Where is Ze Moola

Regarding Texchem Resources

2009-11-23T08:06:00.002+08:00

Comments on Texchem Resources?

I do have some archive news on this company. Perhaps it could offer you a different perspective on what kind of company you are looking at.

25th May 2007: Two Divisions to Drive Texchem

Big plans mentioned. I was more interested in the last line.

For the first quarter ended March 31, the food division registered an operating loss of RM400,000, while its revenue of RM63.8mil was a 12.5% fall from the previous corresponding quarter.

Let's use that quarterly earnings as a marker.

Quarterly rpt on consolidated results for the financial period ended 31/3/2007. Total losses were 889k. Cash 48.457 million. Total debts 304.463 million.

7th Aug 2007. Texchem Eyes Bigger Indonesian Mart Share

TEXCHEM Resources Bhd wants to double its mosquito coil market share in Indonesia to 30 per cent in five years.

The company, which makes household insecticide products under the Fumakilla brand, wants to have a bigger slice of Indonesia's market, which is eight times bigger than Malaysia's

9th Aug 2007 Quarterly rpt on consolidated results for the financial period ended 30/6/2007. Company made 6.566 million from a revenue of 306.676 million.

Texchem Divisions¡¯ Reduced Sales with the Exception of Food

PENANG: Texchem Resources Bhd’s net profit doubled to RM6.57 million in the second quarter ended June 30, 2007 from RM3.22 million a year earlier mainly due to an exceptional gain of RM6.2 million from the disposal of Texchem Consumers Sdn Bhd.

Revenue fell to RM306.08 million from RM323.03 million mainly due to the disposal of TCSB and lower sales volume achieved by the family care, packaging and industrial divisions, which were mitigated by higher sales from the food division...

If you minus out that exceptional gain of 6.2 million, there is not much profits left for the quarter.

27th December 2007, RHB Research iniated coverage.

Texchem Resources
An Attractive Dividend Yielding Stock

Share price : RM1.29
Fair Value : RM1.37
Recom : Market Perform (Initiate Coverage)

...Initiate with Market Perform recommendation. We value Texchem at RM1.37/share, based on a target CY08 PER of 14.5x. Together with our projected 2008 dividend per share of 12 sen, this suggests a potential total shareholder’s return of 15.5%, which is roughly in line with our projected return for the market. Hence, we are initiating coverage on Texchem with a Market Perform recommendation.

Always felt unease with such a recommendation. Share price was rm1.29 and they felt fair value is around 1.37. Not much upside, yes? But they justify it by saying that this is a dividend play. Let's keep watch on this issue.

Jan 14th 2008: Texchem set to make strong recovery in earnings

Texchem set to make strong recovery in earnings

By LEONG HUNG YEE

PETALING JAYA: Shares of Texchem Resources Bhd extended their gains on follow-through interest on Friday.

The counter closed marginally higher at RM1.28 and a breath away from its three-month high of RM1.32 recorded on Dec 27.

Analysts said the counter was clearly on the radar of investors as reflected in its price movement and trading volume over the past few months.

Rating agency Standard & Poor’s (S&P) has a buy call on the stock with a 12-month target price of RM1.45.

It said the company was poised for a recovery in earnings going into 2008 after overcoming operational difficulties that culminated in a net loss of RM900,000 in the first quarter (Q1’07), its first since Q1’04.

“We are forecasting Texchem to report net profits of RM13.1mil and RM11.2mil in 2007 and 2008, respectively, driven by a stronger performance at its packaging division coupled with the ongoing recovery at its food division.

“Excluding the exceptional gain recorded during Q2 '07, recurring net profit is expected to jump 62% year-on-year (y-o-y),” said the agency.

S&P said the company was attractive for its strong dividend track record and gross yield of 7.8%.

It added that Texchem had managed to bring its net gearing down to 112% at end-September 2007 from 140% at end-2006, although financing costs remained high and were a drag on profitability.

RHB Research projected Texchem’s earnings to rebound this year on account of better operating results from the family care and food divisions as well as lower finance costs as the company gradually pared down its borrowing levels.

The research house recommended a hold at RM1.29, valuing the share at RM1.37 based on a target calendar year 2007 price-earnings ratio of 14.5 times.

Eh? Eh? RHB coverage was a market perform, no?

22nd Jan 2008: Texchem to expand this year

... “By 2010, the food division could be expected to generate 30% of group revenue,” he said.

Texchem is also allocating RM7mil to set up seven Sushi King outlets this year in Kota Kinabalu, Miri, Bintulu and in the Klang Valley.

Two new Sushi King outlets were opened in Kuching earlier this month, bringing the total number of outlets in the country to 43....

Feb 2008: Quarterly rpt on consolidated results for the financial period ended 31/12/2007. Texchem made 8.601 million from a sales revenue of 327.192 million. The earnings margin are rather razor thin, yes? (some do prefer to invest in companies that have a profit margins above 20%)

On Business Times (link lost)

Industrial, food units boost Texchem Res pre-tax

Published: 2008/02/22

TEXCHEM Resources Bhd saw its pre-tax profit rise to RM29.735 million in its financial year ended December 31, 2007 from RM22.537 million in 2006.

This, it said yesterday, was due to the improved performance of its industrial and food divisions, which offset the lower profits of the packaging and family care segment.

In a statement to Bursa Malaysia, the group said included in the higher pre-tax profit was an exceptional gain of RM6.2 million from the sale of Texchem Consumers Sdn Bhd (TCSB).

However, its full-year revenue dropped slightly to RM1.258 billion from RM1.267 billion before, due to the sale of TCSB and the lower revenue recorded by the packaging division.

Although the group remains optimistic for this year, it said it is mindful of a potential slowdown in the global economy which could have an impact on its performance.

In a separate note to the bourse, the group said it plans to buy a 21 per cent in PT Technopia Jakarta from Texchem Corp Sdn Bhd for RM5.903 million cash.

It felt this will enable the expansion of its family care division as well as consolidation of the future earnings of the Indonesian-based firm, and increase direct penetration into the mosquito coils market there.

“With a huge population of about 235 million people, Texchem Resources sees great potential in the mosquito coils and household insecticide products market in Indonesia.

“The proposed acquisition therefore represents further steps towards achieving the group’s vision to be the top player in the household insecticides industry in Asean by 2010,” it said. — Bernama

8th March 2008: Texchem targets RM3.2b revenue by 2013

Oo.. I always get sceptical when company boasts out loud to the local media about their revenue targets or revenue growth. Why? Most important is the bottom line, the net profit. One can have all the glittering revenue growth but if it is not accompanied by net profit growth, it all counts for nothing. Anyway as per the earlier quarterly earnings report, we saw that Texchem net earnings were 17.915 million for fy 2007. Note the figure is boosted by extraordinary gain of 6.2 million.

10th March 2008, on the Edge (link lost)

10-03-2008: Texchem confident of sustainable dividend payout till 2011
by Yantoultra Ngui Yichen

KUALA LUMPUR: Packaging, industrial, food and households products group Texchem Resources Bhd is confident of an annual 12% dividend payout until 2011 on the back of its aggressive expansion plans.

Texchem, which is controlled by Japanese businessman Tan Sri Fumihiko Konishi and was listed on the local bourse in 1993, paid dividends as high as 20% in 1999 and 2000.

Konishi, 63, the group’s chairman and chief executive officer, said Texchem’s philosophy was to grow without asking any money from its shareholders, and only pay out dividend annually. It has not proposed any right issues since its listing.

Texchem, whose belt includes Sushi King and Fumakilla, aims to achieve a RM1.5 billion turnover and RM30 million pre-tax profit in its current fiscal year ending Dec 31, 2008 (FY08), riding on its new expansion plans, which might include some mergers and acquisitions (M&A).

Konishi said the group planned to expand its food division in the country as well as in Myammar via M&A as it had seen more sustainability in the food industry throughout its experience in the sector.

“There are about four (in talks on possible M&A) in the pipeline,” he told reporters after Texchem’s analysts briefing last Friday.

The group’s net profit for FY07 rose 8.95% to RM17.91 million from RM16.31 million in FY06 due to improvements in operational performance of its industrial, packaging and food divisions despite the disposal of its subsidiary Texchem Consumer Sdn Bhd. Its revenue hit RM1.26 billion while pre-tax profit was RM29.74 million.

Konishi said Texchem also aimed to expand the number of its Sushi King restaurants to 50 from 44 at present by the end of the year.

On its household division, he said the group planned to venture into new markets like Bangladesh and the Philippines by exploring the possibility of setting up household insecticide manufacturing plants in both countries.

“We will allocate some RM70 million for our expansion plan and expect our overseas revenue contribution to reach 50% (from 35% in FY07) soon (in the next five years),” he said.

Konishi added that Texchem expected its revenue to hit RM3.2 billion turnover and RM100 million in pre-tax profit in 2013 and it targeted to be a RM5 billion (revenue) company by 2020, with pre-tax profit of about RM200 million.

Meanwhile, Konishi said Texchem would increase investments in existing markets like Vietnam, Thailand and China as well as develop more venture businesses within each division.

Rather inaccurate the article. See the comments in red. It said "The group’s net profit for FY07 rose 8.95% to RM17.91 million from RM16.31 million in FY06". Well if one minus out the 6.2 million from rm17.91 million to the disposal, then Texchem fared much poorly in fy 2007 when compared to what it did in fy 2006.

May 2008: Quarterly rpt on consolidated results for the financial period ended 31/3/2008. Revenue did increase but Texchem net profits only 1.059 million!

5th July 2008, on Business Times. (link lost)

Texchem: EU ban eating up revenue

By Marina Emmanuel Published: 2008/07/05

TEXCHEM Resources Bhd's (TRB) associate company Seapack Food Sdn Bhd has seen a 70 per cent production drop since the suspension of Malaysian seafood exports to the European Union (EU).

TRB chairman and chief executive officer Tan Sri Fumihiko Konishi said Seapack is expected to register monthly revenue losses of RM3 million until such time as the suspension is lifted.

"Our monthly production output now stands at 200 tonnes and we hope the authorities will act quickly in resolving the situation," he told reporters after an extraordinary general meeting in Penang yesterday.

Konishi said the EU accounts for 70 per cent of Seapack's exports and the company has been forced to restructure and reduce its workforce from 300 to 80 last month due to the drop in business.

"We are now concentrating on the domestic market and also regional ones," he said, adding that exports now include cleaned and re-sized squid and cuttlefish, along with value-added products such as sashimi squid and also surimi items.

Malaysia last month temporarily stopped seafood exports to the EU following threats of a total ban after checks on local fisheries revealed lacking health standards.

The EU has threatened a total ban on Malaysian seafood following random checks in April on nine companies exporting fishery products which were found lacking in health standards and practices.

Industry experts had predicted that Malaysia is set to lose more than RM11 billion during the three-month wait for the suspension to be lifted.

Konishi said the latest development will not affect the operations of TRB's seafood processing company Sea Master Trading company Sdn Bhd which has 280 people on its payroll.

"Fortunately, we moved fast enough to step up our exports to China and Japan since we are unable to do so to EU countries for now," he said.

South Korea and Taiwan are also the company's other export markets where prawns, squid, cuttlefish, deboned fish and processed jellyfish are sold.

TRB's food division currently contributes 29 per cent to group revenue.

"Since our food division is viewed by TRB as its rising star," Konishi said, "we will continue to invest in this division. For this year, we will invest RM15 million to upgrade our facilities for the food division locally and overseas".

Konishi also said that several new projects for the division are currently in the pipeline to expand the food business in Malaysia and abroad.

31st July 2008: Quarterly rpt on consolidated results for the financial period ended 30/6/2008. Net earnings only 468k!

Oh the dividends issue.

31st July 2008: Interim Dividend. Interim Dividend of 6% less 26% Malaysian tax

15th December 2008: Second interim dividend Second Interim Dividend of 4% less 25% Malaysian tax

On 17th December 2008:

RAM downgrades Texchem debt issue

Published: 2008/12/17

RAM Ratings has revised the outlook on the long-term rating of Texchem Resources Bhd's RM100 million Commercial Papers/Medium Term Notes Programme (2005/2012) (CP/MTN) from stable to negative.

The CP/MTN is currently rated "A3/P2".

In a statement, Rating Agency Malaysia Bhd (RAM) said the negative outlook reflects concerns about the increased prospects of lower sales and profit margins for Texchem amid the difficult operating environment.

"Texchem's overall performance during the nine-month period ended September 30 2008 was below expectations, with narrower profit margins following the distribution issues faced by its family-care division and also the weaker showing of its packaging segment, which had been affected by stiff competition and pricing pressures," it said.

Despite higher revenue, the group's operating profit margin eased to 1.4 per cent for the nine months, from 1.72 per cent previously.

Feb 2009. Quarterly rpt on consolidated results for the financial period ended 31/12/2008. Texchem lost 3.98 million!

May 2009: Quarterly rpt on consolidated results for the financial period ended 31/3/2009. Texchem lost 9.232 million!!!!

Texchem records RM9.2m net loss in 1Q
Written by Financial Daily
Wednesday, 06 May 2009 10:50

KUALA LIMPUR: Texchem Resources Bhd recorded a net loss of RM9.2 million in the first quarter ended March 31, 2009 (1QFY09), compared with a net profit of RM1.1 million a year earlier, mainly due to the impact of the global economic downturn.

Revenue fell 30% to RM242.8 million from RM347.1 million mainly due to a drop in demand for industrial, packaging and food products, despite its family care division having achieved higher sales via its Indonesian subsidiary that was acquired on April 18 last year. No dividend was declared.

Texchem said yesterday the diversified group expected its business environment to remain challenging, and would continue to adopt a prudent approach towards capital expenditure while focusing on managing its trade receivables, inventories and operating cash flows to improve liquidity during this difficult period.

