Monday, 30 January 2017

Wishing you a Happy CNY 2017

Although it is a little bit on the late side, but better late than never.

Wishing all reader a happy chinese new year 2017.


May the health and harmony come to you.
May the wealth and wonderful thing surround you.
May the joy and the jokes brings you laughter.
May the peace and positiveness be with you.


Albeit a challenging year ahead in the equity market, I will always try my best in hoping that I can continue to bring you some excitement in the equity market.

Finally, if you wish to give me a Chinese New Year Angpao as well, I am going to tell you that I am not going to be shy to receive it!! You can do so on the Paypal donate button on the right side of my blog page, and I hope that you will HUAT in 2017, of course, I will remember you for your Angpao deeds. Haha.

Cheers and have a nice holiday with your family, friends and relative.

Wednesday, 25 January 2017

How to "Bonescythe" into Astino

Today Astino saw some movement with improved volume after realizing that this company had been trading at a very attractive value. Actually, at the current price of RM 0.735, Astino is still deemed as undervalue based on it's earning, company fundamental and management as well as NTA.

Before I would start digging into Astino, I would like to side track you a little bit to talk about my pseudonym name - BoneScythe. Actually, quite a handful of people who come to know me in real life for the first time will always never fail to ask me this question - "Why you are called BoneScythe ?". This somehow is a very tricky question to answer for me, because I do not really know how I came towards this nickname as well. As an avid gamer since my younger days, I always use this nickname in any game I played, because I think this is a cool name. Now I am a grown up, I am using this nick in the share market as well.

Basically, Bone is - (bone / tulang / 骨), and Scythe is a kind of knife. If I am going to put it into the context of share market, that will translate into digging out information until the deepest core of the body, which is the bones. Sometimes I wonder, what a coincident with my analysis in share market, where I like to dig deep into the bones of the company.

So coming back to the topic again. Yesterday, I had talked about Astino (If Astino is not your taste, then there is nothing left for you) based on it's earnings (FA related) and chart break out (TA related). To me, these are very surface information. If I am always talking about a stock based on this kind of analysis, you can call me SkinScythe, or FatScythe, because the kind of analysis is very surface and shallow, which is akin to the Skin of your body, or slightly underneath your skin, which is the fats level. So in order to know more, we need to dig deeper into the company, such as looking at the company properties and asset, and determine their value through geographical location and make prediction on the company growth expansion.
 
As for Astino, on a surface, this company is dealing with steel related building products. But if I "BoneScythe" this company deeper into it's properties and asset, let's see what we have here.

So basically, Astino had a lot of freehold vacant land in Penang. If you do not know what is S.P.S means, it is a abbreviation for Seberang Perai Selatan. For the case of Astino, the vacant land are situated at Nibong Tebal area.

According to news reported quoted from The Star, Astino have a collective of 60 acres land bank in Nibong Tebal. In 2015, the group had identify the land bank to be utilized for industrial property development (Source - The Star 2015), and in 2016, the group is already on action stage with architecture plans being draw up (Source - The Star 2016)

Wow, 60 acres. What does 60 acres means to you ? Since most of us are very familiar with square feet, I will convert 60 acres to square feet, which is 2,613,600 square feet. A typical apartment unit of 3 room 2 bathroom is just around 850 to 1000 square feet, so we are talking more than 2600 units of those in floor area. So is this a lot ah? You do the maths la.

So in order to determine the current value, I did some search online through property sites like property guru and iProperty. So according to Property Guru, a good location residential land will be looking to sell at RM 35 per square feet.

Since Astino land are a little bit scattered around Nibong Tebal, I will assume it carrying an average of RM 45 per square feet after land conversion to industrial status. After all, it is freehold, very near to sea (ports) and the second link bridge of Penang.


So calculating back, this will mean that the collective 60 acres of vacant land in Nibong Tebal are looking at a collective value of RM 117,612,000.00. Of course, this is just an "agak-agak" value la. Now I go and add back all the book value of the "vacant land" at the Seberang Perai Selatan and Seberang Perai Tengah area, and come to a total of RM 62,306,210.00. Hmm, now this is a little bit interesting. So, there is a RM 55.3 million differential, which can be potentially contribute to the earning of Astino when revalued ? Waw, that can be a one off contribution of 20 cents to the EPS of Astino if done. (Based on 274.117 million share outstanding)


According to familiar sources, Astino is looking to use some of the land for it's own new factory in order to manufacture new building material to cater for new market. As for some other larger parcel, Astino will then develop and sell it as an industrial factory.

At the current state of the company cash and balance sheet, I think it is very appropriate for Astino to go into a corporate exercise involving right issue and free warrants for the fund raising activities. This will then not stressed the company financial too much during the current state of economy, and the company will also be able to continue dividend payment to it's shareholder while not diluting the shareholding of investor by issuing warrants.


