Sunday, April 26, 2015

Naim Holdings Berhad (5073) - Stock Pick Of The Year


Hello dear readers,

My stock pick for 2015 would be Naim Holdings Berhad - NAIM.

Current price as of Friday 24th April 2015 closing price : RM 2.88
Fair valuation (Target Price) : RM 5.82
Par value : RM 1.00
Net Asset : RM 5.04

By the way, forget about owning any Dayang Holdings Berhad shares directly. Why?

Because Naim holds 30.90% of DAYANG.

Naim has a total of 250,000,000 shares in the market @ RM 2.88 per share.
Dayang has a total of 877,099,935 shares in the market @ RM 2.60 per share.

So 30.90% of total DAYANG's share is 271,023,879 shares. For the sake of simplicity, we reduce it to just become 250,000,000 shares instead.

So if you own 1 share of NAIM : you automatically became an owner of 1 share of DAYANG!!!

Due to the fact NAIM only has 250,000,000 share capital, same as the amount we assumed it owned DAYAMG.

So one can essentially say, NAIM costs merely 28 cent only. Lol?

Get it?! Refer below to get a better understanding.




Naim Holdings Berhad is an investment holding company. The Company, through its subsidiaries, operates in three segments: integrated property developments, which includes residential, commercial and industrial properties with infrastructure and public amenities; contracting of construction, civil engineering, oil and gas and infrastructure projects, and oil and gas services through its investment in Dayang Enterprise Holdings Bhd. Other activities include the manufacture and sale of construction materials, provision of sand extraction and land filling services, property investment holdings, as well as quarry operation. The Company is the holding company for its 100% owned subsidiary, Naim Land Sdn Bhd (NLSB), which is primarily involved in property development and construction. On February 11, 2010, its subsidiary, Naim Overseas Sdn. Bhd. acquired 99.99% interest in Naim Quarry (Fiji) Limited.





For 2014 :






Calculation for Naim's fair value

Average 5 Years EPS : 58.23 cent
EPS x 10Y to break even : 58.23 x 10 = RM 5.82

Gross profit increased by RM 18.36 million or equivalent to 17%.

Earning per share : 92.99 cent (2015) vs 99.49 (2014) dropped by 6.5 cent or 6.98%.

The higher earning were contributed by the disposal of Naim's stake in Dayang Enterprise Holdings Bhd. 

They had disposed 2.73% of DEHB for a total cash consideration of RM 82.1 million. 

Originally they had 33.63% stake in DEHB, upon disposal NAIM still have 30.90% stake left.

Upon disposal, NAIM earned a gain of RM 61.8 million. 

So, their original cost of investment was only RM 20.3 million (2.73% stake) ~ their gain was near 304% !!!!!


Best of all, they still have 30.90% stake left!


With the upcoming plan of Borneo Island City with a Gross Development Value of RM 10 billion, NAIM will surely get to enjoy the spillover of it, given it's good track record on both construction and property sector. They have also won the award for being the most outstanding developer award in 2015 : refer here.

My prediction : 

Sooner or later, NAIM Holdings Berhad will have to give out bonus issue because they only have a share capital of RM 250,000,000 , where as their reserve is around RM 959,684,000. Yes almost 4 times of it's capital. By having a small capital, they will be very limited on bidding on for mega contracts etc. So a capital enlargement is required, and they can do so by issuing out bonus.




Past 10 Years Financial Highlights :



Why you should not be worried on buying NAIM Holdings?

Look on it's top 30 shareholders!

Lembaga Tabung Haji has 10.48% stake.
JPMorgan Chase (USA) has (2.48%+1.25% = 3.73% stake).
Employee Provident Fund (EPF) has 2.18% stake.
Koperasi Permodalan Felda has 1.08% stake.

These 4 big boys has a combined shareholdings of 17.47%. 





Naim has a huge land bank in Sarawak, they have about 7,431,366 square meter of land or equivalent to 1,836 acre of land. 