This article appeared in The Edge Financial Daily, May 6, 2009.

July 2009: Interim Dividend Interim Dividend of 3% less 25% Malaysian tax

Ooo... interim dividend halved! This is what one has to be extremely careful. Dividends are not constant. Yes, they can increase in time (and this usually co-incides with better earnings performances) but they also can be decreased!

Oct 2009: Quarterly rpt on consolidated results for the financial period ended 30/9/2009. Texchem made 1.05 million. Recovery?Not much clues given in its earnings notes.

The Group’s revenue for the current quarter was RM318.4 million, a decrease of 22% compared to RM406.2 million reported in corresponding quarter last year. The lower revenue was mainly due to the on-going global recession which had adversely affected turnover in the Industrial, Packaging and Food Divisions.

As a result, the Group generated a slightly lower pre-tax profit of RM2.7 million against the corresponding quarter of RM3.0 million.

Texchem today trades at 96 sen.

Jon Stewart: Things To Thanks For?

2009-11-22T10:49:00.002+08:00

A Good Long Look At Mieco Chipboard Again

2009-11-21T18:35:00.004+08:00

I have written many a times on Mieco Chipboard before. ( Here is the link to the past articles that I had written before: click link here )

Today I try something new.

Yeah, most know that iCapital is a huge fanboy of the stock. So what I will do is make a new posting based on what iCapital wrote back in 2007.

I will mark in dark blue font as what I think as significant.

Mieco Chipboard (Mieco, 5001)

[Updated on 02/07/2007 07:49:00]

Principal activities: Manufacturing and sale of chipboards and other related products.
Major shareholders: Bandar Raya Developments Berhad, Lembaga Tabung Haji.

This week, i Capital updates Mieco. A quick recapitulation. Mieco is one of the two largest particleboard manufacturers in the Asia-Pacific region. Mieco offers a wide range of plain and value-added products, including decorative melamine faced chipboard (MFC), decorative electron beam foil chipboard (EBFC), decorative polymer faced chipboard (PFC), worktop, direct post form (DPF) board, laminated flooring, and ‘Do-It-Yourself’ (DIY) type of furniture, which are sold under its ‘MIECO Livin Style’ brand.

Sales
Half of Mieco’s output is sold locally, while the remaining half goes to over 20 countries, including China, Taiwan, Japan, Korea, Hong Kong, South East Asia, the Indian subcontinent, the Middle East, Africa and the Australasian countries, with China remaining as its main export market. Mieco’s export markets mainly take plain boards, which give the group a margin of around 11-14%. In contrast, the domestic market takes both plain and value-added boards, such as MFC and PFC. Value added boards give better margins, around 8-10 percentage points higher than that of plain boards. Since domestic sales give a better margin, domestic sales constitute, in monetary terms, around 80% of the group’s total sales – see table 1.

Update on its latest plant located in Kechau Tui, Pahang
Mieco’s first and second particleboard lines, both located in Semambu, Kuantan, were respectively commissioned in 1976 and 1990. In 1995, the group installed a third production line in Gebeng, Kuantan. These production lines all together gave the group a total annual production capacity of around 300,000 cu m. Mieco had its new plant, which is located in Kechau Tui, Pahang, commissioned in Mar 05, and the near RM400 mln investment gives the group an additional yearly production capacity of 640,000 cu m, bringing the group’s total annual production capacity to 940,000 cu m. The new plant produces only plain boards. While older plants are running at full capacity, the new plant is currently running at around 70% of installed capacity.

By the end of the year, the group will increase its capacity utilisation rate to 75%, without incurring any additional capital expenditure. In 2008, with an additional capital expenditure of RM40 mln to upgrade the group’s press line, the group will be able to run at full capacity in the beginning of 2009.

Performance analysis

While Mieco’s sales have been improving, the percentage of revenue that goes to the group’s earnings before interest, tax, depreciation and amortisation (EBITDA) has been on a declining trend, and the decline was accentuated when the group started running its new plant in 2005 – see figure 1. The main reason for the decline in profitability was the rising cost of raw materials. In 2006 alone, wood cost rose 48%. Cumulatively, over the past 5 years, costs of glue and wood have increased 56% and 129% respectively. Also, in 2005, as a result of low selling prices, the group’s sales, grew only 10% from 2004. This also contributed to the group’s lower profitability level in 2005.

Particleboard selling prices plunged in 2005. The plunge was caused by regional industry-wide particleboard production capacity expansion. Similarly, Mieco was also one of those that embarked on an expansion process. Figure 2 shows the sales and EBITDA margin of Vanachai, which is the other large particleboard manufacturer in the Asia Pacific region. Similar to Mieco, which expanded its original capacity by more than double in 2005, Vanachai expanded its annual production capacity significantly from 498,000 cu m to near 948,000 cu m in 2004. Around the same time, other main particleboard players in Thailand had also significantly increased their production capacity. It has to be noted that Vanachai’s business model is different from Mieco’s, that is, besides manufacturing particleboard, its core operations comprise medium density fibreboard (MDF) manufacturing. Thus, compared with Mieco, Vanachai shows much a higher sales value and EBITDA margin.

As demand did not pick up as fast as the capacity expansion, Mieco made a net loss of around RM8 mln in 2005 compared with a profit of RM30 mln in 2004. However, these trends did not apply only to Mieco, but to the particleboard industry as a whole. As such, industry players experienced significant squeezes in their margins, and plunging profitability, despite rising sales, which were mainly due to increased sales volume. Both figures 1 and 2 represent the trend that had been experienced by the industry players.

However, things are turning around. Demand has been picking up quite well, and is thus, stabilising and improving selling prices. Besides, increasing demand particularly in Asia and Europe is expected to boost the group’s capacity utilisation rate. Rebounding demand from Europe would further improve particleboard prices and is also expected to lower the supply coming in from that region. Demand from Asia remains strong. Also, Mieco has successfully expanded its existing markets and entered into new markets such as India and the Middle East. In the longer-term, improving capacity utilisation and particleboard prices are expected to improve the group’s sales, and thus its bottom line. In the shorter-term, however, the situation is not expected to be all that positive.

The reason is that while particleboard prices are improving, the Korean government has come up with a policy, stating that each person is allowed to own only one house in Korea. This has reduced the demand for particleboard from that country. Korea is one of Thailand’s main particleboard buyers. As such a policy has reduced the demand for particleboard from Thailand, manufacturers in Thailand have dumped their products in Malaysia, lowering particleboard selling prices. Currently, particleboard prices are softening and are hovering around RM125 per cu m. Such a situation is expected to continue for another few months, as the Thai manufacturers continue to dump their particleboard over to Malaysia. However, particleboard prices are expected to pick up towards the end of the year, as sales volumes are always stronger in Q3 and Q4.

Q1 07 Results
Compared with Q1 06, the group’s revenue in Q1 07 improved by around 40% from RM68 mln to RM95 mln, due to higher selling prices and higher sales volume. However, its EBITDA hardly changed. Compared with Q4 06, the group’s sales improved by 11% but its EBITDA declined 11%. Comparing Q1 07’s results with that of Q1 06 would give a more accurate picture of the group’s performance, as in this industry (being a cyclical one), sales are usually at their lowest in the first quarter, and will then pick up in the third and fourth quarters. In terms of loss per share, Mieco made a loss of 6 sen in Q1 07, a significant improvement compared with a loss of 43 sen in Q106.

Although selling prices are expected to soften further in the coming months, the group has been working very hard to improve its production efficiency. A thermo plant, which is expected to be set up soon, is expected to give the group annual savings of around RM3-4 mln. Besides, the group’s effort in increasing its capacity utilisation rate will reduce its fixed cost per unit of production, contributing positively to the group’s bottom line.

Rise in raw material costs tapering off
Another good news for the industry is that the rising cost of resin and wood is tapering off. In the shorter term, the impact of the softening particleboard prices is expected to be cushioned by tapering raw material costs.

As part of Mieco’s cost saving measures, Mieco will involve itself in reforestation soon. Mieco was granted an area of 10,000 acres. Also, Mieco managed to secure log supply from a total area of around 2,653 acres from FELDA’s rubber replanting area.

Conclusion & Advice

At RM1.02 and including its 100 mln warrants, Mieco is capitalised at around RM247.2 mln. For this, what do investors get in return ?

Compared with Mieco’s market capitalisation prior to its expansion in 2005 of around RM317 mln to its current market capitalisation of RM247.2 mln, has the near RM400 mln investment added no value to the group? The investment has equipped the group with an additional yearly production capacity of 640,000 cu m, and prepared the group to reap the benefits from the rising demand for particleboard in the region. Also, the new plant has given the group a firmer foothold in the industry.

As expected, recovering particleboard prices have contributed positively to the group’s top and bottom lines, and this trend is expected to continue in the longer-term. While in the near term prices are expected to soften further and lower the group’s margin and thus, its profitability, such a development is expected to be partly offset by the group’s efforts in improving its production efficiency. Despite the group taking up some debts to finance its new particleboard production line, improving profitability along with the contribution from improving prices and demand will enable the group to pay off its loans in a few years time. Based on the positive prospects of the industry as a whole, and together with Mieco’s prudent management, i Capital retains its longer-term buy rating for Mieco Chipboard.

Disclosure of interests (required by the Securities Industry Act): The publisher and associates have an interest in Mieco Chipboard.

Here's my interpretation.

First and most important issue is the vested interest issue. When one has vested interest, how could one NOT have anything positive to say? Yes?

Now the first few bold blue lines.

Declining selling price coupled with rising raw material cost.

In regardless of what company, who is managing the company, who owns the company or who is recommending the stock, how would you interpret that? How would I?

This for me sounds like a real tough industry to be in. (remember Warren Buffett's famous investment advice on such business?)

And not helping at all is Mieco had decided to built a state-of-the-art plant costing some 400 million in 2005 when the tough time hit. One can call it bad timing or one can call it bad luck but fact remains is that Mieco built an extremely expensive plant when the economics of the particle business turned really bad.

400 million plant, plunging selling price and rising cost price simply equated to bad business.

So back in July 2007, iCapital suggested a buy. It said things are turning around. And they used the following reasoning.

Compared with Mieco’s market capitalisation prior to its expansion in 2005 of around RM317 mln to its current market capitalisation of RM247.2 mln, has the near RM400 mln investment added no value to the group?

Firstly, let me say that, in my flawed opinion, what iCapital is doing here is rather risky.

It valued Mieco via market capitalisation. Valuing by market capitalisation is based ultimately on the stock price. Which is saying that the market is valuing the stock correctly and if one is in the game long enogh, one would understand the risk involved in making such a statement. Why? Any given stock can go up on any given Sunday and more often than not, in our local markets, fundamental reasoning and valuation do get dumped into the drain and stocks go flying without wings!

So is the market valuing the stock correctly back in 2005?

Or is the market valuing the stock wrongly back in 2007?

Before I attempt to answer those two questions, let's do a simple review.

Let's look at Mieco's earnings back in 2003.

Back in 2003, Mieco was a solid company. 180+ million and no debts. Growth is there too! ( Do refer this earnings report: Quarterly rpt on consolidated results for the financial period ended 30/6/2003. )

Aug 2005. Quarterly rpt on consolidated results for the financial period ended 30/6/2005. Mieco earnings is only 120k.

Aug 2005: Bandar Raya Bhd, who owns Mieco, "proposed a capital repayment which would be satisfied by the distribution of up to 119.1 million shares in Mieco on the basis of one Mieco share for every four BRDB share."

Not sounding good when the owner announces that they want to dispose Mieco shares!

Nov 2005. Quarterly rpt on consolidated results for the financial period ended 30/9/2005. Mieco is now losing money! Mieco posted a net loss of 3.742 million! Cash in its piggy bank is now only 16.883 million! Total loans stood at 210.849 million.

July 2007, iCapital wrote on Mieco.

Aug 2007. Quarterly rpt on consolidated results for the financial period ended 30/6/2007 Mieco losses increased to 6.075 million! Cash balances has now shrunk to 14 million. Total loans stood at 243.514 million!

How? Earnings went from profit growth to worsening losses. Balance sheet deteriorated. Cash shrank. Loans increased.

So if the market in 2007, values Mieco lowly, wasn't it justifiable?

Perhaps it would be better if I understand the business economics of the company, yes?

It was a business which had bad business economics, in which average selling prices of the product were falling and raw materials costs were increasing! Does this sound like a good business to invest in?

Or should I attempt to value a business in a difficult business environment?

And so Mieco had a 400 million new plant. But just what's the use? Correct or not? Mieco could have the the state of art plant and Mieco could have the best management but if the business economics is not there, what's the use?

( Coincidently see this posting S&P has a Strong Buy on Mieco Chipbaord!. I was bemused. )

Anyway, let's see how Mieco fared since then.

Jan 2008. Bandar Raya to reconsider disposal of Mieco. They tried it in Aug 2005. They failed. Now they try again! No joke. (ps: the Star business link still works. :D )

But Jagan stressed that BDRB's plan to dispose off its stake in Mieco had “nothing to do with the chipboard maker's performance.”
He believes Mieco would bounce back to the levels of its heydays. “The glut in the industry will subside when the supply of hardwood gets scarce,” he said. Also, he pointed out that the increasing environmental awareness would lead to a growing demand for chipboard, which is more environment-friendly.

May 2008: Quarterly rpt on consolidated results for the financial period ended 31/3/2008. Mieco lost money again. Losses totals 3.339 million.

Feb 2009: Quarterly rpt on consolidated results for the financial period ended 31/12/2008. Mieco lost some 14.5 million. Losses were compounded by the fact that they lost some rm5.9 million from disposal of plant and equipment.

May 2009: Quarterly rpt on consolidated results for the financial period ended 31/3/2009. Mieco lost some 22 million! Cash balances only left some 10 million. Total loans stood at 196.567 million.

