Tuesday, February 15, 2011

Why I buy MPHB?

MPHB has been kind to me  making money from this counter has never been easy in the last few years.

To make money from this counter, one has to be patience and have holding power. But not now, since the counter is hot after it announcement to own 100% of Magnum shares last week.

I have been buying and selling MPHB shares for sometime and let me tell you why I like this counter?

Firstly, MPHB is the parent company to Magnum, one of the four gaming company in Peninsula Malaysia, and Magnum has already delisted from Bursa a few years ago, therefore by buying MPHB indirectly I am owning Magnum shares.

Second, share price for MPHB is the cheapest among the four gaming company in the Peninsula Malaysia, namely GENTING, TANJONG and BJTOTO. The cheapest among these three are BJTOTO which is values at RM4.00++.

Third, MPHB's management team also doing their job by discarding non-profits businesses before and after delisting of Magnum and tried to concentrate on its core business. Therefore, the potential to turn the company into profitable is insight.

Fourth, as Magnum is a cash-cow company, whoever holding it will not short of money.

Fifth, MPHB is buying-back their shares continuously and has been paying good dividends for last few years, which is better than FD.

Example in 2009, MPHB was very generous by declaring a distribution of treasury shares of one (1) treasury share for every ten (10) existing ordinary shares, a 10% return.

Anyway, I have been buying and selling MPHB shares since it was valued at RM0.90 until now, RM2.72 as at yesterday closing. With MPHB holding 100% on Magnum, I will hold the remaining a little bit longer. Probably will buy in some more if the price drop below RM2.30.

The comments above do not represent a recommendation to buy or sell. Buy or sell at your own risks.

Sunday, February 13, 2011

It's only temporary correction for Bursa: Analysts

With KLCI down more than 40 points last week, everybody are looking for clue. What will happen to our market next week? Will KLCI continue to fall? Is bear market coming? and etc...

No doubt, our confident will be shaken at this point. Everybody are hoping this is just a short term fall.

With DOW up on Friday and Egypt problem resolved, we will see a rebound on Monday. But not sure will it be for long, as Tuesday is a holiday.

To boast your confident on KLCI, read article below from Business Times.

It's only temporary correction for Bursa: Analysts

The Malaysian stock market's sharp fall this week is likely a temporary correction rather than the start of a bear market, analysts and fund managers say.

Those contacted by Business Times expect the weakness to continue over the short term as more foreign funds move out of emerging markets and back into developed markets on the back of improving economic data in the US.

None, however, planned to downgrade their year-end targets for the benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index, which ranged between 1,700 and 1,790 points.

The index, which eased 2.4 per cent this week erasing all its gains for the year, closed at 1,494.52 yesterday, some 0.6 per cent lower than the previous day.

It was the first time in eight weeks that it fell below the psychologically important 1,500-point mark.

It was the market's third straight day of losses, with three stocks falling for every one that gained.

This was blamed mainly on foreign selling. Recent data show that foreigners turned net sellers this week, with total net selling of RM1.18 billion.

"With net foreign buying totalling RM16 billion since early-2010, this suggests that the market could remain weak for a while," said an analyst from Maybank Investment Bank (MIB) Research.

The head of a foreign research house, which had one of the highest year-end targets for the index, pointed out however, that there has been no change to the country's strong fundamentals and growth prospects.

"The selling in the market now is inevitable given the liquidity build-up in the recent months, but the fact is there has been no structural changes. We see this as a temporary setback and we're not changing our forecast," the person, who declined to be named, told Business Times.

Analysts said there was sufficient domestic liquidity and catalysts, like the kick-off of projects under the Economic Transformation Programme, to buoy the market.

"We think the market's still on a longer-term bullish trend as Asian markets still have very good growth prospects. This weakness could go on for one or two weeks before it stabilises. I don't think the market is going to crash," said Choo Swee Kee, chief investment officer at TA Investment Management Bhd.

Terence Wong, head at CIMB Research, said the recent foreign fund flow-out was not unexpected as regional markets like Thailand and Indonesia also experienced a similar situation.

"We think the market will weather this period and I'm keeping my target at 1,700 points," he said.

MIB Research, meanwhile, said the market's broader weakness offered investors the opportunity to accumulate good fundamental stocks.

OSK Research suggested buying banking stocks on the economic growth story and said the construction, oil and gas and property sectors also made good trading buys.

"With almost equal upside and downside potential, we advise buying on weakness on these sectors," it said in a report yesterday. - By Adeline Paul Raj

Friday, February 11, 2011

Another RED day for KLCI

It looks like KLCI is still celebrating Chinese New Year, a red red day. Oh my, another onslaught on Bursa Malaysia today.

