Confronted by the mixture of changing facts and fluctuating human fancies, the securities analyst is clearly incapable of passing judgement on common-stock prices "generally."
There are , however, some concrete, if limited, functions that he "may" carry on in this field, of which the following are representative :
1. He may set up a basis for "conservative or investment" valuation of common stocks, as distinguished from speculative valuations.
2. He may point out the significance of :
(a) the capitalization structure; and
(b) the source of income
as bearing upon the valuation of a given stock issue.
3. He may find unusual elements in the balance sheet which affect the implications of the earnings picture.
.
Friday, November 26, 2010
Exact Appraisal Impossible
Security analysis cannot presume to lay down general rules as to the "proper value" of any given common stock. Practically speaking, there is no such thing. The bases of value are too shifting to admit of any formulation that could claim to be even reasonably accurate. The whole idea of basing the value upon "current earnings" seems inherently absurd, since we know that the current earnings are constantly changing. And whether the multiplier should be 10 or 15 or 30 would seem at bottom a matter of purely arbitrary choice.
But the stock market itself has no time for such scientific scruples. It must make its values first and find its reason afterwards. Its position is much like that of a jury in a breach-of-promise suit; there is no way of measuring the values involved, and yet they must be measured somehow and a verdict rendered.
Hence the prices of common stocks are "not carefully thought out computations" but "the resultant of a welter of human reactions."
The stock market is a voting machine rather than a weighing machine.
It responds to factual data "not directly" but only as they "affect the decisions" of buyers and sellers.
.
But the stock market itself has no time for such scientific scruples. It must make its values first and find its reason afterwards. Its position is much like that of a jury in a breach-of-promise suit; there is no way of measuring the values involved, and yet they must be measured somehow and a verdict rendered.
Hence the prices of common stocks are "not carefully thought out computations" but "the resultant of a welter of human reactions."
The stock market is a voting machine rather than a weighing machine.
It responds to factual data "not directly" but only as they "affect the decisions" of buyers and sellers.
.
Leader Universal expects diversification to pay off by 2013
Monday, 25 October 2010 00:00
Leader Universal Holdings Bhd is expecting its diversification away from its core business into power transmission and distribution to bear fruit within three years.
Leader Universal, which has its mainstay in manufacturing wire and cables, made its foray into the power transmission and distribution business in 1994 by building electric transmission cables and power plants in Cambodia.
The company is currently building a 100MW coal-fired power plant near the port city of Sihanoukville, Cambodia, which is funded by a syndicated term-loan facility and internally generated funds.
It undertook a financing facility of US$140 million (RM436 million) for the project and has seven years to repay the loan, with an option to extend the repayment period by another two years, subject to its lenders’ approval.
Besides power generation, Leader Universal is also building a 230kV, 110km overhead transmission line linking two substations near Phnom Penh.
The transmission project is partly funded by bank borrowings of US$65 million, payable over 13 years commencing from 2010, from Export-Import Bank of Malaysia Bhd and by internally generated funds. The cost of the entire power transmission project is estimated to be US$107 million. It is targeted for completion by mid-2011, while the substations north of Phnom Penh are expected to be ready by early 2012.
Based on Leader Universal’s latest quarterly report, its long-term borrowings are RM130.38 million while short-term borrowings are RM224.33 million, on the back of total equity of RM667.78 million.
The company, which derives only 6.55% of its revenue from the power transmission segment, expects to see this figure grow to about 20% by FY2013 ending Dec 31.
“Yes, we will see both projects completed by 2013. Currently, over 90% of our revenue is contributed by the wire and cables division,” says Leader Universal’s investor relations official Albert Wong.
Indeed, the company’s revenue for 1HFY2010 was RM1.22 billion, a rise of 33.3% from the corresponding period a year ago. Net profit was RM25.1 million, compared with RM26.2 million for the same period last year.
Earnings per share for the six months stood at 5.75 sen, while net tangible assets per share was RM1.25 on the back of a market capitalisation of RM384.08 million.
On Leader Universal’s outlook for 2H2010, Wong says the company is expected to achieve “better results” compared with the same period last year, barring any unforeseen circumstances.
The company recorded revenue of RM918.76 million for the first six months of FY2009. If it is able to repeat its performance this year, its annualised revenue could hit RM2.45 billion. This is almost equal the RM2.54 billion recorded in 2008, before the US subprime crisis hit the world economy, and also 25.6% higher than the RM1.95 billion revenue achieved in FY2009.