Honestly, I think Astino is a good company. However, after projecting it's expansion and potential future movement in the corporate level, now sitting at the current price, I have no qualms. Now we are talking about Astino at the price of RM 0.74 which is
- trading below PER x 7
- NTA RM 1.14 (Price now is 35% discount)
- Revaluation reserve of RM 55.3 million (Freehold land, so value will keep increase)
- New expansion of factory, spurring potential corporate exercise

Now dear readers, with all this numbers and projection out, I have to tell you that you better not hesitate too long again. Although it might take sometime to see things rolling out 1 by 1 in the corporate level, but once it starts rolling, it will not stop by for you anymore.

Tuesday, 24 January 2017

If Astino is not your taste, then there is nothing left for you

Recently, there are a lot of my reader who are eager to see what is my next "Da Vinci Code". It is always a rewarding journey to be able to crack some market codes that could potentially comes with some handy gains, but of course, with a handy amount of risk as well.

But today, I am not going to crack mind blowing puzzle or codes with you. What I am going to introduce to you is to crack open your mind in order to look at this explicitly beautiful, full of potential, standing on solid fundamental and yet - still being in a cheap valuation.

So how cheap is cheap? If a company is valued at PER x 10 at it's full year earning, I think it is fairly valued already, and anything higher will need to be supported with a well projected growth plan in hand.

So if your attention is captured from the title onward, you will know that the company that I want to introduce to you is definitely - Astino Berhad (Astino - 7162)


So how cheap is Astino ?

We will look at the FYE 2016 result to do a benchmark,

As you can see, despite the volatile business market, Astino had managed to garner an earning of 11.08 cents from business activities (Not those revalue land and recognize as earning).

As of today, the closing price of RM 0.72 is reflecting that Astino is only trading at a PER of x 6.5 !!! Yes, you did not get me wrong, it is at PER of x 6.5 !!! 3-4 years ago, there are plenty of companies that can be easily be trading at this valuation, but this had not been the case recently because most of the company already saw much capital appreciation prior to the 2014 bull market. I really don't know if you can find another company with such solid fundamental trading at this kind of attractive PE or not.

Based on the current state of global economy which is flushed with cash from massive quantitative easing and bond buying activities, Astino can be easily valued with PER x 10, which ultimately gives them a good valuation at RM 1.10, based on FYE 2016 results.

As I had mentioned before on Astino on 19th July 2016 (Astino - Blue Ocean Steel Player), it was trading at RM 0.71 then. Now that Astino fundamental is still intact, debt has seen reduction, and Astino is back to the lucratively attractive price yet again in 2017.


According to the technical chart, Astino indeed saw a price break out from the downtrend line, which is highlighted in red. Prior before the break out, Astino had a healthy consolidation at the range of RM 0.70.

To add on, there had been multiple share buy back into treasury last year which is above the price of RM 0.75, and even the major shareholder Mr Ng Back Teng proceeded into buying some shares from the open market at the price of RM 0.79 in 2016.

Now, the top management had decided to reward shareholder with 1 cents dividend as well, which is a bonus to say, as the management had earlier wanted to reinvest into the expansion plan of the company.

So, if you still do not know what is the businesses of Astino, I would recommend you to better buck up and read it up before it goes out of your grasp again. Here are some of the references that you can refer to
1. Astino to market agro-house products in Vietnam and Indonesia
2. Astino to gain from housing revival plans
3. Astino Home Page

Still not convinced about Astino ?

I know you will definitely have some handbrakes and doubts reserved in your decision.

If that is so, I will need to use some of my analytical skills to analyze and share with you what is the next game changer of Astino in my next chapter. Next chapter again!? Yeah, because that is another tons of information for you to digest.

For this chapter, I want you to open up your mind on this counter that is trading at PER x 6.5. Until your mind is totally opened up, then only you can receive the next batch of even interesting development from Astino, which had to do with it's strategic land banks, where business man will definitely drool over it.

So again, you have to make your decision again. With or without you, Astino will going to flourish.

Tuesday, 17 January 2017

West Coast Silk Road

Well, if you guys had been following me on my previous blog post on Silk Highway, today I am going to share with you regarding my analysis on the biggest hot question in regards to the disposal of Silk Highway.

As every disposal cannot be completed without a buyer, so who is the highest potential buyer for Silk Highway in 2017 ?

**Jeng Jeng Jeng**

Since the completion of Silk Highway, it had never been profitable. One of the reason is due to the slower than expected vehicle volume growth.
As you can see, the highway caters around places that are considered as "suburbs", and the toll are erected further away from the city center. So basically, quite a number of motorist are using portion of this highway without needing to pay toll. For example, many are using portion of the highway to commute from Sungai Long / Mahkota Cheras to KL for free, and they pay toll at Besraya Toll Plaza (which is owned by IJM).