July 2009: Bandar Raya continues to attempt to sell Mieco. LOL! Link to Business Times article titled 'BRDB bullish on Mieco but welcomes suitors' is broken.

Aug 2009: Did Mieco Chipboard Have A Turnaround??

Nov 2009, yesterday. Mieco announced its earnings. It lost 1.574 million. Cash is now only 6.221 million. Total loans is now 177.792 million.

Did you see the line 'Amount due to holding company' under 'Non-current liabilities' in the balance sheet?

Yeah, Mieco now owes Bandar Raya some 35.3 million!

Isn't it so clear why Bandar Raya had been trying to dispose Mieco since 2005?

Consider that fact.

If the holding company doesn't want, why would you want?

---------------------------------------------------------

Here's the business times article.

BRDB bullish on Mieco but welcomes suitors

Ooi Tee Ching Published: 2009/07/07

Mieco is an attractive bride, but Bandar Raya Developments, as a parent, is very choosy of prospective suitors for Mieco, says Mieco chairman

Property developer Bandar Raya Developments Bhd (BRDB) (1473) is optimistic of prospects for subsidiary Mieco Chipboard Bhd, but may sell the chipboard maker if there is a good enough offer.

"Mieco is an attractive bride and is never short of dates. She has always had suitors and is frequently courted. It is just that BRDB, as a parent, is very choosy of prospective suitors for Mieco," Mieco chairman Datuk Mohamed Moiz JM Ali Moiz told Business Times in an interview in Kuala Lumpur.

He disagreed with the view that furniture manufacturing was a sunset industry.

"Furniture is a necessity, be it in a residential, commercial or industrial setting. This industry has legs to see through the tough times. We remain optimistic of the long-term prospects," he said.

Last year, Mieco posted losses of RM36.3 million. It continued to lose money in the first quarter of this year. Mohamed Moiz admitted that it would be tough for Mieco to make money this year.

However, the group has been cutting costs.

"Mieco's monthly output used to be around 50,000 sq ft, but it has now dwindled to 15,000 sq ft. We have had to let go of 166 employees and close down the Hong Kong office.

"In November 2008 we closed our plant in Kechau Tui (in Pahang), but this is temporary. Basically, we've done what we have to do. We've centralised marketing activities to Kuantan," Mohamed Moiz said.

Mieco also has a total debt of RM150 million, but the chairman stressed that the chipboard maker was not defaulting.

"Given the current weakness in global demand for chipboard, we need to take pre-emptive action with the banks. We're re-scheduling the loan repayments to give us some breathing space. We're looking at a two-year-extension. We hope to wrap up talks this month."

Four years ago, BRDB's plan to demerge its stake in Mieco to BRDB's minority shareholders under a capital repayment exercise failed. Mohamed Moiz explained that property development and chipboard manufacturing were capital-intensive industries.

"Back in 2005, BRDB directors saw it fit to just focus on property. We needed at least 75 per cent vote from other shareholders. But when it went to count, we didn't get the numbers. So we left it at that," he said.

Asked if a demerger exercise might be revisited, he replied: "In business anything is possible. It does not necessarily have to be a demerger. We keep our options open.

"We've been in the chipboard-making business for 35 years. We're in this for the long run."

What AirAsia Said About Its Earnings Performance

2009-11-21T09:46:00.005+08:00

Of course I was rather anxious to read what AirAsia had to say to the local press in regards to its earnings performance announced last night.

I, for one, was Massively Disappointed With AirAsia's Earnings.

Excluding the forex gains, AirAsia's core profit was only a mere 33.834 million. Which is never going to be enough when one put into consideration that AirAsia has a total mind boggling debt of 7.215 BILLION!

Let's do the math. At 33.834 million per quarter, one year's total operating profit would only be less than 150 million.

Is that enough?

Let's be kind. Let's top it up to 200 million per year.

Hey... I will also ass-u-me that one day, don't know when, AirAsia will have to repay back these loans, yes?

So at 200 million per year, how many years would it take to repay that 7.215 Billion back?

Try 36 years!

And our poor government had granted (AirAsia) to date a whopping 930.591 million in deferred taxes!

Not in my flawed opinion it isn't! ( See past posting also: Just How Good Is AirAsia Earnings Performance Since Listing? )

Anyway on Business Times this morning.

AirAsia swings to Q3 profit

By Jeeva Arulampalam Published: 2009/11/21

Low-Cost carrier AirAsia Bhd (5099) swung to a third quarter net profit of RM130.1 million on better passenger numbers and ancillary income.

In comparison, it posted a net loss of RM465.5 million a year ago due to one-off provisions for contracts tied to fuel hedging and trades held by now-bankrupt investment bank Lehman Brothers.

"Despite the third quarter traditionally being our weakest quarter, we did well and our Indonesian operation has turned profitable," said AirAsia group chief executive officer Datuk Seri Tony Fernandes.

Speaking to analysts during a conference call yesterday, Fernandes said the airline was looking at a strong fourth quarter as underlying passenger demand remained positive.

"We are well-placed and have seen good sales, especially with the latest one million free seats campaign. We are almost up 40 per cent each day since the campaign," he added.

However, ticket prices for the fourth quarter are expected to be lower than the same period last year due to the challenging global economy.

For the three months to September 30 2009, the airline's revenue grew 4 per cent to RM740 million driven by higher ancillary and other operating incomes.

Fernandes said the airline's ancillary income would grow further in the next six to 12 months, having jumped some 57 per cent to RM36.2 per passenger for the third quarter.

While passenger volume increased 19 per cent to 3.59 million passengers, AirAsia's load factor remained the same at 75 per cent from a year ago.

The average fare was lower by 27 per cent at RM142 compared with RM195 in the third quarter 2008.

If fuel prices continue to rise, AirAsia expects to be impacted negatively in the fourth quarter.

It has taken partial fuel hedges to mitigate the volatility, with 20 per cent of the group's fuel (jet kerosene) requirement in the fourth quarter hedged at a fixed swap rate of US$75 (RM255) per barrel.

Fernandes added that the group may reimpose a fuel surcharge if prices escalate above US$100 (RM340) per barrel.

Meanwhile, AirAsia Indonesia posted a profit after tax of RM21.2 million compared with a loss of RM4.3 million from a year ago. The unit performed well due to its international routes to Australia and Singapore and utilisation of new fuel-efficient aircraft.

However, AirAsia Thailand saw its losses widening to RM40.4 million from RM24.6 million a year ago, due to weaker consumer sentiment and lower fares.

"We are confident of the Thai operations' ability to produce profits and its fourth quarter looks good," said Fernandes.

Hmmm... no mention of AirAsia forex gains of 102 million.

You would imagine that if one has an operating gain of 136.260 million and forex gains accounts for 102 million of the gains, or 74% of AirAsia's operation gains came from forex gains, you would assume that such an information is significant enough!

Apparently it isn't!

Here's the Edge Financial Daily version, AirAsia records net profit of RM130m in 3Q, which at least acknowledged the existance of the forex gains.

KUALA LUMPUR: AIRASIA BHD posted net profit of RM130.07 million in the third quarter ended Sept 30, 2009 (3Q09) a turnaround from the net loss of RM465.53 million a year ago (3Q08) as revenue improved and it also benefited from a foreign exchange (forex) translation gain.

Just a plain mention that AirAsia benefited from a forex gain. Did not bother to mention how much!

74% of its gains was boosted by forex gain.

Surely that's a rather significant issue?

In regards to AirAsia Indonesia and AirAsia Thailand. I would assume that these two represented AirAsia so-called 'jointly controlled entity and associates'.

So why is AirAsia Indonesia and AirAsia Thailand owing AirAsia some 911.061 million in small change???

Why?

I was also thinking about AirAsia's balance sheet issue this morning and as many are aware I had posted many articles on AirAsia (clickable link to past postings) before.

Back in Aug 2009, I wrote It's A 20% Placement For AirAsia!

AirAsia sees more than RM1b in coffers
By Jeeva Arulampalam Published: 2009/08/04

Low-cost carrier AirAsia Bhd (5099) expects to have more than RM1 billion in its coffers by the end of the year, as it grows its profits and undertakes a private placement, says its chief.

“The cash will be used to lower the group’s gearing,” group chief executive officer Datuk Seri Tony Fernandes told reporters after the airline’s annual and extraordinary general meetings in Sepang yesterday

Compare that statement to what I wrote last night Massively Disappointed With AirAsia's Earnings

Cash balances then was 231 million ( See here ) and total borrowings as at Aug 2009 were some 6.957 billion ( see here )

So after the stock sale (which raised some 508 million) and after the 'good earnings report', AirAsia's cash balances reported yesterday was 527 million. Total debts increased to 7.215 billion.

Makes you wonder doesn't it?

Massively Disappointed With AirAsia's Earnings

2009-11-20T19:18:00.009+08:00

AirAsia announced its earnings tonight.

I saw the link and I took a guess of what to expect.

I expected them to show some earnings. Why? The USD had weaken a lot against the ringgit and this would translate to forex gains.
I expected some improvement in the balance sheet. Why? AirAsia sold shares to raise funds. If not mistaken the share sale would bring in some 500 million in cash.

Those were my humble expectations and since I had blogged quite often on AirAsia, I only thought it was correct that I made an update on its earnings.

I quickly look at the summary from DJ.

A net profit of only 130 million? Only 130 million?

This simply isn't enough! That was my first reaction. No joke!

I opened the pdf file attached and looked for its core operating profits.

Page 10.

That screen shot spoke everything about AirAsia.

Taking out the forex gain, core operating profits were only 33.834 million.

Is it enough?

Consider all the investment outlay that AirAsia had taken. Consider the mountain of debt AirAsia is in.

Is a core operating return of 33.834 million enough?

Point 2 or expectation number 2.

Firstly on Aug 2009, I wrote the following: A Quick Look At AirAsia's Latest Earnings

Cash balances then was 231 million ( See here ) and total borrowings as at Aug 2009 were some 6.957 billion ( see here )

Today, November 2009.

Cash balances has increased to a nice 527 million.

But is this enough?

100 PERCENT NOT!

Why? Because AirAsia cash balances were boosted by some 508 million from their share placement sale. Minus this out, AirAsia cash balances is only left with 19 million! Remember in Aug 2009, cash balances were some 231 million!

Where all the money go?

Then let's look at their borrowings.

Omigosh! Total debts is now 7.2 Billion!

How?

So despite raising some 508 million from a share placement sale, AirAsia balance sheet continued to weaken!

Back in Aug, I mentioned in the posting A Quick Look At AirAsia's Latest Earnings on the amount due to AirAsia from its associates.

I wrote the following.

Look at the amount due from the 'jointly controlled entity and amount due from associates' which stands at 410.408 mil and 479.593 mil respectively. The amount totals 890.001 million.

Now if you look back at the earlier table which showed AirAsia cash balances, the "Amount due from a jointly controlled entity" totals 438.339 million and the "Amount due from associates" totals 472.722 million. Adding both totals, we get 911.061 million!

Holy cow!

Why is this happening?

With the mountain of debt AirAsia is in, should AirAsia allow its associates to owe them so much million? 911.061 million is one mountain of small change!

What on earth is happening with this company???

Regarding Aircel and Maxis

2009-11-20T08:09:00.008+08:00

Flashback:

30th April 2007: How Much For Maxis?

Recently there was an article on Star Bix, New chapter at Maxis.
This line is most interesting.

To grow in India, Indonesia and locally in broadband and 3G, the funding requirements are huge, but that is not really an issue, said Jamaludin. This year alone, the company needs RM2.77bil (of which RM1.57bil is for India and RM1.2bil for Malaysia) and in India alone..

And as argued ..

If you are a current shareholder of Maxis, your share of this 2.725 Billion has already being invested in India and Indonesia by Maxis.

How? Should there be a value placed on these investments?

May 1st 2007: Maxis Again

Proposal to take Maxis private

“Yes, we are shocked with the takeover plan but it does make a lot of sense to take it private, given that the current major shareholders see huge value in Maxis that the market does not. Maxis’ India unit, Aircel Inc, for one is a brilliant asset and the market is not valuing it,” an analyst said.

I was shocked. What about the minority shareholders interests? For sure the current major shareholders saw a huge value at Maxis. Hence the privatisation!

“Taking Maxis private also allows the major shareholders to restructure it without having to deal with the minority shareholders. That gives them the flexibility of doing what they need to do with the group and some private equity investors may emerge to nurture the companies within Maxis.

“At some point, we will not be surprised if Maxis makes its way back to the Malaysian bourse but it is expected to also have a dual listing somewhere on an international bourse and its units will also be listed separately,” he added.

Restructure because the major shareholders saw value, right?

And best of all by taking Maxis private, the major shareholders DOES NOT have to deal with the minority shareholders.

Anyway let's look at Aircel.

Here is the link to Maxis last quarterly announcement before it was taken private. click here for the pdf file

Page 18.

Back then, in 2007, revenue increased by rm 53 million in just one quarter. Net additions of 1 million subscribers for just one quarter.

Now during Maxis got relisting exercise, on 29th Oct 2009, OSK wrote the following:

Given what had transpired in 2007, I was not shocked at all that the Maxis overseas operations are not included in the relisting.

Hmmm.... got me thinking.

Maxis had a nice overseas operation. Its Aircel unit was declared to be a BRILLIANT ASSET back in 2007 and the growth in revenue and subcribers shown by 2007 data proved so.

But I am surprised by the statement by OSK: " Maxis will be listed without its loss-making overseas operations." Loss making? Hmmm...

Anyway on today's Business Times:

Aircel to invest US$5.5b in India
By Goh Thean EuPublished: 2009/11/20

MOBILE phone firm Aircel Ltd, a sister company of Maxis, will spend US$5.5 billion (RM18.6 billion) over three to five years to expand its network and cover most parts of India.

