Thursday, 24 July 2014

LIONFIB - A Dragon's Awakening

The market had been recently bogged down with airlines fatal accident. Just not long after the shot down of MH17, another Taiwanese local flight had to fight against the rough weather and succumbed on an emergency landing, putting up more numbers of airlines casualties for the year 2014. However, the overall outlook for the market had been trying to remain on a strong outlook as global leader are marching towards the same direction of encouraging an economy recovery by putting up incentives from a loose monetary policy with a believe on the continuation of the quantitative easing.

While the global outlook had remained strong although with minor hiccups in some region, our local KLSE market had continue to remain a bullish outlook in several sector after the government had plans to continue to boost the country infrastructure and public amenities. Wawasan 2020, which is just 5.5 years away, will be seeing more and more complex mega infrastructure being laid out, with prime focus in the Klang Valley, Penang and then Johor as a major oil and gas hub. The recent talks had been the approval of LRT 3 that will be increasing the coverage in PJ area, further upgrading the construction sector which had been bullish after a series of KVMRT Line 1, Line 2, Line 3 and highways jobs ranging from WCE, EKVE, SUKE, DASH, Kidex and so on.

Following on the bullish construction outlook, we believe that the building and construction material supplier in Malaysia will be looking to see an increase revenue. While there are quite a number of building and construction material supplier, one of them that had caught my attention is Lion Forest Industry Berhad (LIONFIB - 8486)

Let's have a quick look at LIONFIB recent price chart.
LIONFIB had been trading at a low range of volume for the past 2 years with volume hardly coming more than 500,000 of shares exchanging hand in a single day. However, LIONFIB had been seeing more interest as of lately, suggesting that a fresh flow of volume will be coming to visit the counter soon. LIONFIB will be looking to see a larger break out on it's volume after it had been trading at a seemingly super grossly undervalued price for it's assets in hand, and almost a negligible debts in the company.


LIONFIB - Is it just too grossly undervalue

Lion Forest Industry Berhad is primarily involves in
- Building and construction material supplier ranging from steel, cement, tiles, bricks and roofing.
- Automotive spare parts, lubricant and petroleum products.
- Provision of transportation and forwarding services.

LIONFIB can be considered as the best amongst all the other listed entity of Lion Groups. While most of the Lion's group had suffered largely due to the Asian Financial Crisis which had brought a lot of company down, LIONFIB is 1 of the company that had weathered better than the other groups and had not entered into special attention status (PN1, PN17 etc).

A large portion of revenue that LIONFIB is having is mainly from the steel trade. However, 2013 had been a challenging year for most of the Steel player in Malaysia due to the dumping of steels from China. But with more huge mega infrastructure in the line up in Malaysia, the steel industry will be looking to see a better turn around soon.

While LIONFIB had been recording a lower revenue for 3Q FYE 2014, the company is liken to just another sleeping dragon that will wake up with a mighty roar in the coming days.

LIONFIB had been trading at a very grossly undervalue price. At RM 1.04, LIONFIB is trading at an incredibly huge stunning discount of 80% to it's NTA of RM 5.32. To put it sweeter, LIONFIB is also sitting at a huge cash pile of approximately RM 240m, translating to approximately RM 1.03 of cash worth per share while LIONFIB do not have any significant debts at the time being, putting the company in a very strong foothold.

To add up the sweetener, most of the properties that is sitting at LIONFIB had not been revalued to it's recent valuation, with the longest being from 1991.

As of the annual report 2013, the prized asset that LIONFIB is sitting on will be the 2.02 hectare (which is 217432 square feet) of freehold industrial land at Persiaran Jubli Perak. The latest pricing for the land around that area will be around RM 200 to RM 230 per square feet. Should the land be revalued at a skeptical price of RM 215 per square feet, the piece of land will be seeing a RM35million gain, which is bringing another RM 0.20 in value for each of the shares in LIONFIB.

Just based on the cash and revaluation reserved that LIONFIB is sitting on, LIONFIB is already worth RM 1.23 per share (Outstanding share as of now is 231,571,732 shares).


Coming up outlook
Malaysia will be seeing a bullish robust growth in the construction sector which is mainly fueled up by mega infrastructure project from the government, and the bullish properties construction from the developer. The construction sector will be looking to be fully booked until the at least 2018, putting a bright prospect for the building and construction material supplier in the market. Due to the large exposure of LIONFIB in the industry, covering steel, tiles, cement and roofing, LIONFIB will be looking to see a better outlook in the 2H of 2014 and 2015.


LIONFIB will be a good company to be invested into based on
- Strong fundamental backing of the company which is in net cash position, and negligible debts.
- Cash worth of RM 1.03 per share
- Prized asset at Persiaran Jubli Perak which is worth RM 46million in current valuation, an appreciation of RM35 million from the last valuation at 1991.
- LIONFIB being "The Best Lion" amongst all the other lion packs.
- Huge exposure to the bullish building and construction sector for the coming years.
- Trading at a incredible huge discount of 80% from it's current NTA of RM 5.32. Should we factor the latest valuation of all the properties, LIONFIB could be looking at a RNAV of RM 5.55.


I believe LIONFIB will be a looking to challenge above RM 1.15 in a short term outlook. A longer term outlook will put LIONFIB trading above RM 1.50, which is still more than 70% discount from it's NTA of RM 5.32.

Game in or out? You decide.
Bone's short term TP : RM 1.30

Cheers and happy trading

Regards,
Bone

Tuesday, 22 July 2014

EURO - On A Dragon Roar

The market had been reeling in a mixed emotion as of lately, with a bull that had been charging for quite sometime, and a bear that had been putting up guerrillas attack on the market on and off. The recent shot down of MH17 had added much anxiety on the market after the Ukraine Russia standoff had started to attract international attention that might result see them interfering to solve the tension before getting more innocent civilians lives. However, the US market is still hanging above 17000, a critical support level to show that the bullish ball is still in game. While market is always full of surprises, the local KLSE market hottest talk had been on MAS which had been bogged down from financial blues, MH370 and now, MH17.

The recent equity run up had featured a strong rise in Penang's property sector. This sector had been seeing increasing coverage, with E&O leading the spot light. Penang property is set to see their largest GDV in the coming days, with STP 2 alone accounting more than RM 25b in GDV.






The recent strong rally display by Tambun and E&O had been a strong indicator on the strong demand for Penang's prime land.