Basically, this highway can be turnaround by building new links with existing major highway, or newly constructed highway and erecting tolls at better location. But, Silk Holding is definitely not in the position to do this anymore, as their heavily indebted balance sheet couple with negative cash flow does not allow them to do so. If you would ask any experience business man, the best option available for Silk is to dispose off the highway in order to cut the negative cash flow, and reap a one off profit from the investment.

To sum it, Silk Holding Berhad need to find a buyer that owned some highways, and is financially capable of upgrading the highway as well, which left them with not much option. If you ask me, I think the only viable option is only IJM.

But why IJM and Silk mutually aborted the deal in November 2014 ? I think one of the major reason could be due to
1. dilution in earning from fund raising activities in asset acquisition
2. create a drag in net profit as asset is still in a negative cash flow position

Hence putting this unproven egg into the basket could potentially ruin the whole basket of goods, and it's share price will definitely get punished severely for that, which I believe is not what most shareholder want this to happen.

So another better option will be for Silk Highway to be acquired using some new vehicle that IJM had substantial stake in. If you are familiar with the market, it would not take a long time for you to figure out that new vehicle which IJM have substantial stake is - WCE Holdings Berhad (WCEHB - 3565). According to the latest filing, IJM had a total of 26.45% stake in WCEHB.


So, what are the signs in WCEHB ?

Let's look at the price chart of WCEHB.

According to the chart, WCEHB had been pushing towards the RM 1.00 region. Meanwhile, there are also heavy accumulation at the region near to RM 1.00, and the share price had been consolidating at the range of RM 0.90.

If WCEHB wants to acquire Silk Highway, one of the best way to start is probably through a 10% private placement, which can easily raise RM 100 million based on their existing share base of 1 billion shares at a minimum price of RM 1.00 (Par value RM 1.00). If the private placement is RM 1.00, this will make sense to you why the share price of WCEHB is going up? Make sense right?

Meanwhile, I believe there will be potential investor who wants to have exposure in the West Coast Expressway, let's say some China investor ? So private placement is the best option for them to invest in a fixed pricing, and this could be a one arrow piercing two birds scenario for WCEHB.

As for Wzsatu, I believe his role is just a teaser to test the market reaction, because Wzsatu also got some substantial portion of projects in the West Coast Expressway. So, it wouldn't hurt much to do some drama lor I guess ? Haha


Anyhow, I am just sharing my analysis. The rest of it, I will let you to figure out, but 1 thing for sure, Silk Highway will definitely need to be sold off.


Monday, 16 January 2017

The Silk Road of A Highway

The Malaysian equity market had been in a bang at the opening of 2017. The FBMKLCI saw strong rebound from a lowly 1630 to a high of 1682 before retreating into 1672 in the 2nd week of Friday's closing.

If you had been following me recently, I believe that could be looking at a handsome paper gain, or even realized profits in both Gunung and Dataprep. I had been promoting heavily on both of these counters when they are sitting below certain price level which I deemed them very attractive for a strategic position. Of course, both of them had saw share prices surging upwards because proactive reader will take action immediately after knowing the potential of both companies.

In this world, people who act immediately after accessing an opportunity will reap the result. Of course, nothing is guarantee here, as the outcome can be good, can be bad - That's why they have to access it properly in a limited set of time, liken to a competition.

Now, for those who are my avid reader, you know that I like to analyze stuff that no people would go to do, and of course, I always like to share with you on my prediction and analysis like no other people do as well. That is the reason I would like to dwell in company with changes in direction, corporate exercise, take over as well as privatization, because they are always secretive, interesting and very rewarding once you are able to crack the code. Don't you too have a feel of completion after you solved a hard puzzle ?


So what is the next big puzzle that is set in for 2017 in the KLSE ?

Before I would like to show you the subject target of the puzzle, allow me to bring you back a little on some history, and what is the reason for such thing to happen in this manner.

Do you guys remember the story of Green Packet (Gpacket - 0082) on the sale of P1 which emerge as a major topic in 2012 ? News reported that TM had deny any interest in P1, leaving the public guessing around among Digi, Celcom and YTL Communication. In between the period, Gpacket share price rode up and down in a wild manner amidst speculation of different interested parties, which one of them is Digi. However, in the end, TM had emerge as the entity that had bought controlling stake in P1 in 2014, which had finally put a 3 year long puzzle to a closure.

So as you can see, when such a major asset is in the plan of disposal, it will be played around in the market for 3 years.

For this case, allow me to introduce one of the major asset that is up for disposal, and is in it's 3rd year - Silk Highway.



The news of Silk Highway emerge in the market in 28th May 2014 when IJM Corp propose to buy Silk Highway for RM 398 million. (Source - The Star IJM propose to buy Silk). This piece of news had send share price of Silk Holding Berhad flying from a lowly RM 0.35 to a high of RM 1.20 within 9 months.