Wednesday, December 24, 2014

London Biscuits Berhad (7126) 2015 Stock Pick

Fair value : RM 0.83
Current Price (24/12/2014) : RM 0.60 
Potential Upside on Fair Value : 38.33%
Earning Per Share : RM 0.1246

Refer below :




Company Overview :





London Biscuits Berhad is a Malaysia-based company engaged in manufacturing and trading of confectionery and other related foodstuffs. The Company offers packed and ready to eat products, which can be categorize into corn based snacks and cake products, such as Swiss rolls, pie cakes and layer cakes. In addition, it also manufactures range assorted chocolate confectionery, including chocolate-coated peanuts and biscuits, pancake cookies, jelly and puddings, wafer sticks, cup sticks and snack noodles. The Company’s products are marketed under the brand names of Lonbisco, London, Kinos, Gega, Caca, Mizu and Hiro. Its direct subsidiaries are Khee San Berhad, which is engaged in investment holding, and Kinos Food Industries (M) Sdn Bhd, which is engaged in investment holding, manufacturing and trading of confectioneries and snack food. In addition, its indirect subsidiaries are Khee San Marketing Sdn Bhd; Khee San Food Industries Sdn Bhd, Kim Choaw Sdn Bhd and Kinos Food Trading Sdn Bhd.


52 weeks High RM 0.93 
52 weeks Low RM 0.565








Balance Sheet :





Fair value : RM 0.83
Current Price (24/12/2014) : RM 0.60 
Potential Upside on Fair Value : 38.33%
Earning Per Share : RM 0.1246

Refer below :




CIRCULAR TO SHAREHOLDERS IN RELATION TO THE PROPOSED BONUS ISSUE OF UP TO
37,281,357 FREE WARRANTS (“BONUS WARRANTS”) ON THE BASIS OF ONE (1) BONUS WARRANT
FOR EVERY FIVE (5) EXISTING ORDINARY SHARES OF RM1.00 EACH HELD IN LONDON BISCUITS
BERHAD (“LBB”) ON AN ENTITLEMENT DATE TO BE DETERMINED LATER


EGM to be hosted on 31st December 2014 to authorize the proposed bonus issue of ONE warrant for every FIVE existing shares.



Wednesday, November 5, 2014

Revised Target Price For Mitrajaya : November 2014.

Greetings,


In March 2014, I have written an entry for Mitrajaya Berhad (9571).
Kindly refer to this post here.

Current price @ 5th November 2014 - RM 1.01
Target price by March 2015 - RM 1.54


I gave out the first buy call when it was priced at RM 0.49 per share for a projection target price of RM 0.90 per share due to the fact that it's FY 2013 earnings was 7.43 cent per share.

However circumstances have changed over the course of this few months, Mitrajaya remain as the best small cap construction stock to be chosen due to the following reasons :


i) Significant increase on its current order book tenders which stood at roughly RM 1.4 billion ringgit. Yes it is quite big for a small company with about RM 200 million share capital. Recent contracts awarded are as shown below :



With the current order book, Mitrajaya Bhd should be in a safe region for the upcoming 2 to 3 years. Best part is that I have not included it's property segment business yet!


ii) Interesting growth shown in the year 2014 :

Comparison of earnings in the past years are shown below.





iii) It's property division project which is 280 Park Homes in Puchong is approaching it's completion. Major structural works are almost finished and the expected completion will be around October 2015. Gross Development Value : RM 330 million.
Attached below is some of it's current progress that I have obtained from their official website :






iv) Their next property project is Wangsa 9 High Rise Condominium which will be launched next year with a total gross development value of RM 650 million comprises of 565 units Condominiums in 3 blocks. It will be the tallest condominium in Wangsa Maju and it is strategically located besides LRT Sri Rampai.


v) Undervalued land banks which has not been revalued since it's listing (90's) which in book only shows about RM 160 million whereas the market value would be about RM 624 million by now, primarily consists of the following :







Happy investing ;)



Saturday, November 1, 2014

October 2014 Summary

In the last 4 weeks, there have been few significant events that we should pay close attention to :

1) IMF cuts the global economic growth forecast.

2) Saudi Arabia are willing to sell crude oil at a lower price and boost its production, it's official spoke person even said that they won't mind if the price reaches 70-72$ per barrel. As of Friday 31/10/14 , WTI and Brent are trading at $80.54 and $85.86 respectively.

3) After the 2008 sub-prime crisis that hits The United States, The Federal Reserve have been providing a lot of economic stimulus such as Quantitative Easing, which the Fed supports the stocks market by encouraging banks to make more loans and hence the idea works by bank to take the new money and buy assets to replace those they have sold to the central bank. In just mere 4 years, the Fed has spent about 3.7 trillion dollar on it's quantitative easing program. And it has officially ended QE on Thursday 30/10/14.