While both Tambun and E&O might be looking near to be fully valued, another huge coming up potential that will definitely blow your mind away will be - EURO 7208.

Let's have a quick look at the recent price of EURO.
Euro had been consolidating at the range of RM 0.45 for the past 3 months. The consolidation had saw saturation in it's stage, hence looking to see a series of fresh volume to bring the share price higher above RM 0.50 in the coming days. EURO will be looking to tap strongly into the uncharted territory above RM 0.50, which might be seeing it testing RM 0.60 to RM 0.70 in the coming days.


EURO - Brewing with Oxley

EURO had been involved in the manufacturing and trading of office furniture in Malaysia. The Company distributes its products under the brand name of EURO. While most of the furniture maker had been seeing handsome gain, or looking set to gain big in the recover of economy in the West, this had not left Euro out of the pie.
EURO had been able to see a growing revenue for the 1Q of FYE 2014 after raking in more than RM30m, putting the company financial into a good launch for the year 2014. The coming up quarter will be likely to see a strong growth in sales which is likely to see sales penetrate above RM 40m for 2Q 2014, possibly putting up a 2 cents EPS.

While EURO had been looking set to see their financial turning back into the black for FYE 2014, EURO currently had been trading at a 38% discount from it's NTA of RM 0.83. However, EURO RNAV might be looking at anything above RM 1.00 should the latest agricultural land be converted into a mixed residential and commercial development land.


While a lot of company had been diversifying into property development, this had not been a shy move for EURO as well. In fact, EURO will be going into the property market with the loudest bang they can.

The Deafening Catalyst

2 years back, Beverly Heights Properties Sdn Bhd had bought 30 acres of freehold land at the northeast side of Penang, which includes 19 acres of land in the Pepper Estate. The Pepper Estate is a very strategic piece of land that is highly sought after due to it's proximity to prime location.

Currently, the land value for area near Tanjung Bungah and Tanjung Tokong had been ranging from RM 500 to RM 1000 per square feet after the reclamation work at STP1 had set a new benchmark in the land at the northeast of Penang.
30 acre of land, which is 1,306,800 square feet, putting a price tag of RM 800 per sq ft will be ballooning to RM 1.045 billion worth of land value. Now, the question is how does EURO related itself to Beverly Heights Properties Sdn Bhd?

In 2013, Oxley Star Sdn Bhd, a wholly owned subsidiary of Oxley Holdings Limited had entered in a joint venture agreement with Beverly Heights Properties Sdn Bhd to develop the piece of land, which will consist of multi billions worth of high end residential and commercial units. Given the hot demand and strategic area at Pepper Estate, the project will be seeing a big number of purchaser, especially foreigners.

However, the big development had been lacking a listing market entity, which had put a big question mark on which listed entity will be slated to benefit from this huge project.

Let's have a quick look between the relationship of Oxley and EURO


The relationship between EURO and Oxley is further highlighted on their movement in share price dated back to November 2013, where buying interest had appear at the same time frame. Furthermore, both owner of Beverly Heights Properties Sdn Bhd, Dato Tong Yun Mong and Dato Choong Yuen Keong had been on a buying spree on EURO shares. Till date, Dato Choong Yuen Keong command 16,910,000 shares, while Dato Tong Yun Mong is controlling, 8,500,000 shares, both totaling more than 31% of the company shares.

Shall Beverly Height Properties Sdn Bhd be injected into EURO, at the current outstanding shares of 81 million units, EURO might be looking to worth RM 12 per share based on the land value that is worth more than RM 1 billion.


EURO will be a very attractive company to be look into in the coming term and long term outlook. EURO attractiveness is highlighted in:
- Current business improvement with increase revenue chalked at 1Q 2014, and growing EPS
- Trading at almost 50% discount based on RNAV of more than RM 1.00, and 38% discount based on NTA of RM 0.83
- EURO being the closest listed entity to be benefited from the huge development in northeast Penang after bearing common shareholder in Beverly Heights Properties Sdn Bhd.
- EURO highly linked close proximity with Oxley in similar share price movement, in which Oxley Star, a wholly owned subsidiary of Oxley, will be developing the Northeast corridor of Penang.
- First parcel of approximate 5 acre land is ready for development.
- EURO will be worth RM 12, based on the RM 1b land worth in Beverly Heights Properties, shall it be injected into EURO.
- Acquirement of EURO shares made by Dato Tong Yun Mong and Dato Choong Yue Keong lately, highlighting a high chance of possibility for Beverly Heights Properties to be injected into EURO.


EURO will be a possible candidate to break sky high limits in the coming days. At RM 1.00, EURO is just commanding a market capitalization of RM 81 million, which is carrying a development that is value more than RM 1billion in GDV. EURO will be on high chance to hit the limit. A short term outlook could see EURO putting it's step at RM 0.70, which a longer term outlook will suggest EURO trading above RM 1.00 once Beverly Heights Properties got injected into the company.

Are you game in or out? You decide.

Bone's short term TP: RM 0.75 (Potential limit up candidate)

Cheers and have a nice day

Regards,
Bone

Friday, 18 July 2014

EWEIN - Golden Tunnel

Ewein Berhad, a little known company to the public which is primarily involved in the business of precision sheet metal fabrication had came into the lime light after their affliction with Consortium Zenith BUCG Sdn Bhd to develop a 3.73 acre land in STP1. Ewein, under their wholly owned subsidiary, Ewein Land, will be heading a 60:40 joint venture with Zenith BUCG Sdn Bhd under Ewein Zenith Sdn Bhd, which will be developing the land which carries an estimated GDV of RM 700m to RM 1billion.

Before we look into further details, let's have a quick look at Ewein's share price.


Ewein had been trading at the range of RM 0.60 after the bonus issue. Currently, the total outstanding shares in the company stands at 210,925,192 units of shares after the bonus issue. At the current price of RM 0.60, Ewein is commanding a total market capitalization of RM 126.55 million.

Ewein had not seen any heavy traded volume for the past 3 months. However as of lately, Ewein had been seeing some interest which had saw growing volume in the recent trading days. Ewein could be looking set to penetrate past RM 0.60 in a convincing manner in the coming days, backed by the strong participation of volume.