However, the deal was mutually aborted in 25th November 2014 due to certain condition precedent. Among them is the bondholder wanting a piece of the accrued profit from the asset disposal. (Source - The Star IJM And Silk abort deal)

Subsequently, we saw some other parties that expressed interest. Those are parties like Wzsatu and Taliworks, however, nothing materialize between them.

Now, is 2017 going to see this go through ? So let's look into the chart.

According to technical reading, Silk had recently broke above the long term down trend line which notable volume in build up. After consolidating at an average price of RM 0.40 for more than 1 year, this could be a strong case for 2017 to see it through.


To reaffirm this, familiar sources that are very closely related to this case are looking to see an offer of more than RM 400 million this time around. The estimated price is approximately around RM 450 million. Now, this is a very lucrative offer to start with for the new year.

Now, the main question arises - Who is the potential buyer for Silk Highway this time around ?

Since this is a big chunk of analysis, I will put it to my next post to share with you which is my highest potential company that is looking for a solid offer to Silk, accompanied with references, share price movement and corporate exercise prediction.

But for now, what can you do? Of course, I don't know what is your appetite for such an event. But one thing for sure, whether you like it or not, Silk Highway will definitely be disposed off, and this will definitely create a ruckus in the market, and the people who will stand to benefit are those who took immediate action to lock in strategic position. As for now, a good question for you to consider - Do you want to be left out in this ? You know what is best for you.

Honestly, if you are to look at the share price movement of Silk, this is just the beginning of the show. In my next post, I will try to put down the figure, but for now, anything that is below RM 0.45 is a very good price to take position.


Thursday, 12 January 2017

Rooster Year to start with a Roast, But a Toast to CCK

In the coming weeks of January 2017 will be seeing the Chinese people around the world welcoming the Year of The Rooster. But, please do not consult me on astrology pertaining to the Rooster Year, because I only know how to eat a nice chicken meal at Kenny Rogers or Nandos.

This time around, although it suppose to be the year of the rooster, it seems to me that rooster in some parts of the world are being roasted for the wrong reason this year. By now, I assume that you must be thinking in your mind - What wrong can a chicken do to have them being roasted for the wrong reason ?

Well, if you had been following the international news during the year end holidays, you would notice that Japan and South Korea are roasting up more and more poultry in order to contain the worst ever bird flu epidemic which started at the end quarter of 2016.

We heard about the deadly bird flu of H1N1 that had took lives of human due to respiratory complication back then. Now, the outbreak is of the highly pathogenic H5N6, which is more severe than the H5N8 in 2014 and 2015.

Entering January 2017, South Korea had took precautionary steps to control and eliminate the outbreak, culling more than 30 million of poultry.

Some report mention that the figure accounted for more than 15% of the poultry livestock in South Korea. To make it worst, Japan had too reported of bird flu and had started to cull poultry in order to contain the outbreak.

So, by now, can you imagine the magnitude of 30 million poultry ? To put it in some simple figure, 30 million of chicken is able to feed 800,000 adult, each of them consuming 1 chicken a day, for 365 days. Wow, now that is a lot right?

For more reference on bird flu in South Korea and Japan, here is some link I can provide to you.
1. Al-Jazeera
2. Huffington Post
3. Reuters
4. Bangkok Post

According to Bangkok Post, it was mentioned that the Ministry of Agriculture, Food and Rural Affairs regarded this event as the worst outbreak in South Korea, doubling what had happened in 2014 where only 14 million of poultry are destroyed.

The massive culling of poultry had send prices of eggs soaring as much as 30%. Coupling to winter holiday, Christmas season as well as the upcoming Chinese New Year, the supply might not be able to match the soaring demand. So, this is very natural to see more imports of frozen meats as well as eggs.

For this reason, I had ran a check on all the company dealing with poultry in KLSE, and found out that CCK Consolidated Holdings Berhad (CCK - 7035) did involve in exporting their goods to country such as Japan and Korea.

So in order to check if CCK does have positive correlation towards the bird flu event in 2014, I had go through a simple check, and to my amaze, you have to see it yourself.

That is 25% up in a short time frame.

So, while 2014 is a "past tense", we need to look into the present now and determine our action to anticipate the future, only then it will be meaningful, right?


So now, looking at the price now, we can see that CCK is indeed in a uptrend momentum. Since this time around is double the damage (in terms of culling of poultry), let's say we can look for a 35% increase from the starting price of RM 0.60, which means potential of going into RM 0.80.

But, if we are to buy based on this kind of news, sounds more towards speculating right? So, is there any fundamental to back up?

Let's run a simple fundamental outlook of the company then.