However, it should be noted that Leader Universal saw a 33.5% drop in its cash and bank balances for 1HFY2010 to RM135.11 million, compared with the same period a year ago. Its net cash flow from operations also dropped to RM23.92 million, from RM205.91 million.
Wong attributes this to the company’s increased sales, which led to an increase in working capital requirements and resulted in increased debtor balances that were not due for collection yet.
Wong is confident that a steady stream of jobs coming in will keep the company busy over the next few years. Among the projects he cites are
1. the RM40 billion mass rapid transit,
2. RM26 billion KL International Financial District,
3. RM5 billion 100-storey Warisan Merdeka Tower,
4. six highways,
5. schools and
6. hospitals.
Leader Universal also expects to benefit from the Sarawak Corridor of Renewable Energy programme and the implementation of other projects under the Ninth Malaysia Plan worth RM7 billion.
Leader Universal’s associate, Sarawak Cable Bhd, is the front runner to land plump jobs to provide cables in the state. Among its shareholders are Sarawak Energy Bhd, the sole electricity supplier in the state.
Leader Universal’s optimism in Cambodia is premised on its young population hungry for power as the country develops further. It is not a new market for the Penang-based company, which has been looking at Cambodia for some years now.
Given its persistence and expanding power plant business in Cambodia, the company’s diversification is expected to pay off in the years to come.
This article appeared in Corporate, The Edge Malaysia, Issue 829, Oct 25-31, 2010
Leader Universal Holdings Bhd is expecting its diversification away from its core business into power transmission and distribution to bear fruit within three years.
Leader Universal, which has its mainstay in manufacturing wire and cables, made its foray into the power transmission and distribution business in 1994 by building electric transmission cables and power plants in Cambodia.
The company is currently building a 100MW coal-fired power plant near the port city of Sihanoukville, Cambodia, which is funded by a syndicated term-loan facility and internally generated funds.
It undertook a financing facility of US$140 million (RM436 million) for the project and has seven years to repay the loan, with an option to extend the repayment period by another two years, subject to its lenders’ approval.
Besides power generation, Leader Universal is also building a 230kV, 110km overhead transmission line linking two substations near Phnom Penh.
The transmission project is partly funded by bank borrowings of US$65 million, payable over 13 years commencing from 2010, from Export-Import Bank of Malaysia Bhd and by internally generated funds. The cost of the entire power transmission project is estimated to be US$107 million. It is targeted for completion by mid-2011, while the substations north of Phnom Penh are expected to be ready by early 2012.
Based on Leader Universal’s latest quarterly report, its long-term borrowings are RM130.38 million while short-term borrowings are RM224.33 million, on the back of total equity of RM667.78 million.
The company, which derives only 6.55% of its revenue from the power transmission segment, expects to see this figure grow to about 20% by FY2013 ending Dec 31.
“Yes, we will see both projects completed by 2013. Currently, over 90% of our revenue is contributed by the wire and cables division,” says Leader Universal’s investor relations official Albert Wong.
Indeed, the company’s revenue for 1HFY2010 was RM1.22 billion, a rise of 33.3% from the corresponding period a year ago. Net profit was RM25.1 million, compared with RM26.2 million for the same period last year.
Earnings per share for the six months stood at 5.75 sen, while net tangible assets per share was RM1.25 on the back of a market capitalisation of RM384.08 million.
On Leader Universal’s outlook for 2H2010, Wong says the company is expected to achieve “better results” compared with the same period last year, barring any unforeseen circumstances.
The company recorded revenue of RM918.76 million for the first six months of FY2009. If it is able to repeat its performance this year, its annualised revenue could hit RM2.45 billion. This is almost equal the RM2.54 billion recorded in 2008, before the US subprime crisis hit the world economy, and also 25.6% higher than the RM1.95 billion revenue achieved in FY2009.
However, it should be noted that Leader Universal saw a 33.5% drop in its cash and bank balances for 1HFY2010 to RM135.11 million, compared with the same period a year ago. Its net cash flow from operations also dropped to RM23.92 million, from RM205.91 million.
Wong attributes this to the company’s increased sales, which led to an increase in working capital requirements and resulted in increased debtor balances that were not due for collection yet.
Wong is confident that a steady stream of jobs coming in will keep the company busy over the next few years. Among the projects he cites are
1. the RM40 billion mass rapid transit,
2. RM26 billion KL International Financial District,
3. RM5 billion 100-storey Warisan Merdeka Tower,
4. six highways,
5. schools and
6. hospitals.