Ewein - A Path of Golden Tunnel

To recap back on the event, Consortium Zenith BUCG Sdn Bhd is awarded with the Penang Tunneling project which is carrying a tag of RM 6.3 billion in value. Penang state government had swap a 9 acre land in STP1 to Zenith BUCG for them to finance for the FSDD (Feasibility studies & Detailed design) study for the project, which carries a land worth of RM 305million. Previously, Zenith BUCG is being promised of 110 acre from the STP2, however, due to the delay in STP2, the Penang Government had taken 9 acre from STP1 in order for Zenith BUCG to kick start on the work, which means, Zenith BUCG will be only allocated for 100 acre in STP2. Consortium Zenith BUCG Sdn Bhd is chaired by Dato Zarul Ahmad Mohd Zulkifli.

To make thing hot and interesting, Dato Zarul had been appointed as the Director of Ewein Land, putting the company in a hot roll for a series of huge mega project with the likes of sub contracting work from the Tunneling, and development of land in the STP2 after completion.

According to insider sources, the feasibility study that had conducted earlier this year had been finalized and came to a conclusion. While the study had outlined some of the core challenges that might be highlighted, the overall conclusion is in a favorable state to see the kick off for the Tunnel. The study will be looking set to be updated to the public in the coming days.

While most of the mega project that had been dished out usually involved a listed company, the only closest listed entity that will be looking set to benefit the most in the whole development will not be shy of Ewein Berhad. According to sources, Ewein Berhad will be slated to see a significant portion of contract in at least more than RM 1 billion from Zenith Construction Sdn Bhd in the whole project, which stretches from Tanjung Bungah to Teluk Bahang (12km), Lebuhraya Tun Dr Lim Chong Eu to Ayer Itam (5km), Lebuhraya Tun Dr Lim Chong Eu to Persiaran Gurney Highway (4.2km) and the final phase which is the 7.2km George Town Butterworth link, of which 6.5km is undersea tunnel.


I believe Ewein Berhad will be an interesting company to look into in the coming days based on
- RM 1billion GDV project value development above 3.73 acre in STP1 in a 60:40 joint venture with Zenith BUCG under Ewein Zenith Sdn Bhd
- Dato Zarul Ahmad Mohd Zulkifli being the same shareholder/director/chairman in Ewein Berhad, Ewein Land, Consortium Zenith BUCG Sdn Bhd, Zenith Construction Sdn Bhd.
- Ewein Berhad being the only listed company in KLSE that is in close proximity for the RM 6.3 billion road and tunneling project, putting a high chance for Ewein Berhad to secure more contracts in the long run.
- Sources indicating Ewein involvement in the tunneling project worth more than RM 1 billion in value
- Ewein currently trading at 23% discount from it's NTA of RM 0.78, of which most of the properties are not revalued. RNAV estimated at RM 0.90 or higher.
- Favorable feasibility study that will be soon seeing the kicking off of the project, putting great chances of Ewein benefiting from new project orders.


Ewein will be a good company to be traded or invested into based on it's high exposure to the RM 6.3 billion Penang Tunneling project. Currently, Ewein is already in a joint venture property development program with Zenith BUCG which is slated to be worth around RM 1b in GDV, as they are looking to sell units at around RM 1300 psf. Should Ewein get another RM 1 billion of contract from Zenith BUCG in the coming days of the road and tunnel construction, Ewein will be looking set to benefit big time.

A quick outlook will see Ewein trading above RM 0.60. While a longer term outlook might suggest Ewein trading at the range of RM 1.00.

Bone's short term TP: RM 0.75

Cheers and have a nice day

Regards,
Bone

Wednesday, 16 July 2014

Dolmite - On a Diamond Mine

The equities market is still looking good to remain in an upbeat manner, however, sentiment still remain cautious in this fragile state of stability with the Europe financial worries as well as on going tension between the US and Iraq. However, the global outlook still remain bright as most of the leaders of the world are still pushing towards a greater economy recovery and activities.

The 2H of 2014 will be possibly seeing a higher focus on building material supplier for both public infrastructure, properties and Oil & Gas industry as developers and contractor will be pushing for more orders and delivery before the GST that will be kicking in 2015, resulting in a higher cost of goods.

One of the core component in the construction segment - limestone, will be a heavily demanded ingredient in the robust outlook for the construction segment in Malaysia. Below is an example on LaFarge Malaysia Berhad on it's up trending price since January 2014, signalling the bullish demand on the cement industry.
 
While the industry will be looking to be handsomely rewarded in the coming days due to their overloaded demand, Dolomite Corporation Berhad (Dolmite 5835) had came to my great attention on their coming bright prospect that might put a diamond knot in their coming up financial year.

Let's have a quick look at Dolomite share price.
Dolomite had been consolidating at the range of RM 0.35 for more than 6 months without much significant participation of volume. A fresh surge of volume had suggested that Dolomite will be looking to tap into a higher region in the coming days after seeing a saturation below RM 0.40. Dolomite will be looking set to challenge above RM 0.50 to see itself penetrating into the uncharted territory. Dolomite might be looking to land into the RM 0.60 region.


Dolomite - A Prospect Brighter than Stars

Dolomite Corporation Berhad mainly operates in two segments
- Manufacturing, which include the manufacture and sale of hot mixes, concrete piles and ready-mixed concrete.
- Construction and property development, which include the piling and precast concrete construction contracts, earthworks, buildings and expressways contracts.

Dolomite prospectus for the 2H of 2014 will be very great which is back by the strong robust demand in the cement, fueled by the hot rolling infrastructural projects and mega mixed development around the Klang Valley. Dolomite favorable quarry location is one of the prime factor for any reason for a contractor to get supplies from them.

Dolomite quarry in Hulu Langat is one of the single largest granite quarries in Malaysia, with a span of 838 acres of land, covering bountiful of rock reserves for the Klang Valley demand.


According to internal sources, Dolomite book order for the natural resources had been seeing a stunning growth over the past 1 year, underlining the huge demand in the resources.

The huge demand in the cement had been fueling up the quarrying sector which had been displayed by other bigger players like IJM, MFCB, HapSeng and recent rising star, WZSATU.



Dolomite, compared to it's peer which had displayed huge upside, is carrying a huge amount of explosive which could possibly see it's share price sky rockets towards the ceiling once this beautiful gem is uncovered.