Since food is an essential thing for human being, and with the increasing population, food will continue to grow in demand. Take the latest quarterly result, the adjusted earning per share is approximately 2.05 cents (Adjusted for Bonus Issue). Since this is defensive in nature, we can annualize it to 8.2 cents for 4 rolling quarter, valuing RM 0.82 at PER x10.

Well, now this is not so bad.

Since this company also had a history of paying dividend as well (2 cents in 2015, 3 cents in 2016), we would expect a coming dividend to be approved in May later this year, probably 3 to 3.5 cents. This alone also represent more than 4% in dividend at the current price.

Now, it is decision time for you and CCK and the chicken as well. You can continue to grill your chicken meat, or grill it with CCK. But as for the chicken, fate is the same for them. With or without bird flu, they are still going to get grilled.


Bone's TP : RM 0.80




Tuesday, 10 January 2017

吃不下风险,那就回去投资定期存款吧



我相信这应该是你们第一次看见我利用华语来骗写我的布洛克。因为我有12年的华文教育,所以我的华文水准可说是数一数二的, 但是,是倒数的那个。所以如果我有利用错误的词语,请多多谅解。

其实,我选择利用华文来表达是因为有一家股票分析集团,声称RH Research在昨天做出一个对于Dataprep 的判断和分析。我读过了以后,觉得他的分析在对于普通人的角度上来看,的确是有他的摘要。

里面的内容我也不需要怎么去从副,细节可以在这里找到.但是我就是要针对他的最后一段的其中一句话。此文说到就算未来这传闻是真的,本专也宁可错过,也不愿意承担太高的风险

为何我会那么说呢?

让我利用我的角度与你判断。他家也知道为何他家在股票市场做投资,就是应为要买取一个机会来是你的投资赚钱。那你们会这么去投资呢? 我就给你两个局面。

局面1 – Dataprep 还没有演变之前,但经过你自己的分析,你觉得有这个机会,你做出一个 rm 2300来投资 10000股。一档Dataprep真的成为你所分析的,那时我们不再说23 仙,而是 RM 2.30 或以上。

局面2 – Dataprep演变成功,那是rm2.30,你买10000股来投资也需要RM 23000

这个局面就好像当初 Ecoworld 选择买进 Focal Aim的时候。还没有完成RTOFocal Aim在于 rm 2.00领域。完成后就是RM 5.50

现在 Dataprep已经完成 Corporate Exercise,大股东 VXL 也纷纷投入公司,以还清公司债务。难道这点你没有留意到? 然后,如果一个潜质那么大的机会,但是在 20仙你都要怕,我还是觉得你回去投资银行的定期存款吧。上云顶赌博都不至rm 2300啦。这个市场就是有风险的,但是如果错过,那就永远错过咯。而错过的人就只是会说葡萄酸,不然就必须以整张1000%的价钱买下来.

毕竟我写完我的看法,虽然我也不要与你说肯定,但是我觉得这个动作一定值得。竟然 Datuk Lim Chee Wah都投入多过 Rm 30 m 在于Dataprep,我吃得下这笔风险。这个决定你自己做个判断。

Monday, 9 January 2017

This is really your once in a life time chance!

I believe many are expecting me to write my next installment on the next coming Genting that I had spotted on, which is Dataprep. Here am I !!! I am not going to disappoint your urge and desire in chasing my next analysis and findings on Dataprep on becoming the next potential Genting.


Evolving Into


Before I would start, I would like to congratulate those who had took quick action on what is becoming to Dataprep after reading my piece of sharing and analysis in my previous 2 writings. I had featured Dataprep through "New Year, New Life, New Journey with the next Genting in making" and "Dataprep walking the talk and making the changes". It was a mere 15 cents overlook counter, which had now saw price appreciated to 20 cents in 2 days. As I had mentioned, anything below 20 cents is truly worthwhile and a blind buy decision. Now Dataprep is sitting at 20 cents, but will it stop here? I will show you 2 examples of my forecast later on why Dataprep will not stop here.


As you can see in this chart, Dataprep had risen sharply in the past 2 days, however, if you would ask me, I would say Dataprep could be ready to breach above RM 0.25 in the coming days. Why now? Why not earlier why I had mentioned before in 2015 ?

Yes, I agree that I had mentioned on Dataprep in 2015. That is the time where I had put this company into my monitoring list, and to see if the company is really doing any action on it. And of course to my delight, there are works being done and restructuring completed. That alone is a solid proof for me to pursue on Dataprep intensively since the "chef" inside Dataprep are ready to cook the meal now as well.

You could label my action as hard sell, or maybe you are kind enough to see the better side of my noble intention. But as a matter of fact, I did not come into Dataprep to make a recommendation when it is sky high. In fact, I make the effort to feature to you this potential company full of juicy development almost at the lowest point of the 10 years price, which is 15 cents!!! So did you see the difference of me and other "Gurus" around ?