KLCI down another 9.47 points to close at 1494.52.

The 1500 point has gone, no more, habis........

When will we be able to see 1500 again ???

Today bought in 100 lots of PJDEV WC at an average price of 0.343.

FEAR in shares market

Greed and Fear, these two emotional things always appear in any shares market.

As yesterday KLCI down 2% for more than 30 points. Here where FEAR kick in, lots of people are worry market will go down and down, couple with a number of bad news from analysts, and also around the world.

Even some analysts begin to talk about BEAR is coming.

Yesterday sell-out is part of profit taking, as market already up so much since the beginning of 2011, especially after CNY. Everybody are looking for an excuse to make some profit and reenter market later.

So don't ever listen to analysts, when there say sell, in fact there are buying. And when there say buy, actually there are selling.

Anyway, these is the way shares market are going on. Trust nobody, do your own homework before enter shares market.

Wednesday, February 9, 2011

Good news on PANTECH

The following article is a bit long but worth reading, you will like Pantech more after reading it.

Pantech to benefit from higher oil & gas spending
- by Insider Asia

Despite weakness in Pantech Group Holdings Bhd’s latest earnings results for the third quarter of its financial year ending February 2011, we remain sanguine on the company’s longer- term prospects — on expectations of increased contracts flow in the oil and gas (O&G) sector to downstream support industries.

Pantech is one of the largest one-stop centres for pipes, fittings and flow control (PFF) products in the country — providing customers a complete solution for the transmission of fluids and gases from point A to point B.

Its products have wide applications across industries — used for pipelines, refineries, processing plants and marine vessels in the O&G sector as well as in gas reticulation, marine, onshore and offshore heavy engineering and fabrication services. The company also caters to customers in the power generation, petrochemical, chemical, oleo chemical, water and palm oil refining industries.

Sales in FY10—FY11 affected by demand slowdown emand for the company’s PFF products was affected by the global financial crisis over the past two years. Sales hit a trough in 4QFY10 at RM66.5 million, well off its peak of RM139.4 million in the previous corresponding quarter — on the back of slower demand both in the domestic and export markets. As a result, sales for FY10 were down by 21% to RM402 million.

Whilst demand rebounded somewhat in 1HFY11, the recovery has been weak. Domestic demand, in particular, remained lacklustre due to the lagging effect from the slowdown in contracts flow during the crisis period.

Whilst the company saw resilient demand from the palm oil refining sector, it was insufficient to offset the slowdown in the O&G sector, which accounts for roughly 70% of Pantech’s business.

Although outlook for the O&G sector has strengthened considerably in recent weeks and is now expected to register robust growth over the next few years, spurred by the government’s Economic Transformation Programme (ETP), contracts awarded by key players including national oil company Petronas have yet to filter through.

Sales for Pantech’s trading division fell again in its latest 3QFY11 results.

Although the manufacturing division has been registering strong recovery — primarily from overseas markets, including to the US and the Middle East — it has not been able to fully offset the drop in domestic sales. In fact, utilisation at its manufacturing facility is almost back to optimal levels but the weak US dollar is weighing on sales translated back into the local currency.

As a result, overall sales were still 22% lower at RM262.9 million in 9MFY11 while net profit declined to RM23.9 million, down from the RM40.1 million in 9MFY10.

We do not foresee any material improvement in the company’s sales and earnings in the final quarter of FY11. This is after taking into account the fewer working days during this period with the Christmas, New Year and Lunar New Year breaks.

As such, we estimate sales to fall by another 16% to about RM336 million in FY11, while net profit is expected to drop to RM30.7 million, down 39%. Even excluding the one-off gains in FY10, normalised net profit in FY11 is still estimated to fall by about 34%.

Positively, we expect demand for the company’s PFF products to strengthen from hereon, especially going in 2HCY11 and over the next few years. In addition to volume increase, global steel prices too have been trending higher in recent weeks, which would further bolster sales and margins.

Robust outlook for O&G sector

Outlook for the domestic O&G sector, Pantech’s single biggest customer group, is robust. The Malaysian government has pinpointed the sector as one of the key focus areas under its ETP.

Last month, the government unveiled another 19 entry point projects under the ETP worth RM67 billion, including some RM15 billion to be invested by ExxonMobil and Shell to upgrade their existing fields and facilities as well as a RM5 billion deepwater petroleum terminal project in Johor.

Some of the other notable projects previously mentioned for the O&G and energy sector include the liquefied natural gas regasification plant in Melaka and two coal-fired power plants in the peninsula.
In addition to the expected increase in exploration and development of new deepwater projects, Petronas is planning to implement an enhanced oil recovery programme to extract more from its existing oilfields.