The Huge Catalyst

The recent quarry license issues in Selangor had been playing a role of an angel and a devil. A total of 8 quarry operator out of the 28 operator in Selangor had been facing short term operating license issues, which had saw their operation being suspended due to the non renewal of their short term operating license. This had lead to a higher demand squeeze towards those remainder operators in the Selangor state, putting them to work almost non stop over the clock to cater for the huge demand. Amongst them had saw Dolomite in the line up for the beneficial of the suspension of license for those affected 8 quarry operators.

While hot stuffs usually go rampage and overheat further, one of the substantial shareholder of Dolomite Corporation Holding is Tan Sri Abu Sahid Bin Mohamed, the recent limit up factor behind IPMUDA Berhad surge from RM 1.10 to RM 1.43 on 3rd July 2014. Tan Sri Abu Sahid is commanding a notable stake in Dolomite, with a total of 15,725,500 of shares, or 5.97% in hand. Dolomite could be on a hot rail to see it's share price on a possible route of hitting limit up as market hype had been strong on the recent action on Tan Sri Abu Sahid Bin Mohamed open market purchase on IPMUDA.


Dolomite will be a very attractive company to be traded and invested into based on their involvement in the quarry industry, and the huge demand of limestone which is fueled up by the robust demand in the mega infrastructure development in the nation.

A summary outlook for Dolomite Corporation Berhad
- Huge demand for limestone/cement back by the robust huge infrastructural and mixed residential and commercial development in Klang valley.
- Suspension of short term quarry operating license in 8 of the 28 operators in Selangor since January 2014, putting Dolomite in a bright position to see a higher order in it's product.
- Prime location of the quarry site which is situated in Hulu Langat, making them favorable for contractor to order because of lower logistic cost
- Increasing order throughout the 2H of 2014 to avoid higher cost after the implementation of GST in 2015.
- Trading at 25% discount based on the NTA of RM 0.572. However, RNAV could be hitting more than RM 2.00 after the 838 acre of quarry land in Hulu Langat can be turned into a land for development.
- Tan Sri Abu Sahid as a substantial share holder with 6% holding in Dolomite. Tan Sri Abu Sahid is the recent person behind the limit up of IPMUDA. Tan Sri Abu Sahid had been increasing his stake in Dolomite in a gradual manner as of recent.

Dolomite will be looking to challenge above RM 0.50 in the short term outlook. A strong penetration above RM 0.50 will see Dolomite moving towards the uncharted territory, which could possibly see a visit at RM 0.60, and subsequently RM 0.70 to RM 1.00.  A long term outlook will put Dolomite at RM 1.00.


Bone's short term TP: RM 0.65

Cheers and have a nice day.

Regards,
Bone

Friday, 11 July 2014

CAB - Fiery Chicken

The market is looking set to come back in a strong manner despite the current temporary correction after a bullish surge that had saw the DJIA penetrate above 17000 in the past few days. The equity market is unlikely to see slow down until the next set of economical data release, or when it is nearing the next coming quarterly result which will be subjected in the month of August.

While market had been in the correction manner, putting a right foot hold in the correct market theme might be able to see a better risk-reward return. The 2H of 2014 had saw a quick focus on Properties and Construction Building Material supplier being the focus as the market had anticipated more kick start on the huge major public infrastructure, and also to dish out some huge projects. However, one of the rising trend in the 2H 2014 will not be anyhow being shy in the Food category - Consumer Products (FMCG).

The strong rising trend in the poultry had been denying negative market sentiment. We had saw strong inflow of capital in the likes of PW (7134), LayHong (9385), QL Resources (7084), TeoSeng (7252) and CCK (7035).





The above charts had shown a strong rising trend in the poultry industry that had been challenging new high after another high.

While most of the poultry stock had been moving for quite sometime, the recent poultry that had just geared on will be CCK Consolidated Holdings Berhad (CCK - 7035) and CAB Cakaran Corporation Berhad (CAB - 7174). While both are interesting at their primary stage of booming, CAB had caught my deeper interest based on it's current undervalued position, better business diversification and a larger room for appreciation, another qualified candidate for a potential limit up target.

Let's have a quick look at CAB latest share price movement.
CAB had not saw any active trading for the past 3 years.  In fact, share price had been remaining in a greatly depressed manner for a long time. However, the latest outlook in the poultry industry had bought some light into CAB, in which CAB had saw a all time record breaking volume that had saw more than 3.5m of share exchange hand. CAB had started to challenge above an uncharted territory above RM 0.70, which might be seeing the share price locking horn at the biggest psychological barrier at RM 1.00.


CAB - A Hyper Bright Outlook
CAB, lead by group managing director Chuah Hong Pong, is primarily involved in the following:
- Integrated Poultry Farming and Processing
- Marine Product Manufacturing
- Marketing and Food Processing
- Restaurant and Franchising

Starting from 2013, CAB had been growing in a very aggressive manner. CAB continue to cater to the growing market demand which had saw them pumping their broilers output to 4million a month, underlying the increasing demand for the source of protein from the poultry meat. Resident in Malaysia are consuming an approximate of 45 million of broilers every month.

The growing population in the nation had been one of the major rising factor behind pushing for more source of protein. The influx of foreign worker in the labor forces had been another strong underlying factor to push the demand for the poultry meat further.

As of 2Q 2014, CAB had recorded a strong rising revenue for the 1H FYE 2014, an increased of 12.14% compared to the previous year. CAB will be looking to break above RM 700m in revenue for FYE 2014, marking a new chapter in their business history. CAB will be looking for a double digit growth in the 2H of 2014 which will be mainly fuel by more festival celebration ahead. CAB will be expecting to see EPS soaring as high as 3 cents for the next 2 quarters, putting a total estimation of 10 cents in EPS for FYE 2014. Should CAB hit an EPS of 10 cents, trading at a PER x10 will see CAB being valued at RM 1.00.

At the current price of RM 0.69, CAB is traded at a 38% discount from it's NTA of RM 1.11. However, due to it's diversified nature of business, and a global presence and exposure, CAB could be easily being valued more than RM 1.50, putting it trading at more than 50% slash discount.

CAB will be seeing a better cost management after streamlining it's processing to a Sungai Petani, a 120,000 sq ft facilities located on a 8.9 acre site, enabling it's economy of scale in production and processing. The processing plant started operation in the end of 2013, which will be reflecting positively in the FYE 2014 result.