In order to reinforce what I am saying, here I will show you 2 examples.

The first example is Pentamaster, where I had recommended when it is just a mere 27 cents in 30th May 2014. At that point of time, Penta is considered being in the lowest point of the starting of the uptrend. I saw the potential in Penta due to the rising need of use in the semiconductor industry. As facts speak for itself, today, Penta is RM 1.40.

The second example is MPI, recommended at 4th Nov 2013 at the price of RM 2.85. Similar to the case of Penta where I had forecast on an improving semiconductor industry, this company proves itself with a total cumulative dividend of 61 cents in the next 3 years and capital appreciation of 160%.

Just like my semiconductor industry forecast 3 years ago, now I am putting up my forecast on Dataprep going into Gaming Industry 3 to 5 years down the road from now on. If you had read my previous 2 analysis "New Year, New Life, New Journey with the next Genting in making" and "Dataprep walking the talk and making the changes", I would reckon that you are sure that I am not putting a blind bet in Dataprep as I have substantial amount of facts to support my forecast.

So now, I want to share with you where is the much potential "Gaming" site of Dataprep.

1. Vietnam

Yes, Vietnam is my first choice of pick. Probably you guys will be wondering - What ? Vietnam ? As a matter of fact, Vietnam already had 7 casinos and more than 50 electronic gaming facilities license nationwide, serving foreigners only, of which most of them are from China. If you are updated with the news and development in the casino industry of South East Asia, Vietnam is betting on the development of casinos to boost the country's tourism growth and make it more competitive against other tourism destinations such as Singapore, Malaysia, Thailand, the Philippines and Macau. (Source from Vietnam Investor Review - Vietnam betting on more casino)

According to the news, Vietnamese Prime Minister Nguyen Tan Dung had approved the development of tourism projects that include casino components on Phu Quoc Island in the southern province of Kien Giang. And to give some suspense, the lucky winner is not publicly announced, but I have high anticipation on VXL Holdings Sdn Bhd.

As you would see, now Vietnam already have a lot of boutique gaming outlets, and in order to push the economy further, Vietnam is looking for a more comprehensive integrated tourism industry. This in turn will relate to massive development that comprises hotels, theme park which comes with gaming facilities. In fact, news also quoted saying that Vietnam is also opening the casino to it's local citizen soon, after a bill to legalized Vietnam citizen above age 21 to enter casino and electronic gaming outlet is submitted in 2H 2016.

In fact, Datuk Lim Chee Wah had intention to develop 1800 hectares of land at Ha Long Bay, situated at the province of Quang Ninh, which is very near to the southern part of China. (Source - Vietnam News - VXL explore La Hong Bay)

VXL lead by Datuk Lim Chee Wah is nothing short of big funds for integrated development. Along with it's experiences in developing resort city and leveraging expertise from Genting group, VXL chances are just too good to be missed.


2. Cambodia

Cambodia is not losing out to Vietnam on casino too. This is the place where Dr Chen Lip Kong saw the rise of his NagaCorp empire through NagaWorld Casino in Phnom Penh. Badev is a great interchange border city of Cambodia and Vietnam, and due to the current ruling that Vietnamese are not able to enter casino or electronic gaming outlet at their own country, Badev is frequented with Vietnamese citizen.

VXL has developed a master plan with integrated resort to add value on the current state of the city. Likewise Vietnam, Cambodia is also looking to attract foreign investment and the government is in dire need of cash. Hence, casino is one of the option that Cambodia opted in order to lure huge foreign direct investment in developing the country tourism sector through integrated resorts that offer casino and electronic gaming.



So after reading all this, where is China ? Yes, I had left China out in the casino picture for now, because if I would to give information about VXL able to set up electronic gaming and casino in China, I am afraid this will make Dataprep hitting the ceiling limit. Haha.. well, this is a joke for now.

As for now, both Vietnam and Cambodia casino are favorite places for the Chinese tourist to visit all year long.


As a conclusion
If you really do believe Dataprep heading into this direction (Hotel, Tourism and Gaming), I really have to leave this part to your own good head to think about what is the future share price of Dataprep. A boom in semiconductor industry can send Penta up 500%. As for Dataprep into Gaming Industry, you know what is best.


Friday, 6 January 2017

Dataprep - Walk the Talk, Make the Change

Since the heat is had started to grow on Dataprep starting this new year of 2017, the next best option is to pump in more oxygen into the glowing embers. After all, since there is a fire, it is not good to waste the fire without cooking a good meal, don't you agree with me?

Before Dataprep continue to unleash into the unreachable universe, I am here to tell you that I still think Dataprep is a good buy at this price at RM 0.165. Yes, you might doubt my intention for saying this, but I had to point out some facts to you for your consideration as well.
Based on this transaction in 12 June 2015, VXL did a direct business transaction to acquire of 28.8 million shares at RM 0.20, which cost RM 5.7 million. Give this a thinker, 28.8 million shares at RM 0.20, so what are you doing now when Dataprep is still below RM 0.20 ?

