surprise.

Bone's short term TP: RM 0.85

Cheers and have a nice day

Regards,
Bone

Friday, 27 June 2014

Prestar - Double Dragons

The 1H of 2014 had been bullish in sector like Properties, Plantation, Furniture and Semi Conductor. In the 2H of 2014, we are going to see more focus in the Construction sector, primarily lead by KVMRT line 2 and a few major government infrastructure projects that includes highway, water dam and also Sarawak SCORE.

With all this mega infrastructure projects in line, it will be very worthwhile to take a look at the material supplier for all this projects. Amongst all the material supplier for all this mega infrastructure project, I would like to highlight on PRESTAR RESOURCES BERHAD, a major supplier for highway railings.

 Let's have a quick look at the recent price movement for Prestar


Prestar had been consolidating at the range of RM 0.60 for the past couple of month, however, the counter had seen some new fresh volume that is signifying a growing interest in the company in the coming days. Prestar will be looking set to break above RM 0.65 with a huge volume and will be looking to put a foot hold at RM 0.70.

Prestar on hot rail

As highlighted in my earlier coverage, Prestar primarily involved in:

- Slitting & shearing of carbon & stainless steel mother coils into slitted coils / sheets for automotive, electrical & electronic, office equipment, metal stamping indsutries
- Roll forming of carbon steel pipes and hollow sections
- Roll forming of stainless steel pipes & hollow sections
- Manufacturing of steel flat bars, steel purlines
- Manufacturing of wheelbarrows and platform hand trucks
- Manufacturing of steel shelving & pallet racking and other storage equipment
- Manufacturing of highway guardrails


Prestar had continue to display a growing volume, signaling the bullish demand in the material supplying for huge infrastructural projects. However, the lower contribution on the earning per share might be attributable to a higher operating cost in 2014, but we believe that the management will be taking adequate steps in preserving the earning of the company which will be displayed in the later quarter for the financial year of 2014.


For the 1Q of 2014, Prestar NTA is standing at RM 1.13, which is still at a discount if we had look into the land and properties that the company is owning, which is highlighted in my earlier post - Prestar - Railing on Hot Roads.


Coming up Catalyst in 2014

2H 2014 will see many groundbreaking event for many highway projects that will be built across Klang Valley. A total of 6 highways with a total project value of almost RM 20 billion will be expecting to start work in the 2H of 2014. Amongst them in the line will be

- Kidex (Kinrara - Damansara Expressway) - RM 2.42b, length 14.9km

- EKVE (East Klang Valley Expressway) - RM 1.55b, length 39.5km

- WCE (West Coast Expressway) - RM 5.04b, length 233km

- SUKE (Sungai Besi - Ulu Kelang Expressway) - RM 4.18b, length 31.8km
- DASH (Damansara - Shah Alam Expressway) - RM 4.3b, length 23km

- DUKE extension (Duta - Ulu Kelang Expressway) - RM 1.18b





Which that many highway that are going to kick start in the 2H of 2014, Prestar will be looking to see a higher book order and revenue in the coming days. While they had secured the WCE contract, the other notable contract will be from EKVE and SUKE that will give them yet another double strike on the push from the WCE. This had yet to include the mega development in Sarawak - SCORE, which will be building a lot of roads and highway, as well as the KVMRT line 2 and line 3 project that will see a lot of demand in steel as well.

Prestar position will be very bright in the coming days, fueled by major infrastructure project. Currently  at the price of RM 0.64, Prestar is trading at a discount of 43% on it's NTA. Prestar will be seeing a strong booming growth in the coming 2 to 3 years period. At it's current price, Prestar will be a good target for both trader and investor to secure their position.

Prestar will be looking to break RM 0.65 and challenge RM 0.70 in the coming days. A short term outlook will see Prestar reaching RM 0.70, while a longer tenure will be looking at RM 0.85 to RM 0.90, with a projection of 10 cents in EPS trading at PER x9.

Do you want to choose to see or feel it yourself? You decide.

Bone's short term TP: RM 0.70

Cheers and have a nice day.

Regards,
Bone

Thursday, 26 June 2014

Tadmax - Turning Point

The global equity market had started showing weakening signs as the tension between the US and Iraq had brought uncertainty into the market. Speculation had is that the US needed this spark in order to see their military sales chalking up again. Market will be expected to remain in the rough water sentiment until further global stabilization is sighted.

While the fundamental of the market still remains intact as monetary policy from the West had been committed to adapt the loose monetary policy, it could be the best moment now to pick up some of the shares that had been hit down from their peak, or with a good catalyst that will drive the share further. For this, I would say that Tadmax Resources Berhad (formerly known as Wijaya Baru) could be a good counter to be looked into.

Let's have a quick outlook at Tadmax Resources Berhad


Tadmax had saw it's share price spiraling upwards until hitting a high of RM 0.65 after the news on the sale of the 310 acres of land at Pulau Indah at a tag price of RM 317.3 million (RM23.50 psf) to Ivory Merge Sdn Bhd, a wholly owned subsidiary by 1MDB Berhad goes public. As the share had cool off after a 4mth period, consolidating at the range of RM 0.50, the share will be looking back to see a set of fresh volume again as it march forward from the saturated point of RM 0.50. Should Tadmax be able to break above RM 0.50 in a convincing manner, Tadmax will be likely be putting a foothold at RM 0.55.


Tadmax - Awaiting a savior
Previously, Tadmax (formerly known as Wijaya Bary) had been remaining in a lowly manner as the company had been reporting losses since 2009. The company had saw it's business dwindling south as the competition from the timber business had been very competitive and challenging. Tadmax, in need of a turnaround, had no choice but to materialize some of it's asset for cash, while had boil down to a controversial 310 acre land sale at Pulau Indah with a tag price of RM 317.3 million, in which some of the public might questioned over the purchase of 1MBD, whether it had been paying on a huge premium.

Tadmax land sale will result in a large amount of cash. At the price tag of RM 317.3 million, the revenue generated from the land sale for each share of Tadmax is worth RM 0.85 per share. While Tadmax will be using a huge portion of the land sale, approximately RM 260 million, in clearing off the debts, this will translate to a net gain of RM57.3 million, equivalent to RM 0.153 net gain per share from the disposal (based on outstanding shares of 373,231,746 shares).

While many might be thinking what will be Tadmax be using on the net gains of RM 57.3 million,  internal sources had been looking for a special dividend of around 5 cents which will be paid back to the shareholder.


