A lot of people have this kind of mind: To make money in the stock market must have a special talent. "Special talent", usually refers to high academic qualifications.
Most people think with this condition is the best position on stock investment. In fact, with highly educated people the investment success rate is lower than average person.
The main reason is important of cultivation & knowledge or education level is secondary.
The so-called "cultivation" refers to a correct concept, the spirit of perseverance, patience, mentally stable and so on, without these qualities of mind thinking, no matter how good the knowledge, it is difficult to make a success in the stock market.
This is also important the person must have basic knowledge which including how to read & understand the financial statement (fundamental analysis) & technical analysis. If invested without knowledge, this is called "ignorant" & risky investment, equivalent to "blind hit".
However, no matter how rich the knowledge, this is useless if there is no cultivation as a guide. This is why mostly the high level educated person cannot perform better then lower educated with high cultivation.
If the person able to acquire both of knowledge & cultivation, I can predict that no matter how, this person will able make a success in stock market investment.
Therefore, be a normal person, buy low sell high. Buy when you've study this stock is at undervalued level; sell it when you've study this stock is extremely over its fair/true value.
Normal means just like shopping concept at supermarket mega sales day or queue for petrol price increase. However, in stock market people like to buy high, this is sound strange like?
To do "normal people" have to study it? Yes, at least in the stock market to do normal, we must study in order to do so.
Be noted that only buy good quality/undervalues stock, if poor quality, even if cheap also cannot buy.
This is normal behavior - this is reasonable behavior. Only normal people you insist!
Most people think with this condition is the best position on stock investment. In fact, with highly educated people the investment success rate is lower than average person.
The main reason is important of cultivation & knowledge or education level is secondary.
The so-called "cultivation" refers to a correct concept, the spirit of perseverance, patience, mentally stable and so on, without these qualities of mind thinking, no matter how good the knowledge, it is difficult to make a success in the stock market.
This is also important the person must have basic knowledge which including how to read & understand the financial statement (fundamental analysis) & technical analysis. If invested without knowledge, this is called "ignorant" & risky investment, equivalent to "blind hit".
However, no matter how rich the knowledge, this is useless if there is no cultivation as a guide. This is why mostly the high level educated person cannot perform better then lower educated with high cultivation.
If the person able to acquire both of knowledge & cultivation, I can predict that no matter how, this person will able make a success in stock market investment.
Therefore, be a normal person, buy low sell high. Buy when you've study this stock is at undervalued level; sell it when you've study this stock is extremely over its fair/true value.
Normal means just like shopping concept at supermarket mega sales day or queue for petrol price increase. However, in stock market people like to buy high, this is sound strange like?
To do "normal people" have to study it? Yes, at least in the stock market to do normal, we must study in order to do so.
Be noted that only buy good quality/undervalues stock, if poor quality, even if cheap also cannot buy.
This is normal behavior - this is reasonable behavior. Only normal people you insist!
Despite an improvement from trough levels in 4Q08, Masteel warns of continuing price volatility and tepid demand in the steel market that will likely be a drag on 2009 earnings. Near-term uncertainties aside, we can extract some current positives - such as firmer pricing and increasing orders by end-users (and not traders or stockers), which indicate a firmer underlying demand for steel products - for a more optimistic medium-term outlook.
Strong profitability track record. The steady growth in lottery sales in the Philippines underpinned by new games, higher jackpot and minimum price per bet has helped PGPI sustain a steady revenue and earnings growth over the past 8 years, during which its revenue and earnings registered a CAGR of 28.4% and 41.1% respectively. Its latest FY08 results indicate that earnings visibility and momentum continues to be strong, with revenue and pre-tax profit growing of 21.8% and 25.5% respectively.
♦ … but has potentially turned the corner. Moving forward, we believe the coming quarters ahead should be better for the group due to: 1) improving macro economic conditions; 2) falling newsprint prices; as well as 3) positive steps taken/planned by management. We expect the full impact of Berita Harian's and Harian Metro's ad rate hikes would be felt in 2Q. In addition, we expect the global economy to gradually stabilise in 2H09, followed by a recovery in 2010, and this should also benefit adex. Apart from the above, we see cost pressures gradually easing as lower newsprint cost starts filtering through for the group.
♦ Cover price hike for Harian Metro another booster. Another potential booster we see for the group is its recent cover price hike in mid-Apr for Harian Metro. Its daily now costs RM1.50/copy (previously RM1.20) while the weekend edition is now RM1.80 (from RM1.50).
♦ But Malay Mail acquisition potential dampener. It was recently reported in the press that moves are afoot for NSTP to buy back Malay Mail. If the acquisition materialises, we see this as a negative for NSTP. Firstly, the daily was loss-making and, we think, unlikely to have turned around especially given the deterioration in adex. Secondly, the acquisition could mean that management may need to divert time and focus in trying to turn around the ailing daily.
♦ Risks. The risks include: 1) weaker-than-expected adex; 2) higher-thanexpected newsprint costs; and 3) a depreciating RM vs. the US$.
