Pintaras Jaya - More room for rally?

On 13th March, We have featured Pintaras Jaya as a undervalued and overlooked company. It was trading at 20% discount to our Fair value of RM3.90. Since then it has rallied from RM3.05 to RM4.00 translating  a 31% increase in price. The rally was very much triggered by the news of receiving a new contract worth RM71Million on the 7/4/2014.

The million dollar question now is, can this rally continue?

Looking at the order received announcement records, YTD 2014, it has received RM169Million worth of orders. This is 78% of last years RM256million order book which itself a record high. However, interestingly 2013 revenue is slightly lower then in 2012 mainly due to delays in project delivery. Which means a better Earnings can be anticipated for 2014 with the over flowing of earnings from 2013. If 2014 records higher order book, certainly market will anticipate stronger earnings.

As this discussion goes on, one thing is obvious: From a actual undervalue position based on the current earnings, we are moving on to forecasting a undervalue position based on anticipated earnings. Hence, risk in investing in Pintaras Jaya has risen accordingly. Safety of margin has reduced drastically if not no longer available. Also looking from the price movement, a short term correction is bound to occur.

In conclusion, at this price levels, it is no longer cheap yet not overly expensive either. the underlying fundamental of business has not change at all. Buying now, risk level has gone up and one must take a short term correction into account. For the longer term, as long as the projects theme is still in play, This counter will be in a good position.

Note: I am a share Owner of Pintaras Jaya

Happy Investing !

(For more company articles please click: Company Analysis)

Bursa Trade Participation 2014 Week 13

There is a saying : "Follow the Money", It is not a secrete that asset prices grows when there is money flowing into it, in particular 'Hot' money. It pays to monitor this flow. The following chart tracks the weekly trade participation since May 2013. It shows how much net trades excuted by Foreign institution(green), local retail(red) and local institute(blue) in RM million. A negative value is net selling, positive value means net buying. The FBMKLCI index is overlayed to see if it does influence the overall picture.(Data Source: Inter-pacific securities sdn. bhd.)

Week 13 comment:

foreign institution reversed it trend by becoming net buyers of RM710.9 million worth of equity. Immediately the index moved up in tandem. The important question is, will this trend continue?  

Bursa Trade Participation 2014 Week 12

There is a saying : "Follow the Money", It is not a secrete that asset prices grows when there is money flowing into it, in particular 'Hot' money. It pays to monitor this flow. The following chart tracks the weekly trade participation since May 2013. It shows how much net trades excuted by Foreign institution(green), local retail(red) and local institute(blue) in RM million. A negative value is net selling, positive value means net buying. The FBMKLCI index is overlayed to see if it does influence the overall picture.(Data Source: Inter-pacific securities sdn. bhd.)

Week 11 comment:

     Foreign Institutions sold RM 334.60 milion last week. However, The FBMKLCI made a rebound. Local Institution continue to support the KLCI. The following wewk (week 13) will be the 1st week where investors reacts to US FED Chair lady's comments. It  is obvious from below chart, the KLCI index is very much affected by the Foreign fund flow.

Notion - 10th AGM Take away message.

On the 20th March, Notion vtec held its 10th AGM at the Premiere Hotel Bukit Tinggi Klang. together with few other share holders, I attended and posted some question to the board

Not many attended, but the executive Chairman did took some time to answer question posted. Personally, I think Mr.Thoo the Executive Chairman has replied openly, professionally and to his capability. Certainly there were things not completely revealed, yet questions were replied at length. The overall sentiment is understandably subdued due to the poor result for FY2103. The only press came to cover is The Edge malaysia.

Some important point I took away were:

1. Alcyone

• The Chairman admitted it was a investment mistake. He would resign from the board if  Notion losses (e.g: has to write down) the entire investment of RM15million in Alcyone.
• However, in a informal conversation, he is confident that Notion will be able at least take back the investment.
• Notion would not be investing more then the RM15 million already invested. Which means effectively, Notion will not subscribe the right issue. (Formally, Notion will subscribe the right issue but Alycyone will subscribe it back....how this works is not clear at the moment, Bottom line, no more capital injection from Notion.)
• There is severe drought at the mines, so mining works has been affected.