4) However, as the Fed stops QE, Bank Of Japan made a huge surprise, Japan's Prime Minister, Shinzo Abe announced that they will be expanding their QE program at even faster pace of about $712 billion a year! Their goal is to reduce deflation and at the same time put an end to it.

5) Gold and silver price tumbled to a 4 years low thanks to Bank Of Japan's decision, which means there will be a huge rally on share markets that are about to take place.

Saturday, August 9, 2014

Bina Darulaman Berhad (BDB) a hidden gem of Kedah







2 years range price chart.

BDB core business includes :

1) Construction
2) Property
3) Investment holding
4) Oil palm plantation

List of landed properties owned by BDB :








Most of the land held have not be revalued.

Majority shareholders of the company :

1) PERBADANAN KEMAJUAN NEGERI KEDAH : 54.49%
2) CIMSEC NOMINEES (TEMPATAN) SDN. BHD. CIMB FOR GENERAL TECHNOLOGY SDN. BHD. : 4.00%
3) RESON SDN BHD : 3.54%
4) CHUANG SHOW CHUAN : 3.51%
5) AMANAH SAHAM KEDAH : 2.98%

Financial aspects :

a) PAR VALUE : RM 1
b) Share capital  : RM 72 million
c) Earning per share for 2013 : 29.03 cent
d) Earning per share for 2012 : 29.78 cent
e) Earning per share for Q1 2014 : 7.11 cent
f) Net assets per share : RM 3.71 (keep in mind that this is without all of BDB's land being revalued - if they were to be re-assessed, it's NTA could reach RM 5 (based on self valuation by multiplying it's current land and properties with a 1.5 factor)

Current P/E ratio (2013) is only 8 !

My personal consideration for a company that is directly linked to a State Government, 15 would be a fair P/E for it.

Target price by end of 2014 : RM 4.35



News :

a) The company has made a press release about their goal of expanding outside of Kedah.
b) PROPOSED "en bloc" SALE OF 323 UNITS DOUBLE STOREY TERRACE HOUSES AT TAMAN INSANIAH, KUALA KETIL, DISTRICT OF BALING, KEDAH DARULAMAN.
c) Darulaman Realty Sdn Bhd (subsidiary of BDB) had entered into S&P with TulangisMaju Sdn Bhd for disposal of a piece of leasehold land for RM 3.8 million. (To receive the payment within 3 months from agreement date).
d)  Issued letter of acceptance (LoA) for PROPOSED PAVEMENT WORK FOR THE PROJECT "MEMBINA JALAN PERSEKUTUAN (LALUAN 67) DARI PEKAN SUNGAI PETANI, DAERAH KUALA MUDA, KG PEKAN TAWAR, DAERAH BALING, 14.1 (PAKEJ 1) - DARI PERSIMPANGAN LENCONGAN TIMUR KE PERSIMPANGAN LALUAN (K620), KEDAH contract worth RM 9.45 million (expected end date 28th May 2015)
e) PROPOSED ACQUISITION OF SEVERAL PARCELS OF LAND MEASURING APPROXIMATELY 1200 ACRES (485 HECTARES) IN AGGREGATE FROM PERBADANAN KEMAJUAN NEGERI KEDAH ("PKNK").
f) Might be the beneficiary for proposed development of Kulim airports ( costs expectation : RM 1.6 billion)




Wednesday, May 28, 2014

Boustead Plantation IPO - Indicative Price RM 1.60 - Target price RM 1.97













The official prospectus can be found here.








Malaysian palm oil producer Boustead Plantations Bhd (IPO-BOPL.KL) priced its IPO at an indicative price range of 1.50 ringgit to 1.60 ringgit per share as it seeks to raise up to 1.05 billion ringgit ($327.05 million) in an initial public offering, its chairman said on Tuesday.

The company is the plantation arm of financial-to-defence conglomerate Boustead Holdings Bhd. It is offering 163.57 million shares to institutional investors and about 64 million to the Malaysian public.

Those shares are in addition to 428.43 million shares being offered to unit holders of Al-Hadharah Boustead Reit, Boustead Holdings and eligible directors and employees.