As you would know, Dataprep saw VXL coming in as a strategic shareholder in 2002. And through the journey, VXL pump in a lot of money in order to keep this listed company alive, and while doing so, VXL had the opportunity to increase it's stake until the current substantial portion of almost 65%. That means, Dato Lim Chee Wah already had a plan for Dataprep, and he had been keeping this listed company status alive for a freaking 15 years!! Do you know what is the feeling of 15 years? That is the period of time where you go to Standard 1 and study till Standard 6, and then go to Form 1 and study again to Form 6, and then go University and study for 3-4 years. So it is not funny to wait for 15 years.

But why Dato Lim Chee Wah have to wait for 15 years?

It is very simple, in this business world, big business is not a one shot one talk and straight on kind of business. Just take an example for Japan, it took them 3 years to approve the casino bill. Then the cabinet will need probably 2 to 3 years to craft and implement the detailed bill. Thereafter further planning and building will take another 4 to 5 years before Casino can be operational in Japan. Give some allowance, that could come to almost 15 years from the approval to operation. (Source - CNBC Japan Casino)

So as you can see, it takes a long time, and there are a lot of uncertainty in between. And that is one core reason why Dato Lim Chee Wah did not opt for an IPO for his casino venture. In fact, slowing eating up into an ailing company will be a better choice, because you can
- keep the company afloat with existing business while waiting for approval
- slowly increase stake in ailing company through corporate exercise such as share placement
- avoid high level of attention
- ailing company divert retail attention away from the main focus

I think you will seldom see an IPO company where major shareholder still hold 65% share after IPO right? But now, VXL is holding 65% of Dataprep, which is considered very high threshold of ownership.

At this moment, your most impetus question could be - Where is VXL casino going to be? Since this is a very attractive topic by itself, I will leave this part for my next episode, where I will pour down my analysis with news reference for you to have a thinker on it.

Now, probably what you need now is - show you the proof of transformation in Dataprep

Aside from the corporate exercise that had been completed in 2016, I would like to show you more in depth development inside Dataprep itself.

Attached is the course that is being partake by staff and executives in Dataprep in 2015 and 2016.

 Courses offered in 2015

 
Courses offered in 2016

Wow!!! So Dataprep, an IT company, is asking staff and executive to attend CIDB Green Card course, INDUCTION and Site Safety Supervisor Competency Course ???

This is one of the solid proof that the company is indeed getting ready to venture into where they want - Leisure, Hotel, Property Development and Gaming. As a matter of fact, things are deploying to work since 2015, which is quite in line with what the Annual Report 2015 had to mention about the company going to diversify and create new stream of revenue.

To add on, Dataprep had also changed their Managing Director in 2016 as well. Now Mr Tan Hock Chye is the new Managing Director.
This change is rational because the former MD which is Encik Ahmad Rizan Bin Ibrahim is more skillful in IT businesses, while Mr Tan Hock Chye has more than 34 years of management and financial experience spanning across several industries in retailing, manufacturing, publishing, offshore marine transportation, FMCG, industrial goods and hospitality.

Since now you can see that the company indeed had changes in both corporate level as well as internally, this is the best time to bet on this turnaround company with Dato Lim Chee Wah as the White Knight. Best time means, before Dataprep fly too high above, which is now!

After all, Dataprep is now NET CASH from cash injection by major shareholder, what are you going to worry ?

Coming up next - Where is the Casino!
 

Thursday, 5 January 2017

New Year, New Life, New Journey with the next Genting in making

Firstly, I want to wish all my readers a happy new year. As we know, 2016 is a very rough year for some businesses, and as usual, the equity market in KLSE is even harsher due to multiple factor from a weakening RM, foreign selling pressure, under performing result as well as with some company plague with fraud and scam investment.

It has never been easy in the investment of equity market. Anyone who can tell you that investing in equity market is easy is definitely portraying the wrong image.

4 days after entering into 2017, this new year, we began with a new lease of life, a new journey altogether. Let the bygone be bygone, but do not forget the lesson you had learn throughout the journey.

As I would to speak of a new life, I would also like to point towards some companies with a new lease of life, new mission and new adventure. Of course, I am not going to talk about a "char siew pau" seller having a new lease of life by selling "dao sha pau". This kind of story, you also got no interest lor. But what if I am going to tell you a developing corporate story of an IT company which will be going to evolve into the next huge gaming entity like Genting ?
Wah! Now this will only be something that is worth my time and your time, right?

So which is this company that is going to replicate the successful Genting Berhad which is founded by the late Tan Sri Lim Goh Tong?

