Monday, 1 September 2014

My Portfolio Aug14

Summary for August 2014

Aug-14
Numbers of stocks 8
Cash/Share ratio 0
Share Bought Protasco @ 1.64
Share Sold None


Overall 2014
Portfolio Return Aug14 1.9%
KLCI Return Aug14 -0.28%
Portfolio Return YTD14 60.7%
KLCI Return YTD14 -0.05%


Stock Portfolio @ End of Aug14

Core Portfolio
Stocks Average Latest G/L (%)
TAMBUN 0.77 2.46 219.5


Satellite Portfolio
Stocks Average Latest G/L (%)
GTRONIC 2.43 4.91 102.1
INARI 0.73 3.13 328.8
LATITUD 2.09 3.33 59.3
MATRIX 2.09 3.16 51.2
PRTASCO 1.64 1.64 0.0
SCIENTEX 5.47 6.13 12.1
YOCB 0.69 1.15 66.7


Comment:
  • Bought a little bit of Protasco with little free cash accumulated in July. This is against my initial plan to buy only during the next major correction...
  • Decide to keep YOCB & Latitude at the moment despite "poor" latest quarter results, as I am confident they will post better top & bottom lines for FY15.
  • Scientex finally moves up!
Plan:
  • May consider to add more Protasco, but need to sell others.

Saturday, 30 August 2014

Tambun's Ambitious Move

Recently I've just found out that Tambun Indah has a new website for its Pearl City. It is quite nicely done.

In my previous post I mentioned that we might see the first condominium in Simpang Ampat soon, perhaps after 2 years time.

However, if you look at the latest Pearl City master plan below, there is an item in pink colour which is the "Avenue Garden Serviced Apartment".


       Latest Pearl City Master Plan


The initial plan for this project includes 4 layout with sizes of 775, 980, 1100 & 1260 sq ft. It should be something like Straits Garden with commercial title.

It is understood that Avenue Garden might be launched in early 2015, which is far ahead of what I expected.

How will potential buyers respond to this project? I can't be too optimistic as it does not come with a residential title, unless Tambun Indah give it an irresistible price.

Anyway, it will be located next to the GEMS International School & a proposed commercial tower which will house Tambun Indah future head quarter. The proposed medical center & under-construction Pearl City Mall will be at a short walking distance.




From now on, I think Tambun will concentrate on its 600-acre Pearl City development. Future launches in the pipeline include Rain Tree Park 2, Pearl Tropika, Pearl 28, Central Avenue shop offices as well as Avenue Garden suites.


Friday, 29 August 2014

Latitude: Any Space For Growth?

Latitude Tree FY14Q4 Financial Result

LATITUD FY14Q4 FY14Q3 FY14Q2 FY14Q1 FY13Q4
Revenue 142.8 146.8 184.4 177.1 124.4
PBT 10.3 14.8 26.0 20.7 9.4
PBT% 7.2 10.1 14.1 11.7 7.6
PATAMI 8.7 12.8 19.0 14.6 5.9






MAS Rev 23.4 32.3 31.6 28.9 23.2
MAS PBT -0.7 3.0 2.1 1.2 -1.0
VIET Rev 114.4 108.1 147.7 142.2 96.1
VIET PBT 13.0 10.9 24.9 20.0 12.0
THAI Rev 5.0 6.4 5.1 6.0 5.2
THAI PBT -0.4 -0.1 -0.3 0.02 -0.5






Total Equity 308.2 296.8 270.1 249.8 232.1
Total Assets 475.3 475.5 530.1 478.6 449.8
Trade Receivables 37.0 49.1 58.2 55.4 33.8
Inventories 93.5 90.7 95.4 81.8 89.7
Cash 123.1 109.0 147.4 116.1 96.1






Total Liabilities 167.9 179.3 205.5 179.3 173.4
Trade Payables 79.1 77.7 95.7 85.1 72.9
ST Borrowings 78.8 91.4 95.5 78.9 85.1
LT Borrowings 7.9 8.9 11.1 12.3 13.5






