Tuesday, 21 February 2017

This quiet company is really worth a mention afterall

Since February is a financial reporting month, the coming few days will be very interesting, with much company presenting their quarterly result. While much of my previous recommendation had to do with potential corporate exercises, change in company direction, emergence of new shareholder, I am thinking that it would be good mix "dishes" to bring in some company that are growing and doing well financially and fundamentally but still undervalue according to their share prices.

Typically, the company that I am going to introduce later will not be going to see much interesting moves in the corporate direction, except for normal day to day business. Hence, this kind of company will be suitable for investor with strong holding power that will know how to appreciate the company fundamental and wait upon their business to reward them at the right time.

Now this company is quite similar to Arank, which I had introduced to you last year when it is still RM 0.67. At that point of time, I am able to see 2 thing that can benefit Arank, which is the improvement of margin and the improving demand of it's products.

Since Malaysia already implemented measure to protect the local steel industry, I will continue to stand believe that local steel player will continue to benefit from this. In additional, the start work of MRT 2, LRT extension and revival of housing project from affordable housing will also contribute to the resumption of demand in steel products.

For this, I would like to recommend this undervalue yet potential company again - Chuan Huat Resources Berhad (Chuan - 7016)

Technically speaking, this company had dwindle down a lot from it's previous glorious peak. Now, the share price is looked prepared to make a come back, supported with improving fundamental and financial.

Actually, I had made a previous recommendation on Chuan when it is still laying lowly at RM 0.48 last year. However, due to the volatility surrounding the market from crude oil to the US presidential election, this counter had been hidden into the forgotten woods again.

Since this is a fundamentally doing well company with improving earning, especially improving profit margin from a better selling price in steel product, I think it is very fair for me to give this company a small mention, especially for the coming quarter report for the 4Q FYE 2016 that will be going to be around this few days.

The 3 rolling quarters had saw EPS at 4.78 cents now. Going to do a small projection of the company performing another 1.5 cents, which can make an estimation of total FYE 2016 EPS to 6.3 cents, relating to a valuation of RM 0.63 at PER x 10.

Since this company had a huge base of NTA at RM 1.55 per share, this will be a good cushion for you to hold this company longer.

I believe that the commencement of work from MRT 2 and LRT extension as well as affordable housing will contribute greatly to Chuan earning, especially under the circumstances that the local steel industry is protected by MITI from external cheap imports that damages the profit margin.

Since the coming quarter report is anticipated with a good result, this will probably worth your pick if you believe that Chuan is going to do better in the future.

Thursday, 16 February 2017

I do not want you to regret forever if you miss this opportunity

The beginning of 2017 is a powerful start in the equity market scene, especially on impending corporate exercise that will be taking place this year. Because of this, I am putting up even more extra effort in order to bring to you the corporate development that is happening in the market, and it;s coming direction as well.

As I understand that sometimes you will find it hard for you to trade on my recommendation due to the starting price gap that is resulted from higher price queue in the opening trades, however, I really do not have any control on this issue to be honest. But because of this, I am now going to give you one of the best pick in 2017 that had the potential to surge 100% from the current price, so that you will have a better buying and investing range according to your appetite.

Oh yea, I am going to show you a stock that have the potential to surge 100% !!! No joke on this, because it is proven from past experience, not 1, not 2, but more than 3 examples!!!

So before you will continue to read on, I have to tell you that you better be mentally prepared, because what I am going to unveil to you will just blow your mind off!!! However, please note that this investment recommendation is only suitable for those that are going in with cash to hold. Of course, if you have the appetite to make a contra-trade, you have to time it wisely.

Now, what is the big bang stock in 2017 that I am going to reveal to you that is packed with 100% surge potential ?

Before introducing, I will need to show you what had happened in the past to some other counters.

The first case is the case of Maica (Malaysia Aica Berhad) being RTO into Sunsuria Berhad.

