Wednesday, 1 October 2014

My Portfolio Sep14

Summary for September 2014

Sep 2014
Numbers of stocks 8
Cash/Share ratio n/a
Share Bought Huayang @ 2.32 & 2.42
Share Sold Tambun @ 2.45 & 2.60 (part)
Protasco @ 1.68 (all)


Overall 2014
Portfolio Return Sep14 4.9%
KLCI Return Sep14 -1.06%
Portfolio Return YTD14 71.2%
KLCI Return YTD14 -1.11%


Stock Portfolio @ End of Sep14

Core Portfolio
Stocks Average Latest G/L (%)
None




Satellite Portfolio
Stocks Average Latest G/L (%)
GTRONIC 2.43 4.68 92.6
HUAYANG 2.36 2.34 -1.1
INARI 0.73 3.23 342.5
LATITUD 2.09 3.80 81.8
MATRIX 2.09 3.25 55.5
SCIENTEX 5.47 7.44 36.0
TAMBUN 0.77 2.57 233.8
YOCB 0.69 1.02 47.8


Comment:

  • Tambun is relegated to satellite portfolio, as I think core portfolio should be reserved for stock with huge potential upside. 
  • Sold all Protasco shares due to uncertainty in the company (boardroom & legal suit).
  • Chose Huayang over OSKProp, due to its track record and upcoming Puchong West development.
  • No significant change in exposure to property sector to date, after selling off Protasco and part of Tambun, and buying Huayang.

Plan:
  • To collect more Huayang shares on weakness.
  • To watch plantation stocks closely.
  • To look for a new member for core portfolio.



Monday, 29 September 2014

Lesson From Trying To Save A Few Cents

I wrote quite a lot about BJAuto in this blog even before it was officially listed.

If you look at my portfolio and transaction history, apparently I have never bought any of its shares.

At IPO price of 70sen, BJAuto closed at RM1.82 on its debut day. This is 160% higher than its IPO price. 

The IPO price of merely 70sen gave an "illusion" that its share price was already very high at above RM1.40.

After BJAuto released its magnificent FY14Q2 result 2 weeks later, I set my target price at around RM2. So there was actually still 25% of upside at RM1.60. 

However, I still hope that its share price will drop lower, as the PE ratio used to calculate the target price was 15x.



Personally I am very optimistic about Mazda's future. Though in Malaysia it is still not on par with other established brands like Toyota, Nissan and Honda, I strongly believe that one day it will become as popular as those brands.

Besides, being unpopular now also gives it a huge potential of high growth.

I'm confident because I'm a fan of Mazda. I know how well Mazda will do with its new design and engine. I'm sure that going forward, Mazda in Malaysia and Philippines will only grow at a great pace.

I did not buy BJAuto's shares even though I know that its PE will drop sooner or later due to its high growth potential.

It turned out to be true as BJAuto keeps releasing better and better financial results, along with better market share of Mazda vehicles.

Now BJAuto's is trading at RM3.40. Those who successfully applied for its IPO and resisted the temptation to sell at more than 100% gain in the first day will gain 386% in just 10 months.

For me, I can only rue the somewhat funny decision not to buy BJAuto's shares early.



Actually I did attempt to buy BJAuto's shares, with buy order placed.

I can remember the day clearly as I was working outstation for that whole week. At that time, I only have access to internet before 9am and after 7pm.

BJAuto's share price fell quite significantly from RM2.15 to RM2.04 on 21 May 2014. I predicted that it would drop further and I decided to buy at RM2.00.

Why RM2.00? It's just because I think it is a nice number which is also a psychological support.

So I queued my buy orders at RM2.00 before the market opened on 22/5 and 23/5. They were not matched as the lowest the share price hit was RM2.02. 




On the very next week, I was about to leave for a holiday trip to China. I didn't attempt to buy BJAuto at that time because I would not be able to monitor the market for a week.

I came back from China on the 3rd of June, only to witness BJAuto's share price jumped to RM2.10 on the very next day, and it never looked back from there. As a result, my appetite to buy BJAuto also faded from there.

Why didn't I just put my buy order 2sen higher? Now I can only watch BJAuto's share price going further up to more than RM3.

Anyway, if I did not work outstation or did not go to China at that time, surely I would have already bagged BJAuto's shares at RM2.00.

This proves that I have no "fate" with BJAuto's shares.

At this stage, a few cents of difference is still important for me. I hope that one day this can be changed...

Thursday, 25 September 2014

Scientex: Consumer Packaging To Drive Growth

Scientex FY14Q4 Financial Result

SCIENTEX FY14Q4 FY14Q3 FY14Q2 FY14Q1 FY13Q4
Revenue 415.4 426.8 383.5 364.8 371.2
PBT 56.0 48.1 44.4 37.8 40.2
PBT% 13.5 11.3 11.6 10.4 10.9
PATAMI 48.8 37.2 33.9 29.3 30.3






Manu Rev 297.3 317.2 288.5 289.2 277.4
Manu OP 18.8 16.4 15.9 17.7 20.6
Prop Rev 118.1 109.6 95.0 75.6 93.8
Prop OP 36.9 32.5 29.3 22.2 31.4






Total Equity 712.7 686.2 649.9 635.9 628.7
Total Assets 1400.4 1333.2 1304.4 1263.1 1286.4
Trade Receivables 243.5 274.8 251.7 209.7 195.5
Inventories 109.0 82.1 76.3 86.0 80.7
Cash 83.8 56.4 89.3 91.2 152.2
Prop Dev Cost 104.6 71.8 74.4 57.5 68.5






Total Liabilities 665.0 624.9 633.3 606.8 637.7
Trade Payables 272.1 238.9 214.2 229.4 258.4
ST Borrowings 262.9 179.1 205.8 167.9 167.6
LT Borrowings 77.5 156.2 163.7 164.3 167.8






Net Cash Flow -68.4 -95.8 -62.9 -61.0 115.8
Operation 153.5 89.5 30.9 13.5 209.7
Investment -149.2 -106.7 -67.0 -54.1 -345.0
Financing -72.7 -78.6 -26.8 -20.4 251.2






EPS 22.09 16.43 15.34 13.27 13.80
NAS 3.22 3.10 2.94 2.88 2.84
D/E Ratio 0.36 0.41 0.43 0.38 0.29


Again, Scientex breaks its quarterly net profit record by posting a PATAMI of RM48.8mil (Up 31.1% QoQ) in the final quarter of FY14, even though revenue drops slightly by 2.7% QoQ.