"I must say the demand for our stock has been quite encouraging," said Boustead Plantations's chairman, Lodin Wok Kamaruddin.

Lodin told reporters after the launch of the company's IPO prospectus that "if we are able to price it at 1.50-1.60 ringgit, we feel that certainly would be a good price for investors to take up the shares in the market," he added.

Boustead Plantations plans to use the proceeds to expand its total planted area to 100,000 hectares from the current 71,000 hectares by 2017 via acquisitions of existing plantations estates and reserve land mainly in Malaysia, Lodin said.

Pricing is slated for June 11 and its market debut set for June 26, according to the prospectus.

Affin Investment Bank, Credit Suisse and Maybank Investment Bank are the global co-ordinators, the prospectus showed.

Monday, March 31, 2014

This Grandfather Left One Final Letter, You Gotta Read...



On Sept. 3, 2012, James K. Flanagan of West Long Branch, N.J., died unexpectedly of a heart attack.
He wrote this letter to his five grandchildren just months earlier and it is reprinted here with the permission of his daughter Rachel Creighton.

Dear Ryan, Conor, Brendan, Charlie, and Mary Catherine,

My wise and thoughtful daughter Rachel urged me to write down some advice for you, the important things that I have learned about life.
I am beginning this on 8 April 2012, the eve of my 72nd birthday.

1. Each one of you is a wonderful gift of God both to your family and to all the world. Remember it always, especially when the cold winds of doubt and discouragement fall upon your life.

2. Be not afraid . . . of anyone or of anything when it comes to living your life most fully. Pursue your hopes and your dreams no matter how difficult or "different" they may seem to others.
Far too many people don't do what they want or should do because of what they imagine others may think or say. Remember, if they don't bring you chicken soup when you're sick or stand by you when you're in trouble, they don't matter.
Avoid those sour-souled pessimists who listen to your dreams then say, "Yeah, but what if . . ." The heck with "what if. . ." Do it! The worst thing in life is to look back
and say: "I would have; I could have; I should have." Take risks, make mistakes.

3. Everyone in the world is just an ordinary person. Some people may wear fancy hats or have big titles or (temporarily) have power and want you to think they are above the rest.
Don't believe them. They have the same doubts, fears, and hopes; they eat, drink, sleep, and fart like everyone else.
Question authority always but be wise and careful about the way you do it.

4. Make a Life List of all those things you want to do: travel to places; learn a skill; master a language; meet someone special. Make it long and do some things from it every year.
Don't say "I'll do it tomorrow" (or next month or next year). That is the surest way to fail to do something. There is no tomorrow, and there is no "right" time to begin something except now.

5. Practice the Irish proverb: Moi an olge agus tiocfaidh sí "Praise the child and she will flourish."

6. Be kind and go out of your way to help people -- especially the weak, the fearful, and children. Everyone is carrying a special sorrow, and they need our compassion.

7. Don't join the military or any organization that trains you to kill. War is evil. All wars are started by old men who force or fool young men to hate and to kill each other.
The old men survive, and, just as they started the war with pen and paper, they end it the same way. So many good and innocent people die. If wars are so good and noble, why aren't those leaders who start wars right up there fighting?

8. Read books, as many as you can. They are a wonderful source of delight, wisdom, and inspiration. They need no batteries or connections, and they can go anywhere.

9. Be truthful.

10. Travel: always but especially when you are young. Don't wait until you have "enough" money or until everything is "just right." That never happens. Get your passport today.

11. Pick your job or profession because you love to do it. Sure, there will be some things hard about it, but a job must be a joy. Beware of taking a job for money alone -- it will cripple your soul.

12. Don't yell. It never works, and it hurts both yourself and others. Every time I have yelled, I have failed.

13. Always keep promises to children. Don't say "we'll see" when you mean "no." Children expect the truth; give it to them with love and kindness.

14. Never tell anyone you love them when you don't.

15. Live in harmony with Nature: go into the outdoors, woods, mountains, sea, desert. It's important for your soul.

16. Visit Ireland. It's where the soul of our family was born -- especially the West: Roscommon, Clare, and Kerry.

17. Hug people you love. Tell them how much they mean to you now; don't wait until it's too late.

18. Be grateful. There is an Irish saying: "This is a day in our lives, and it will not come again." Live every day with this in mind.