According to The Star in 23rd Jan 2014, TER Equity Sdn Bhd had offered RM 0.85 for a share in the take over exercise. However, the take over exercise do not intend to delist the company. Subsequently, Maica went up rampage into RM 1.70, which is 2 times the value of the price offer in the take over exercise.

The second case is a landmark case in my analysis, which is Euro Holdings Berhad.

The major shareholder intended to take over Euro at a price of RM 0.44, however, I had
"Bonescythe'd" into Euro after acquiring convincing data on the future development of the company, hence causing the company to surge. Nevertheless, the company went into a corporate exercise involving a bonus issue of 2 bonus share for 1 ordinary share, and on Nov 2015, Euro traded above RM 0.30, which is equivalent to RM 0.90 before the bonus issue.

The third case is involving Mulpha Land being RTO into Thriven.

By far, this is the fastest surge that I had seen. Prior to the Mulpha Land take over offer at RM 0.50 a share, the offer lapse and the share price went rampaging towards a peak of more than RM 1.00 in less than 3 months. Again, this had proven the theory that a company that is being offered with a take over price, but intend to maintain it's listing status, will be fired up 2 times from the take over price!!

Now this is 3 real life example, and no bullsheet here. Amazing finding here right? There is one more, which is GW Plastic (RM 0.65) being RTO into MCT (RM 1.30) as well.

So, now I need you to look at this company in detailed and carefully. This company is called Rex Industry Berhad (Rex - 9946)

On the 7th February 2017, Rex received a take over offer from the MD and the major shareholder, both joint as the Person Acting in Concert, for a price of RM 1.65 a share. According to the prospectus of the take over offer, there is no intention of delisting the company.

If you are sensitive enough, the movement of the share price had indeed reflected on a certain corporate development since March 2015, where a significant amount of volume is recorded at the transacted range of RM 1.60. Now that the game is revealed, Rex is offered a take over price of RM 1.65.

If the above 3 real life example is speaking to you straight to your heart, then you will know that Rex is going to boom towards RM 3.30 in the coming days. Yea, I am not joking, it is RM 3.30 and you can mark my word for this.

But when will this happen is a real question mark. So I will give you 2 scenario to think about it.

Scenario 1 - If the company decided to do a bonus issue, then only pushes up, it might easily take 1 year, same like the case of Euro.

Scenario 2 - If the company decided to push first, then only do a bonus issue, then it will replicate the movement of Mulpha Land, booming up to the value 2 times of the offer within 3 months.

Most importantly, being Scenario 1 or Scenario 2, Rex is going to head towards RM 3.30 in value from the take over price of RM 1.65.

And I have to tell you, lately, the Malaysian food related packaging company are hot on heels being targeted for take over exercise. Just recently before Rex, Denko is being offered RM 0.55 a share for take over.

As you can see, Denko already trading at 27% premium (Currently Denko priced at RM 0.70) from it's take over price of RM 0.55.

So what are you waiting on at REX ??!! Currently, REX is trading only 11% above it's take over price. Now at RM 1.83 towards RM 3.30, you are standing to see your investment flourish 80%!!! Invest 100 lots worth RM 18300, and let it grow and become RM 33000 in 1 year !!! Let's say a worst scenario that it takes 1.5 years for this 80%, that is 4.4% of return every month for 18 months!!!

I don't know what are you thinking now, but I have to tell you that I am going hold on to this golden nugget until it become another landmark case for my research analysis.

And one more thing, you better act real fast because I don't know if this thing will go Limit Up or not, because limit up is RM 2.37, and it is still far away from RM 3.30!!

Wednesday, 15 February 2017

If you had missed Padini run up 1 year ago, you better not miss this!

Today, I am going to share to you on a company that had the potential in replicating the success story of Padini Holdings Berhad. As I believe most of us know of the brand Padini, it's major growth in the recent years had been spectacular, which is creditable to it's new concept store - Brands Outlet.
As you can see, Padini expansion with Brands Outlet had been very successful, because this concept store understand the market demand and cater right to the need of the consumer.

