Thursday, November 29, 2012

PTARAS and FAVCO: the 2 well-performing counters in construction support industry

In my current stock investment portfolio, there are 2 well-performing counters in construction support industry, both having forward PE ratio below 5. Despite the recent KLSE market slowdown, I still hold on to them and will consider to contrarily increase my position should their price drop following the market sentiment.

Both of them have healthy order book, consistent earning growth, and their business are very unlikely to be affected by the outcome of the upcoming general election of Malaysia.

The main business of Pintaras Jaya (PTARAS, 9598) is piling & foundation systems, civil engineering and superstructure building. In 1999, it acquired Prima Packaging which manufactures metal pails & cans as container for paint, chemical, lacquer, motor oil, ink, food, etc.

One of the attractive points of PTARAS is it managed to obtain high profit margin from its business.

PTARAS is cash rich with zero debt, and they have engaged with 3 fund managers to invest a large portion of their cash reserved into the share market. The 3 fund managers are: Kumpulan Sentiasa Cemerlang, Singular Asset Management, and Pheim Asset Management. This should be a better option than keeping the cash in bank and earning the low interest rate, as long term return of well-managed stocks is expected to be better than bank interest. However, certain people might not like this, as its investment gain/lost will fluctuate its earning figure in financial reports.

PTARAS is trading around its NTA of RM3.14 now. It has declared a final dividend of 12.5 sen single tier in respect to its last financial year, which will gone ex on 27 December 2012 and payable on 15 January 2013.

Favelle Favco (FAVCO, 7229) was an Australian company, bought over by Muhibbah Engineering (MUHIBBAH, 5703) in 1995 and becomes a subsidiary of the later since then.

FAVCO's business involve in the designing, manufacturing, supplying, servicing, trading and renting of tower cranes, offshore cranes, crawler cranes, wharf cranes and marine winches.

FAVCO has manufacturing facilities in Malaysia, Denmark, USA and Australia. They have own marketing arms in Malaysia, Singapore, Australia, UK, UAE, etc. as well as a strong dealer network around the world. In fact, 90% of the world's 13 tallest buildings had used Favco's tower cranes during their construction.

As at 21 November 2012, FAVCO's outstanding order book stood at RM746.1 million, of which majority is from the oil and gas cranes for the offshore oil and gas exploration and production activities. Remaining are from the shipyard, construction and wind turbine industry. This will keep them busy for the whole year of 2013.

FAVCO's D/E ratio has been declining from year to year. The D/E for FY2011 is at healthy level of 22%, and it is in a cash surplus position. Its net profit margin has been kept on improving over the past few years from 4.17% in FY2007 to 9.87% in FY2011.

It seems that the stock price of FAVCO has been laggard behind its strong fundamental and business performance, probably caused by its parent MUHIBBAH which has some issue in its Asia Petroleum Hub (APH) project. Anyhow, the problem with MUHIBBAH should not affect the fundamental and business of FAVCO at the time being.

MUHIBBAH has just sold a crane fabrication yard in Australia to FAVCO recently, which I see is positive to FAVCO future financial.

Disclaimer: This article is intended for sharing of point of view only. It is not an advice or recommendation to buy or sell any of the mentioned stock counters. You should do your own homework before trading in Bursa Malaysia.

Friday, November 23, 2012

Check and monitor Celcom Mobile Internet data plan usage

Celcom Mobile Internet data plan is currently packaged as follow:

  • mLite (300MB/month)
  • mBasic (1GB/month)
  • mAdvance (3GB/month)
  • mPro (5GB/month)
If you exceed your monthly quota usage of your plan, Celcom will probably throttle your mobile Internet to a very low speed, unless you purhcase additional quota with them.

How to check and monitor your daily and monthly mobile broadband usage, so that you can subscribe to the right plan, without need to pay more (for too much unused quota) to Celcom?

If you are using the data plan with Android smartphone, you can install an app called 3G Watchdog in your phone to monitor your Internet data usage on your side. 3G Watchdog even comes with a widget to report your Internet data actual and predicted usage on your phone's screen.

However, what really matters is not the record on your side, but the record with your mobile operator, as that will be used in your billing and also throttling.

One easy way to check your Celcom Broadband usage status is to send an SMS from your smartphone using its data plan to 22188 with content "VOL STATUS".

Another way which will give you more details is to get the infor from Celcom Online Customer Service (OCS) website.

After login to the Celcom OCS website, drop down the "My Account" menu and select "Fair Usage Policy". Then, click the "Check Usage" button.

You can note that in case you need to purchase for additional quota for your Internet data usage, there is a button to do so.

After clicking the "Check Usage" button, you will need to provide a start date and end date for the checking, which I think should be optional but the website makes it mandatory. Why can't the checking be on the latest month if user doesn't select the date range?

Then, you will get your Celcom data plan info for each billing month within your checking date range. Information includes the billing cycle start date and end date (which you should set into your 3G Watchdog setting accordingly), allocated volume for your package, volume used (this is the important data that we are checking on), subscribed speed (the maximum Internet download speed you can get from your package).

If your Internet has been throttled, you will also see the throttling information there. If you purchased additional quota, the purchased volume is also shown there.

Click on the figure in the Volume Used colume, you can check on your daily recorded usage.

Note that Celcom can actually track your usage down into categories such as file sharing, web browsing, email, messaging and misc.

You will notice that the daily volume recorded by Celcom will be slightly different from the daily volume recorded by your 3G Watchdog app. Anyhow, the variance should not be too wide apart.