It already has US$3.5 billion (RM11.8 billion) in US dollar and Indian rupee loans. The rest will come from shareholders like Binariang GSM Sdn Bhd, which owns 74 per cent of Aircel.
Binariang also owns stakes in Indonesia's PT Natrindo Telepon Selular and Maxis Communications Bhd.

Countries like India and Indonesia are where growth will come from for Bina-riang. The group has just spun off Maxis Bhd in Malaysia, raising some US$3.3 billion (RM11.1 billion) in Southeast Asia's biggest initial public offering.

"Aircel has really grown over the past few years, from a small company two years ago to the third most admired telecom brand. It is still growing at a healthy pace," said Aircel director Sandip Das, also the chief executive officer of Maxis Bhd, in an interview on Wednesday.

Aircel now covers 18 circles in India and is expected to launch its services to all 23 circles by the middle of next year. In India, licences are given out for areas known as circles.

"We are now adding one million new subscribers every month. We now have about 26 million subscribers," he said.

The last statement caught my attention!

"We are now adding one million new subscribers every month. We now have about 26 million subscribers,"

OMIGOSH!

Aircel is now adding in ONE MILLION new subscribers every month!

Back in 2007, it was ONLY (what an understatement) doing 1 million per quarter!

And Aircel has 26 million subscribers.

WOW!

Now this got me thinking.

Assume, yeah ass-u-me, that I am a Maxis fanboy, and despite what had happened before, I am now a Maxis shareholder again. (Ass-u-me lah! ). Yeah, assume I had the share before, share got delisted and now I buy back again to be a shareholder again.

Now I wonder how would I feel to read about all this.

Maxis of old used to include all Maxis overseas operations. Yeah, the brilliant Aircel was included. Maxis of today is just a plain Maxis. No Aircel!

Yeah no Aircel.

A telco company that has a growth of 1 million new subscribers per month!

How lah?

On the Edge Financial Daily: Bold IPO bet pays off for Ananda Krishnan

.......... Ananda's privatisation of Maxis angered investors, who had accepted RM15.60 a share. Ananda soon sold a 25% stake to Saudi Telecom at RM16.40 apiece.

"It's a masterstroke — he forked out money to privatise, and then made more selling it to the Arabs," said the person with knowledge of the billionaire.

Poor minority shareholders... !!!

The relisting of Maxis comes after the prime minister called for firms to list in a bid to boost Malaysia's sluggish and illiquid stock market.

Ananda obliged — but this time, he is listing only the Malaysian operations, leaving the fast-growing Indian and Indonesian businesses with the parent Maxis Communications Bhd.

China's Empty City!

2009-11-19T10:05:00.000+08:00

Highlighted by T&T::

YTL E-Solutions Should Not Be Considered Anymore As A Wimax Play

2009-11-19T08:51:00.005+08:00

For prophet.

This is from YTL Communications home page here

Our Background
YTL Communications is a subsidiary and the communications utility of YTL Power International, a utility group active across key segments of the utility industry worldwide.

Headquartered in Malaysia, YTL Power International operates in Malaysia, the United Kingdom, Singapore, Australia and Indonesia. Its core businesses include: power generation, retail and transmission, and water supply and wastewater services.

YTL Power International is a subsidiary of YTL Corporation, a leading integrated infrastructure developer in Malaysia with global investments in utilities, cement manufacturing, construction, property development and investment, hotel management and development, as well as information technology serving over 12 million customers on three continents.

Both YTL Power International and YTL Corporation are listed on Bursa Malaysia (the Kuala Lumpur Stock Exchange). Both companies are component stocks of the FTSE Bursa Malaysia composite index which comprises 30 of the largest companies based on market capitalisation.

And just how did this came about?

The following is a screen shot from a CIMB report back in Sep 2009.

See also this older posting: Comments On YTL's RM3 Billion Broadband Venture

So what about YTL E-Solutions now? Here are some comments from the same CIMB report.

Yeah Lloyd Blankfein Should Just Shut Up!

2009-11-19T08:01:00.003+08:00

On CNN Money: Shut up, Lloyd Blankfein!

Shut up, Lloyd Blankfein!

The Goldman Sachs CEO is trying to portray the Wall Street titan as a paragon of virtue. But Blankfein should stop pretending that the bank is a charity.

By Paul R. La Monica, CNNMoney.com editor at large
Last Updated: November 18, 2009: 12:22 PM ET

NEW YORK (CNNMoney.com) -- The public relations gurus who are advising Goldman Sachs Chief Executive Officer Lloyd Blankfein might want to give him some new advice. Shut up!

Blankfein made a startling confession Tuesday. He apologized for Goldman's role in the financial crisis, saying that the bank "participated in things that were clearly wrong and have reason to regret."

But it's tough to take Blankfein at his word. This mea culpa came a little more than a week after he made an embarrassing comment in an interview with the Financial Times, saying that he was just "doing God's work." Interesting. I don't believe there are any references to credit default swaps in the Bible, Torah, Koran or any other religious text.

While Blankfein might have made the "God's work" comment in jest, it still goes to show that he needs to tread carefully if he really wants to prove to taxpayers that Goldman is not really the blood-sucking parasite that many are now making it out to be.

Goldman is facing a populist backlash because it was one of the original nine firms to receive bailout funds last fall. But it is now all of a sudden generating gigantic profits again and putting away large wads of cash for employees in its bonus pool.

Goldman has earned $8.4 billion in the first nine months of 2009. The company has already set aside $16.7 billion for compensation expenses, putting it on track to have a bonus pool of about $21 billion at year's end.

So it's no wonder that Blankfein has turned the spin cycle on over the past few months to try and send the message that Goldman Sachs (GS, Fortune 500) is the Wall Street equivalent of Google, i.e. it won't do evil.

On Tuesday, Goldman announced that it, along with investing legend Warren Buffett, is launching a $500 million program geared toward helping small businesses.

That's certainly admirable even though it's fair to cynically point out that Buffett's Berkshire Hathaway (BRKA, Fortune 500) investment firm is Goldman's largest shareholder. So I don't think I am going out on a limb to guess that the idea for this largesse probably had its roots in Omaha as opposed to the corner offices on Broad Street.

And if Blankfein is really sorry about the mistakes Goldman made, here's a thought: Instead of contributing a meager $500 million to help get small businesses back on track, maybe he could kick in $14 billion instead.

That's the amount of money Goldman received from AIG (AIG, Fortune 500) (courtesy of the U.S. taxpayer-funded bailout of the insurer) because of the so-called counterparty risk.
The small business program is Blankfein's latest attempt to try and prove that what's good for Goldman is good for America.

Last month, Blankfein told Fortune managing editor Andy Serwer that the company contributes to the nation's growth. "Once the economy starts to turn, we get very involved," he said.

Back in July, Goldman went out of its way to pat itself on the back for paying $1.1 billion to the government to redeem warrants that Uncle Sam got as part of last fall's $10 billion bailout of the firm.

Goldman deemed the payment "full and fair," and in a statement Blankfein gushed that Goldman was "pleased that this additional money can be used by the government to revitalize the economy, a priority in which we all have a common stake."

None of this is technically wrong. It's, of course, better for Goldman to be back in the black as opposed to bleeding red ink.

But has Blankfein blanked out and mistaken himself for former Goldman chief (and soon to be former governor of the Garden State) Jon Corzine? It almost sounds as if Lloyd is running for public office. What's next? Kissing babies and train rides all across America?

Blankfein shouldn't feel the need to constantly remind us of how Goldman is an important cog in the GDP growth machine and engage in excessive self-flagellation just because business is booming again.

It's actually an encouraging sign that banks like Goldman, JPMorgan Chase (JPM, Fortune 500), Wells Fargo (WFC, Fortune 500) and U.S. Bancorp (USB, Fortune 500) -- to name a few -- are this strong only a few months after many thought the financial system was doomed.

The notion that Goldman's good fortune is a problem is silly. Even though many average Americans are still struggling financially, it's misguided to suggest that everybody should be suffering and that the nation would have been better off if Wall Street went under. We shouldn't be demonizing success.

And let's not forget that Goldman has paid back taxpayers not just for the warrants but the full $10 billion in TARP money. There's a big difference between Goldman and Bank of America (BAC, Fortune 500) and Citigroup (C, Fortune 500), which still don't seem to be healthy enough to return bailout funds.

But Goldman Sachs is a bank. It's supposed to make money. It's supposed to take risks. Lloyd isn't exactly running the March of Dimes.

Blankfein is fighting a battle he can't win. He can't come out and bluntly state that his company's return to prosperity should be applauded because it proves that his firm's employees are more competent than Goldman's rivals. That's why he should just keep quiet.

The problem is that Blankfein is trying to dupe people into thinking that he's had his Ebenezer Scrooge moment and that Goldman is now more interested in serving the public than making a buck.

Apologizing for the credit bubble and claiming that Goldman has the best interests of the people at heart just makes Blankfein look foolish, not sympathetic.

Come on. We all know how Wall Street works. The fact that Goldman hotshots are set to make big bonuses this year isn't nearly as insulting as the fact that Blankfein wants us to believe that investment bankers and traders are really nothing more than highly compensated social workers.

Well said.

In an another article on Reuters, highlighted by TT, Goldman was exposed to AIG losses: government report

NEW YORK (Reuters) - Goldman Sachs Group Inc could have suffered dramatic losses if the federal government had not intervened to prop up American International Group Inc, according to a government report.

The report by the special inspector general for the government bailout program raises doubts about Goldman's previous claims that it was hedged against potential AIG losses.

Last fall, as the financial services industry stood on the brink of collapse, the government stepped in with an unprecedented effort to rescue the system. AIG was among the companies that received billions of dollars from the U.S. Treasury's Troubled Asset Relief Program.

If AIG had collapsed, it would have made it difficult for Goldman to liquidate its trading positions with AIG, even at discounts, the report said. It also would have put pressure on other counterparties that "might have made it difficult for Goldman Sachs to collect on the credit protection it had purchased against an AIG default."

Finally, the report said, an AIG default would have forced Goldman Sachs to bear the risk of declines in the value of billions of dollars in collateralized debt obligations.

A Goldman spokesman called the risks discussed in the report a "moot point."

"Goldman Sachs has consistently said its exposure with AIG was collateralized and hedged and therefore we had no direct credit exposure," Goldman Spokesman Michael DuVally said. "Given the hedges, collateral, and government backing as a result of the bailout, the additional risks of declining market values in the event of an AIG default are a moot point."
AIG has received pledges of up to $180 billion in taxpayer aid since last fall to help save it from collapse. It was revealed in March that Goldman received $12.9 billion in payments and collateral from AIG.

David Viniar, Goldman's chief financial officer, in March told reporters that the Wall Street bank did nothing wrong when it accepted payments to close out trades with AIG.

The full report can be viewed at: here

Me?

I think them guys on Wall Street should get a real job. Get a life!

Kenneth Vun Ordered To Pay Back RM2.5 Million For Misusing Company's Funds For Personal Benefit

2009-11-18T14:28:00.004+08:00

1st October 2007: Securities Commission scores a first!

On the Edge Financial Daily: FTEC’s former MD ordered to restitute RM2.5m in IPO funds

Written by Financial Daily
Wednesday, 18 November 2009 11:38

KUALA LUMPUR: Kenneth Vun @ Vun Yun Liun, former managing director and shareholder of FTEC Resources Bhd, has been ordered by the High Court to restitute to the company RM2.496 million, the amount of the company’s funds he had caused to be misused for his personal benefit.

The Securities Commission (SC) said in the landmark court ruling on Nov 11, Vun was also restrained from directly or indirectly managing FTEC funds and any of the group’s companies for two years after he had complied with the restitution order, unless with prior SC approval.

“This is the first time ever a company director has been ordered by the court to restitute company funds,” the SC said in a statement yesterday, calling the scoring of “another milestone in its relentless efforts to enhance corporate government”.

FTEC has been renamed Mangotone Group Bhd.

The SC said the judgment marked a major success for the regulator which had sued Kenneth Vun on Sept 26, 2007.

It said its investigation into the utilisation of the FTEC public issue proceeds showed that Vun had utilised a portion of the proceeds for his own benefit and personal use, constituting a breach of the conditions set by the SC when it approved its listing.

The SC said the civil action was brought under Section 100 of the Securities Industry Act 1983, which allows the court to make a restitution order upon application by the SC if it found a person to have contravened a relevant requirement.

“The SC views the judgment as a timely reminder to directors of listed companies that they must not treat company funds as their own and that they must at all times discharge their duties with honesty, integrity and accountability,” it said.

This article appeared in The Edge Financial Daily, November 18, 2009.

Of course FTEC the stock does not exist no more.

It has changed its name to TecAsia. TecAsia had then changed its name to Mangotone.

And Mangotone in Aug 2009 was classified as a GN3 stock!

Saturday August 15, 2009

Mangotone slips into Bursa's GN3

PETALING JAYA: Mangotone Group Bhd is now an affected issuer of Bursa Malaysia’s Guidance Note 3 (GN3) and required to submit a regularisation plan to the stock exchange regulator for approval in the next 12 months.

In a filing to Bursa on Tuesday, the company said it had defaulted on debt and interest payments due to operational difficulties in the past two quarters, lower trade facilities, decline in sales and low margins.

Further in an announcement on Wednesday, Mangotone said its cash reserves and collections from receivables and sales would be prioritised to sustain operations, replenish fast moving stocks and to pay essential overheads.

Do refer blog posting: This Stock Called Mangotone (FTec)

Speculative Article Drives Affin Up!

2009-11-18T08:15:00.009+08:00

Monday Nov 16th 2009: Affin surges on possibility of merger with HL Bank

Affin surges on possibility of merger with HL Bank
Written by Joseph Chin
Monday, 16 November 2009 09:40

KUALA LUMPUR: Shares of Affin Holdings rose on speculation that the Guoco Group may look into a merger between HONG LEONG BANK BHD [] and Affin Bank Bhd.