Upcoming Catalyst

The current ban of log export from Myammar had definitely leave a hole in the supply chain of the logging industry. This will also be the best time for Tadmax to unlock the 80,000 ha of timber land in Indonesia. Coupled together with the recovering economy from the west, this will be the best time for Tadmax to unlock the value from the land with the harvest, and the later part will be replanting the land with palm oil plantation in order to create a sustainable source of income.

Tadmax might also be seeing emergence of new shareholder that will be injecting business and asset into the company. The group will be looking forward to explore the palm oil sector.


I believe Tadmax will be an interesting company to look into. The land sale will be putting the company balance sheet back into the black which will make it attractive enough for investor to inject asset  or business.

Tadmax can be attractive to both trader or high risk investor based on:
- Land sale to 1MDB, marking on off gain of RM317m, of which RM260m will be used to pare down debts and interest, and RM 57.3 million will be used to pay a special dividend and also soldier
- Special dividend rumored to be around 5 cents per share
- Unlocking value from the 80,000 ha of Timber land in Indonesia that could worth more than RM200 million
- Becoming a palm oil plantation player


Tadmax will be looking to break above RM 0.50 in the coming days, while a longer tenure outlook will see Tadmax retest RM 0.65.

Bone's short term TP: RM 0.55

Cheers and have a nice day

Regards,
Bone

Wednesday, 25 June 2014

SCIB - Soaring on SCORE

Sarawak - This will be one of the coming theme play after seeing a bullish development on Sarawak that is fueled by the SCORE (Sarawak Corridor of Renewable Energy). Undoubtedly, Sarawak Corridor of Renewable Energy, since its inception in 2008, has been a great source of encouragement, not only for the Regional Corridor Development Authority (RECODA), but for the state government and Sarawak as a whole. SCORE will be one of the core component in making Sarawak in becoming a developed state within the framework of the National agenda as envisioned by Vision 2020. 

While most of the largest beneficial of the SCORE might be sounding the likes of CMSB, Naim and SCABLE, little had known for SCIB (Sarawak Consolidated Industry Berhad), however not after today.

Let's have a quick look at SCIB on it's recent price movement

 
SCIB had been trading at the range of RM 0.50 for the past 1 year. The consolidation at that level had seen saturation and is currently looking to set it's base above RM 0.65 in the coming days. SCIB will be anticipating a large volume to penetrate above RM 0.65 in the coming days.


SCIB, primarily involved in the manufacturing of Prestressed Spun Pile, Reinforced Concrete Square Pile, Spun Concrete Pipe, Reinforced Concrete Box Culvert, Prestressed Beam, Concrete Roof Tile and Industrialised Building System (IBS) components such as Hollowcore Slab, Wall Panel, Column and Beam had been playing a substantial role in the development of SCORE since its inception. Back then at 2011, SCIB had been supplying 30% of the SCORE development material. However, SCIB will be taking up a larger role in the coming days after the completion of their new plant near Kuching.


SCIB and SCORE

SCIB precast concrete products and industrialized building systems (IBS) are in demand for the construction of manufacturing plants by energy-intensive industries and access roads to hydroelectric dam projects in Sarawak Corridor of Renewable Energy (SCORE).

SCIB will be taking a larger role on January 2014 after the completion of the new production line which will be adding another 30,000 tonne of production, effectively putting SCIB production to 114,000 tonne a year.

While the area of coverage had been very huge, this huge pie is a big opportunity for SCIB to tap into the supplies of the Industralized Building System.

Currently, rumor had it circling that SCIB had won a supply contract for the hydro electric plant that might be worth more than RM 200m in total. SCIB will be seeing a turn around this year as the progress and development of SCORE push to another level. SCIB will definitely be benefited from the major development from SCORE when more infrastructural projects will be dished out in the 2H of 2014.

I believe SCIB will be an interesting company to be vested based on the following
- Current market theme play - Sarawak themed company
- Robust development of the SCORE in Sarawak that consist of more than RM 22 billion in investment
- Completion of new factory that will increase output capacity of Industrialized Building System that will start to contribute early this year
- Favorable political connections towards the state governor.
- Involvement in the supplies of the building of new hydro electric plant and it's infrastructure.


A short term outlook will see SCIB moving above RM 0.65, while a longer term outlook might probably suggest SCIB to trade at RM 0.80.

Bone's short term TP: RM 0.70

Cheers and have a good day

Regards,
Bone

Tuesday, 24 June 2014

Maybulk - Bulking on POSH

Broad market sentiment had continued to show bullishness as the DJIA had entered into challenging 17000 in the coming days. While the market are buying into the wave for a economy recovery, foreign market continued to be bullish, we will be seeing more participation into the local market once the foreign fund comes to pay a visit.

While market had been in hot talks for semiconductor related industries, thanks to the huge demand created from global tech company like Apple and Samsung, quite a number of heavy weight industry had been losing their shine and crawling lower, while some might had saw their bottom already. However, it had came to my interest on Maybulk despite the current outlook on the BDI, which is almost at it's year low.

Let's have a look at Maybulk recent price movement.


Maybulk had been trading above RM 2.00 on a couple of months back despite the volatile BDI which had been fluctuating in a huge manner. However, Maybulk did not manage to maintained above RM 2.00 after seeing the BDI dropping into a year low, resulting in Maybulk consolidating at the range of RM 1.85 for the past couple of weeks. Maybulk had saw a series of accumulation at the current level of RM 1.85 as the accumulation might be seeing a saturation which will be anticipating a coming strong volume in bringing the share price above RM 1.90 with a greater surge of volume.



Maybulk and POSH

Maybulk primary activities are doing Bulk Carriers, Tankers and Ship Management. However, Maybulk 21.23% stake in PACC Offshore Services Holdings Ltd (POSH) might be able to see the group diversify their exposure into the lucrative industry of Oil & Gas.

Maybulk had been sitting in a net cash position of RM155.19 million, translating to a total of RM 0.155 net cash worth per share. Maybulk net cash position in a heavy industry is a truly good advantage, as most are still struggling to repay their interest and debts.

Maybulk prized asset came into the limelight when POSH is listed in the SGX on 27th April 2014, enlarging their investment appreciation by a great leap. To date, POSH is sitting on a market capitalization of SGD  1.704 billion (RM 4.432 billion, SGD 1 = MYR 2.6), directly translating into Maybulk 21.23% in POSH worth RM 940.977 million. Maybulk's stake in POSH already accounted for RM 0.941 per share.