2. Sell and lease back of Factory.

• The tender process is expected to end at the end of March. (According to the financial controller during informal conversation, tenders were from consortium and high net worth individual. None from public listed companies REITS etc.)
• Mr.Thoo, mention the exercise will be "very rewarding" in a very cheeky way. Does this mean special dividend on the way? He did mention, some of the building were bought at RM25 psf, currently it is RM75 psf.
• Mr.Thoo also revealed, proceeds from the exercise, 2 years of rental will be kept as reserves, remaining to be used for capex. If they don't find anything to invest/use of the money they "might" return it to share holders.

3.Manufacturing activity

• SLR segment orders are till weak. HDD enterprise has picked up. Aumotive is growing.
• About 100 CNC machine from the SLR segment is converted to the HDD segment which is running at full capacity. SLR is running at 50%.
• Informally, management reveal Q2 will be better then Q1. SLR is expected to recover in 2015

Summary

2014 will still be a poor year with slight improvement. The Alcyone story will be complicated and affect sentiment.  Impact to bottom line will be minimal. Strengthening of the USD will still impact negatively  on the bottom line due to Forex hedging Notion undertook. (This is unfortunate, as USD is expected to strengthen further, as a exporter it should benefit.). The only bright spot will be the lease and sell back, special dividend might be on the way. That is a big "might".

There was a scene whereby there is a motion in the meeting agenda to reappoint Mr.Thoo back as Chairman. I would expect they already have a proxy ready to propose and second the motion as all other AGM does. There wasn't one! After every one waiting and looking around, I actually had to raised my hand and acted as proposer and another share holder acted as seconder...Mr.Thoo actually said he thought he is retiring early..Board tussle brewing? or over confident? 

Having said that, I have a sense of respect to the Executive Chairman, who is willing to openly admit his mistake and take responsibility for it. 

Happy Investing !

(For more company articles please visit: Company Analysis)

Notion- Alcyone suspended in Australia

Very Worrying progress with the investment made by Notion.

on 5th March 2014, Alcyone is asking more money from Alcyone share holders by issuing Right Issues. Which means Notion has to inject more money to the company. At the same time, exploration has to be suspended, but silver is still produced from the heap.

Then 18th March, ASX, the Australian Stock Market operator suspended Alcyone's listing in failing to provide Financial report! The Alcyone management has come out to explain that it was done deliberately in view of the proposed right issue. I find this baffling, Why can't financial report be provided with a planned right issue? I could only speculate the report might be very poor.

Not a good development.

Happy Investing !

(For more company articles please click: Company Analysis)

Bursa Trade Participation 2014 Week 11

There is a saying : "Follow the Money", It is not a secrete that asset prices grows when there is money flowing into it, in particular 'Hot' money. It pays to monitor this flow. The following chart tracks the weekly trade participation since May 2013. It shows how much net trades excuted by Foreign institution(green), local retail(red) and local institute(blue) in RM million. A negative value is net selling, positive value means net buying. The FBMKLCI index is overlayed to see if it does influence the overall picture.(Data Source: Inter-pacific securities sdn. bhd.)

Week 11 comment:

     Foreign Institutions sold heavily last week. loading off RM989.30 million worth of equity. No surprise as the KLCI index has fallen with this out flow. 

Pintaras Jaya Berhad- Pilling in profits

 

One of the beneficiary to the Mega trend of Urbanization and population growth  is construction. More infrastructures will be needed to accommodate the ever growing need for transportation, places to work and stay. One of the important feature of any infrastructure is the foundation.


Pintaras Jaya Berhad, found a niche in this area.  As the only listed pilling company, it is somewhat below the radar of investors. The following charts will show why we should take notice as I believe it is undervalued.

Note: I am a share Owner of Pintaras Jaya

Happy Investing !

(For more company articles please click: Company Analysis)