At 9.27am, Affin was up 20 sen to RM2.54 with 1.7 million shares done. Affin-WC rose five sen to 20 sen with 18.4 million units done.

The Edge weekly reported Guoco is believed to have put out feelers to gauge the possibility of raising ringgit funding in the domestic capital market. It was earlier reported that Guoco was busy accumulating shares in Bank of East Asia.

The report said speculation is rife of a merger between Hong Leong Bank Bhd and Affin Bank Bhd, in which Bank of East Asia owns 20.5%.

The classical IS BELIEVED justification used to ram up a stock.

And it WORKED like a charm in a hot market.

And what's amazing is that the local market community and the stock researchers started commenting on what is basically a 'rumour', a 'speculation'. Which as you know is nothing more than coffee talk.

Here is a snippet from a CIMB research note.

By Winson Ng Gia Yann CFA
The Edge reported that speculation is rife that Guoco's potential acquisition of a stake in Bank of East Asia (BEA) could spark a merger of Hong Leong Bank and Affin Holdings, which is 20% owned by BEA. If true, it would be positive for Hong Leong Bank as it would give it a quantum leap in size and help it achieve cost savings in the longer term. However, the impact of any deal on the bottomline would hinge on the pricing. We believe that Hong Leong Bank's positive attributes have been priced in, going by the 41% jump in its share price over the past three months, which has pushed valuations above industry average. We retain our earnings forecasts and target price of RM7.50, (10% premium over DDM value). The stock remains an UNDERPERFORM premised on the potential de-rating catalysts of (1) above-average valuation, (2) slower recovery in loan growth, (3) lower-than-expected dividend payment, and (4) margin compression. We prefer AMMB Holdings for exposure to the sector.

And even RHB Research technical analysis was quick enough to spot the break out in the stock and released a technical report on the stock and gave it a BUY rating.

End result?

The stock surged 13%!!!!!!!!!!!

Let's look at Affin-W.

How nice eh?

These guys speculated on an event, published it and the stock flies!

Wonder what the journalists would be saying to themselves when they retire?

However, at the day end, all hell broke loose! Affin Holdings quickly denied the whole speculation.

On Business Times the next morning:

Affin: No merger talks with Hong Leong Bank

By Adeline Paul Raj Published: 2009/11/17

Affin Holdings' stock surged 13 per cent yesterday after it was reported that the bank might merge with tycoon Tan Sri Quek Leng Chan's Hong Leong Bank

AFFIN Holdings Bhd (AHB) (5185), owner of the country's second smallest lender Affin Bank Bhd, says it is not in talks to merge its bank with Hong Leong Bank Bhd.

AHB's stock had surged 13 per cent yesterday after a local business weekly reported that the bank might merge with tycoon Tan Sri Quek Leng Chan's Hong Leong Bank.

Its share price rose 30 sen to RM2.64, its highest close in about 22 months. Some 16 million shares changed hands, more than six times that of the previous trading day.

Hong Leong Bank, meanwhile, shed 2 sen to RM8.30.

"The board wishes to clarify that it is not involved in any discussions involving a merger of Affin Bank and Hong Leong Bank," AHB said in a statement to the stock exchange after the market closed.

It said that it was, in fact, not in talks on any potential merger or acquisition relating to its banking operations at the moment.

The business weekly had quoted unnamed sources as saying that a merger between the two banks might be possible as there was speculation that Hong Kong's Guoco Group Ltd might buy a controlling stake in Bank of East Asia Ltd (BEA).

The speculation came about after Guoco raised its stake in BEA last week to 8.01 per cent from 7.99 per cent, emerging as its second largest shareholder.

Quek controls both Guoco and Hong Leong, while BEA has a 20.5 per cent stake in Affin Bank.

"As BEA has 20.5 per cent of Affin, this news sparked talk of a potential merger of Hong Leong Bank and Affin," CIMB Research said in a note yesterday.

BEA's share price rose sharply after Guoco increased its stake in the lender last week. The bank has, however, since said that it has not been in any talks relating to intended acquisitions.

BEA, Hong Kong's largest independent local bank, yesterday officially opened its new regional headquarters in Singapore.

And of course the stock started falling!

By 9.36 am, the following newsclip appeared on the Daily Edge. Investors take profit on Affin

Investors take profit on Affin
Written by Joseph Chin
Tuesday, 17 November 2009 09:36

KUALA LUMPUR: Investors were quick to take profit on AFFIN HOLDINGS BHD [] shares and its warrants in early trade on Tuesday, Nov 17 after it clarified it was not in discussions involving a merger with HONG LEONG BANK BHD [].

At 9.25am, Affin-WC fell 5.5 sen to 39 sen and it was the most active with 21.68 million units done while the shares slipped 10 sen to RM2.54.

The 30-stock FBM KLCI rose 8.62 points to 1,286.93. Turnover was 139 million shares valued at RM113 million.

In a late statement on Monday, Affin said it was not involved in any negotiations on any potential acquisition or merger relating to the banking operations of the group.

However, investors should note the statement from the board of Affin Holdings that it is "continuously looks at measures to further enhance the performance and value of AHB Group for the benefit of its shareholders".

Its share price rose to a 22-month high yesterday after The Edge weekly reported that the Guoco Group was exploring funding options for a takeover of Affin Bank.

Take profit???????????

Omigosh!

Consider the fact.

If someone bought the story based on the speculations and the speculations have been denied, what does one expect these buyers to do?

Sell would be the logical thing, yes?

And would you call such an action as 'taking profit'?

They were taken for a ride and since the speculation is denied, what else can they do?

How nice can it be? The Edge Weekly spun the news out. Stock flew. Company denies. Stock falls!

Have we not hear such a theme before?

Strange too. Don't you ever wonder about the roles of these so-called business journalists? Are they here to spin out speculations? And if the stock flies, do they consider their job as well done?

And if that was enough, try read the following article on the Daily Edge published at 11.50am, knowing very well the stock is tumbling down!

Talk of possible merger lifts Affin shares

Talk of possible merger lifts Affin shares
Written by Joyce Goh & Fong Min Hun
Tuesday, 17 November 2009 11:50

PETALING JAYA: AFFIN HOLDINGS BHD [] shares rose to a 22-month high yesterday, following market talk of a possible merger of its unit Affin Bank Bhd — the country’s second smallest bank — and Tan Sri Quek Leng Chan-controlled HONG LEONG BANK BHD [].

At the close of trade yesterday, Affin Holdings gained 30 sen to RM2.64 with 16 million shares changing hands.

The merger talk was prompted by news reports that Quek’s Guoco Group Ltd may consider buying over Hong Kong’s Bank of East Asia (BEA), which owns a 20.5% stake in Affin Holdings.

“Getting the 20.5% stake in Affin through BEA is nothing to be excited about. If it leads to a GO, then that’s something to shout about… But for the moment, it’s better not to jump the gun given that things on the possible BEA buy is said to be still ‘fluid and early’,” said a banking analyst with a local research house.

“If the merger does happen, it will be a convoluted effort as it involves levels above the two banks. Quek will be getting a stake in Affin very indirectly should he buy over BEA. He could just buy it and keep Affin as an investment,” noted the analyst.

Affin in a written note to Bursa Malaysia yesterday, clarified that its board was not involved in any discussions involving a merger of Affin Bank and Hong Leong Bank.

”The board of Affin continuously looks at measures to further enhance the performance and value of Affin group for the benefit of its shareholders. However, at this juncture, the board of Affin is not involved in any negotiations on any potential acquisition or merger relating to the banking operations of the Affin group,” it said.

Meanwhile, earlier yesterday, Affin Bank’s head of corporate communication Thomas Tan noted in a written reply: “Affin Bank does not comment on rumours related to market activities. It does not have a statement to issue at this time.”

Hong Leong Financial Group and Hong Leong Bank officials could not be reached for comment, while Guoco Group’s corporate communications department in Hong Kong had yet to return our call at press time.

Meanwhile, banking analysts and fund managers noted that the management of both Affin Bank and Hong Leong Bank were very diverse and it would take a long drawn effort to merge their operations.

“I guess anything is possible at the moment. It makes business sense because it may be a good time to merge ahead of recovery… but they have to resolve shareholder and cultural issues,” said Choong Khuat Hock, Kumpulan Sentiasa Cermelang Sdn Bhd’s director of research and fund manager.
Some are not sold on the idea.

“I am really doubtful that a merger will happen,” said another local fund manager, adding that Quek’s sights were now trained outside the country.

Regardless, a banking analyst noted: “Investors should look at the fundamentals of the bank and not buy on rumours. With or without this possible merger, we still like Hong Leong Bank as a stock,” said the analyst.

Just recently, Hwang-DBS Vickers upped its target price for Hong Leong Bank to RM9.50 from RM8.

“Although Hong Leong Bank has surged 46% since August 2009, we believe there are still prospects for growth from its regional expansion. We have not accounted for potential growth in Vietnam and possibly Indonesia should any acquisition take place.

“Even at this juncture, we believe Hong Leong Bank offers attractive value proposition with a sustainable 16% ROE in addition to a 3% stable dividend yield with an upside potential,” it noted in a Nov 12 report.

Yesterday, Hong Leong Bank ended trading at RM8.30 while HONG LEONG FINANCIAL GROUP BHD [] closed at its 52-week high of RM6.80.

CIMB Research noted at the beginning of the month it was positive on Affin’s aggressive target of 20% return on equity (ROE) and lower non-performing loans (NPL) ratio. The group’s net NPL ratio declined to 2.96% as at end-June 2009 from 3.3% at end-2008.

“In FY08, Affin Holdings recorded an ROE of 6.8%, which is projected to improve to 9% in FY11. Assuming Affin Holdings and Affin Bank have similar ROE (targets), the group would record a net profit of RM1 billion in FY11, 122.2% higher than our forecast, if it manages to hit an ROE target of 20%,” it said.

CIMB Research set its dividend discount model-based (DDM) target price for Affin Bank at RM2.59 based on 7.9 times FY10 price earnings (PE).

Despite this, some industry observers believe Affin still needs to prove itself. “They still need to reinvent themselves and set itself apart from the other banks in the country. Setting targets is one thing… delivering it, is another,” said an industry observer.

This article appeared in The Edge Financial Daily, November 17, 2009

See how Affin-W comes crashing down!

How now my dearest brown cow?

How nice to be a reporter eh?

Mortgage Deliquencies Hit New Record High

2009-11-17T21:57:00.003+08:00

On AP Newswire: Mortgage delinquencies hit another record in 3Q

By Eileen Aj Connelly, AP Personal Finance Writer
On 6:50 am EST, Tuesday November 17, 2009

NEW YORK (AP) -- The pace at which people fell behind on their mortgages slowed during the summer for the third consecutive quarter, but the overall delinquency rate hit another record, a new report shows.

Friday, Oct. 16, 2009.

For the three months ended Sept. 30, 6.25 percent of U.S. mortgage loans were 60 or more days past due, according to credit reporting agency TransUnion. That's up 58 percent from 3.96 percent a year ago.

Being two months behind is considered a first step toward foreclosure, because it's so hard to catch up with payments at that point.

The rate was up 7.6 percent from the second quarter. That's a much smaller jump than the 11.3 percent rise in the second quarter from the first, and the 14 percent leap seen in the quarter before that.

While the slowing growth rate is a positive sign, the increase shows there's still a lot of problematic mortgages out there, said F.J. Guarrera, vice president of TransUnion's financial services division. The company doesn't expect the figure to start declining until the middle of 2010.

Two things must get better before mortgage delinquency rates start reversing themselves, he said: home values and unemployment. "Until we see improvement in both of those areas, it's possible that it will take longer for delinquency to improve," Guarrera said.

The statistics, which are culled from TransUnion's database of 27 million consumer records, show that mortgage delinquencies remain highest in the four states where the crisis has hit the worst.

-- In Nevada, the rate reached 14.5 percent, up from 7.7 percent a year ago.

-- In Florida, the rate was 13.3 percent, up from 7.8 percent last year.

-- In Arizona, the rate hit 10.4 percent, up from 5.5 percent in 2008.

-- In California, the rate jumped to 10.2 percent, from 5.8 percent last year.

North Dakota remained the state where mortgage holders most often paid on time, with just 1.7 percent delinquency, up from 1.4 percent last year.

TransUnion expects delinquency to rise to just short of 7 percent for the fourth quarter, compared with 4.6 percent for the 2008 fourth quarter. The rate may reach 16 percent in Nevada. Those states with the highest delinquency and foreclosure rates will likely continue to see depressed housing prices.

The average mortgage debt per borrower nationwide edged up to $193,121 in the third quarter, from $192,287 last year. The District of Columbia had the highest average mortgage debt per borrower at $359,788. The lowest average mortgage debt per borrower was in West Virginia at $97,265.

Also see http://www.prnewswire.com/news-releases/transunioncom-mortgage-loan-delinquency-rates-on-course-to-hit-record-in-2009---deceleration-in-rate-climb-continues-for-third-consecutive-quarter-70264787.html

Quick Look At Lion Diversified Earnings

2009-11-17T19:56:00.008+08:00

Flashback: A Quick Look At Lion Corp And Lion Diversified's Earnings , Flashback On Lion Diversified's RPT Transactions and Lion Diversified's Stake In Lion Corp

Tonight Lion Diversified announced its earnings.

It was not a shocker for me.

I was more interested to see the cash balance sheet and compare it to what it reported the previous quarter.

Here is Aug 2009 cash balance.

Here is the cash balance sheet reported today. (Thanks GoldmanJr for pointing out that I had loaded a wrong screen shot earlier. :P )

Here is the debt balance in Aug.

Here is the debt balance today.

How?

Lion still roars?