While many might not know about POSH, it is actually the Largest Asian based provider of offshore support vessels and one of the top 5 globally (according to industry consultant Infield’s data based on number of vessels operated), with a diversified fleet servicing offshore oil and gas exploration and production activities. POSH's offshore support vessels perform anchor handling services, ocean towage and installation, ocean transportation, heavy-lift and offshore accommodation services, as well as harbour towage and emergency response services. Revenue is earned from the time charters of its vessels, as well as lump sum project contracts for which its vessels are deployed. Customers include major oil companies and large international offshore contractors.

Currently, PACC Offshore Services Holdings Ltd (POSH) has won a US$80.5m (RM260m) charter for its semi-submersible accommodation vessel, named POSH Xanadu, for use by Petroleo Brasileiro SA (Petrobras). Petrobras would charter POSH Xanadu for a year beginning December 2014, with the option to extend for another year. If the charter is extended, the total contract value will be in excess of US$144m.

Coming up catalyst

POSH Arcadia had been in the final stages of negotiation and will be sealing the deal soon which might be seeing another US90m to US100m value of contract pumping into the balance sheet of POSH Ltd. Moving forward, the growth catalyst for POSH in FY15, with delivery of two 750-person DP3 SSAVs (semisubmersible accommodation vessels), estimated to potentially double its earnings base in FY15F assuming deliveries are on track and charter-out contracts are secured on time.

Should POSH run smoothly in their deliveries, POSH might be looking to soar to SGD 1.30 in the coming short term.


Maybulk should be a good investment to be considered at the current price based on:
- Strong net cash position of RM155 million (RM 0.155 net cash per share)
- Bottoming up BDI that will be seeing a reversal cycle in the coming days
- Maybulk diversified exposure in oil and gas industry through PACC Offshore Services Holdings Ltd (POSH)
- 21.23% stake in POSH, interpreting a stake that is worth RM 940.977 million (RM 0.941 per share) at the current price of SGD 1.15 in POSH share price
 - POSH Arcadia to secure a chartered contract in the coming days ahead
-  Robust oil and gas industry ahead, fueling demand for OSV.

By looking at the net cash value and the stake value from POSH, each share is worth RM 1.095, excluding the current fleet of asset that Maybulk is sitting on which is worth more than RM 2 billion. Maybulk NTA might be ringing more than RM 2.50, of which RM 1.095 is a liquid asset in cash or shares. Maybulk will be looking to see more contribution from POSH. Maybulk will be looking to challenge a short term price of RM 1.95, while a longer tenure outlook will suggest Maybulk to be above RM 2.10.

Bone's short term TP: RM 1.95

Cheers and happy trading

Regards,
Bone

Monday, 23 June 2014

SCABLE - Scoring to A New High

The local market should be able to see back some bullishness and more participation from the retailer as the Western leaders had committed to keep the rates low and as Europe will push the economy rolling as they start their own quantitative easing to continue push on the recovery of the economy. While the World Cup had been giving quite a number of unexpected match result, the KLSE had been quite unexpected as well, choosing to remain in a slumber manner despite the bullish news from the foreign market.

However, I would presume that the KLSE market will start to resume into action soon in the middle of June and early of July, prior to a pre-Hari Raya pump up. While most of the counter had been sitting on the high side, SARAWAK CABLE BERHAD had managed to caught up with my attention.

Let's have a quick glance on the recent price movement of SCABLE


SCABLE had been consolidating at the region of RM 1.50 to RM 1.60 for around 5mths. SCABLE might be seeing saturation at the current level, and a strong fresh volume will be anticipated to take place in SCABLE as SCABLE will start to take it's stronghold above RM 1.60 in the coming days ahead after the company had been awarded with numerous of mega projects that will be looking to worth billions of ringgit.


SCABLE is primarily involved in the power solutions. It manufactures two types of power cables, wires and conductors. The single core power cables and wires and multi-core power cables and wires are used in distribution lines, as well as inside end user homes, offices and factories. It manufactures conductors that support voltage in excess of 33 kilovolts and include all aluminium conductors (AAC), all aluminium alloy conductors (AAAC), all aluminium conductor steel reinforced (ACSR) and aluminium binding wires.

SCABLE on the prime moment


SCABLE had been in a prime limelight of late when their subsidiary Trenergy Infrastructure Sdn Bhd had secured a total project worth of RM618.6 million with joint venture partner, Sinohydro, for the Package B (MAPAI to LACHAU - RM352.8m) and Package C (LACHAU - Tondong - RM 265.8m) cabling project.

Previously, SCABLE had secured a small scale project at the Tudan-Miri 132kV stretch, carrying a project value of RM 32.9 million. SCABLE will also start to see some recurring contribution from the RM80 million 10MW mini hydro plant that is constructed at North Sumatra.

SCABLE, where 33% is owned by Datuk Seri Mahmud Abu Bekir Taib, the eldest son of Tan Sri Abdul Taib Mahmud, is a strong and dominant company in the region of Sarawak. Sarawak biggest catalyst will be the SCORE development that will be looking to attract more than RM200 billion in investment from numerous local and foreign company, particularly those who are involved in energy sectors. Under the SCORE outline, Sarawak will become on of the mega power house that will see more hydro electric plant to be erected. Currently on the plan is Baram - 1200MW, Baleh - 1295MW, Pelapus - 410MW,  Limbang 1 & 2 - 200MW and Lawas - 100MW. While all these huge mega project will be generating more electric power, the important medium to transfer the electricity is though the cables.

With such bright future ahead, SCABLE will be looking to see more projects being secured in the 2H of 2014.

Current Catalyst

SCABLE will be expecting an official announcement on their coming up project that is covering from Tanjung Manis to Bintulu and Manbong to Kalimantan, both carrying a combined total of RM 400 million. The project will be slated to be announced soon in around the 2nd of 2014.


We expect more project in relation with SCORE to be dished out soon in the 2H of 2014 after seeing more SCORE/SARAWAK related companies making a run up that had been going on for quite sometime. SCABLE at it's current price of RM 1.53 is really liken to a canon ready to be explode in the coming days.






SCABLE purchase quite a number of  medium to high voltage cable from Universal Cable. SCABLE move to privatize it's supplier will be looking to see a greater benefit in the long run as there will be more and more cabling project to be dished out in Sarawak under the Rural Electrification Scheme.