As both Tan Sri Lim Kok Thay and Dato Lim Chee Wah are the son of late Tan Sri Lim Goh Tong, they are like a ferocious tiger ready to pound anytime. So come the old saying, 1 mountain cannot keep 2 tigers. While it is Tan Sri Lim Kok Thay who took over the helm as the Chairman of Genting Berhad, so where is Dato Lim Chee Wah going to be ?

That's right, Dato Lim Chee Wah headed over to China - Hong Kong to build his own empire, the VXL Group.  The VXL Group had a diverse portfolio ranging from properties investment in China, U-Inns Hotel brand, Genting Secret Garden in China, Master planner for Cambodia-Vietnam entertainment city (Bavet) and others. However, VXL Capital Limited is taken over by Dato Lim Chee Wah in 2003, but he before that, he did bought into Dataprep in 2002.

So what is the relationship of Dataprep Holding Berhad and VXL Group ?

Let's have a quick run using the Annual Reports of Dataprep Holding Berhad.


 Dataprep Annual Report 2014 - VXL Holdings Sdn Bhd (53.09%)

 Dataprep Annual Report 2015 - VXL Holdings Sdn Bhd (60.62%)


Dataprep Annual Report 2016 - VXL Holdings Sdn Bhd (64.20%)


Since 2002, VXL came into Dataprep as a major shareholder with a 30% stake. Through a series of corporate exercise in order to rescue the company after falling into financial difficulties and dropping into PN 17 twice, this had resulted in VXL increasing it's stake into 53%. Despite Dataprep uninteresting financial performance, the last 2 years saw VXL pumping more money into Dataprep through a direct business direction and private placement exercise, totaling more than RM 10 million. First is a direct business transaction involving 28.8 million of shares at RM 0.20, while the second one is a 38.8 million private placement at RM 0.145.




So what is the leading cause for VXL to be buying and increasing it's stakes in an ailing and non performing company? Truly this will not make sense to you, right?

But if you would to read in detail of those annual report, it is the company intention to diversify into other sector in order to grow the company.

According to the annual report of Dataprep in 2014 and 2015, the Chairman had informed that the group is planning to introduce new revenue channel from areas such as Gaming, Property and Leisure. Wow, did you read properly ? Gaming !!! Gaming is inclusive of slots and casinos.



Alright, if you are still reading, you should be very excited by now, because you know that you are really coming towards an opportunity where this Dataprep could be the next Genting in the making. So, before I am going to share with you my in depth exploration in Dataprep and VXL Holdings Sdn Bhd, I would like to tell you that Dataprep will be undergoing several corporate exercise in order to raise fund for new business.

It is notable that Dataprep had underwent a major corporate exercise involving par value reduction and cleaning up balance sheet from it's past losses as well as a private placement by VXL in order to clear all it's debt and also fund for working capital. Now the company is in net positive cash position.

What I am looking to happen here is
1. Private placement
2. Right Issue with free warrants
3. Bonus Issue (in a much later date)

If you are familiar with corporate finance, you will reckon that my prediction on Dataprep next move will make sense. I am expecting the coming private placement and or right issue to be command a share premium, probably priced at RM 0.20 to RM 0.25. The share premium will then be rewarded back to investor through bonus issues (That is the reason for the company to clean up it's balance sheet). In order to attract investor, I would believe that VXL will be going to award huge contracts, or concession to Dataprep. (VXL did it once by appointing Dataprep as PDP on ICT for Genting Secret Garden).

Probably you might be thinking, why trust my prediction ?

So I will show cast to you some of my example, like the case of Perdana being taken over at RM 1.55. In my blog entitled "Perdana - A Diamond Eye", I had shared my analysis when Perdana is just trading at RM 1.20 and come out with a projection of RM 1.60 as the take over offer, which is just a mere 5 cents difference.

Still not convinced? If you had been following me long enough, you would know that I am the first person in KLSE to unveil the master plan behind Euro Holdings Berhad in several chapter, from prediction of company direction change, take over offer and it's price thereafter and even corporate exercise such as Bonus issue which indeed happened.

Conclusion
Needless to say much, if you are given a chance 20 years ago to invest in Genting Berhad, will you do so? Surely everyone would say yes. But let's come to reality, what is past is past, however, what is going to happen in the future is the path that you should focus on. Now, you hold the key to your own destiny.

Dataprep at the all time low price now in 10 years. Don't thank me for this, but thanks to those volatile equity market that help brought Dataprep to such a lucrative price now. Yes, only valid for now.


Well, too much of information for now. But these are good enough to make you give a real thinker on what are you doing now to capitalize on the next Genting in making.

Next, I will be sharing with you more on Dataprep business in China, Cambodia and Vietnam, which includes massive plan in hotel, leisure and it's most captivating gaming industry.

So, go and have a good thinker, but don't be too late.

Cheers to you.