Regarding Salcon

2009-11-17T07:43:00.006+08:00

In reference to the following posting: http://sahamas.net/forum10/5619-2.html

My past postings on Salcon were based on how misleading the local press was on the stock.

My very first posting on Salcon was exactly some four years ago! Salcon.

Let me repaste what I wrote.. (the Star link is broken! :( )

.. and today.. there's a huge write-up on Star Bizweek: China boost for Salcon , which was written by me favourite creative write, Jose Barrock.Correct me if i am wrong here cause i am seeing a trend developing here. Want a nice juciy article written in a 'creative manner', just call Jose!

Sigh. Isn't it utterly disgusting? No?

Take a look: (snippet of the creative writing in dark blue italic)

For the first six months of its financial year, Salcon posted a net profit of RM570,000 on the back of RM112.6mil sales. The company’s earnings per share during the period was 30 sen, while its net tangible asset per share stood at 52 sen.

EPS of 30 sen????!!!!???

See how badly the fact is twisted? An error of intent? Or was it a mere printing/typo error?

If this was a printing/typo error, how come such error occurs so frequently?

And i like this part...

“At present, Salcon is for investors with an appetite for slightly longer-term gains. The fund managers are not sure when the sector will pick up, so they are scared to take positions, I can understand that ... There is a lot of opportunity here, we have the right contacts and have forged some strong relationships here. Just like when we started out, it was difficult. It is all part and parcel of business. So far we have done well,” he says.

See how creatively written?

Here's my simple question: How can an investor trust that you will deliver when you have utterly failed to deliver what you promised to them ipo investors? Another case of talk is cheap?

At its close of 45.5 sen on Thursday, Salcon is trading at a price earnings ratio of some 9.4 times. The company’s price to net tangible asset per share is at an attractive 0.9 times, which is well below that of its peers, Puncak Niaga Holdings Bhd and Taliworks Corp Bhd.

A PE ratio of 9.4 times?

LOL!!!.... yet another badly twisted fact. EPS is only 0.3 sen lor and not 30 sen. So how to get a PE ratio of 9.4 times? LOL!!!

Isn't it utterly disgusting that we have such blatant shenanigans going on in our daily financial news?

My last posting on Salcon WAS on 25th Oct 2007: Salcon.

My issue was simple. I was bemused by the attempt by Salcon to venture into the insurance business and what I found so interesting was the fact that despite tendering for so many projects (it was said back in 2007, that Salcon had tendered some 7.5 BILLION worth of projects) and that Salcon had a 650 million order book, Salcon simply wasn't performing. Its last reported earnings (07 Q2) then, showed only a paltry earnings of 330k only.

And I was shocked at how the local press decided to highlight the fact Salcon made some 5 million the previous fiscal year, IGNORING the fact that half year profits from Salcon was only a paltry 330k only. Yeah, why wasn't this fact mentioned in the press.

This was the earnings report I was looking at: Quarterly rpt on consolidated results for the financial period ended 30/6/2007

This was the balance sheet I was looking at back then.

And this were the earnings I was looking at.

............. earnings
07 Q2..... 0.030
07 Q1..... 0.274
06 Q4..... 4.816
06 Q3..... -0.672
06 Q2..... 0.024
06 Q1..... 0.164
05 Q4..... -28.112

As can be seen it was not a happening performance from Salcon.

Anyway, as mentioned before, some would argue that it is not healthy just looking at the past. The future is just as important and as Salcon had some order book worth 650 million and bidding for billions of contract and surely based on future expected earnings, then perhaps there are justifications to be optimistic for Salcon.

Which is why this posting.

I have to give credit where credit is due.

LOL!

Else, I be accused to be a mind less open.

Here is the trailing twelve months earnings.

..............Sales...... net profit
09 Q2.....111.649 -- 6.410
09 Q1..... 79.763 - - 3.247
08 Q4..... 81.039 - - 1.453
08 Q3..... 64.537 - - 1.853

And here is the snap shot of the balance sheet.

Now in the earlier balance sheet at 07 Q2, Salacon had cash balances of 122.127 million and total loans of 104.322 million. (net cash of 17.805 million)

The latest, Salcon cash balance of 211.023 million and total loans of 165.264 million. (net cash of 45.759 million) Receivables had soared to 202.829 million versus 76.026 million. (Yes, the high receivables are a huge issue. The receivables did show slight improvement because the previous year, Salcon's receivables were at 236.138 million.)

And here is how the stock is doing.

ps: This ain't no tipsy! If you want to get tipsy, a bottle of whisky in the morning will do nicely! It's a mere acknowledgement that Salcon's water projects have started bringing in money and that Salcon's water projects aren't all gloom and doom as I had mentioned back in 2007. And I CERTAINLY have no idea if you could lose money in this stock. Yeah man! I really do not know if you can lose money, so this one my disclaimer. Folks simply love to ass-u-me. oO

Just How High Can You Fly Jetson?

2009-11-14T11:00:00.006+08:00

Saw the following news clip on Star Business: K Jetson unusual market activity due to speculation

Saturday November 14, 2009

K Jetson unusual market activity due to speculation

PETALING JAYA: Kumpulan Jetson Bhd’s unusual market activity could be linked to market talk that the Naza Group is close to securing a privatisation project.

“The company is not aware of any reason for the unusual market activity but it could be due to speculation on the privatisation project by Matrade to Naza Group.

“The market may have linked the Naza Group to Jetson by way of common shareholders,” Kumpulan Jetson said in a filing with Bursa Malaysia yesterday.

It added that it had made due enquiry with its board as well as major shareholders and found there was no material corporate development not previously disclosed.

The exchange had queried Kumpulan Jetson following strong trading activity in the stock in the past few days.

The share price had surged 39% in the past one week but closed one sen lower at RM2.94 yesterday.

LOL!

This stock closed at rm2.94.

Speculations eh?

One really have to admire the company's straight forward answer. No twisting, no turning. Hey, it's pure market speculations. What's wrong?

And don't you just love the stock name? Jetson.

Eh? What's wrong with the name Jetson? Well, nothing. LOL! But local folks just love to play with names. Jetson could easily turn into son of Mr. Jet. And since jets do fly, surely one would say the son of the jet should also fly. LOL! (ps. if you stop your stare, i shall stop this kind of talk. :p2 )

Anyway, posted on 21st September 2009, What's Up Kumpulan Jetson?. Jetson last closed on that day 1.96. Jetson today is rm2.94. (Why some say they cannot make money in Bursa Malaysia ah?) (yeah, stop gawking! hehe)

Ain't life grand?

This used to be a 60 sen stock.

Hello... 60 sen stock.

Now it's a 2.94 stock!

Ooolala! Stop gawking wei! Already declared that it is market speculations.

ps: on 4th November, there was this newsclip.

Jetson proposes private placement of 5.279m shares
Written by Joseph Chin
Tuesday, 03 November 2009 19:27

KUALA LUMPUR: KUMPULAN JETSON BHD [] has proposed to undertake a private placement of 10% of its paid-up or 5.279 million shares.

The company said on Tuesday, Nov 3 the shares to be placed out was expected to raise gross proceeds of up to RM11.1 million.

This is based on a maximum issue size of 5.279 million placement shares, and assuming the issue price of the placement shares is fixed at RM2.10 per placement share.

At RM2.10, this is a discount of about 7.9% from the five-day weighted average market price of up to Nov 2 of about RM2.28 per Jetson share.

Now don't you wonder?

Yeah I do wonder too.

Don't you love this placement share tool?

ps... so easy to make money hor.

ps/ps.. why call it private placement? call it privilige placement mah!

5.279 million shares at 2.10. Now the share price is at 2.94.

LOL!

Sino Hua An's Earnings Turnaround

2009-11-14T09:27:00.003+08:00

Here's Sino Hua An's earnings.

The turnaround is positive.

Indeed it is.

The balance sheet weakness mentioned in earlier postings highlighted in the posting Massive Losses Posted by Sino Hua-An has seen all round improvement.

(ps: don't start assuming. I have no idea if you can lose money in this stock, ok? )

From the company's notes:

Review of Performance

For the third quarter ended 30 September 2009, the Group recorded consolidated revenue of approximately RM349.8 million. The cost of sales for the quarter under review amounted to approximately RM326.1 million.

Given the gradual recovery phase experienced in the coking industry since the early part of the year, the Group has managed to return to profitability in the current quarter after recording three consecutive quarters of losses since the fourth quarter of 2008, stemming from the consequences of the economic downturn and challenging business environment in the said fourth quarter of 2008. This was mainly attributed to the spread between the prices of metallurgical coke and that of coking coal that have widened adequately coupled with the gradually improving prices of the by-products during the current quarter under review.

During the current quarter under review, the Group’s revenue reduced by approximately 29.6% to RM349.8 million from RM496.9 million in the preceding year corresponding quarter. This was mainly attributed to approximately 37.9% reduction in the average price of coke in current quarter under review compared with that of the preceding yearcorresponding quarter.

The cost of sales have also reduced by approximately 31.3% to RM326.1 million in the current quarter under review from RM474.5 million recorded in the preceding year corresponding quarter. This came about as the average price of coking coal had eased downwards by approximately 38.1% in the current quarter compared with that of the same quarter of the preceding year. Premised on the above, the Group registered a gross profit and net profit after tax of approximately RM23.7 million and RM18.5 million respectively for the current quarter under review compared to that of registered in the preceding year corresponding quarter of RM22.5 million and RM11.7 million respectively.

P1 Wimax: Honey Have You Cut It? Part II

2009-11-13T07:45:00.005+08:00

Posted last night: P1 Wimax: Honey Have You Cut It?

I was wondering what the boss will say.

Here is the link to an interview published on Star Business: Green Packet CEO says losses are short term

Remember the following are WHAT was said by the CEO!

Friday November 13, 2009
Green Packet CEO says losses are short term
By YVONNE TAN

PETALING JAYA: Green Packet Bhd reported a higher net loss of RM31.8mil for its third quarter ended Sept 30 against a net loss of RM10.3mil for the same period last year due to continued heavy promotional activities and investment costs related to the development of its 4G (Worldwide Interoperability for Microwave Access or WiMAX) business.

Revenue for the period however was higher at RM63mil versus RM18.2mil in 2008 while loss per share stood at 8 sen and 3.2 sen respectively.

“The losses are ‘technical, planned’ losses,” group managing director and chief executive officer CC Puan told a media briefing yesterday.

“We are sacrificing short-term profits for long-term gains,” he said.

To-date, the mobile broadband networking solutions provider has spent more than RM337mil in capital expenditure to develop its 4G business which is parked under Packet One Networks (M) Sdn Bhd (P1).

Puan said the P1 planned to spend another RM650mil within the next two years to develop the network and enable it to provide up to 65% coverage of Peninsular Malaysia’s population by 2011. Currently, P1 has 35% network coverage in the peninsula.

The company also had plans to extend its network to East Malaysia and Singapore next year, he said.

Puan said P1’s current subscriber base stood at “more than 100,000” from 10,000 as at the end of last year and the company was on track to meet its target of 200,000 by the end of next month.

“It’s a stretched target but we are on track,” he said.

In the third quarter, PI’s net adds were 36,000 against 25,000 in the second quarter, a growth of 44%.

“P1 WiMAX launched its services less than two year ago and already, we are recognised as one of the top four 4G WiMAX operators in the world,” he said.

Puan said he expected Green Packet to return to the black in the second half of next year with PI targeted to break even (in terms of earnings before interests, taxes, depreciation and amortisation) by the first quarter of 2010.

On the other pillar of Green Packet’s business – the product and solution business which was currently profitable, Puan said he targeted shipments of customer premises equipment to overseas markets to increase to 1.5 million units next year from about 200,000 currently.

The company, he said, targeted sales to total US$97.5mil (RM329mil) based on the average cost of US$65 per equipment.

For the nine months to Sept 30, Green Packet made a net loss of RM81.9mil compared with a net loss of RM17.9mil a year earlier. Revenue was RM161mil against RM63mil.

Oh my!

Consider these facts!

Green Packet earnings since 2006: 55 mil -> 30.2 mil -> -55mil -> - 81.9 million (3 quarters)

From earnings 55 million in 2005 in 2006, the company has now lost some 136.9 million for its last 7 quarters!!!

“The losses are ‘technical, planned’ losses,” ? " We are sacrificing short-term profits for long-term gains,” ???

Want to count the amount Green Packet has burned TRYING to venture into Wimax?

Why don't he sit down and count if such a business (Wimax) is really viable?

Every tried google the phrase 'wimax problems' and limit your search to pages from Malaysia?

(try this google search link: here )

Let me highlight a couple of links.

Complaints - P1 Wimax always suffer with slow connection

Written by Administrator
Friday, 02 October 2009 09:39
I am using p1 wimax and always suffer with slow connection problems. I had issued this problem to skmm and I got feedback from p1, which then the connection is better. However, the good thing is not lasting long, not even for a week. These 2 months, I can’t get connection, or extremely slow/unstable connection…

I called customer service care line. The guy told me my location is just 180m away from the base station, I should have good connection. So he log my case and provided me a case number, said that technician will contact me later. After few days, I called again since I do not receive any call. Another personnel checked my case number and told me this case is processing, technician will contact me very soon.

Until yesterday, I do not receive any call from P1. Within this period, connection is not improved. I can’t even get any connected signal. So, I called again. This guy told me, the base station is under repaired, so for my area, no connection is very normal, it is their problem, not my problem. Of course I know this is P1’s problems. So I asked him, then what shall I do? When the station will be back to normal? He said he don’t know. The station is malfunction since 16 Sept until now. I feel so weird as I do not receive any notification from P1 regarding this.

Is it fair to us when the station is down for half month, while still charging us for one month’s fee?? So I told him it’s ok for station down, but for my case, even the station is not down, connection is poor for so long. Then the guy said it is normal when many users access at the same time. And asked me if there is many advertisement pop up, etc?