I believe SCABLE will be a good company to be invested into based on
- Strong political ties with the government of Sarawak.
- Robust and bullish growth outlook for SCORE in Sarawak
- Securing RM400m Tanjung Manis - Bintulu and Manbong - Kalimantan project
- Potential winner for SCORE Phase 2 which consist of a 500kV line and 2x 275kV line
- Strong Order book which had more than RM 1billion worth of contract in hand
- Potential Winner for future projects that might be worth more than RM 3 billions from the hydro electric plant at Baram 1200MW, Baleh 1295MW, Pelagus 410MW, Limbang 1&2 200MW and Lawas 100M.


SCABLE will be looking to break forward in the coming days. A short term outlook will place SCABLE above RM 1.60, while a longer term outlook will see SCABLE soar above RM 2.00 in the coming days.


Bone's short term TP: RM 1.70

Cheers and have a nice day

Regards,
Bone

Wednesday, 18 June 2014

LEESK - Riding on the Surge

The global market continue to see bullishness in an overall manner as the US and European Bank continue to adapt to the loose monetary policy in order to encourage more market activities as US and Europe continues into the journey of recovery in their market. While there are still some global tension arising from the likes of Russian-Ukraine and US-Iraq conflicts, the situations might be able to go into an overblown situation from the media to spread fear into the market. In a local outlook, the KLSE market volume continues to see lower participation as the trend continue with the small capital market during this World Cup season.

However, despite the mixed signal from the market, it had came to my attention on Lee Swee Kiat Group (LEESK - 8079) on their current price and coming up prospects.

Let's have a quick look at LEESK


In a quick outlook, LEESK had been seen consolidating at the range of RM 0.15 to RM 0.17 for the past 5 months. A more significant volume on 12th June 2014 with more than 10m of shares changed hand had earmarked the urge of LEESK in pushing forward and breaking up towards RM 0.20 in the coming days. LEESK will be seeing another huge large volume spike in the coming day that will easily break above RM 0.17.


LEESK - A Delayed Catalyst

LEESK had been primarily involved in foam and mattress related products, which is engaged in the manufacturing, trading and distribution of mattresses, bedding accessories, laminated foam, polyurethane foam, natural latex foam and other related products. LEESK distributes its latex foam products under the brand name of Napure and beddings under the brand name of Tempur and Englander. Besides that, LEESK also involves in sofa and furniture under the brand of Calia, Meta and Gautier.


While LEESK might be just some other ordinary company that is doing their routine activities, what could be coming up for LEESK.

Most of LEESK revenue comes from the local market. As of 2013, the revenue from local market consist of almost 70% of the total revenue, while the next is US and Europe. While the 2H of 2013 and 1H of 2014 had been very much bullish for most of the furniture company like Homeritze, Latitude, PoHuat, SWSCAP and the recent one being SYF,  LEESK is a prime target that had been crippling in a quieter note as they are looking to perform greatly in 2014 with a large unbilled sales in hand and also the growing demand.

LEESK is looking to see their revenue breaking above RM100 million as they prepare to put in more focus on the overseas market, particularly in the recovering market of US and Europe. The huge export market to the US and Europe had been always the boost factor for most of the furniture company in Malaysia.

Beside focusing more on the foreign market, the local market will also see more demand in the coming days, especially in the 2H of 2014 as many of the highrise projects around Klang Valley will be seeing a lot of unit handovers soon, which will be easily translating to a huge demand spike in both the mattress/bed and furniture sector. 2H 2014 will at least see another 50,000 of new homes in Klang Valley being ready to be handled over to their respective owner


With 167.8m shares issued and at the price of RM 0.16, the market capitalization for LEESK is just a merely RM26.85m.

LEESK had 2 properties under their belt that is worth a total of approx RM 24 million. Not including the machinery and business which might be looking for another RM20 to RM30 million, the current price for LEESK had been definitely undervalued.

While the group current financial position is still nothing big to brag about, however, they are trying to reduce their debt level significantly in order to put the group in a stronger position in the coming days ahead.


LEESK could be a good company to be invested in due to:
- Bullish local demand for mattress/bedding and furniture in the 2H of 2014 as more highrise projects are looking to handover their units to the owner.
- Bullish economy outlook in the US and Europe as both of the continents are experiencing an economy recovery at it's strongest point of time.
- Undervalued company that could be trading in more than 50% discount at the current price of RM 0.16 from it's assets and business. LEESK can be easily worth more than RM50m based on it's assets and business.
- Still a laggard to move in the furniture industry, compared to movers like Homeritz, Latitude, Pohuat and SYF.
- Company direction to focus more on foreign market sales, as well as local sales. LEESK is aiming to see revenue breaching RM100m for FYE 2014.


LEESK could be a good counter to be invested or traded in based on it's potential growth in the coming days ahead. A short term outlook will be seeing LEESK challenging RM 0.20, while a longer term will suggest RM 0.25 to RM 0.30 as LEESK starts to deliver in their quarterly results.

Bone's short term TP: RM 0.20

Cheers and have a nice day

Regards,
Bone

Monday, 16 June 2014

ILB - Tango & Cash

The global market had been quite bullish over the week as World Cup Fever rises, brushing away the saying that the market will be going to be slower as affected by the World Cup. However, I believe that the market continue to remain in a cautious manner with the latest global event being the tension at Iraq that had saw Crude Oil prices surging as high as 4%. The Russia - Ukraine crisis had also yet to see an ending so soon, which had been sending out the fear message on the lacking of supply in the energy resources is the tension prolonged, or go from bad to worse. However, market had been remaining in a overall bullish manner, especially on the new Federal Reserve vice chairman - Stanley Fischer, another believer of the money printing game to boost up the economy.

While the recent market had saw activeness in the small cap company, cash rich company, or company sitting in huge pile of cash had been always my target, which does not exlcude - ILB (Integrated Logistic Berhad - 5614)

Let's have a quick glance at ILB recent price movement.


ILB had been consolidating at the range of RM 0.80 for the past couple of months after selling off 2 subsidiaries in China, hugely raising their cash level. As of the latest quarter, ILB cash amount is standing at RM 175.758 million.

At the current outstanding shares of 178,025,503 units, ILB cash worth per share is standing at RM 0.987 per share. At the current price of RM 0.80 per share, ILB is standing at a discount of 18.9% on it's cash worth per share.


