Tuesday 29 September 2020

Prolexus: ProXmask To The Rescue

While Supermax's latest single quarter net profit in FY20Q4 was better than its previous 48 months results combined, Prolexus's latest single quarter net profit in FY20Q4 is about its previous 42 months combined.

And there's no significant one-off gain. Not bad indeed.

Simple reason given by the management: fabric mask.

Prolexus recorded revenue of RM97.9mil and PATAMI of RM23.9mil in its final quarter of FY20 ending in July. 

This is a record profit by a huge margin despite a lower revenue YoY. Its previous average quarterly PATAMI was around RM6-7mil during its good time. 

This means that its profit margin has improved tremendously.

Wednesday 23 September 2020

The Legends: QL vs Scientex

What is the first thing that crosses your mind when someone mentions about QL?

  1. A company that sells seafood
  2. A company that sells chicken and eggs
  3. A company that operates Family Mart
  4. A company that grows its revenue and profit annually without fail for more than 10 years
I think most investors with a few years of experience in Malaysia stock market will choose no.4.

Yes, QL is a "legendary" stock in Malaysia which has registered annual revenue and net profit growth every year without fail for at least 17 years (my available data is from FY2003).

It is commonly used as a reference when people talk about fundamental long term investment, consistent growth story and good management team.

While QL is no doubt a great company, how about Scientex? 

Sunday 20 September 2020

Hibiscus: Sizable Private Placement of CRPS

On 9th September 2020, Hibiscus suspended its trading to make announcement of proposed private placement of new Convertible Redeemable Preference Shares (CRPS).

What is CRPS?

Preference shares are shares of a company issued with a fixed dividend payout. They are not like common shares which can dilute a company's earning and assets per share. 

Preference shares holders have the priority to be paid first in case the company is liquidated but they do not have voting rights compared to common shareholders.

Redeemable means that the company can redeem or buy back the preference shares in the future.

Convertible means that the preference shares can be converted into company's common shares before a specific date.

Private placement means that the shares are sold directly to private investors, not to the company existing shareholders.

Wednesday 16 September 2020

Brief Notes on Top Glove

Top Glove is going to announce its highly-anticipated FY20Q4 tomorrow. Almost everyone expects at least triple jump in its net profit QoQ.

Its PATAMI in previous quarter was RM347.9mil. For the upcoming quarter, I read from various sources that it will be at least RM1.2 billion.

How will the market react to its result tomorrow?

Saturday 12 September 2020

When Is The Next Property Boom?


Property gurus say: "Property price will double every 10 years". Is it true?

My parent bought a house which cost RM40k back in 1983. If the theory is true, then in 1993 it will cost RM80k, 2003 RM160k, 2013 RM320k and 2023 RM640k.

I don't know at what price similar houses in that area were transacted in the past, but now I know it's worth around RM450k.

This 10-year property price theory looks good as it successfully predicted that after 2013 its valuation will be more than RM320k.

However, we only have 3 more years to reach 2023 and I don't think it can appreciate another RM200k to reach RM640k in such a short period of time.

Wednesday 9 September 2020

Can Small Automation Companies Thrive?

Impact of Industrial Automation on the Manufacturing Sector

Nowadays people are talking about Industrial Revolution 4.0 (IR 4.0), which is about smart factory with the integration of Internet of Thing, big data analytics, artificial intelligence, automation etc.

Manufacturing businesses will probably lose their competitiveness and be at risk of being eliminated if they do not go for this revolution.

Automation is one of the major component of IR 4.0. It is not a surprise to see that some of the stocks related to automation have posted decent growth in revenue and profit.

Their share price keep on increasing until a PE of more than 50.

Among those solid companies related to automation and robotics are Greatech, Pentamaster and MI. They are fundamentally sound and deserve to have their share price appreciation.

Favelle Favco, an undisputed king of cranes in Malaysia, also diversified into automation business mainly in the oil & gas field in 2018.

There are other smaller automation companies listed in Bursa Malaysia such as Genetec, iStone and AT Systematization.

Friday 4 September 2020

My Portfolio Aug20

Summary For Aug 2020

Numbers of stocks 13
Share Sold Matrix @ 1.74

Share Bought Genetec @ 1.49

Supermax @ 21.30
Overall 2020
Portfolio Return Aug20 13.41%
KLCI Return Aug20 -4.90%
Portfolio Return YTD20 28.34%
KLCI Return YTD20 -4.00%

Portfolio @ End of Aug20

Stocks Avg Jul20 Aug20 Div20 Aug20% Overall%
BAUTO 1.92 1.41 1.36 4.2 -3.5 -29.2
DAYA 0.035 0.015 0.020
33.3 -42.9

HIBISCUS 1.05 0.60 0.595
-0.8 -43.3
JAKS 0.88 0.77 0.76
-1.3 -14.2
JHM 1.33 1.52 1.69
11.2 27.1
KPOWER 2.03 2.60 3.27
25.8 61.5
KRONO 0.76 0.570 0.600
5.3 -21.0
LEONFB 0.505 0.305 0.315
3.3 -37.6
PRLEXUS 1.15 0.64 0.685
7.0 -40.4
SCIB 2.06 2.83 3.42
20.8 66.0
SCIENTEX 2.735 9.10 9.40 10.0 3.3 243.7


In August, finally I sold all my Matrix shares after holding them for almost 7 years. The gain of 76%, or average 11% per annum is not too bad.

Matrix is the stock that I always want to sell but also reluctant to sell. I might decide to sell tonight but the next day I change my mind. This scenario repeated multiple times.

There is another stock more or less like this and it's Scientex. At this point of time I plan to keep it for long term until a drastic change to its fundamental.

I added Genetec and Supermax in August. The strategy in Genetec is similar to Geshen, a loss-making company which has a potential to turnaround.