My Blogging's Journey

If you look at the very first post of this blog, the date is 25th May 2011. So it has been 3 years + 3 months since I started this blog.

It is neither a too long nor too short period of time.

Looking back at those old posts, I can see how I grow as a person and an investor. This is part of the reason I keep this blog alive - to keep the old memories within the unlimited internet space.

Similar to most bloggers I guess, I started well with one post in a day or two. However, later it became one to two posts a month. 

I was just sharing my view and my research in a very casual way. I do not promote this blog anywhere even until today.

Initially readers mainly found this site through internet search engines, but now there are links from other blogs & forums. I'd like to thanks all of them as it is a great honour to have their recognition.

As I was more interested in property investment in the "early days", I wrote more about property.

This blog was almost dead in the end of 2012, when I was busy renovating and moving into my new house.

After settling in my new home in Jan 2013, I found that most of my money was stuck in a few losing stocks, as I have sold those winning stocks to pay for the renovation.

For the first 4 months of 2013, I didn't really return to the stock market because I had no excess cash to buy more. I needed to serve the credit card installment etc at the same time.

I felt something was terribly wrong with my stock portfolio. So I decided to sell all the stocks except Tambun Indah. This has later proved to be an important decision for me.

The loss suffered from selling these losing stocks almost wiped out all my previous gain in stock market. I have learnt the painful way that reluctance to cut loss early is deadly.

With the remaining cash, I decided to restart my engine in stock market as property price has gone beyond my buying ability.

However, my stock analysis skill was still the same like the old days, basically I looked only at the revenue, net profit and part of the balance sheet (cash & borrowings). If I have a good "feel" to it, then it is a "Buy".

So my first buy after the restart was actually also a mistake in my opinion, in which I bought Tropicana. As a result, I sold it later at a loss 11 months later.

Nevertheless, I learned new things along the way, from other financial blogs, books and websites. I learned to set buy & sell criteria, and the most important thing of all, to be more disciplined.

Fortunate enough for me, other stocks that I invested in after Tropicana perform decently well until today.

To enable myself to be more disciplined in stock market investment, I decided to share my stock portfolio in this blog from Oct13 onward, so that I know that other people are watching & scrutinizing me.

I have to buy and sell for good reasons.

I also make it a routine to summarize my portfolio return at the end of each month and also share the review of the quarterly financial result of the stocks I own, so that I can decide from there my own target price, and whether to keep, add or sell.

I don't want to bring readers to "Holland" so normally I don't share in this blog as soon as I do a buy or sell transaction. Please be reminded again that readers should invest at their own risk and I will not be responsible for their gain or loss.

I'm sure that some readers may not like what I write, especially when I "talk bad" about certain stocks. I try to avoid that but the purpose of this personal blog is to share my thought, which can be positive or negative.

I think almost every investment bloggers will experience "attacks" at some point of time. Investment involves money & money is a very sensitive thing.

Someone may think that I try to influence readers to buy or sell certain stocks. Someone may also think that I am arrogant by posting my investment return or discussing my success stories. Well, I have no power to control other people's mind.

In term of stock selection, I try to eliminate the temptation for short term gain from contra & short term trading. I only choose those stocks that I think I can hold for longer term, which is at least one year.

I just use the simplest PE valuation method to valuate a stock. Though I don't directly use the discounted cash flow and discounted dividend model, I do actually consider a stock's cash flow, dividend, exceptional gain & loss before I decide to buy it.

To be honest I still haven't learnt enough about other valuation methods but I will do so in the future.

I believe that my stock investment strategy and stock valuation method will continue to change over time, hopefully to a more mature and better one.

I hope this blog, which will record all my investment stories from good to bad, from happy to sad, can last until my retirement, be it 10 years, or 20 years from now.

Gtronic: No "Soft Hands" In Dividend Payout

Globetronics has just announced second interim dividend for FY14, which is 5sen plus a special dividend  of 6sen. The total 11sen is 22% higher than corresponding period last year.

This dividend will be ex-ed on 21 Oct 2014.

Gtronic usually pays dividends 3 times a year. Table below shows its recent dividend history.

Dividend	FY14	FY13	FY12	FY11
1st	2(5)	5	2	1.5
2nd	5(6)	5(4)	5(2)	5
3rd		2(2)	2(1)	2
Total	18+	18	12	8.5

Special dividend in (bracket)

Gtronic paid a total of 18sen dividend for its FY13, which is about RM50mil while its PATAMI for FY13 is just RM52.6mil. It's nearly 100% dividend payout!

If this trend is to be continued, it may pay at least 5sen for the final dividend of FY14, making it total 23sen (4.7% yield at RM4.94). This will bring the payout to RM64.6mil which is close to its guesstimated earning of RM70mil for FY14.

       Gtronic dividend history

Despite paying so much dividends, its cash is still piling up. It's a little cash generating machine indeed.

Anyway, Gtronic is currently actively looking for M&A. Will this affect its future dividend payout?

Why Protasco?

Last year I did not want to buy Protasco's shares at RM1.40, but now I bought them at RM1.64!

When I started to study Protasco last year, its share price was hovering around RM1.40.

Apart from the fact that it depends on government for contracts which I don't really like, I think it is still a good company to invest in, as it diversifies its earnings into property & Oil & Gas sector.

At that time, I decided that I will only buy Protasco if its share price drops to RM1.20 or below.

In the end, it turned out that Protasco's share price advanced 50% from RM1.40 all the way up to RM2.10.