To summarize on Brands Outlet, this concept store offer a wide range of variety at above average quality but at a attractive price. And it's purchase always enticed consumer to buy more for a cheaper price. For example, a adult long sleeve shirt will cost RM 80 for 2, where quality are not compromised. If you were to go to Parkson, 1 long sleeve shirt will easily cost you more than RM 100. (That is the reason for the downfall of Parkson)

Clothing and apparels is a must for everyone, unless you are still living with in the jungle with some tribes. Padini ability to capture the right market demand had been heavily rewarded with a rising up share price. Now, Padini is sitting at a market capitalization of RM 1.6 billion.

Now, Padini is already very successful. Of course, today I am not going to promote Padini to you, but in return, I am going to promote a very unique company which had the capabilities to replicate the journey of Padini. Of course, I am not going to say that this unique company is going to replicate Padini success in 100%, but being able to replicate 50%  will still consider as not bad already, because this company is still quite unknown to most of the retail investor, and the potential of this company is so huge.

How huge is the potential of this company? I will reveal to you later on. But, I have to inform you that you need to act really fast, because good thing doesn't wait any long for those who are slow.

So, what is the name of this company ?

So it is Jerasia Capital Berhad (Jerasia - 8931). This company is host towards brands like Mango, Touch, Violeta, Terranova, Nike, CALLIOPE, Ladylike, Milani, Charlie, and concept store Trio Basic.

Before I will go down to the details on Jerasia expansion plan, I will like to show you a quick outlook on the company share price.

As you know, Jerasia is currently just having 82 million of shares. At the current price of approx RM 0.68, the market capitalization is just a merely RM 55.38 million (Padini is RM 1.6 billion). Although the share price had been subjected to some upwards rising, I strongly believe that this is just a start for Jerasia. Based on the technical chart, you can easily see that Jerasia had broken 2 long term down trend resistant line, which strongly suggest that on the coming upwards trend of the company share price. Jerasia share price saw the highest at RM 1.15 back at August 2015.

So why am I saying that Jerasia can potentially replicate the growth story of Padini ?

Here is one of the most important factor that you will have to know.

The brand is called - TRIO
If Padini is riding on the success of Brands Outlet, now Jerasia is coming out with Trio Basic Concept Store.

Of course, I will reckon that there are still space of improvement for TRIO basic concept store. For example, Brands Outlet have a grand entrance with a captivating color (Brown Orange Color), mixing with yellow ceiling down light and, it is able to give a different impression that carries certain quality and standard. In my opinion, if Trio can provide a little style on it's concept store (rather than just plain white based background), then they are capable for a head to head fight with Brands Outlet. Since this concept store is just a start for the company, I expect that there will be more improvement and upgrades in it's appearance.

But, what is most important here is, Jerasia had came out with a new offering to cater to the market needs, and this new concept store can be very potential if it continue to position itself and penetrate successfully into the market. Nevertheless, the TRIO Concept store are currently generating massive revenue and profit for the group, and this concept store will be expected to see more contribution in the coming future as the company continue to expands is foot mark into new market.

Expansion Expansion Expansion
Now that Jerasia had successfully tested on it's new concept store - TRIO, it is time to talk about growth and expansion, which ultimately bring forth to you - Public Fund Raising and Corporate Exercise.

As you can see, Jerasia is just having 82 million share of Par Value RM 1.00, with retained earning of RM 62 million. For the past 10 years, there had not been 1 corporate exercise, except for some dividend paid to investor.

I believe, Jerasia will be on the route of public fund raising in order to accelerate on the growth and expansion of the group.

Potential Fund Raising Option
Option 1 - 10% Private Placement. Since the Par Value of the share is RM 1.00, so the minimum pricing of the private placement will be RM 1.00. Based on the current share base, Jerasia can raise RM 8 million from this exercise, which is considered not bad.