To put it more interesting, Kyros Kebab, a fully owned franchise arm of CAB is another rising star in the latest fast food industry. With more coming up shopping malls in the Klang Valley, the exposure of Kyros Kebab in the presence of the public will be looking set to see another big hit in the market. The higher consumption in the fast food outlet had also been outline by BJFood lately.


Current Catalyst
The Hari Raya Celebration that is around the corner had been the rising factor for the huge demand for the poultry meat. While the current dry and hazy weather outlook had been hampering growth of the broilers, the huge demand fueled by the Hari Raya Celebration is chalking up the prices of the broilers for 3Q 2014. During the 3Q of 2013, the searing heat waves that hampers the production of broilers had been a major factor for the increase of the prices.


CAB will be another big hit in the market in the coming days ahead. CAB diversified business outlook within the industry itself had position itself on a different level compared to it's peers. CAB will be a great trading or investment vehicle based on:
- Rising strong demand on poultry meat as a cheap source of protein.
- Strong demand fueled by more festival season in 2H 2014, lower output due to hot and hazy weather, pushing the increase of the prices of broilers.
- CAB strong exposure in local and international market presence (US, Europe, UAE, India, China, Indonesia, Philippines, Brunei and Singapore)
- Streamlined processing plant in Sungai Petani at 2013 to achieve a better economy of scale which will benefit the company starting FYE 2014.
- Diversified business portfolio which involved in Food Franchising - Kyros Kebab.
- Diversified business portfolio which involved in Supermarket - Pasar Raya Jaya Gading.
- Diversified business portfolio which involved in marine meat processing.
- Price revision on the poultry meat in 2H 2014.
- Trading at 38% discount on NTA of RM 1.11.
- Estimated EPS for FYE 2014 to be at 10 cents, PER x 10, valued at RM 1.00

CAB will be very attractive in the coming days. CAB challenge above RM 0.70, while a huge strong volume might be able to send CAB to the roof of RM 1.00. A longer term outlook might be seeing CAB trading at RM 1.30.

Are you ready for the run? You decide.

Bone's short term TP: RM 0.90 (Potential Limit Up target)

Cheers and have a nice day.

Regards,
Bone

Tuesday, 8 July 2014

SAPRES - The Upward Spiral

The month of July had been a great moment for the equities market as global sentiment had been encouraging for retailer to see a worthy participation. DJIA had started to see some healthy adjustment to the recent huge climb above 17000, which might be seeing the huge foreign fund starting to visit Asia once they start to cash out the US market.

The recent market movement had saw a revisit in the properties segment. The recent hike had saw the properties index break above the 1450 mark, marking a 2nd revisit in the 2H of 2014.

While the notable counter that had saw much participation in the trading which includes E&O, EUPE, Malton, GOB, HUAYANG, KSL, MAGNA, MENANG, MRCB, MUIPROP and some others, it had came to my attention on SAPRES (Sapura Resources Berhad - 4596).

Let's have a quick look at SAPRES latest chart movement.
Sapura Resources had been consolidating for the past 6 months at the range of RM 1.00. The consolidation had seen a level of saturation and will be looking to break into a new level for a fresh level of volume. Currently, SAPRES will be looking to see better volume participation in a property trending market as it poise itself to challenge above RM 1.10 in the coming days ahead.


SAPRES primarily engaged in property investments and education. The property investments segment is engaged in the rental of investment properties. The education segment is engaged in the provision of higher education. APIIT, UCTI is amongst the few of the tertiary education hub under SAPRES arm.

SAPRES had been enjoying a steady flow of investment properties rental return due to the anchor tenant that is mostly consist of Sapura group of companies which is dealing in the energy sector. As of FYE 2014, the rental income had been attributable for 55% of the group income. SAPRES had also saw a better revenue after a better enrollment rate in their university, as well as the power cabling subsidiary which had turn the table around from a deficit of 9m to a positive of 2m in 2014.


SAPRES is current very attractive due to it's current huge discount position from it's NTA. At RM 1.07, SAPRES is current trading at a huge discount of 57% based on it's latest NTA of RM 2.49.

Based on it's current properties, SAPRES office building which is situated at Mines Resort City could be worth much more after as it's valued is last recognized at year 1999, putting a possible 30% increase to it's current valuation.

SAPRES another prime asset might not come short of the warehouse office and store that is at Jalan Tandang, Petaling Jaya, bolstering a huge area of 49,927 sq meter (537,409 sq ft / 12.33 acre). However, the only hampering effect that is suppressing the value of the land is because of it's leasehold status that is very near to expiry. However, SAPRES might be able to see a huge appreciation in it's NTA should the land leased be renewed, or to be converted back to FREEHOLD status which had been an ongoing issue within the Petaling Estate residents. SAPRES might be easily seeing at least RM 160m gain from the conversion.


Current Catalyst
SAPRES had finally got ready to inch the Joint Venture with KLCC Holdings Sdn Bhd to develop a plot of land in front of the current KLCC to cater for more office spaces and a retail podium. This will be one of the maiden flagship project that SAPRES will going to undertake. SAPRES will be managing a total of 70% of net letable area.

While the joint venture is huge, SAPRES might be going to undertake a corporate exercise to raise fund in order to fund for the scale of the project.


 SAPRES will be an interesting company to be invested in based on:
- Strong director background which is involved in energy division.
- Current huge discount position of 57% to it's NTA of RM 2.49.
- All properties carrying a tag price which is before year 2000.
- No. 10, Jalan Tandung Warehouse/Office land which could be worth RM 150m once lease renewed or converted to be freehold.
- Strong growing education market, underlying a stronger revenue contribution in FYE 2014.
- Cabling business had come back into the black with net proft of approx 2m compared to previous losses of 9m.
- Maiden JV project that is to be kick start in the 2H of 2014 with KLCC Holdings Sdn Bhd.
- Current properties revisit market trend in the 2H of 2014.

SAPRES will be looking to challenge above RM 1.10 in the coming days.  A short term outlook might be able to see SAPRES trading at the range of RM 1.20, while a longer tenure outlook will see SAPRES trading at RM 1,50.

Bone's short term TP: RM 1.25

Cheers and have a nice day

Regards,
Bone

Monday, 7 July 2014

LONBISC - The Explosive Biscuit

The equity market had continued to challenge forward in a very strong manner, lead by the DJIA bullish index which had set a spot at 17068 on last Friday closing. The latest bullish employment data had continue to encourage more economical activities after the Fed's commitment in the loose monetary policy to keep the market growing. This year had saw new emerging big capex spender which comes from Technology Firm, which had saw Apple, Google and Samsung spending big capex on R&D, advertisement and promotion in the smart phone booming era.