But for my case, I have no chance to access those web pages, as the connection is always down. Then, I required him to check for the case no. I got, he said this case number is not existed in the system. I am wondering is this way of P1 to solve customer’s problem /complaints? Close the case without any actions taken/feedback from users? Or… Simply throw a fake case number to user to shut user’s mouth? I wish to talk to someone that can really investigate and help me in my problem. Not some customer service officers that answer the phone with same answers that are not answers to my question.

I lost my entertainment, social times with outside world. I also missed out some jobs opportunities/offer that sent to my email mailbox. I am not asking for unlimited usage that let me download thousands of mp3s, games, movies, dramas etc, I am just asking for a connection that can let me check email, messaging, e-banking, and browse for some info.

Most funny thing is, I still have to go cybercafé or steal time to online at office, for my personal things…. Last but not least, I paid my bill every month.

Do try reading some comments posted in this blog: http://azlan.anilezfa.com/p1-wimax, the very last set of comments: http://azlan.anilezfa.com/p1-wimax#comment-35157 is utmost interesting!

Hi Ronnie,

The explanation provided by Fazrul is not a solution for my problem hence my problem is still not solved yet.

I still need to connect to the Internet using my neighbour’s Streamyx connection due to the bad connection using my P1 Wimax during peak time which is the most likely time also need to use the service.

I need to wait for at least 1 month before I could enjoy the service, as I should. This is what I have been advice since P1 is going to build a new base tower or whatever you call it to improve my Internet connection in my area.

Since you mentioned if there is anything, which you could do besides my existing, problem YES there is one thing!

I have complained to Fazrul that about 2-3 weeks ago that I have been advised the technical team only works till 10pm by one of the agent, but Fazrul denied this and have told me that the agent gave me the WRONG INNFORMATION. Believe Fazrul have sent a complaint on my behalf to the Customer Service Department.

I have not received any feedback or call on this complaint!!!

Are you guys serious in handling customer’s complaint or you just treat it like a junk?

Regards,

Jagdip Singh Gill

Sent: Sunday, June 28, 2009 9:11 PM

Subject: Re: P1 – Services – Bad Service

Im having trouble again for the past 2 days to connect to the internet using my P1.

1st call i made on the 27june spoke to Ms Mimi Baizuhana and she promised me that someone will call back within 24 hours

2nd call was made after 24 hours since no one call me back and i spoke to a guy (dint get his name)

He placed me on hold for several minutes after getting my details and had hang up the line after that.

3rd time i call and spoke to Ms Izza on the 29june and explained my issue and she asked me to wait for another 48 hours before someone will call me back again.

I demanded for someone to assist me immediately but she refused to escalated me further saying that she has to follow P1’s policy which is that they are not allowed to transfer my call to any the supervisor. What kind of crap policy is this ?

Im really disappointed with the service from the staffs of P1 which is not acceptable.

I also regret that i had cancel my Maxis Broadband and switched to P1 Wimax thinking that the service would be much better but i truly made a BIG MISTAKE!

Firstly i was conned by the P1 Wimax sales person saying that the place i live on the 19th floor has very good service P1 Wimax. However when i call in P1, i was advised that 19th floor is not covered by P1 wimax service.

Secondly when i have problems with connections they people at P1 wimax would not bother calling me back despite of the promised that made. Not even once they have call me back to solve my problem.

I would not recommended any of my friends or family member to P1 Wimax as the service is horrible!!!!

Hopefully after lodging this complaint with the rightful ministry & press, actions will be taken to restore back damages made to customers by P1 Wimax.

Please call me back as promised !

I been waiting for 72 hours…..Please fullfill to your SLA promise!

FYI – Im paying for your service and not getting it for free hence i need your help to resolve the issues.

Regards,

Southern Steel Swings Back To Profit

2009-11-12T20:49:00.003+08:00

Just a very short posting.

Southern Steel announced its earnings tonight and just for the record, it has swung back to profits.

Past postings on Southern Steel can be found here

P1 Wimax: Honey Have You Cut It?

2009-11-12T19:47:00.008+08:00

Green Packet announced its earnings tonight.

At this rate, losses should pass 100 million this fiscal year! (see Would You Want To Invest In Green Packet? )

Yeah, Green Packet had a rights issue which did helped the balance sheet.

But.. look at the cash flow.

The rights issue brought in some 98.8 million in cash BUT as one can see in the table above, Green Packet's cash still decreased.

Yes, Green Packet is burning cash really fast!

And not helping is the massive losses.

Now I am not a fan of this Wimax business. Let me repaste what I wrote in an older posting Comments On YTL's RM3 Billion Broadband Venture

>>>>>>>>>

span >However, I am not a WiMax fan because I simply believe that this is an extremely difficult business venture to profit from. This is my flawed view. And if I am wrong, what's new? :p2

Many have tried WiMax already. Have you?

If you have, how impressed are you?

Are you happy with the upload/download speeds? Are you happy with the connectivity?

Ok, so how good is WiMax as a business?

Yeah, from a business perspective, how good is WiMax? :D

Take the more recent news. Like for example, early this month, on FT.com Nokia dismisses WiMax prospects

“I don’t see that WiMax is taking hold anywhere in a big way,” said Anssi Vanjoki, Nokia’s head of sales and manufacturing, at a Nokia launch event in San Francisco.
“I don’t think the future is very promising [for WiMax]. This is a classic example of industry standards clashing, and somebody comes out as the winner and somebody has to lose.

Clearwire is one of the leader in US and some are extremely impressed with what Clearwire has to offer.

Ok, le't go back in time a bit.

A year ago, on Washington Post, Whatever Happened To Sprint's WiMax Venture?.

Sprint then had to merge with Clearwire: Sprint, ClearWire merging WiMAX operations.

Clearwire has agreed to merge with Sprint's wireless broadband division in a new, as yet unnamed, joint venture. The deal has financial support in the form of $1.05 billion from cable giant Comcast, $1 billion from chip champ Intel, $650 million from Time Warner Cable and its subsidiaries, and $500 million from search Brobdingnagian Google. That's a grand total of $3.2 billion of outside investments, plus whatever cash Clearwire and Sprint might bring to the table.

Don't expect Sprint itself to bring a fat dowry, though. The company has about $2.4 billion in cash equivalents, but also a staggering $20.5 billion debt load. Sprint is trying to sell off its Nextel unit, which was acquired for $35 billion in 2005, but reports on that effort say that Nextel is only worth about $5 billion today. And ClearWire is in a similar situation of more debt than cash, albeit on a much smaller scale.

Ahem.. big money business. :D

SmartMoney had the following article WiMax Venture Gets Weak Reception From Market

There's a lot to take in at first glance, and there's no simple explanation for Wednesday's early rise and late-in-the-day drop. This is a complex project that's failed to get off the ground, and that accounts for plenty of investor skepticism. A WiMax deal last summer between Sprint and Clearwire was agreed upon, but never signed.
But you don't need to be Alexander Graham Bell to understand that a 9% one-day pop in a stock that has nearly one-fifth of its shares held short can create a classic short squeeze, even if it's a squeeze of short duration.

Philip Solis, an analyst at ABI Research, sees short-term profit taking at work, but says the implications for the new Clearwire go well beyond Wednesday's trading.

"Sprint chose WiMax in 2006: it had the vision, and it pulled together an ecosystem of chipset and equipment companies. But there was one missing piece: money," he wrote in a Wednesday report. "They needed financing and the confidence of the investor community. The formation of this joint venture completes the picture."

Here is the two year chart of Clearwire or CLWR on yahoo's finance. Not impressive at all.

And if you click the Income Statement on that yahoo finance, you would understand the reasoning of the poor performance.

So how?

Capital expenditure is massive in this business and yet the return is lacking.

>>>>>>>>>>>>>>>>>>

Tell me, is this being reflected in Green Packet?

Is Green Packet spending more and more money? And all one is seeing is more and more losses!

And after the rights issue, Green Packet is planning a placement of shares!

Green Packet proposes 10% private placement
Written by The Edge Financial Daily
Tuesday, 10 November 2009 22:31

PETALING JAYA: GREEN PACKET BHD [] is proposing a 10% private placement of up to 84.8 million new shares of 20 sen each towards raising additional funds expeditiously and strengthening its balance sheet position without incurring interest costs as opposed to bank borrowings.

In a statement today, Green Packet group managing director C C Puan said the exercise may also broaden its institutional investor base.

"The additional funds will enable us to take full advantage of local and international opportunities presented to us. In line with our business strategy, we require working capital for capital expenditure and operating expenses including the deployment of WiMAX infrastructure in Malaysia and other overseas markets," he said.

Green Packet said the issue price would be determined and fixed by the board once approval had been sought from the relevant authorities.

It said both its major shareholders, Green Packet Holdings Ltd (GPHL) and OSK TECHNOLOGY [] Ventures Sdn Bhd, had indicated their intention to participate in the proposed placement. It added that the placement shares were also proposed to be placed out to independent third-party investors to be identified later.

It is expected to be completed in the current financial year ending Dec 31, 2009.

Puan, who is also a substantial shareholder of GPHL, said: "This proposed private placement will enable GPB's major shareholders to continue supporting the 4G WiMAX operator business to further its positive prospects in Malaysia and to become a multi-market pan-regional leader."

Incredible?

A week earlier on Business Times.

Packet One earmarks RM300m for 2010 capex

By Goh Thean Eu Published: 2009/11/07

Internet service provider Packet One Networks (Malaysia) Sdn Bhd (P1), which invested some RM300 million over the past two years, will expand more aggressively in 2010 by spending RM300 million in the year alone.

P1, a wholly-owned subsidiary of Green Packet Bhd, said the funding would not be a problem as it has various options.

"There will not be any funding problems. We are looking at various options, which include vendor financing," said P1 chief executive officer Michael Lai after a media briefing in Petaling Jaya yesterday.

Vendor financing means if P1 buys equipment from a company, it could pay in instalments, for instance.

The company has planned to invest up to RM1.5 billion from 2007 until 2012 to expand its wireless broadband coverage in the country.

Currently, its services cover 35 per cent of the population in Peninsular Malaysia. By end 2012, its services are expected to reach over 60 per cent of Malaysians.

It is also planning to roll out services in Sabah and Sarawak sometime in the first quarter next year.

The company is expected to spend not more than RM300 million on Sabah and Sarawak market.

"There are still studies to be done, we will know more about the actual capex when we go there," he said.

Meanwhile, Lai said its sister company P1 International, is expected to commercially launch its services in Singapore by the end of next year.

"The exact capex and timeline, we will reveal later. We will definitely roll out services in Singapore only when we have full population coverage. Hopefully, by end of next year, it will materialise," he said.

It just had a rights issue and it is selling shares via placement but yet the company INTENDS TO SPEND, SPEND AND SPEND!

And needless to say this posting would not be popular.

Anyway, given the fundamentals and the extreme losses, would you be shocked to see how Green Packet the stock has been performing lately?

Are we living in a market where stocks get rewarded insanely for losing more and more money???

The Baltic Dry Index Continues To Surge But Is it Sustainable?

2009-11-12T08:11:00.005+08:00

In case you missed the recent postings on Baltic Dry Index (BDI), the BDI continued its surged again.

And here is the six months chart on the index.

However not all optimistic at all because the doubt on the sustainability of the rally in the index.

On India's Business Standard, here's one article. Surge in freight rates fails to lift shipping cos' morale

Surge in freight rates fails to lift shipping cos' morale

Abhineet Kumar / Mumbai November 12, 2009, 0:50 IST

A rise of about 70 per cent over 45 days in the Baltic Dry Index (BDI), the global benchmark for shipping freight rates of dry bulk carriers, has failed to cheer Indian companies, who see it as only a temporary surge.

On Tuesday, BDI was 3,615, up 67 per cent from 2,163 on September 24. The index reached its 22-year-low of 663 in December 2008, sliding nearly 95 per cent in about seven months from an all-time high of 11,793 in May 2008. The rates had collapsed as steel producers cut output. Even the world’s largest steel maker, ArcelorMittal, breached contracts for shipping cargoes in that period.

“There are no positive indications for sustaining the freight rates at these levels,” said K S Nair, director for the bulk carrier and tanker segment at Shipping Corporation of India. “It is a temporary upsurge, as demand picked up from China to fulfill their consumed inventory of iron ore.”

Steel prices have been dropping internationally on low consumption. Earlier this month, Indian producers brought down the price for flat steel by Rs 1,500 a tonne, to Rs 32,000-34,000 a tonne in the spot market. According to analysts, these prices are expected to correct further by Rs 500 a tonne next month.

“Unless consumption in the US and Europe starts picking up and countries like China begin exporting, there would not be a real surge in demand for these ships,” said Nair, whose company has the highest 19 dry bulk carriers in the country.

“We are not sure if the index can sustain at these levels,” said A R Ramakrishnan, chief executive officer, Essar Shipping, which has got nine bulk carriers, including cape size or bulk carriers. “There are positive sentiments building in different geographies, but it is yet to be seen if it brings any fundamental boost to the global economy.”

After the hitting the 22-year-low in December 2008, the index had already recovered to 4,291 this June, as China started building inventory for iron ore. According to industry analysts, depending on the ships, companies achieve operational break-even at index levels of 3,700 to 4,000. But it again fell to 2,163 on August 24.

New vessels coming from the yards are another concern for the industry, for the low freight rate expectation. “We are expecting 10-15 per capacity addition in the global fleet in the next one year and this is further going to put pressure on the freight rates,” said Vikram Suryavanshi, a shipping analyst with Karvy Stock Broking, a local brokerage

Here is another article.

Baltic index rises further, Chinese demand strong
Wed Nov 11, 2009 9:17pm
By Jonathan Saul

LONDON, Nov 11 (Reuters) - The Baltic Exchange's main sea freight index .BADI, which tracks rates to ship dry commodities, stayed at over a four-month high on Wednesday as firm Chinese demand for raw materials boosted sentiment.