♦ Forecasts. We now project NSTP to break even in FY09 (previously net loss of RM8.3m) while we have raised our FY10 and FY11 net profit projections by 23.3-38.1%. These revisions largely reflect the upward
revisions to our circulation revenue projections to factor in the cover price hike by Harian Metro, partly offset by weaker ad revenue projections.
♦ Investment case. We have revised our target FY10 PER downwards to 9x from 11x to reflect the potential concerns should the acquisition of Malay Mail materialise. However, together with the revision in earnings forecasts, our fair value has been raised to RM1.31 (RM1.16 previously) and consequently, we have upgraded our recommendation to Market Perform from Underperform.
• Domestic demand for steel products is down 50% YoY on average but has picked up 15% MoM recently. Average selling prices (ASPs), meanwhile, have also fallen 50% YoY but have stabilized lately. Given the collapse in demand and ASP, we expect Masteel to report a net loss in 1Q09 and possibly in 2Q09 as well. • Masteel also confirmed that its bio-tech venture is on the back burner for now, given the uncertain economic situation. The plant is ready but Masteel is not in a hurry to commence operations. We remove this project from our forecast but the impact to Masteel's bottomline is not material.
• 1H09 is unlikely to be a profitable one for Masteel and we look ahead to 4Q09 and onwards for a recovery in steel demand and improving ASPs. With a new political administration in place, we believe domestic infrastructure projects would be farmed out quickly and we should see positive impact of these project rollouts by 4Q09.
• We maintain our Buy recommendation on Masteel with a higher 12- month target price of MYR0.95 (from MYR0.75). The higher target price is a result of a higher target PER. We maintain our valuation method of a blend of PER and P/BV methodology. We utilize a PER of 4x (from 2x) and P/B of 0.5x (unchanged) against our forecast 2010 (rolled over from 2009) EPS and BVPS to derive our target price. The target PER is derived from peer average while the target P/B is derived from the group's historical average.
• We think investors are currently focusing on steel companies' 2010 earnings potential in anticipation of improving demand and ASPs stemming from increased global pump-priming. In Masteel's case, share price catalysts could come from improving margins from 4Q09 onwards.
• We think investors are currently focusing on steel companies' 2010 earnings potential in anticipation of improving demand and ASPs stemming from increased global pump-priming. In Masteel's case, share price catalysts could come from improving margins from 4Q09 onwards.
• Risks to our recommendation and target price include lower steel prices, higher-than-expected raw material prices and lower-thanexpected demand.
• We remove Masteel's biotech venture from our assumptions and reduce our steel sales volume projection to reflect slow demand pickup for much of 2009. These factors reduce our Masteel 2009 and 2010 net profit estimates down to MYR10.3 mln (from MYR45.4 mln) and MYR39.9 mln (from MYR49.9 mln) respectively.
Malaysia Steel Works (KL) (Masteel) is a steel producer with a capacity of 650,000 tons per annum (tpa). It produces steel billets and bars that are sold to downstream steel companies for the manufacturing of bars and other long products for the construction sector. The stock is a component of FBMEMAS.
BToto said it has entered into a share sale agreement with Ferrystar Limited (Ferrystar) for the proposed acquisition of 6.81% equity interest in Prime Gaming Philippines Inc (PGPI) for a total cash consideration of RM32.3m, or Php7.50/share. On completion of the propossal, BToto's stake in PGPI will increase from 81.5% to 88.3%. Based on PGPI's FY08 earnings and net of interest income forgone, the additional 6.8% equity in PGPI is only expected to enhance BToto's FY10 earnings by 0.3%. As BToto's share price has spiked up of late in anticipation of this piece of news, we believe it could be in for a mild correction, which would provide an opportunity to accumulate on weakness. Maintain BUY, TP: RM5.10, on strongerthan- expected dividend payout being the main catalyst for a share price re-rating.
Background on Prime Gaming Philippines Inc. PGPI is an investment holding company listed on the Philippines stock exchange. PGPI derives a major portion of its income from its wholly owned subsidiary, Philippine Gaming Management Corporation (PGMC), which is involved in leasing online lottery equipment and providing technical and software support to the Philippine Charity Sweepstakes Office (PCSO) exclusively for the Luzon area in the Philippines. As part of the lease agreement, PGMC is entitled to a percentage share of the Philippines Charity Sweepstakes' lottery revenue in the province of Luzon.
Strong profitability track record. The steady growth in lottery sales in the Philippines underpinned by new games, higher jackpot and minimum price per bet has helped PGPI sustain a steady revenue and earnings growth over the past 8 years, during which its revenue and earnings registered a CAGR of 28.4% and 41.1% respectively. Its latest FY08 results indicate that earnings visibility and momentum continues to be strong, with revenue and pre-tax profit growing of 21.8% and 25.5% respectively.