Monday, November 12, 2012

ICAP AGM over, Tan Teng Boo and ICAP BOD got overwhelming support from shareowners

The 8th AGM of close-end fund Bhd (ICAP, 5108) which lasted from 9am to 3pm (with 2 hours lunch break to allow calculation of votes to Resolutions #3 onwards) on 10 November 2012 was finally concluded, with overwhelming support given to Tan Teng Boo and the current BOD of ICAP. It is still very far away for Laxey Partners to attempt to obtain a seat in the BOD of ICAP.

About 2000 shareowners have attended this AGM, and apparently 99.8% of the attendee headcounts are on Teng Boo's side, while 0.2% in the hall was in favour of Laxey.

Laxey Partners has recommended to use share buyback mechanism to try to minimize the discount gap between the ICAP's share price and its net asset value (NAV), which we still unsure if it is approvable for CEF in Malaysia to do so, and the method is not bulletproof and has no guarantee whether will really work or not, and even if it works, it "will only benefit short-term traders" as said by Teng Boo.

Meanwhile, Teng Boo has revealed an innovative way of introducing a dual-listing global fund with attached warrants to address the discount gap issue. He didn't disclose much as he is still working on it, and said that hopefully it will be materialized in early 2013.

From the percentage of votes casted to the resolutions, it is clear that City of London Investment Management Company Ltd. was not on Laxey's side. I doubt they are on Teng Boo's side too. They possibly did not cast any vote.

Although Teng Boo managed to beautifully win the battle this round, he has to really ensure that his proposed "dual-listing global fund with attached warrants" can get materialized and can really work. If not, that will be a good attack point from Laxey, and Teng Boo might not be getting as much support from ICAP shareowners again if he failed to deliver.

Teng Boo and the new 7-people BOD must work really hard for ICAP to sustain the victory and avoid subsequent attack. This should be good to all the shareowners of ICAP, including Laxey. After all, we believe Laxey is here to gain money from investment, and not to make trouble for no reason.

Disclaimer: This article is intended for sharing of point of view only. It is not an advice or recommendation to buy or sell any of the mentioned stock counters. You should do your own homework before trading in Bursa Malaysia.

Monday, November 5, 2012

The upcoming AGM of ICAP on 10 November 2012 will be crucial for all shareowners

Most of the shareowners of close-end fund Bhd (ICAP, 5108) have been wondering why the AGM of this year comes so late.

It was 2 weeks after the announcement made on 18 October 2012 about its 8th AGM to be held on 10 November 2012, an Addendum to the 8th AGM notice has been dispatched through Bursa Malaysia's Company Announcements webpage, that a shareowner named Ms. Evelyn Ho is nominating 3 persons (including a foreigner who is the CEO of Laxey Partners) to enter the board of directors of ICAP. On the other hand, the present BOD is also nominating 2 more friendly partners to contest for the directors election.

As you might notice, the share price of ICAP has been trading at discount to its NAV since 2008, and the gap has widen to more than 20% from 2011 until today. This is a good investment opportunity for anyone who want to invest in ICAP with discounted price to its NAV. In addition, ICAP fund management has been performing well, with its NAV keeps rising despite the discount in its share price.

Then, we saw a foreign fund City of London Investment Management Company Ltd. emerged as substantial shareholder of ICAP since August 2011 and keeps on accumulating until holding about 7% of ICAP to date. Later, we also saw another foreign fund Laxey Partners Ltd. also emerged as substantial shareholder of ICAP since April 2012 and also keeps on accumulating until holding about 7% of ICAP to date. 

Laxey Partners Ltd. has many track records of accumulating the shares of close-end funds at discount, then getting into the BOD of the fund, replace the chairman/CEO and hostily take over the control of the fund. The sudden nomination of 3 persons apparently from Laxey Partners Ltd. to ICAP's BOD is definitely a threat to the existing BOD, and if the replacement of the directors does happened, it will affect the fund's future direction and hence affect the interest of all ICAP shareowners.

According to its 2012 Annual Report, ICAP has 3000+ shareowners, of which about 65.8% are held by about 2,000 minority holding 100-10,000 shares. CDAM, the fund manager, also holds about 0.5% of the shares.

In its Annual Report, ICAP reiterates that it "exists for one simple reason : to allow long-term shareholders or more aptly called share owners, to benefit from value investing. Investing in your Fund allows the power of compounding to work for you. If we succeed in achieving this, we would have also shown that serious long-term investing in Bursa Securities can offer superior returns." This is inline with its IPO Prospectus stating the investment strategy to be "intelligently eclectic".

If the existing shareowners want to maintain ICAP's investment philosophy and agree that the fund has been well managed and the present BOD has been taking care of the interest of all shareowners, they should show support to the existing BOD during the coming AGM.

Anyway, let's see what Laxey Partners going to propose, and what the existing BOD and the fund manager is working on to enhance the value to the shareowners. If City of London is on their own, we might see a triangular war, else, we'll see a cut-and-thrust war. The party who can convince the minority shareowners with 65.8% holding will be the winner, but the minority shareowners must be present to the AGM or appoint proxy the exercise their rights.

That's why, the upcoming AGM of ICAP is very crucial to the fate of ICAP.

Disclaimer: This article is intended for sharing of point of view only. It is not an advice or recommendation to buy or sell any of the mentioned stock counters. You should do your own homework before trading in Bursa Malaysia.

Hint: Click on the "Older Posts" link to continue reading, or click here for a listing of all my past 3 months articles.