Option 2 - Share Split 1 to 2, subsequent private placement or right issue free warrants. For this option, splitting the share into 2 will see the share issued becoming 164 million shares, and Par Value becoming RM 0.50.  A private placement of 10% will also raise 8 million if priced at RM 0.50. However, a right issue will provide the company with some cash and not diluting it's earning immediately until the conversion of warrant.

Now, I had shared to you a very valuable company with the potential of replicating the success story of Padini.

Currently at the price of RM 0.675, you are buying into a company that gives you
- a massive potential on future growth and expansion plans
- a share with NTA of RM 1.75
- a company with high potential of corporate exercise, with more than 40% upside potential from the current price
- a profit making company
- a resilient company being in apparel industry (everyone need to wear clothes)
- a company benefit from strong USD

Still not convinced enough?

Now, I will throw in some extra insights for you. Since the company is reporting on the performance from October - December 2016, which is a holiday season and mega sale season, it's coming quarterly report in February is expected to be stronger.

Alright, now that I had informed you on all the potential of this company, the only thing left now is your own decision again.

Lastly, you have all the rights to doubt my sharing, but I have all the rights to show you a lot of my success story in the like of such as AWC at 30 cents, Denko at 38 cents, Gadang at 80 cents before bonus issue, Penta at 27 cents, and the recent ones like Arank at 66 cents which is now trading at RM 1.20.

I am not asking you to believe me and my view. But if you believe in the management of Jerasia Capital Berhad, and believe in the potential of the new concept store Trio, and believe in the coming expansion plan, I don't know what is stopping you now.

Monday, 13 February 2017

Only Read This If You Had Not Huat Enough

As most of you can start to smell the essence of election looming around the corner, I would like to reassure you that you should start believing your nose because it ain't going to go wrong this year. While the big question is when will this be, I have to leave it to you to decide, but if you are asking me, I would say it is really very very near already, and don't ask me why.

And because of this, I have to work extra hard by putting up myself on weekends and staying up at night just for one thing - To make sure you HUAT before the 14th General Election. If you had been following me closely and tightly, I am sure that you had indeed make 1 round of Huatness at KSL, because I dedicate that counter for you to Huat at Chinese New Year.

So for this time around, I do not know if you really want to continue to ride the HUAT wave with me or not, therefore I am opening my doors again and let you decide whether you want to make another big HUAT at this high potential company.

Now, before I continue to take up some of your precious time in reading my "KLSE Sherlock Holmes Series", I need you to do something for your own first.

Firstly, if you think I am going to bull sheet later on, please close this page immediately and leave as fast as you can, because your time keeps on ticking, and I don't want to waste your precious time.

Ah, don't say I did not forewarn you earlier. You choose at your own accord, to continue reading this article now, and of course, you choose to continue this Huat Journey as well!!!

Since you are so adamant to make sure you Huat all the way, I will tell you this company that is packed up to the full brim and waiting to explode vertically now.

This company is none other than - Iretex Corporation Berhad (Iretex - 7183)

Actually I intended to inform you earlier, but it had shot up faster than I had expected. However, I believe this is just a starting warm up. As you can see, Iretex had broken up from a 2 year long term downtrend line. I don't know if you want to agree with me or not, but breaking out from a 2 years long resistant line is actually quite attractive and could signal a reversal on downtrend as consolidation is already saturated now.

So why do I need to introduce you to Iretex ? I know you will want to argue with me that this company is full of craps and losing money with some problematic shareholder. Yes, in fact, I have to inform you that Iretex is currently a money losing company. However, not all bad boys will be bad forever right? Let's look at the bright sight also, and they will turn out to be good man when grow up, which I believe could happen in Iretex.

What is the interesting news here is that according to familiar sources, Iretex is currently being targeted upon for acquisition / take over exercise.

Since Iretex is involved in packaging / corrugated carton  / hard paper box manufacturing and related services, we will look at some of the historical events in this industry.