Both manufacturing and property divisions perform equally well as shown in the table above.

Balance sheet remain healthy with slight reduction in net debt/equity ratio from 0.41 to 0.36.

Net cash flow for FY14 stays in negative territory due to high capex and generous dividend paid to shareholders amounting to RM57.5mil (FY13). Cash flow from operation remains strong.


SCIENTEX FY14 FY13 FY12 FY11 FY10
Revenue 1590.5 1229.0 881.0 804.0 694.8
Revenue growth % 29.4 39.5 9.6 15.7
PBT 182.3 143.0 107.2 96.6 70.8
PBT% 11.5 11.6 12.2 12.0 10.2
PATAMI 148.5 110.3 83.9 77.2 60.3
PATAMI growth % 34.6 31.4 8.7 28.0






EPS 64.57 51.00 39.00 35.90 28.00
NTA 3.22 2.84 2.44 2.17 1.92
ROE 20.8 17.5 16.0 16.5 14.6
DPS 21.0 26.0 14.0 12.0 9.0


Overall for its full FY2014 ended in 31st July 2014, Scientex achieves revenue and PATAMI growth of 29.4% and 34.6% respectively compared to FY2013. Both revenue of RM1.59bil & PATAMI of 148.5mil are new high for Scientex.

This impressive result is mainly due to increased contribution from its consumer packaging division (acquisition & increased production capacity) & encouraging demand for its property in Johor especially Taman Scientex Senai which has a GDV of RM1.3bil.

Total property sales in FY14 reaches about RM470mil. Unbilled sales stays at RM537mil at the end of FY14. It still has 896 acres of development land with potential GDV of about RM4.3bil.

ROE has breached 20% mark for the first time at 20.8%

With FY14 EPS of 64.6sen (base on total shares of 230mil), my target price for Scientex will be RM7.75 (PE 12x). 

Scientex declares final dividend of 13sen for FY14, making it a total of 21sen or 3% dividend yield at share price of RM7.00. This represents a 32.5% payout from FY14's PATAMI. There is no special dividend this year so dividend this year is lower than previous year's 26sen.

Scientex will certainly need more cash in the near future for expansion in its consumer packaging business. Nevertheless, management promises to keep the dividend payout policy of at least 30%.


       Acquisition of Great Wall Plastic in 2013


Meanwhile, Scientex has entered into a share sale agreement with Japanese packaging film manufacturer Futamura Chemical, in which the latter will subscribe to 5 million new ordinary shares of Scientex Great Wall Sdn Bhd (SGW) at a price of RM40mil. 

This 5 million shares will represent 5% equity interest in SGW with the remaining 95% held by Scientex through its wholly-owned subsidiary Scientex Packaging Film Sdn Bhd.

This means that there will be no enlargement in total paid up shares of Scientex Berhad, thus no dilution of EPS.

However, 5% of earning from SGW will be allocated to Futamura as non-controlling interest.

Futamura has the option to purchase up to another 15% (total 20%) of SGW shares in the next 5 years. It can also sell back the shares to Scientex in 3 years.



SGW is formed as a subsidiary of Scientex's consumer packaging business after the recent acquisition of Great Wall Plastic & Seacera Film. Before this Scientex only involves in industrial packaging.

The equity participation of Futamura will facilitate SGW to build a new world class BOPP film manufacturing plant adhering to stringent Japanese standards and quality in Pulau Indah, Malaysia.

The total investment cost is expected to reach RM170mil which will increase Scientex BOPP film production output by 10 times from 6,000 MT to 60,000 MT per annum.

The new BOPP plant is expected to be completed by the second half of year 2016.

Besides gaining Japanese technology, Scientex will be able to grow its consumer packaging products presence in Japan, while assisting Futamura to develop and market its products in South East Asia region.

This will be a win-win situation for both parties.

       Acquisition of Seacera Film in 2014


Meanwhile, SGW will also extend its product portfolio to the manufacturing of cast polypropylene (CPP) film through an expansion plan costing approximately RM50mil. The production lines with production output of 12,000 MT per annum are expected to start operation by the second half of year 2015.

Scientex will allocate RM240mil capex over the next 2 years for expansion mentioned above. It expects the annual production capacity of its consumer packaging segment to increase to 120,000 MT in 2017, from current level of 30,000 MT.

This means that annual revenue from this segment may grow from current RM295mil to over RM1bil by FY2018! Don't forget that Scientex still has its property & industrial packaging segment.


       Scientex: Publicly listed in 1990


Along its 46 years of history, Scientex has made 3 game-changing moves. First, it diversified into plantation business in 1977 with 1,004 acres land in Pasir Gudang. After that, this plantation land has proven to be a stepping stone for its foray into property development in 1993. Scientex then further enhanced its value by expansion into consumer packaging segment since 2013. 

Judging from the history, there is no reason not to believe that Scientex might emerge as a blue chip stock in the future.