Valuation and pricing questionable. The acquisition price of Php7.50/share values PGPI at 17x FY08 PER, which is relatively undemanding given its strong earnings CAGR in excess of 20%. However, since its lease agreement with PCSO expires in August 2015, coupled with the fact that the acquisition price of Php7.50/share represents a steep 8.2x PBV, the key downside risk lies in PGMC's ability to successfully extend its present lease agreement.
1Q09 results expected to be in the red ... Excluding contribution from associates, we expect NSTP to post a pre-tax loss in its upcoming 1Q results. Firstly, we expect higher newsprint cost to drag 1Q bottomline. Secondly, this higher cost would be compounded by our expectations of weaker ad revenue during the quarter.♦ … but has potentially turned the corner. Moving forward, we believe the coming quarters ahead should be better for the group due to: 1) improving macro economic conditions; 2) falling newsprint prices; as well as 3) positive steps taken/planned by management. We expect the full impact of Berita Harian's and Harian Metro's ad rate hikes would be felt in 2Q. In addition, we expect the global economy to gradually stabilise in 2H09, followed by a recovery in 2010, and this should also benefit adex. Apart from the above, we see cost pressures gradually easing as lower newsprint cost starts filtering through for the group.
♦ Cover price hike for Harian Metro another booster. Another potential booster we see for the group is its recent cover price hike in mid-Apr for Harian Metro. Its daily now costs RM1.50/copy (previously RM1.20) while the weekend edition is now RM1.80 (from RM1.50).
♦ But Malay Mail acquisition potential dampener. It was recently reported in the press that moves are afoot for NSTP to buy back Malay Mail. If the acquisition materialises, we see this as a negative for NSTP. Firstly, the daily was loss-making and, we think, unlikely to have turned around especially given the deterioration in adex. Secondly, the acquisition could mean that management may need to divert time and focus in trying to turn around the ailing daily.
♦ Risks. The risks include: 1) weaker-than-expected adex; 2) higher-thanexpected newsprint costs; and 3) a depreciating RM vs. the US$.
♦ Forecasts. We now project NSTP to break even in FY09 (previously net loss of RM8.3m) while we have raised our FY10 and FY11 net profit projections by 23.3-38.1%. These revisions largely reflect the upward
revisions to our circulation revenue projections to factor in the cover price hike by Harian Metro, partly offset by weaker ad revenue projections.
♦ Investment case. We have revised our target FY10 PER downwards to 9x from 11x to reflect the potential concerns should the acquisition of Malay Mail materialise. However, together with the revision in earnings forecasts, our fair value has been raised to RM1.31 (RM1.16 previously) and consequently, we have upgraded our recommendation to Market Perform from Underperform.
Sime Darby has made an offer to acquire Ramunia Holdings for RM232m, comprising RM46.2m in cash and RM185.8m in Sime Darby Engineering shares.
COMMENTS
Compared to the previous lapsed offer by MISC to inject its subsidiary Malaysia Marine & Heavy Engineering valued at RM3.2bn in return for 1.4bn Ramunia shares valued at RM1.00 each and RM1.8bn RM0.50 seven-year unlisted ICPS, Sime Darby's offer values Ramunia at just RM0.43 per share, or 1.65x price/book.
Compared to the previous lapsed offer by MISC to inject its subsidiary Malaysia Marine & Heavy Engineering valued at RM3.2bn in return for 1.4bn Ramunia shares valued at RM1.00 each and RM1.8bn RM0.50 seven-year unlisted ICPS, Sime Darby's offer values Ramunia at just RM0.43 per share, or 1.65x price/book.
As Ramunia's assets represent a strategic fit for Sime Darby Engineering, it will be positive for Sime Darby if the offer is accepted. However, given the relatively low price coupled with partial satisfaction by shares in unlisted Sime Darby Engineering rather than Sime Darby, we believe Ramunia may not accept the offer if it has a choice. However, given the heavy gross gearing of RM360.6m, gross cash of just RM38.8m and the fact that Ramunia pays about RM7m in interest cost per quarter, Ramunia will run out of cash in less than 1 ½ years. We have a neutral view on the Ramunia deal.
Sime Darby has signed a US$800m accord with the Liberian government to restore and expand the country's 3rd largest rubber plantation and help develop the latter's palm oil industry. Under the 20-year accord, the Liberian government will provide Sime Darby with more than 200k hectares of land for the project.
COMMENTS
While details are lacking, it appears that the accord requires Sime Darby to invest US$800m to develop 200k hectares of oil palm plantation, which boils down to RM14.2k per hectare. Compared to IJM Plant's recent announcement of RM160m in development cost per 10k hectares, this number appears to be quite close. However, our concern is how much can be recouped before the 20-year accord is over, which is less than one planting cycle.
While details are lacking, it appears that the accord requires Sime Darby to invest US$800m to develop 200k hectares of oil palm plantation, which boils down to RM14.2k per hectare. Compared to IJM Plant's recent announcement of RM160m in development cost per 10k hectares, this number appears to be quite close. However, our concern is how much can be recouped before the 20-year accord is over, which is less than one planting cycle.
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