1. Japan Oji Paper take over United Kotak Berhad in 2011 (Source - The Star)
2. Japan Oji Paper take over HPI Resources Berhad in 2011 (Source - The Edge)
3. Japan Taisei Lamick take over Malaysia Packaging Industry Berhad in 2016 (Source - The Star)
4. KPS take over Century Bond Berhad in 2016 (Source - The Star)

The latest heat in the packaging industry is Singaporean owned Oregon Tech launches take over offer on Denko Industrial Corporation, which involves in food packaging.

As a conclusion, I would like to conclude that the packaging industry in Malaysia is very attractive for foreign company for M&A exercise.

Looking at Iretex, the company is currently having a market capital of RM31.5 million at the current share price of RM 0.235 based on 134.26 shares. This is a very lucrative price for big player such as Oji Paper or Thai Container in their expansion plan at the South East Asia region.

Here is why I think Iretex is very attractive.

As you guys would know, Iretex is actually looking to restructure and strengthen their balance sheet through a par value reduction of RM 0.40 into RM 0.20 and a 10% private placement exercise after the par value reduction. However, this restructuring plan had been aborted, which at the mean time, emerge 2 new shareholder (Elite Cosmo Group Limited and Famous BlueChip Sdn Bhd).

Prior to the abortion of the previous plan, the company is still looking at ways to strengthen the balance sheet. For some, the abortion of the plan might be a bad thing, but for me this move reassured me further more that why Iretex will be looking to surge further from here.

Here is what I think.

Scenario 1, raising fund through private placement. Placing a 10% private placement at RM 0.40 par value now can raise x2 more fund from a par value of RM 0.20. Since now is RM 0.235, that is a very lucrative price now if there is a private placement.

Scenario 2, white knight identified which is looking to take over the whole company. Since now Iretex is already all time low, I don't foresee much chance of this company going lower, and a take over offer will definitely see the share price shooting higher. Since there are some people that are converting some loan stock (Iretex-LA) at an exercise price of RM 0.60, that could be a good hint that probably Iretex is going to head for that direction soon!!!

Wow, now are you getting fired up enough for Iretex ?

For now, I think this is adequate for your mind to crunch the idea and prospect first, because if I continue putting in more information, I am afraid this thing is going to shoot through the roof without you.

Now since you are in this Huat Journey with me, I leave the next course of action in your own good hand.


Tuesday, 7 February 2017

If you really want to HUAT this year, then you really need to read this

Today, I would like to take this golden opportunity to continue your HUAT journey in the KLSE. So, despite a lot of people are telling a lot of people that 2017 will be a very tough year, business market will be bad, property market will be bad, share market will be worst and Malaysian currency market will even perform from bad to worst, it had been most astonishing that the local KLSE market had been charging up ever, and funds start to flow back into emerging market going into the inauguration of President Donald Trump.

What I am going to introduce to you for this week dish is something that most of the mass market will try to avoid - Properties segment. As you had been hearing that in order to beat the market, you have to do what the 90% of people are not doing currently, so does the property counter come fitting into this picture?

Of course, not all the property counter are good, hence it is very important to be very selective and pick the real good ones, with good fundamental, historical earning, future forecast earning, good NTA and good prospect.

As you can see in the below 3 property counter that is in the KLSE, they are doing not too bad as of lately as volume start to pick up back on them.

So, what is the "dish" that I am going to introduce to you now is the next big question.

Without wasting much time, I want to introduce this undervalue company named - KSL Holdings Berhad (KSL - 5038)

Before I would go into the details, I need to show you the chart first in order to ensure you know that you are not chasing something that had been pumped up all over the sky, hence wasting your time and probably money. At least now you can know my noble intention here, and you must always remember that I always always and always have noble intention. Agree or not is up to you again la. 

Since some funds are guiding back their way back to emerging market, such funds are looking into company that are really undervalue, or lack behind in price based on valuation derived from their earnings. I am going to talk about KSL earnings part later on, but for now, you have to look at the technical chart first.