ILB - Moving Forward

Integrated Logistics Berhad (ILB) operates in three segments:
- Warehousing and related value added services segment, which is engaged in the rental of warehouses, handling and providing logistics solution services.
- Freight forwarding segment, which is engaged in the business of sea and air freight forwarding and shipping agent.
- Transportation and distribution, which is engaged in the trucking and container haulage.

ILB had saw continuous losses in their operation at China because of the competitive environment that had saw profit margin slashing down. The decision by the management to exit the China market had been a great decision as ILB dispose off it's Shenzhen and Henan assets, and making a one time off profit from the disposal and also putting a stop into the bleeding assets.

While China had always been a competitive business environment, the ILB board of management had decided to exit the China market and focus on the Middle East market that could be able to see a higher profit margin. ILB is currently in a joint venture with National Trading and Developing Establishment (NTDE) of the UAE to form Integrated National Logistic (INL).


ILB will be looking at their joint venture to see a breakeven at the end of 2014, and start to run in a profit in 2015. ILB will be also looking to put more focus into the Dubai for it's geographic location, the increasing importance of airports and the region’s booming aviation sector. Dubai being a vital connection point between East and West had been facilitating the global flow of goods, services and ideas. The latest Dubai’s foreign trade (excluding oil & gas) amounted to more than DH 1 trillion (USD 270 billion) from January to September 2013.

Back then in 2007, ILB had entered into an agreement with NTDE for a 50:50 JV to operate a logistic hub in Dubai. However, the plan was put on hold due to the 2008 financial crisis. INL started operation in October 2012. As of August 2013, utilization rate at the warehouse is around 30% to 40%. However, with NTDE as its JV partner, NTDE will be aggressively seeking out to ramp up it's utilization rate with their strong connection in international consumer brand in the Gulf. NTDE is the exclusive distributor of world-renowned food and beverage brands like Cadbury, Pokka and Häagen-Dazs.


Coming up Catalyst

ILB will be focusing in the middle east's huge market which is still growing aggressively. ILB will be coming to seal a deal for it's disposal at Wujian Co which operates 2 warehouse near to Shanghai. The disposal for both of the warehouse is rumored at around RM60m. ILB 70% ownership in IL HK, in which IL HK owned 65% in Wujian Co, will be translating a 45.5% ownership from the RM60m proceeds from the disposal, which is RM27.3m, interpreting to another boost of RM 0.153 of cash value into each share of ILB.

The recent massive purchase of shares from Makoto Takahashi (holding 10.47%)and Tee Tuan Sem (holding 10.49%) had also raised the eye brown of the public on the possible privatization of the company by the 2 of them.



ILB will be a great company to be invested in based on the following:
- Sitting on a cash pile of RM 175.758 million, translating to RM 0.987 cash worth per share.
- Selling of Wujian Co, raising cash level by a possible RM 27.3m, translating to a possible RM 1.14 cash worth per share.
- Strong director buy back from Makoto Takahashi and Tee Tuan Sem
- Possible target for privatization
- Great exposure in the Middle East logistic market with 50:50 joint venture with NTDE
- Strong growing Middle East market that is already huge with foreign trade amounting to USD 270 billion in first 9 month of 2013


ILB will be seeing a run up in the coming day, with a short term price target of RM 0.90, and a longer term price target of RM 1.20 when they disposed of the 2 warehouse in China and boost up the utilization rate in INL.

Bone's short term TP: RM 0.90

Cheers and have a nice day

Regards,
Bone

Sunday, 8 June 2014

June Special Edition - Benalec

While there are many different style in investing into the equities market, investing into a company which had a unique business model with a series of track record, have a great growth potential, have powerful business ties and relationship, and lastly, a powerful and strong driver in the company management team will seldom goes wrong. With all these being said, Benalec Holdings Berhad might be one of the company that you might be looking to.


Benalec had been involved in land reclamation works in the peninsula Malaysia. Benalec started their journey to high rise with a project offered to them in Langkawi to construct a wave breaker back then at 2000. As they continue to grow, Benalec had been involves in reclamation work from Penang to Melaka. Benalec's upcoming long haul project will be in Johor that will be covering more than 5500 acres of land from Tanjung Piai and Pengerang Integrated Petroleum Complex.

Currently, Benalec is sitting on a several prime projects which includes:
- Phase 1 of E&O STP2 project in Penang with a total 720 acre which will be worth more than RM3 billion
- Oriental Boon Siew (M) Sdn Bhd contract worth RM204m (excluding rock revetment works) in Melaka. Benalec will undertake the construction, completion and maintenance of coastal reclamation for Ultra Green under Phase 2A, Phase 3A, Phase 3B and Phase 4, a total of 415 acre.
- Tanjung Piai Integrated Petroleum & Petrochemical Hub with 3485 acre and Pengerang Integrated Petroleum & Petrochemical Hub with 1760 acre that will worth more than RM15 to RM20 billion.





With a total of more than RM25b projects in their pipeline, and a huge area of reclamation to be covered from Tanjung Piai to Pengerang, Benalec will definitely be a great company to look into as the prospectus of the company will be very interesting in the coming years ahead, especially when the projects kicks off and revenue start to kick into the balance sheet of the company.

However, due to the scale of the projects in Johor, Benalec current outfit and settings might not be able to see it delivering them in an interesting time frame. Benalec current operation hadn't been seeing a pause as of today as projects are coming in faster than what they could handle. Benalec will probably need to increase their scale of operation by at least 150% to 200% to push the production in order meet timeline and expectation.


Potential Capital Raising via Private Placement

Petronas capex of RM300b from 2011 to 2015 had only seen a utilization of RM76b as of January 2014. While Petronas will be committed in using up all the RM300b allocated for the nation oil and gas industry, Malaysia will be seeing another RM200b of projects to be dished out in the coming 1.5 years. The commitment in Petronas capex had placed the oil and gas industry trading at a high premium. The Oil and Gas sector had been one of the prime focus where the government had laid out 13 pointers to be focused. The 13th pointer "Increasing Petrochemical Output", will be seeing a kick start soon in the 2H of 2014.

While Benalec might be facing a problem of "How to increase the scale of operation", however, seeing this as a good problem will be pushing forward to a potential capital raising through private placement in the company. The company's current great prospectus will not be shy of seeing potential great tycoons and foreign investment fund that had been eagerly eying for potential oil and gas catalyst in Malaysia.

Let's have a view of prime candidates that could be interested in Benalec's private placement.