I thought that I will never have a chance to be a shareholder in Protasco, just like what I experienced earlier with Boilermech & BJ Auto.

However, due to the cancellation of O&G deal, and perhaps disposal of shares by major shareholder & director, Protasco's share price fell all the way down from RM2.10 to current level of around RM1.65.

I was aware that its share price was falling but I did not really keep a close eye on it, until one day it just happened by chance that I noticed it has reached its major support line at RM1.65 on 15/8/2014.

I have a strong feeling: Is it my second or perhaps last chance to own Protasco?

So I bought its shares at RM1.64 on 15/8/2014, at 12:29pm just a few seconds before market afternoon break.

Never had I felt so lucky because after the market re-opened 2 hours later, straight away Protasco jumped and closed at RM1.69. It even breached RM1.80 in the next 2 days.

However, it has fallen back to my entry level now. Luck is running out? Or third chance to accumulate more?

Why I bought Protasco? There are actually multiple reasons.

1. Growth in property & construction division

Protasco launched the first phase of its DeCentrum project in Bangi in the end of year 2012. It's been almost 2 years so I would expect it to contribute more to its top & bottom lines from now on, though the overall GDV is not too high at RM250mil.

Just recently in June 2014, Protasco has launched the phase 2 of DeCentrum, which is Unipark condo (2x20 storey towers with 320 units) with GDV of RM225mil. It was reported that 50% were snatched up in the first week. So this should contribute positively to its FY14Q3 result I guess.

This 100-acre RM10bil DeCentrum project is 100% owned by Protasco.

Protasco has purchased 14.4 acres of commercial land in Pasir Gudang. Earlier MIDF reported that it may launch phase 1 with GDV RM800mil next year. However, in anticipation of softening property market next year, Protasco is looking to slow down its launch in the near future.

Besides, Protasco has entered into an MoU on 28/5/14 to joint-venture with Nextnation (Nexgram) to develop a 5.9-acre mixed development in Cyberjaya. Both parties share similar shareholder in Tey Por Yee & Ooi Kock Aun. The MoU will expire in 6 months.

For the construction part, the excitement is the RM578.5mil  PPA1M Civil Servants housing project at Putrajaya awarded on 23th Oct last year. It is expected to be completed in 2 years so it might also contribute greatly from the second half of FY14 onward.

Meanwhile, the two PR1MA projects worth RM88mil at Manjung & Jelebu have been delayed due to land issue.

       Phase 2 of DeCentrum - Unipark Condo

2. Attractive dividend yield

Even though at RM1.65, Protasco's PE ratio is not that low, but its dividend yield is certainly excellent at 6%.

I think this dividend yield can support its share price above RM1.65. As I expect its bottom line to grow in the next 2 years, this means that dividend paid to shareholders will increase as well, as long as it keeps its generosity in dividend payout at 50-60%.

FY	Net Dividend / Share (sen)
2009	9.0
2010	10.0
2011	8.0
2012	14.0
2013	10.0
2014	??

3. Strong balance sheet

In short, it is in a net cash position. Cash flow from operation in FY13 was very good but it is in the negative territory after the second half of FY14, mainly due to decrease in payables.

This may not sound nice but I find that Protasco usually has negative operating cash flow in mid year, and it will turn positive at year end may be due to the billing nature of its contracts. Protasco never fail to end its financial years with positive operating cash flow since listed in 2003. So I expect it to turn positive by year end.

4. Failure in O&G venture

For me, the inclusion of O&G business will make Protasco complicated and hard to predict. It may need to pump in a lot of money. So it's not the end of the world after the deal fell through, as Protasco will concentrate more on its core businesses.

5. Falling share price.

If Protasco is still trading at RM2.00 or above, I will not consider to buy. However, it fell to a strong support with dividend yield of at least 6%.

       Protasco @ RM1.65

Anyway, there are some issues that need to be taken into account.

As we all know, a big chunk of Protasco's income comes from road maintenance contracts, which is recurring in nature.

However, some of the long-term contracts are expiring soon as shown in the table by MIDF below.

MIDF reported that Protasco is currently negotiating for renewal of road maintenance contracts. MIDF is confident that Protasco will be awarded the renewal contract by the end of 2014. If it fails, then the attractiveness of Protasco will be greatly discounted.

The award of building construction is on negotiation basis, and the contracts may not come regularly. So this might mean fluctuation in financial contribution from construction division.

So far the contracts awarded to its construction division this year include:

• 21/1/14 - Projek Perumahan Mampu Milik 1Malaysia in Manjung & Jelebu, in 18 months from date of sites possession, RM88.1mil
• 2/6/14 - Federal road zone 2A Sarawak, in 12 months, RM21mil

As stated earlier, the PR1MA projects are still yet to kick off due to land issue. 

In Mac 2014, Protasco has also signed agreement with Himalayan Builders & Engineers to invest USD100mil to set up engineering testing lab (memorandum of collaboration) & boutique hotel (MoU) in Nepal. At the same time, an agent will promote and enroll Nepalese students to IUKL.

       Beautiful Nepal


Protasco has proposed private placement of 50 million new shares together with 1:2 free warrants, as well as bonus issue of 1 free warrant for 10 existing shares. Total warrants issued will be 133.5mil. This exercise will increase the total paid-up share by a whopping 54.8% to 518mil if all warrants are converted to mother shares in the future.

Since the O&G venture has failed, I think Protasco's small shareholders should pray very very very hard that this corporate exercise will be called off.

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.