Net Cash Flow 26.5 11.5 48.2 14.6 41.9
Operation 81.2 55.5 42.2 20.3 52.9
Investment -37.6 -34.0 -4.1 -1.2 -3.1
Financing -18.5 -5.8 5.0 -8.6 -7.4
EPS 8.93 13.12 19.52 15.02 6.12
NAS 3.17 3.05 2.78 2.57 2.39
Net D/E Ratio NC NC NC NC 0.01


Latitude's FY14Q4 revenue & PATAMI drop 2.7% & 32% QoQ respectively. This is mainly due to loss of 8 production days in its Vietnam factories, together with delay in goods delivery.

If there are 26 working days in a month, then 8 days will represent 10% in a quarter with 3 months.

The drop in PBT margin to 7.2% is a bit disappointing. Increasing raw materials cost might be the reason but I'm not sure whether the hiccup in Vietnam plays a part or not.

Anyway, revenue of RM142.8mil is still an acceptable figure for me.

Despite the Vietnam trouble, revenue & PBT from Vietnam operation in the latest quarter are still higher QoQ and YoY.

Balance sheet grows stronger with more cash and less borrowings compared to previous quarter, even though RM28mil was spent on acquisition of remaining shares of LTIG earlier this year. This is because it has excellent operating cash flow at RM81.2mil.


Latitud (RM mil) FY14 FY13 FY12 FY11 FY10 FY09 FY08
Revenue 651.0 493.7 517.9 500.6 506.9 397.4 404.2
Revenue growth % 31.9 -4.7 3.5 -1.2 27.6 -1.7
PBT 71.9 35.7 16.6 21.7 40.3 11.2 8.4
PBT% 101.4 115.1 -23.5 -46.2 259.8 33.3
PAT 55.0 24.4 9.8 12.5 27.7 12.5 10.8
PAT growth % 125.4 149 -21.6 -54.9 121.6 15.7








EPS 56.59 25.07 10.1 12.8 28.5 21.6# 16.7#
NAS 3.17 2.39 2.16 2.02 1.97 2.74# 2.47#
ROE 17.8 10.5






For the whole FY14, revenue improves by 31.9% to RM651mil while PATAMI jumps 125.4% to RM55mil. This includes a forex (USD vs MYR) gain of 5.2%. ROE reaches an impressive 17.8%.

EPS stands at 56.6sen which means Latitude is currently traded at a PE ratio of 6.0x at share price of RM3.40.

If given a fair PE of 8x, my target price for latitude will be RM4.53.

Latitude will only pay dividend once a year in December. It paid 6.3sen for FY13 which represents 25% payout from its net profit.

If it were to keep this dividend payout ratio, this means that it might pay 14sen for FY14. This is a 4.1% yield at current share price of RM3.40.

What if it decides to pay 40%, since its cash are piling up? This may mean 6.8% yield with 23sen dividend.

Besides, it is also capable to "reward" shareholders with 1:2 bonus issues.




Does Latitude still has space to grow its top & bottom lines?

LTIG became Latitude's wholly owned subsidiary in Q3 of FY14, so it contributes only half of FY14's result. FY15 will see full contribution from Vietnam's operation.

FY14 also sees Latitude increases its Vietnam production capacity by USD1.0mil per month or roughly RM37mil a year. However, I'm not sure what is the utilization rate. If the utilization rate is already high, then the growth might be limited and it needs more capex for expansion.

The most important thing is the demand for its products. As almost all its export are to the US, it will be closely linked to US economy and consumer spending.

It is learnt that Vietnam government will compensate those factories affected by riot. This might also contribute a little to Latitude's bottom line if it is true.

Anyway, Latitude is still trading around PE of 6 and price/book ratio of 1.1x. 

Latitude's historical financial results are up and down, which might be the reason market refuses to give it a higher PE. Will this trend continue in the near future?