The national oil company also intends to open the market for the development of marginal oilfields to encourage greater participation from local companies working with technological know-how from foreign players. Earlier this month, the very first contract for the development of a marginal oilfield in Berantai, located offshore Trengganu, was awarded to two local players in partnership with foreign technology provider, Petrofac Energy Developments.

The aim is to sustain the level of O&G production in the country. To this end, various tax incentives were also announced late last year to spur capital investments, including accelerated capital allowances, investment tax allowances and lower tax rates for eligible projects.

The increased capital spending will, in turn, drive growth in supporting industries such as that for pipes, fittings and flow control products manufactured and distributed by Pantech. Over the years, its clientele list has included local players such as MMHE, Ramunia, Kencana Petroleum, Dialog Group, KNM and Gas Malaysia.

In our next piece, we will discuss further on Pantech’s operations and expansion plans as well as its valuations.

Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.

Tuesday, February 8, 2011

This could be the reason why GENTING down

Genting, Genting S’pore down on concerns of lower VIP customer flow 

- by Chua Sue-Ann, theedgemalaysia.com

KUALA LUMPUR: Share prices of Genting Bhd and its subsidiary Genting Singapore plc fell from market open yesterday on concerns of a possible reduced volume in its VIP customers at the latter’s Resorts World Sentosa (RWS) integrated resort.

Genting’s shares opened after the holiday break at RM11.52, falling throughout the day to close at an intra-day low of RM10.90, shedding 62 sen. Some 8.46 million Genting shares were traded.

Across the causeway, Genting Singapore’s shares fell nine cents from S$2.15 to S$2.06 after a day of volatile trading activity with almost 164.32 million shares exchanged.

This came after Citi Investment Research said it reduced its revenue forecast for Genting Singapore’s 4QFY10 results, which is for the period between October and December last year by about 7% to S$765.1 million (RM1.8 billion). Consequently the research house also reduced Ebitda (earnings before interest, tax, depreciation and amortisation) estimate by about 7% to S$371.7 million.

In a note dated Feb 6, Citi Investment Research also said it had conservatively lowered its RWS 4QFY10 VIP rollings assumption to a 5% quarter-on-quarter (q-o-q) decline from the 2% q-o-q growth forecast earlier.

Consequently, the research house also slashed Genting’s earnings estimates for FY10 to FY12 by 1% to 8%.

Genting is expected to report its fourth-quarter results by end of this month.

Citi Investment Research’s revision of Genting’s performance forecasts comes after Las Vegas Sands Corp last week reported a 20% q-o-q drop in its VIP gaming business in its Singapore casino, Marina Bay Sands, sparking concerns that its rival, RWS could see similarly weak performance.

“We believe we could see some ripple effect as the market could become worried about a possible volume decline at Resorts World Sentosa,” Citi Investment Research said.

The research house noted that in Las egas Sands’ 4QFY10 results released on Feb 3, Marina Bay Sands had generated Ebitda of US$305.8 million (RM929.6 million) and a 54.6% margin which had been the highest numbers from any single property in Las Vegas Sands’ history. The results were largely attributed to Marina Bay Sands’ 3.11% VIP hold rate and stringent cost controls, Citi Investment Research said.

Citi Investment Research said it had also lowered its VIP rolling assumption for Marina Bay Sands by 20% and Ebitda by about 3% for the FY11 and FY12 estimates despite guidance from Las Vegas Sands’ management that Marina Bay Sands’ Ebitda in January had reached US$110 million.

Nevertheless, it remained positive on the growth prospects in the Singapore gaming market despite lower volume at Marina Bay Sands’ VIP business and a possible similar decline at RWS.

Singapore is expected to generate US$5.1 billion in gross gaming revenue in 2011, implying that Singapore’s market size with the two casinos was roughly 85% of Las Vegas’ market size, Citi Investment Research said.

Meanwhile, AmResearch yesterday upgraded Genting Singapore to a “buy” from a “hold” with a higher fair value of S$2.60 from the previous fair value of S$2.13.

AmResearch said it raised Genting Singapore’s fair value to account for the expected higher casino revenue growth underpinned by increased VIP gaming turnover, higher casino patronage and a long-term terminal growth rate of 8.5% from FY20 onwards.

Genting Singapore’s forecast net profit growth of over 20% annually from FY11 to FY13 would likely be driven by an expected increase in casino patronage and VIP gaming revenue as well as growth in visitorship and average spending at non-casino attractions, AmResearch said.

“We believe that Genting Singapore is in the early stages of profit growth. Hence, despite the group’s strong core net earnings in the first year of operations, we reckon that there is still upside potential,” AmResearch said in a note dated Feb 7.
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