1. Tan Sri Quek Leng Chan

Tan Sri Quek Leng Chan had been in a huge rampage mode recently as the tycoon had started to hunt down a number of oil and gas company in Malaysia after seeing the bullish sector in the coming days. As of to date, Tan Sri Quek Leng Chan had notable vested interest in Alam Maritim, TH Heavy, Scomi Energy, Sona Petroleum, while foreign firms includes Singapore listed Ezion Holdings Ltd.

Tan Sri Quek always doesn't come in a single note bang. His side kick partner, Paul Poh, had been taking up position in notable oil and gas company through his private vehicle, Caprice Capital.

Benalec's business prospect, current market capitalization, total shares issued and market liquidity will be a good target for Tan Sri Quek Leng Chan.


2. Johor Corporation

Johor state owned investment and administrative vehicle - Johor Corporation, had recently stir up attention in the market after their latest news in DBHD. What is stirring up more attention is the possible intervention of Sultan Ibrahim Sultan Iskandar in the administrative of the JPHC (Johor Property and Housing Commission). Sultan Ibrahim Sultan Iskandar had been very active in turning Johor into one of the major economy hub in Malaysia.

Currently, under Johor Corporation's business portfolio includes Plantation, F&B, Healthcare, Hospitality, Property and Logistic and Services.

While Benalec involvement in Johor is a huge scale, will there possibility of a spin between them?

3. Tan Sri Chua Ma Yu

Tan Sri Chua Ma Yu came into the limelight after his savvy investment portfolio had grown into
multi billions. While Tan Sri Chua Ma Yu had been a low profile investor, his private investment vehicle, CMY Capital had appeared as cornerstone investor in several huge corporate including IHH Healthcare Berhad and Astro Malaysia Holdings Berhad.


CMY Capital is currently developing a high profile 6 star hotel in Kuala Lumpur, dubbed St Regis at KL Sentral is a stunning RM 1.2b investment that will be soon to ready in the end of 2014.

Currently, Tan Sri Chua Ma Yu eldest son, Simon Chua, had been seen creeping up quietly into the corporate world. At 27, Chua Sai Men is still learning the ropes in the corporate world from his father. The recent limelight came when Chua Sai Men had acquired 5.1% of stakes in Cypark Resources Bhd.

In a public statement, Chua Sai Men had expressed interest in the companies which is involved in oil and gas, particularly those that will see projects and contracts from Petronas. To put things even more interesting, Chua Sai Men had also mentioned that he had been investing in stocks in the oil and gas sector.

Benalec robust outlook and growth in the belt could be a high potential candidate for CMY Capital to see interest into it.

4. Termasek Holdings

Termasek Holdings is Singapore largest fund. Incorporated in 25 June 1974 with a portfolio of just
S$354 million, today Termasek Holding is holding a record portfolio of more than S$215 billion. Termasek portfolio tremendous growth started from March 2003 at S$61 billion, and in the 10 years journey had tripled up the value of the portfolio.

While Singapore land had been scarce, the demand of land reclamation will never come shy in the coming days ahead as Singapore continue to drive their economy higher, which will directly look into more land to cater the growth. Termasek investment's decision will be focusing on 4 themes which includes Transforming Economies, Growing Middle Income Population, Deepening Comparative Advantages and Emerging Champion.

Benalec involvement in Tanjung Piai and Pengerang had started to see attention from Termasek Holdings. Recently, Termasek had been rumored as one of the purchaser for a plot in the Tanjung Piai reclamation project.

5. Norges Investment Fund

Norway had been seen as 1 of the richest country with a strong sovereign fund that comes from their bullish oil and gas sector.

 Norges Fund, one of the largest foreign fund that is investing in Malaysia had been seen nibbling at Malaysian small and mid cap companies which are directly or indirectly related to the oil and gas industry. As of end of 2013, Norges Fund had been taking up small stakes in 53 Bursa Malaysia listed companies with an investment value of around RM 1.7 billion. Norges Fund had started to invest in the Malaysian market since 2010, and is currently sitting on a paper gain of more than RM 600m, giving their current portfolio valuation at RM 2.3 billion.

While Norges Fund had targeted most of the prominent name in the oil and gas industry, Benalec could be an upcoming rising star in the industry after seeing it's large role in the oil and gas industry in Pengerang and Tanjung Piai.


Major Corporate Exercise in the pipeline
Benalec current business is a capital intensive industry. The undertaking of the future projects will be looking at huge capital being played down the line. While private placement will be one of the high potential corporate exercise, we will definitely not play down a possibility of rights issues and bonus issues.

Benalec will definitely need to raise capital in order to see a larger scale of operation to cater for the huge area covered in the projects. At the current scale, should Tanjung Piai have to see extension to a further date to kick off, it should be actually a very good blessing in disguise as Benalec will benefit from a higher operation margin, and a lower risk of LAD (late delivery) that will incurred unnecessary cost.


Benalec - Invest in growth
Investing into a growing company will definitely be good. However, investing in the different stages of time is what it makes differences in the investment return. To be able to see the company prospect and invest into Benalec before any new influential substantial shareholder will be an even powerful advantage. While a company with good business model and prospect, if loomed with bad management, it will still another rotten fruit. While a number of event had happened in Benalec, things had taken a huge change as the EGM on 26th June 2014 will officiate everything into order, and Benalec will be seeing their best ever transformation under Dato Vincent Leaw full control on the company to steer it into greater heights.

Benalec will be one of the black horse in the coming days ahead. However, before the black horse will take is tour, had you decided in your investment now?


Reference
Benalec - Mounting a Solid Front
Chua Sai Men
Quek Leng Chan
Norges Investment Fund


Friday, 6 June 2014

Kimlun - Tunnels of Lights

The latest announcement from the ECB to cut rates as a bold measures to fight against the risk of deflation by putting a record low of 0.15% on the interest rates will be going to see fresh bullishness in the equities market again. The DJIA challenge above 16800, putting a foot hold at 16836.11 (+98.58) earlier today as the market continues to see a bullish run for the coming days as major continent in the world continues to maintain a loose monetary policy in a means to encourage more market activities.

While KLSE had been still lurking in the low, I believe this will be a good time to hunt into some good and cheap stocks that had yet to saw large rally. One of them that is attractive to me is - Kimlun

Let's have a quick outlook on Kimlun's recent share price movement.
Kimlun had been consolidating at the region of RM 1.60 after challenging above RM 1.70 prior to the weak market sentiment that had saw a broad weaker volume on the market. However, as consolidation starts to saturate at the region, Kimlun will be looking to see a fresh interest of buying in the coming days that could be looking forward to challenge above RM 1.70 in the coming days. Kimlun fundamentals had been going good and strong as the company


Kimlun had started off as a infrastructure construction company in the early days. However, Kimlun had started to venture into properties development as of recently which had saw a strong reception in their projects.