Leader Universal also expects to benefit from the Sarawak Corridor of Renewable Energy programme and the implementation of other projects under the Ninth Malaysia Plan worth RM7 billion.
Leader Universal’s associate, Sarawak Cable Bhd, is the front runner to land plump jobs to provide cables in the state. Among its shareholders are Sarawak Energy Bhd, the sole electricity supplier in the state.
Leader Universal’s optimism in Cambodia is premised on its young population hungry for power as the country develops further. It is not a new market for the Penang-based company, which has been looking at Cambodia for some years now.
Given its persistence and expanding power plant business in Cambodia, the company’s diversification is expected to pay off in the years to come.
This article appeared in Corporate, The Edge Malaysia, Issue 829, Oct 25-31, 2010
Perodua sees higher sales on strong demand
Friday November 26, 2010
KOTA KINABALU: Perusahaan Otomobil Kedua Sdn Bhd (Perodua) has revised upward its sales figure for the year, given the strong demand for its vehicles.
Managing director Datuk Aminar Rashid Salleh said the company was now expecting to sell 185,000 vehicles in 2010 compared with an initial projection of 176,000 units.
He said that MyVi remained the most popular of Perodua's range of vehicles, accounting for about 41% sales, while the Viva compact and Alza multi-purpose vehicle (MPV) made up 37% and 22% of sales respectively.
To us, the Viva will continue to be relevant for many years to come, Aminar said at the launch of the Viva Elite Exclusive here yesterday.
He said the Viva accounted for 10,500 of the 21,300 vehicles sold in Sabah and Sarawak so far this year.
Sabah contributed 46% to our sales in this region and I believe the market still has a lot of room to grow.
We aim to increase the sales contribution from this part of the country from 14% to 20% within five years, Aminar said, adding that this would be achieved through a concerted advertising campaign and various ground activities.
Asked about competition from foreign makers of compact cars, such as those from South Korea and China which were trying to make their presence felt in the country, he said Perodua had had a good headstart in terms of establishing its sales and service network nationwide.
We are an established brand as evident from the good resale value of our vehicles. This includes the Kancil which was introduced some 17 years ago, he said.
Aminar said Perodua also understood Malaysians' taste and that it designed its vehicles accordingly.
KOTA KINABALU: Perusahaan Otomobil Kedua Sdn Bhd (Perodua) has revised upward its sales figure for the year, given the strong demand for its vehicles.
Managing director Datuk Aminar Rashid Salleh said the company was now expecting to sell 185,000 vehicles in 2010 compared with an initial projection of 176,000 units.
He said that MyVi remained the most popular of Perodua's range of vehicles, accounting for about 41% sales, while the Viva compact and Alza multi-purpose vehicle (MPV) made up 37% and 22% of sales respectively.
To us, the Viva will continue to be relevant for many years to come, Aminar said at the launch of the Viva Elite Exclusive here yesterday.
He said the Viva accounted for 10,500 of the 21,300 vehicles sold in Sabah and Sarawak so far this year.
Sabah contributed 46% to our sales in this region and I believe the market still has a lot of room to grow.
We aim to increase the sales contribution from this part of the country from 14% to 20% within five years, Aminar said, adding that this would be achieved through a concerted advertising campaign and various ground activities.
Asked about competition from foreign makers of compact cars, such as those from South Korea and China which were trying to make their presence felt in the country, he said Perodua had had a good headstart in terms of establishing its sales and service network nationwide.
We are an established brand as evident from the good resale value of our vehicles. This includes the Kancil which was introduced some 17 years ago, he said.
Aminar said Perodua also understood Malaysians' taste and that it designed its vehicles accordingly.
Thursday, August 5, 2010
Saturday, July 31, 2010
Collected 174,000 MJPerak at 19.88 sen average
This month, I collected another 174,000 MJPerak at average price of 19.88 sen a share.
Wish me LUCK !
Wish me LUCK !
Collected Analabs at RM 1.62
I collected another 10,000 Analabs shares at RM 1.62 ...
Wish me LUCK !
Wish me LUCK !
Saturday, July 24, 2010
Reserves ~ 15 Jul 10 : RM 309.9 b > 8.0 mo > 4.4 x
International Reserves of BNM as at 15 July 2010
The international reserves of Bank Negara Malaysia amounted to RM309.9 billion (equivalent to USD94.8 billion) as at 15 July 2010.
The reserves position is sufficient to finance 8 months of retained imports and is 4.4 times the short-term external debt.