While the market had been in a hot trail for technology products, it had came to my attention on several cheap and undervalued consumer goods that in the FMCG sector which could be deliver another big hit in the market - LONBISC (London Biscuits Berhad - 7126)

Let's have a quick look at LONBISC latest price movement.

LONBISC had not saw any active trading 2 years back although the company had been in the green for a 12 consecutive years since their listing of IPO. However, the recent movement in LONBISC had been encouraging after LONBISC had successfully broke above RM 0.75 and put a stronger foothold at the range of RM 0.85 to RM 0.90 for the past 3 months. The 3 months consolidation at the range had suggested a saturation and will be looking to challenge above the uncharted area once breaking above RM 0.90 in a convincing manner with substantial participation in the volume.


LONBISC - A Steady Growing Market

London Biscuits Berhad is a Malaysia-based company engaged in manufacturing and trading of confectionery and other related foodstuffs. The Company offers packed and ready to eat products, which can be categorize into corn based snacks and cake products, such as Swiss rolls, pie cakes and layer cakes. In addition, it also manufactures range assorted chocolate confectionery, including chocolate-coated peanuts and biscuits, pancake cookies, jelly and puddings, wafer sticks, cup sticks and snack noodles.

LONBISC will continue to see a bullish outlook in both the local and overseas market as it is able to cater to the Halal market. The growing population in the world, and the longer longevity in human due to better health care had been the main pushing factor in the global demand for food. LONBISC had saw a drastic increase in it's revenue that had saw an approximate of RM 80m positive increase in 3Q 2014 compared to 3Q FYE 2013, underlying the strong rising demand for food.


LONBISC had invested a lot in their machinery 4 years back to boost output and production which will be likely to reap reward in FYE 2014. While most of the cost of business activities had risen sharply, LONBISC ability to stay in the green side had been rather spectacular. At the current price of RM 0.86, LONBISC is actually trading at a reasonably huge discount of 58%.

According to internal sources, LONBISC will seeing a very strong 4Q FYE 2014 result, which may see the FYE 2014 revenue breaching RM 400m as LONBISC continue to expand locally and internationally in a very aggressive manner. The coming up HARI RAYA FESTIVAL SEASON will also looking set to see a surge in LONBISC order book.


LONBISC - A Potential Privatization

As of lately, Dato Sri Liew Yew Chung had on 2 different occasion, exercised it's ESOS totaling 4.266 million shares at the price of RM 1.00 per share. While the exercise of ESOS had put many investor in a dazzle when LONBISC share price is only trading at the range of RM 0.90, the exercise will see Dato Sri Liew Yew Chung controlling a total of 28.07% in the company, which is only short of a 5% to trigger a MGO and take over the company. At the current price of RM 0.86, LONBISC market capitalization is only RM 140.658 million, putting it an attractive target for take over as the company had been in the green for the past 12 consecutive years, catering to a worldwide market, and had a NTA of RM 2.05 (A company worth RM335.291 million based on 163,556,789 shares)

Dato Sri Liew Lew Chung will only need to fork out RM 153 million to offer for RM 1.30 for the remaining shares in the market not owned by him to put this golden laying goose into his pocket. LONBISC had a strong properties portfolio which consist of mostly freehold land in strategic areas.


I believe that LONBISC will be an attractive target for both investor and trader in the coming days ahead. LONBISC will be a good company to be focused in based on:
- Strong business fundamental which in involving in the FMCG industry.
- LONBISC solid business display which see the company in the green for 12 consecutive years.
- Global population growth, accelerates the demand of food.
- LONBISC market presence in both local and international market.
- LONBISC being able to cater to the HALAL market, which is 70% of Malaysia population.
- Potential privatization by Dato Sri Liew Yew Chung.
- Trading at a slash discount of 58% based on NTA of RM 2.05, which consist of 85% freehold properties asset.
- Strong growing revenue and a potential revenue break out above RM400m for FYE 2014
- Hari Raya Festival Season to boost demand.

LONBISC will be a very attractive below the price of RM 0.90. LONBISC will be looking to test RM 0.90 in the coming days, and a convincing break out above RM 0.90 will see LONBISC break into the uncharted territory as it will possibly head towards the psychological barrier of RM 1.00. A long term outlook will put LONBISC trading at RM 1.50, based on it's growing revenue, strong NTA.

Had you decided to detonate this biscuit? You decide.

Bone's short term TP: RM 1.00

Cheers and have a nice day

Regards,
Bone

Friday, 4 July 2014

SYSCORP - Rising Sea Dragon

The global market equity outlook had returned into a bullish manner as the DJIA took the lead and challenge above the 17000 mark in a strong note, putting the bear back into the den. The US employment figure continue to improve in a drastic manner, indicating a healthy come back in the economy cycle. The KLCI had also been trying to challenge the 1900 mark after consolidating at the range of 1870 for around 3 months.

As the equity market starts to heat up, the Sarawak themed play which is fueled by the SCORE (Sarawak Corridor of Renewable Energy) had been putting a lot of Sarawak Company into a bullish ram. We had the looks of Naim, SCABLE, CMSB and PMETAL which had been soaring in a powerful manner. As interesting as all the above company, and as the last had always been kept for the last, SYSCORP had caught my very attention as it had yet to be noticed in a full scale whilst is prospectus is huge given the outlook of SCORE.

Let's have a quick look on SYSCORP latest price movement


Syscorp had been consolidating for the past 5 months without any extraordinary huge participating volume. Syscorp had see saturation in the level of RM 0.50 and will soon be exploring into a new region in the coming days as SYSCORP will be charging into the uncharted zone above RM 0.55. A quick outlook will be seeing SYSCORP challenging a psychological barrier of RM 0.60 in a huge volume.


SYSCORP - Yet another big SCORER

SYSCORP, or known as Shin Yang Shipping Corporation Berhad, engaged in the provision of domestic and international shipping services, ship repair and fabrication of metal structures. The Company operates in three segments:
- Shipbuilding, ship repair and fabrication of metal structures.
- Domestic and regional shipping segment, covering regional routes within Malaysia and ASEAN
- International shipping segment, which carries out shipping business in United Arab Emirates and international routes to Japan, Korea and China.