As you can see, KSL had been sliding down in a long term downtrend line for more than 1 year. And according to the resistant line drawn, we are now sitting at a Reversal Point where technical reading will support a strong short term reversal. Now that KSL is sitting at RM 1.00, there is high potential for the reversal to hit RM 1.12.

But before chasing KSL down the road when market open, I will show you again what you will be getting for that RM 1.00 paid for a share of KSL. Remember, it is what you will be getting, not what I am going to get, because this is about You and KSL, KSL and You.

Since the Annual Report 2015 is 138 pages, I will help you summarize 2 very point that I feel is very strong and influential.

Some land are really undervalue until almost underwater
First Point is very easy and straight forward for most of the retailer. KSL got a big piece of land at Klang - Bandar Bestari, which they had acquired in 2007. According to the book, that land is carrying a 2007 valuation (RM 12.5 psf) , and now we are 2017. Since this parcel of land is intended for landed property development, the current market rate is going for about RM 350 psf for a completed landed project. Ok lar, let's be very skeptical and pessimistic and assume that the land is value at RM 25 per square feet, ok or not ?

Based on RM 25 psf, this piece of land is worth RM 328.5 million !!! Eh, that is almost a RM 160 million valuation gain from that land at a very skeptical value oh. And this is just one of the land, there are plenty more in Johor which is still carrying valuation of 2002, and this I will leave it to you to do your own homework lar.

The result is still good actually
Now the second point is also very straight forward with a little bit of prediction. So what you need to predict here is - The 4th Quarter result for FYE 2016.

According to news from The Star in 2014, KSL still have a remaining GDV of RM 5 billion. Since the group are still actively selling landed property in Klang and Johor, and preparing to undertake KSL 2 city mall in Klang, that will position the group still busy with projects, probably estimating at RM 4 billion.

So, now I want to predict that KSL maybe can deliver 4 cents EPS in 4th Quarter FYE 2016 (Again skeptical). So my projection will see FYE 2016 total EPS at 19 cents.

Since I am so skeptical already, I again use a skeptical PER of x7, that will value KSL at RM 1.33 (My friend, this is a very skeptical prediction lar, if you predict 5 cents for 4th quarter and PER x 10, that will be RM 2.00 already you know ? )

Actually, based on the above 2 information + the technical chart, KSL is already very attractive. But since I want to make sure you HUAT, I need to show you KSL hidden weapon as well. I will try to explain as easy as I can to let u understand easier.

Actually, many people do not understand what is Share Premium Account and it's intended use. And because of this, many retailer miss out on potential corporate exercise that can benefit them.

So, how does this share premium account appear? Let me give you an example. Let's say the company Par Value is RM 0.50, but the company do a private placement at RM 1.00, so there is a Premium of RM 0.50. That RM 0.50 will then be stored inside the share premium account, and it cannot be simply used for normal operation such as company operation. The money here can only be utilized for corporate exercise such as Bonus Issue. When the company do bonus issue, it will then capitalized the money in the share premium account into share capital, and can utilize them for company day to day operation.

So with RM 180 million in share premium, and KSL Par Value being RM 0.50, that means KSL can issue bonus share up to 360 million units. So based on the current total share issued, I think KSL can do a bonus issue of 1 bonus share for every 5 ordinary share.

Now your question might be - Why KSL want to do Bonus Issue again? 2014 they just did a 1 to 1 bonus issue.

If you allow me to explain, I will reckon there is a very high tendency that KSL will undertake bonus issue this year 2017. The reason is because KSL will need this money for their major undertaking in Klang, featuring the KSL City Mall 2 with anticipation of RM 10 billion in GDV with 10 main development.

So now I had already presented to you 3 HUAT points along with a HUAT chart of KSL. But if you are still not convinced on it, then I will let KSL talk to you personally, because KSL will only tell you to "Kindly Sai Lang" !!! Hahaha