Kimlun 1Q FYE 2014 net earnings had risen to RM 19.5m, marking a 117% increase from the previous quarter. While the 1Q FYE 2014 had been earmarked with a one off disposal gain of RM 10.8m from the Nilai land which had also pared down gearing.



Kimlun had been in the lime light as of recent prior to the bullish segment in the major infrastructural projects, especially in the KVMRT tunneling projects. To recall, Kimlun had won RM 1.1b worth of construction jobs last year with most of them during the 2H of 2013.

Of all construction company, we are favorable with the management team of Kimlun in delivering their projects timely and a good cost controlling management. Whilst most of the construction company involved in KVMRT project had suffered from overblown cost albeit their large order book, for Kimlun to make it on a green note with a profit margin of approx 10% on their project value had made them exceptional amongst the other construction company. Beside construction revenue, Kimlun also benefit from it's manufacturing division for the supply of tunnel lining segments to the KVMRT project.

Kimlun on a new venture

Kimlun latest venture in the properties in Cyberjaya dubbed The HYVE had saw exceptional reception in their launch. The HYVE, a total GDV of RM 240m had saw takes up of more than 80% already.

To date, Kimlun is sitting on an unbilled property sales of approximately RM 150m.

Kimlun will be planning their new bungalow projects with approximately RM 120m in GDV at Shah Alam after acquiring the land from Melati Ehsan. Although government had been putting in cooling off measure in the property market, the niche market in the bungalow segment will continue to see demand.

Kimlun will be officially launching it's Medini Opus in Johor that is carrying a GDV of RM 446m. The launch will continue to see contribution into the FYE 2014-2015 of Kimlun.


I believe Kimlum will be a good company to be invested due to their strong fundamentals. Kimlun's current order book stands at RM 2.1billion, and will be expecting more to come into their hand in the 2H of 2014.

Kimlun will be a good company to be invested in due to
- Strong order book of RM 2.1b that will be keeping them busy for the coming 2 to 3 years.
- Diversified into properties division that make their revenue less reliable for tenders.
- Strong management team with good cost controlling measurement.
- Involvement in KVMRT Line 1.
- Robust KVMRT growth prospect as Kimlun involves in the manufacturing of Tunnel Lining Segment (TLS) and the Segmental Box Griders (SBG)
- Outward expansion with foreign project secured - Singapore MRT
- Bullish outlook in the construction sector in 2014 and 2015 which is fueled by KVMRT Line 2, PR1MA Housing Construction, Refinery and Petrochemical Integrated Development.

We believe Kimlum will be able to see more projects secured in the 2H of 2014, possibly inching near RM 3b in the coming days. A short term outlook will see Kimlun trading towards RM 1.70, as a long term outlook will see Kimlun touching at RM 1.90.

Bone's short term TP: RM 1.70

Cheers and happy trading.

Regards,
Bone

Wednesday, 4 June 2014

Benalec - Mounting A Solid Front

Ever heard of the saying of "Too many chefs ruin the soup"? It couldn't be more true in Benalec, however, not after the Dato Vincent Leaw took back the total control of the company with an off-court settlement with the brothers.

Dato Vincent Leaw, being the youngest of all the siblings, had been the main pile driver of the company. Benalec had been able to transform from private company with a NTA of RM30 million in 2005 to a market capitalization of approximately RM1 billion today is a great journey for the company. However, the best moment for the company now is when Dato Vincent Leaw took full control of the company, where he will be steering Benalec in full steam ahead for the coming days. Dato Vincent Leaw full control of the company will be marking a new chapter in Benalec.


Let's have a brief outlook at Benalec share price movement of recent.

Benalec had been trading at the range of RM 1.15 for the past couple of week. On 14th May 2014, Benalec recorded a breaking high volume where more than 60m of share changed hand after closing in a solid note at RM 1.10. Currently on consolidation stage, Benalec will be looking back to see another surge of stronger volume in the coming days as it will penetrate above RM 1.20.


Benalec and the Golden Shores

Benalec unique business model could be considered as the 1 and only in Malaysia as they specialized in the reclamation of lands. Till date, Benalec had so many notable achievement under their belt ranging from reclamation works in Pulau Pinang, Port Dickson and currently focusing in Kuala Sungai Melaka.

To put it more interesting in Benalec, Benalec had the ready in house machinery and equipment that will play in a higher profit margin, which could be as high as 40%. With their unique technology that Benalec had developed, the reclamation had made much easier as they will only need to "relocate" the sea sand into the place for reclamation which will further boost up their operational profits.

With the current equipment, Benalec is able to reclaim more than 1 acre of land in a day, which will shortened the reclamation process by nearly half the timeline. With more project coming up in hand, and under the aggressive leadership and driving forces of Dato Vincent Leaw, we might not discount that Benalec will be looking to increase production by another 100% which will further shortened the reclamation process.

Currently, Benalec is sitting on a several prime projects which includes:
- Phase 1 of E&O STP2 project in Penang with a total 720 acre which will be worth more than RM3 billion
- Oriental Boon Siew (M) Sdn Bhd contract worth RM204m (excluding rock revetment works) in Melaka. Benalec will undertake the construction, completion and maintenance of coastal reclamation for Ultra Green under Phase 2A, Phase 3A, Phase 3B and Phase 4, a total of 415 acre.
- Tanjung Piai Integrated Petroleum & Petrochemical Hub with 3485 acre and Pengerang Integrated Petroleum & Petrochemical Hub with 1760 acre that will worth more than RM15 to RM20 billion.

With a total of RM 25 billion worth of projects for the span of 5 to 6 years, and with a skeptical profit margin of 30% due to it's in house equipment, Benalec could be looking at a massively huge windfall profit of RM 7.5 billion, which could be interpreting at RM 9.27 net profit per share (based on 808.515m shares) in 6 years. In a 6 years average, Benalec is looking to see a RM 1.54 net profit per share, while trading at a PER of x8, Benalec valuation might be able to blow over to more than RM12 per share in the coming days. To put things in a more skeptical manner, taking 50% off from perfect scenario for other provision in the operation and unforeseeable cost, Benalec will still be sitting at RM 6.00.