Currently, SYSCORP had a total number of 301 vessels with a Gross Registered Tonnage (GRT) of 469874 tonnage which is trading around the Asian region in various sizes includes tugboats, dumb barges, hatch covered barges, coastal cargo vessels, and supply vessels.


Whilst the shipping industry had been facing huge challenges on low cargo rates, SYSCORP had been able to maintain itself by putting in focus in ship building, repairing and maintenance work.

SYSCORP revenue had saw a huge increase after securing more new ship orders, ship repairing and maintenance work. According to reliable internal sources, SYSCORP revenue for FYE 2014 is slated to breach above the RM 1 billion mark, as it possibly put up to around RM 1.2 billion in revenue, marking the return of SYSCORP into the black.

As of recent, SYSCORP had venture into the transportation of iron ore for mines in Indonesia. Shipment of the mineral will commence in the 2H of 2014 which will be contributing positively towards the financial of SYSCORP.

SYSCORP involvement in the oil and gas industry will be the major face lift for the company. The recent contract back then at 2013 is a RM70 million contract from Dayang for the construction of an offshore accommodation work boat. The robust oil and gas industry outlook in Malaysia for 2014 and 2015 will be seeing more contract dishing out to cater for the demand in the industry. With Petronas commitment to spend up the RM 300 billion capex (Currently still around RM 200b remaining) from 2011 to 2015, oil and gas industry outlook in Malaysia will continue to be bullish for the next 3 to 5 years. SYSCORP is looking set to more order from the oil and gas industry in the 2H 2014 for it's ship building yard in Miri, Kuala Baram and Bintulu.

Beside the bullish oil and gas industry, the Sarawak SCORE program will also see SYSCORP being one of the major beneficial as they will be hugely benefit from the busy in and out transportation of raw material from East to West Malaysia. We continue to believe that the SCORE program that includes sea port building will continue to provide a positive outlook for SYSCORP.


Upcoming Catalyst
While the shipping rates had been low, SYSCORP focus in ship building, repair and maintenance had been a contributing factor for the revenue. SYSCORP will be relocating resources and focus in the ship building, repair and maintenance sector. SYSCORP is also being rumored to receive a few ship building contract worth more than RM 100m from a oil and gas company for a high end vessel.




I believe SYSCORP will be a good potential company to invest
- Direct and indirect benefits from multi-billion SCORE program
- Involvement in the robust oil and gas industry.
- Involvement in ship building, repair and maintenance. Ship repairs had been a growing demand, which underline SYSCORP major revenue.
- Growing palm oil/timber out put in Sarawak and Sabah 
- Trading at a discount of 44% from it's NTA of RM 0.93
- Award of ship building contract that is slated for 2H 2014
- Diversified business with Foreign exposure in UAE in transportation of building material.


SYSCORP will be a good investment vehicle after the company focus in the ship building and repair and maintenance services, which is the main contributing bottom line in the revenue. In the coming days, SYSCORP will embark more into the oil and gas sector, putting him as another rising star like Coastal Contracts. SYSCORP will be seeing to challenge above RM 0.60 in the short term outlook, while a longer tenure will suggest SYSCORP trading at RM 1.00 should SYSCORP repackage himself into a visible oil and gas player.

Bone's short term TP: RM 0.65

Cheers and have a nice days

Regards,
Bone

Thursday, 3 July 2014

IPMUDA - The Royal Flush

The US market continue to challenge higher alongside with the European market as economy data continue to exceed expectation. Despite the rumored World Cup downtrend, the equities market had seen with more participation lately. The current run up would suggest a possible revisit on the property counters that had been in played 2 to 3 months back.

While a lot of investor and trader might see Malaysian stock as being too expensive after hitting a high after another high, quite a number of investor are actually still poaching for potential big hits that had a bigger room for appreciation. With this in line, it had came to my attention on a potential "LIMIT UP" candidate - IPMUDA BHD (Ipmuda - 5673)

Let's have a quick look at IPMUDA chart.


IPMUDA had not seen any active trading for the past 2 years. The daily transacted volume for IPMUDA had not breach 300,000 in a single day, however, not until the recent movement that had saw IPMUDA seeing more volume participating. IPMUDA had previously challenge RM 1.20, and the coming day will be seeing RM 1.20 being taken down with a huge volume.


IPMUDA - When Sky Is The Limit
IPMUDA primary business activities is engaged in trading and distribution of building materials. It is involved as distributor and supplier of construction and finishing building materials, heavy steel products, architectural hardware, home improvement materials and other construction related products. In addition, the Company also engaged in leasing of properties, development of residential and commercial properties, providing fluid engineering systems and maintenance works, manufacturing and supplying of kitchen cabinet and wardrobe systems.

The supplying of building material and construction will continue to remain bullish throughout the year of 2014 and 2015. With more big government infrastructure project that is slated to be announced in the 2H of 2014, and a row of sky scrapper and condominiums to be delivered, the demand for the building material had been in a rising trend, resulting in building material getting more expensive. Company that is involved in supplying of building material, cement, tiling, iron cast bars will continue to see a better performance in their upcoming quarterly result.


IPMUDA 1Q FYE 2014 had saw a drastic increase in the revenue as earning per share leap jump into 3.17 cents per quarter at the back of a huge NTA of RM 2.13. IPMUDA will be slated to see a huge jump in the revenue for the coming quarters as the later had secured a larger construction supplying contract that might be seeing revenue hitting as high as RM180m for 2Q 2014, estimating a possible 4 to 5 cents EPS for 2Q 2014. Internal sources are estimating that IPMUDA will be delivering an astounding FYE 2014 which might be looking to see a leap from jump in the revenue. Based on sources, IPMUDA might be slated to see a more than 25 cents EPS that will be coming stronger order and asset disposal. At the current price of RM 1.10, IPMUDA is trading at a discount of 48% on it's NTA of RM 2.13, a hugely undervalued and discounted market price.



IPMUDA Prime Catalyst
IPMUDA prime catalyst will not come short of it's current 2 heaviest prized asset.