The international reserves of Bank Negara Malaysia amounted to RM309.9 billion (equivalent to USD94.8 billion) as at 15 July 2010.
The reserves position is sufficient to finance 8 months of retained imports and is 4.4 times the short-term external debt.
Thursday, July 8, 2010
Perodua: Rate hike unlikely to affect sales
Thursday July 8, 2010
Perodua: Rate hike unlikely to affect sales
KUALA LUMPUR: Perusahaan Otomobil Kedua Sdn Bhd (Perodua) does not expect the recent rise in interest rates to affect its sales significantly.
Its managing director Aminar Rashid Salleh said interest rate rise in April and June had little impact on the car maker’s sales for the first half of the year.
“We are still recording good sales as consumer sentiments are strongly inclined towards affordable cars with good fuel economy which we are well known for,” he said at a media briefing on the company’s first-half performance here yesterday.
Aminar said Perodua sold 95,000 vehicles in the first six months of the year, representing an estimated 31.7% of the domestic market share. This is an increase from 77,000 units or 30.7% share in the same period of last year.
“The 23% increase in vehicle sales were due to the improving economy, contributions from the Alza MPV, and also the continued high demand for Myvi and Viva models.
“Barring unforeseen circumstances and higher demand for the festive season in the third quarter, we are confident of reaching our 176,000 units sales target for 2010,” he said.
Perodua sales in June rose to 16,300 units from 13,200 units in the same month of last year.
He also said Perodua’s aftersales had increased its vehicle intake in the first six months of the year to 823,000 units from 771,500 units in the first half of 2009 with higher productivity and the addition of eight new service dealers.
Perodua now has 163 service outlets consisting 45 branches and 118 service dealers.
At the briefing, Aminar also launched Perodua’s latest Myvi variant - the Myvi Limited Edition (LE) – which has been restyled for women.
“As more than 50% of Perodua car buyers are women, we feel a variant that is more fashionable and appealing to them should be introduced,” Aminar said.
Based on the standard Myvi 1.3-litre variant with a four-speed automatic transmission, the Myvi LE gets additional features including new interior trim colours, decorative cubic printing on centre cluster and door trims, chrome interior door release latches, vanity mirror on driver sunshade and side door mouldings.
Priced on-the-road at RM48,600 or RM1,700 over the standard Myvi variant, the Myvi LE also gets dual front airbags, USB and Bluetooth connectivity as standard equipment.
Perodua: Rate hike unlikely to affect sales
KUALA LUMPUR: Perusahaan Otomobil Kedua Sdn Bhd (Perodua) does not expect the recent rise in interest rates to affect its sales significantly.
Its managing director Aminar Rashid Salleh said interest rate rise in April and June had little impact on the car maker’s sales for the first half of the year.
“We are still recording good sales as consumer sentiments are strongly inclined towards affordable cars with good fuel economy which we are well known for,” he said at a media briefing on the company’s first-half performance here yesterday.
Aminar said Perodua sold 95,000 vehicles in the first six months of the year, representing an estimated 31.7% of the domestic market share. This is an increase from 77,000 units or 30.7% share in the same period of last year.
“The 23% increase in vehicle sales were due to the improving economy, contributions from the Alza MPV, and also the continued high demand for Myvi and Viva models.
“Barring unforeseen circumstances and higher demand for the festive season in the third quarter, we are confident of reaching our 176,000 units sales target for 2010,” he said.
Perodua sales in June rose to 16,300 units from 13,200 units in the same month of last year.
He also said Perodua’s aftersales had increased its vehicle intake in the first six months of the year to 823,000 units from 771,500 units in the first half of 2009 with higher productivity and the addition of eight new service dealers.
Perodua now has 163 service outlets consisting 45 branches and 118 service dealers.
At the briefing, Aminar also launched Perodua’s latest Myvi variant - the Myvi Limited Edition (LE) – which has been restyled for women.
“As more than 50% of Perodua car buyers are women, we feel a variant that is more fashionable and appealing to them should be introduced,” Aminar said.
Based on the standard Myvi 1.3-litre variant with a four-speed automatic transmission, the Myvi LE gets additional features including new interior trim colours, decorative cubic printing on centre cluster and door trims, chrome interior door release latches, vanity mirror on driver sunshade and side door mouldings.
Priced on-the-road at RM48,600 or RM1,700 over the standard Myvi variant, the Myvi LE also gets dual front airbags, USB and Bluetooth connectivity as standard equipment.
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