The Current Catalyst

While good things doesn't come alone, Benalec will be looking to see the kick off for Phase 1 of E&O STP2 projects in the coming couples of weeks. Insiders sources had seen the green light given by the Penang authority in the STP2 projects as E&O had started to rally in a very fierce manner. STP 2, carrying more than RM3 billion will be looking to give Benalec revenue a huge boost in the coming financial year. While the exact terms had not been fully ironed out, should the project is to be settled by cash, Benalec will be looking to see their balance sheet stronger by RM3 billion.



Benalec had also secured more than RM 600m of land sale in the reclaimed Melaka land which will give the company another lift as well.

In my opinion, Benalec is really undervalued at the current price. Benalec will be a company to be traded or invested based on:
- RM 25 billion worth of projects in hand
- Sole player in the industry without any possible market competitor sighted in the next 5 years
- Reputable and notable solid track of record in delivering
- High profit margin in operational activities due to strong in house resouces
- Strong political ties, especially with the Johor Government
- Huge exposure to the Oil and Gas industry, especially Pengerang.
- Strong and solid management team lead by Dato Vincent Leaw
- Attractive target for both local and foreign funds due to it's market liquidity

Benalec will be looking to challenge above RM 1.30 in the short term outlook. A medium to long term outlook will position Benalec above RM2.00 as the projects start to take off in the 2H of 2014. Benalec will be the black horse of KLSE for the coming days.

Are you decided for Benalec? Good things never wait for the slow to decide. The game is yours.

Bone's short term TP: RM 1.30

Cheers and have a good day

Regards,
Bone

Monday, 2 June 2014

Ecofirs - Part 2: A Glowing Diamond

It had been quite a while since I last mentioned about Ecofirst Consolidated Berhad back then at November 2013 (Ecofirs - From Carbon to Diamond) as the company is undertaking a huge makeover and restructuring process that had been maneuvered by turnaround specialist - Dato Tiong Kwing Hee. Dato Tiong joined Ecofirst Consolidated Berhad back then at 2008 as he takes this as a challenge after he had successfully turnaround Mercury from a loss making company to a profitable company that had recently announced a 10 cents dividend back to their shareholders.

To date, after a 6 year transformational process inside Ecofirst, things had never been the same again as Ecofirst returned into the black again from a pile a mess after Dato Tiong reshuffled the whole management team and went forward to inject his personal assets into Ecofirst to help the company turnaround.

Let's have a quick glance at the current share price movement of Ecofirst Consolidated Berhad.


Ecofirst had been consolidating at the region of RM 0.30 for a period of 4 months. During the stage of consolidation, Ecofirst had saw major shareholder and CEO Dato Tiong accumulating large amount of shares. Till date, Teoh Seng Kian held 13%, Dato Teoh Seng Foo held 2.06% while Dato Tiong Kwing Hee held 5.03% of Ecofirst Consolidated Berhad shares. Ecofirst will be likely looking for a break out with huge volume in the coming days after consolidation looks saturated at RM 0.30 region.


Ecofirst's Mega Plan

Dato Tiong had finally settled the dust in Ecofirst after reviving the South City Plaza into a Edu Mall and placing back the mall into action. Currently, the mall is enjoying around 7.5% on rental yield. Dato Tiong had also managed to turned the stone around for 1Segamat Mall in Johor after the mall was left abandon during the 1997/1998 Asian Financial Crisis. With all this problem resolved, Ecofirst is now ready to put up a new front with 2 flagship project that is going to be helmed by Dato Tiong Kwing Hee and the team.

The first flagship project that Dato Tiong is going to unleash will be the latest 62 acres land acquired from Zurich in Ulu Klang for around RM 150m. This strategic piece of freehold land will be fronting MRR2 highway, while right beside the piece of land will be an approximately 20 acres land which is held by IGB. The development dubbed as "Ampang Heights" will be looking for a GDV of more than RM1b as Ecofirst will look into a possible JV with IGB in some development to bring out the ultimate synergy in the development. At RM 150m for a 62 acres of freehold land with accessibility and public infrastructure to the CBD area of KL in 10minutes, the acquisition price of the land is already undervalued as it could worth RM200m now. Ecofirst will be launching a mixed commercial development that will comprises of high end SOHO suites at a price that could be seeing flocks of buyers rushing in. The project will also feature low density bungalows which will be delivered phase by phase.

As interesting as the first flagship project, the second flagship project that Ecofirst will be undertaking will be in the heart of the CBD area of Ipoh that will be commencing soon in the late 3Q of 2014. The land which is currently worth more than RM80m had been secured by Ecofirst at only RM20m, which will put a RM60m paper gain in Ecofirst balance sheet (approx 9.2 cents per share). This flagship development by Ecofirst will also highlight a new era for Ecofirst as it could be sold off at a rapid pace considering the cheaper entry cost of land at a steep huge discount. Ecofirst had successful delivered Taipan Commercial Center in Ipoh, and this coming up project that carries around RM350m of GDV will be seeing it selling like hotcakes soon.


With more than GDV of RM 1.3b worth of project that is going to be rolled out, Ecofirst will be going to be a very interesting company to be looked upon into. After seeing Dato Tiong's ability in reviving Ecofirst from the slump, the public confidence in Dato Tiong will be on a very solid note. While the above had been already good, all this had yet to factored in the 1000 acre of agricultural land in Johor that will be used for organic Gaharu plantation which could be worth a stunning RM2b once fully planted and ready to harvest.


In my opinion, Ecofirst will be definitely a good company to be invested in after seeing so much positive changes in the management team and the company had been putting on convincing figures again. With Dato Tiong spearheading the company, I believe Ecofirst will continue to bring more excitement and value to the shareholders. Ecofirst prospectus will be exciting based on
- Ulu Klang 62 acre flagship project dubbed "Ampang Heights" worth more than RM 1b in GDV and a possible JV with IGB
- Ipoh project with approx RM350m GDV that will be priced 25% cheaper than market ongoing projects
- Agricultural research and development in Gaharu plantation that will be looking for a RM2b worth plantation
- Acquisition of Ipoh Land which is below market value, putting approx 9 cents gain per share



A short term outlook will see Ecofirst challenging RM 0.35, while a longer term outlook will see Ecofirst possible setting down at RM 0.50 when parts and parcel started to put into their respective places.

Are you decided for this venture? Don't be too late.

Bone's short term TP: RM 0.35

Cheers and have a nice day
Regards,
Bone