The Jalan Mayang freehold land which is approximately 15,000 square feet is worth around RM 2,500 to RM 2,700 per square feet. Put an average of RM 2,600 psf for a 15,000 sq feet land will be amounting to RM 39 million for this piece of land, which is a RM 19million increase or RM 0.262 profit per share (based on 72,469,500 shares)


As hot as the land in Jalan Mayang, the 132,306 sq feet land at Jalan Bagan Dalam is at close proximity to the Penang Sentral Integrated Transport Hub multi billion project that is endorsed by Chief Minister Lim Guan Eng. Penang Sentral Integrated Transport Hub will be looking at a GDV of RM 2 billion, which is a big catalyst for the area around it.

The recent back to back open market purchase of shares by Wong KiChin and Tan Sri Abu Sahid bin Mohammed in a huge manner had also sparked major attention on the company's upcoming development. IPMUDA had been rumored that the Jalan Mayang land had been disposed to unlock the shareholder value in the company.

IPMUDA shares will easily be carrying a true NTA of above RM 3.00 after reevaluation of it's major assets, further suggesting that the current price is overly cheap. Should we peg IPMUDA current price of RM 1.10 against NTA of RM3.00, IPMUDA is trading at a slash discount of 63%.


I believe IPMUDA will be a very interesting company to be looked at, given it's solid fundamental of the company, and the strong asset position that the company is holding to. IPMUDA will be a fine investment and trading target based on
- Huge growing demand in the construction supplying sector.
- Strong growing revenue
- Possible of unlocking part of shareholder value through disposal of Jalan Mayang Freehold Land
- Trading at 48% discount at the NTA of RM 2.13
- Strong recent buy back from directors
- Solid management team and investment decision team.
- Jalan Bagan Dalam freehold land which is in close proximity with the more than RM2 billion Penang Sentral Integrated Transportation Hub development that will proper the land price around the area further.

IPMUDA will be looking to challenge above RM 1.30 in the short term. A longer term outlook will place IPMUDA at RM 1.80, given it's strong fundamental and it's strong in demand prized asset. A potential limit up target.

Are you game in or out? Make your decision before the limit hits.

Bone's short term target: RM 1.40

Cheers and happy trading.

Tuesday, 1 July 2014

Pinepac - A Prime Transformer

I believe that everyone that had been putting up a high expectation from the latest Transformer 4 : Age of Extinction might had felt a little bit of let down due to it's storyline. However, for those that are expecting high level of non stop action with huge explosion after explosion, Transformer might not be a let down as it can cater to your explosive hunger on it's almost 3 hours long movie.

While Transformer 4 is going hot at the cinema gallery, Pinehill Pacific Berhad (Pinepac -1902) might be another big hit in the KLSE.

Let's have a quick brief on the latest price movement of Pinepac.

Pinepac had not seen any activeness in it's trading, however, not until the recent movement that had saw Pinepac pacing higher after a 8mth long consolidation at the range of RM 0.35 to RM 0.40. Pinepac had tapped into the uncharted territory, and will be looking to test on the psychological barrier of RM 0.50 in the coming days with notable volume.


Pinepac is formerly known as Multi Vest Resources Berhad. Pinepac primarily involves in the plantation segment, which is in the business of cultivation of oil palm and processing of palm oil. It offers crude palm oil, palm kernel and other oil palm products for sale. Most of the plantation land is situated at Indonesia and Perak.

The recent El-Nino warning that had been issued by global climate agencies had warned about the possibility of the drought developing in the South East Asia region that could possibly see a dry spell hitting the countries from 2H of 2014 for a possible period of 6 months, a worrying sign that will see an escalation in food prices as the supplies dwindle down due to the lower production as affected by the lower amount of rain fall. As of today, the CPO had regained back it's pace and started to challenge above the 2500 mark. CPO had been predicted to soar above RM 3000 per tonne like what happened last round, which is a bullish indicator for plantation company.

Pinepac, currently trading at a 57% discount towards it's NTA of RM 1.00 had been in a series of rough waters as earning had been inconsistent. However, the stronger uptrend in the CPO might be able to see Pinepac putting a brave front to challenge ahead of RM 0.50 in the coming days.


Pinepac - The wild card

One of the notable fact between Pinepac and ABN (Asian Broadcasting Network) is a common shareholder by the name of Tan Sri Datuk K.K Eswaran (known as Tan Sri Ketheesawaran).
While the licensing for the Pay-TV space had been a very lengthy and hard process to obtain, it hadn't come too hard for ABN (previously known as Nilaimas Corporation Sdn Bhd) to obtain the license to for the broadcasting under politically well connected Tan Sri Datuk K.K Eswaran.

To date, ABNxcess, which is powered by cable network will be competing head to head with current market leader Astro that is offering satellite network. The ultimate difference between a cable powered TV is that it will not be affected by bad weather condition.

Till date, ABN rolled out had been serving approx 100,000 customer, and will be seeking to expand in a aggressive manner in the coming days. While arranging for an IPO might be a little bit of lengthy process for ABN, a outright RTO on Pinepac to get ABN listed into the public market to source for private placement and more working capital might be one of the best solution that ABN will be considering. ABN had previously secure RM500m of working capital from Bank Pembangunan Malaysia. Tan Sri Datuk K.K Eswaran will be looking at RM 2.5 billion for a start that will be in the form of equities and loan.

Given that the industry is capital intensive, ABN will be looking to enlarge their working capital in order to expand their coverage and secure more customer. Currently, ABN will focus to build their market base in the KL and Johor region. In the coming days, ABN will be tapping into the East Malaysia which is another golden mine after satellite TV failed to provide up to expectation.


Conclusion
I believe that Pinepac will be an interesting counter moving forward. With the current uptrend of CPO prices and palm kernel, Pinepac will be expecting to record a high margin on it's production. However, the prime transformer for Pinepac might be a potential RTO on the company to pave the way for ABN to be listed into the KLSE. To heat up on the game, it had been informed that the internal sources had also considered the option on this entry as being the fastest manner to secure the funding needed for ABN to expand further without delay.

ABN will be a good buy based on:
- Rising CPO prices
- Trading at a 57% discount on the NTA of RM 1.00
- Major shareholder, Tan Sri Datuk K.K Eswaran, politically well connected with the prime minister family
- Pinepac being a high potential RTO target for ABN

In a short term outlook, Pinepac will be looking to challenge RM 0.50, however, a longer term outlook might place Pinepac at RM 2.00 should be it be transformed into ABN

Are you game in or out? You decide.

Bone's short term TP: RM 0.60

Cheers and have a nice day

Regards,
Bone