The index, which gauges the cost of shipping resources including iron ore, cement, grain, coal and fertiliser, rose 3.68 percent or 133 points to 3,748 points and was at its highest since June 30 in a tenth straight session of gains. In recent months Chinese demand for iron ore -- the primary material in the manufacture of steel -- has dominated freight market activity while adding to swings on the main index.

"Pacific capesize freight rates are continuing to firm on the back of iron ore demand into China, with strong support in the last 10 days lifting Pacific spot rates for Australia-China," John Banaszkiewicz, managing director of freight derivatives broker FIS, said.

"On the back of that, interest in fixing for short periods has grown, suggesting (ship) owners have confidence in the nearby market."

Iron ore appetite has picked up in Europe, with seasonal demand for coal, especially in France and Germany, helping to bolster interest for the larger capesize ships and also smaller panamax vessels, brokers and analysts said.
There has also been a rise in interest for iron ore and coal in North America and Japan, they said. The Baltic's capesize index .BACI rose 4.56 percent on Wednesday and was at its highest level since July 3. Average capesize earnings were at $67,385 on Wednesday, over 27 percent down from their June peak this year.

PANAMAX PUSH

Port congestion in Brazil as well as in China and at Australia's Dalrymple Bay have tied up many capesize vessels, which typically haul 150,000 tonne cargoes such as iron ore and coal, brokers and analysts said.

The Baltic's panamax index .BPNI rose 2.8 percent on Wednesday, helped by activity in the U.S. Gulf driven by soybean exports bound for China.

Panamax rates in the Pacific have also been boosted by appetite for coal cargoes out of Australia and Indonesia into south China and Japan.

Brokers and analysts said Chinese demand still remained the key element in sustaining freight gains.

"Should the Chinese decide their stockpiles are full then the market rally could come to an abrupt end," Banaszkiewicz said.

China's production of metals, fuel and power stayed at record levels last month as industrial output hit a 19-month high, but falling imports of copper and iron ore fuelled doubts whether it really needed so much material. [ID:nPEK338701]

The main sea freight index hit a more than eight-month high on June 3 of 4,291 but has been erratic since then.

"Solid demand from China and other importing regions have sustained a tight market balance, which we expect will remain tight through Q4/09 boosting the (dry bulk fleet) utilization level to 93-94 percent," Arctic Securities said in a report.

"From 2010 and beyond we are more negative and expect fleet utilization dropping to 85 percent by 2011. Deliveries will weigh rates down -- even with a continued steady recovery in global demand for seaborne trade."

Analysts say freight rates could come under pressure due to concerns over the rising number of new ships set to hit the market in 2010, despite indications of some vessel cancellations and delays, analysts said.

"Longer term, the outlook is still clouded by the potential impact of new building (ship) deliveries to the supply side," FIS's Banaszkiewicz said. (Editing by Anthony Barker)

Quote to remember: "Should the Chinese decide their stockpiles are full then the market rally could come to an abrupt end,"

A Look At Ecofuture

2009-11-10T08:59:00.003+08:00

May 31st 2007.

Ecofuture 'excited' after completing expansion
By Zaidi Isham Ismail
bt@nstp.com.my

May 31 2007

ECOFUTURE Bhd is anticipating an exciting outlook with the commissioning of its fourth RM50 million factory last month, signalling the completion of its expansion plan.

"Our new factory will be in full swing next year and we have received fresh sales orders from overseas," Ecofuture executive chairman and managing director Yeo Kim Luang Yeo told reporters yesterday.

Ecofuture's four factories are all located within the same compund in Segamat, Johor, and its latest factory produces non-wood virgin pulp which can be turned into paper.

The plant is expected to produce between 1,000 and 1,500 tonnes of non-wood virgin pulp monthly which are derived from empty fruit bunches of oil palm fruits and sold at between US$600 and US$700 (RM2,040 and RM2,380) a tonne.

Yeo said the company has received orders from Canada and it is also looking at possible tie-ups with local companies to produce more of the non-wood virgin pulp.

"This is a huge scientific breakthrough for the company and a good opportunity for our country to convert biomass into products such as manufacturing papers, prints, corrugated cartons and paper-based products."

Ecofuture makes environment- friendly products such as food/general packaging products that are biodegradable, toxic-free, compostable, microwaveable and made or recycled from natural palm fibre and biomass.

These products include fibrous sand mats and food packaging materials under the brandname Ecomat, Ecopak and Ecofibre.

Ecofuture was listed on the Mesdaq market of Bursa Malaysia in January 2005 and exports half of its products overseas to China, the Philippines, Canada, US, Australia, European and West Asian countries and Taiwan.

For the year ended December 31 2006, Ecofuture posted a lower pre-tax profit of RM674,843 from RM2.1 million a year ago due to the floods in Johor which affected the quality of its oil palm fruit brunches in the fourth quarter of 2006.

Its revenue, however, rose to RM80.1 million from RM69.1 million following the higher turnover achieved by the milling operations and higher crude palm oil prices.

June 19th 2007.

Ecofuture Sees Biomass Products Revenue Growing 10 Pct This Year

June 19 (Bernama) -- Ecofuture Bhd expects revenue contribution of its sustainable products derived from oil palm biomass materials to grow by 10 percent in the financial year ending Dec 31, 2007 due to growing overseas demand, said executive chairman Jang Lim Kuang.

She told Bernama recently that 95 percent of the group's export earnings come from these products which include natural oil palm fibre strands under the Ecofibre brand, and the bio-degradeable mulching and soil erosion geotextile mat under the Ecomat brand.

Another segment under Ecofuture's belt are the environment-friendly food and general packaging products, which are also bio-degradeable, toxic-free, compostable, microwaveable and made from natural palm fibre, said Jang.

"The potential for non-wood virgin pulp is great overseas as many countries are strict on preserving their forests, especially in the West. That's why the oil palm pulp price is high at the moment," Jang said.

"Of course, we are constantly upgrading our products as well."

Jang pointed out that although Malaysians are not averse to using environment-friendly products, the premium price deters them.

"But that is not the case for Europeans and Americans who are into these things especially when it comes to food containers. As long as they can save the environment and themselves from harmful chemicals used in styrofoams and polysterene plastics, they will buy these types of products," she added.

According to her, almost 80 percent of the organic shops in Kuala Lumpur are using Ecopak containers and utensils.

On the Ecomat, the geotextile mat which helps retain moisture and grows grass and vegetation, Jang said it is gaining interest from West Asian customers who use it in the desert.

"The Arabs became interested in Ecomat for vegetation on the sand dunes after we successfully planted the mats in the desert, on the outskirts of Beijing, China," she said.

She added that the group will be further promoting the Ecomat at the 2008 Olympic Games in Beijing following a government-to-government effort to promote local products there.

Meanwhile, Jang said, the group aims to develop and diversify its downstream business from the existing products.

"Oil palm milling may be our core business, but Ecofuture wants its overall forward looking plan to be based on an environment-friendly dream. This is something I can see us doing in the future," she said.

Sounds like a happening company eh?

Aug 2007: Quarterly rpt on consolidated results for the financial period ended 30/6/2007 - Lost 1.115 million.

Nov 2007: Quarterly rpt on consolidated results for the financial period ended 30/9/2007 - Lost 0.397 million.

Yeah.. I had it in my notes.. yet another company whose earnings did not reflect the optimistic news on the company.

June 2008.

17-06-2008: Ecofuture proposes 10% placement, debt settlement via shares

KUALA LUMPUR: Ecofuture Bhd has proposed settlement of debts via the issue of a total of 34.51 million shares and a 10% private placement towards raising funds for working capital and improving its cash flow.

In a statement yesterday, Ecofuture said it would issue 21.82 million shares of 10 sen each, representing 12.5% of its paid-up capital, at 16 sen each towards settling debts of RM3.49 million owing to Larizz Bumi Over-Seas Services Sdn Bhd. It will also issue 12.69 million shares or a 7.27% stake at 16 sen per share for debts of RM2.03 million owing to its executive chairman and managing director Jang Kim Luang @ Yeo Kim Luang.

Ecofuture said the issue price represented a premium of about five sen or 45.5% to its five-day weighted average market price up to May 15, 2008 of 11 sen.

It said the proposed placement would also address the public shareholding spread requirement. As at May 23, 2008, its public shareholding spread was at 24.88% with 1,140 public shareholders holding not less than 100 shares each.

Placement and debt settlement.

So I decided to keep watch.

Aug 2008: Quarterly rpt on consolidated results for the financial period ended 30/6/2008 - it lost 2.254 million.

Nov 2008: Quarterly rpt on consolidated results for the financial period ended 30/9/2008 - it lost 3.058 million!

Feb 2009: Quarterly rpt on consolidated results for the financial period ended 31/12/2008 - it lost some 1.919 million!

May 2009.

Ecofuture sees turnaround in FY10
Written by Yantoultra Ngui Yichen & Lam Jian Wyn
Tuesday, 26 May 2009 10:38

KUALA LUMPUR: Ecofuture Bhd, a palm oil miller and biomass products maker, expects to turn around in the next fiscal year ending Dec 31, 2010 (FY10) on the back of potential new orders for its biomass business and the leasing out of its palm oil mill.

“We are in talks to lease out our palm oil mill so that we can focus on our downstream business,” the Mesdaq-listed firm’s executive chairman and managing director Jang Kim Luang @ Yeo Kim Luang said. “To date (as of FY08), we have a total of RM6 million orders at hand.”

She said the high price of crude palm oil (CPO) in the first half of FY08 had sapped Ecofuture’s working capital due to its fresh fruit bunches (FFB) purchases.

“We lease it out and remove the headache, then we will have all the biomass we want and the steam to process it, which is free of charge,” said independent non-executive director Hiew Seng.

Meanwhile, Jang said Ecofuture expected its new product “Pulp-Eco”, which is a non-wood virgin pulp, to become one of its future growth drivers as it saw a huge market potential for this product in its overseas markets.

“Right now, we have a presence in Canada, the US, the UK, Australia, Taiwan, Japan and the Middle East,” she said.

Ecofuture’s net loss in FY08 widened almost three-fold to RM8.49 million from RM2.18 million a year earlier on the back of a 13.5% drop in revenue to RM94.53 million from RM109.28 million.

According to notes accompanying its financial statements, the company attributed its overall performance mainly to the inability to procure sufficient FFB for its milling business, which in turn affected its downstream biomass business segment.

The company had a debt to equity ratio of 2.51 times, a slight drop from 2.77 times a year earlier.

On the RM20 million total short-term borrowings that were repayable within one year, Jang said the company would negotiate with the banks to convert part of the borrowings to term loans. As at Dec 31, 2008, the company had a long-term debt of RM19.88 million, a slight increase from RM19.71 million in the previous year.

The company’s net asset per share as of Dec 31, 2008 was 10 sen, a decrease from 14 sen a year ago.

This article appeared in The Edge Financial Daily, May 26, 2009.

May 2009: Quarterly rpt on consolidated results for the financial period ended 31/3/2009 - it lost 3.511 million!

Aug 2009: Quarterly rpt on consolidated results for the financial period ended 30/6/2009 - it lost 2.377 million!

How?

On today's papers..

Ecofuture prices private placement shares

Published: 2009/11/10

ECOFUTURE Bhd (0067) has fixed the price of its proposed private placement of 22.411 million shares at 12 sen each, a 100 per cent premium to the five-day volume weighted average market price of its shares up to and including November 6 2009.

In an announcement, the company said that based on the price, it expects to raise a gross proceed of RM2.689 million.

Ecofuture said it has no intention to place the shares to directors or substantial shareholders of the company and/or persons connected with them. - Bernama

Placement priced at 100 per cent premium!!!!!!!!????

Crikey! Is Christmas so early???

Here is Ecofuture's historical chart since listing.

Update On Baltic Dirty Tanker Index

2009-11-10T08:44:00.004+08:00

Last posted: Baltic Dirty Tanker Index (BDTI) Does Not Indicate All Is Well

The chart posted back on Aug 10th 2009 did not look too encouraging.

However, as can be seen on the latest chart update, things have indeed turned rather well the past 3 months.

Here's the updated one year chart.

Update On The Baltic Dry Index

2009-11-10T08:34:00.003+08:00

Time to update the BDI.

My last posting on BDI: Sesa: The Market Is Stabilizing

Yeah, as mention in the posting, Baltic Dry Index Stages Strong Rebound ( see also Baltic Dry Index May Surge More Than 80 Percent! ).

Here's an interesting article: Shipping firms to raise freight rates to cover loss

By Sunil Kumar Singh on Monday, November 09, 2009

A few shipping lines carrying cargo from the Middle East are expected to raise freight rates in the next few months to cover losses suffered by the slowdown this year, said industry analysts.

On November 2, Maersk Line, one of the biggest global shipping companies, announced a rate increase from November 15 for dry cargo going from South Asia and the Middle East to European destinations.

"Trading conditions for carriers operating in these markets are still subject to unacceptable rate levels and the situation is unsustainable in the longer term. The rate increase is necessary to continue to operate our services with the high level of reliability our customers have come to expect from Maersk Line," Maersk Line said in a press release.

Industry players in the shipping and logistics sector do not rule out the possibility of upward freight revision by other shipping lines in the coming months.

"Shipping cargo rates have already reached their bottom this year, and there is a greater possibility that many other shipping lines in the region will revise their freight rates in the coming months," said Shankar Subramoniam, General Manager for the UAE at Clarion Shipping.

However, the rate increase does not mean the volume of cargo movement is rising or there is a significant spurt in demand from overseas markets, said industry players. On the contrary, carriers may just cash in on the coming festive months and apply the rate increases to improve their freight earnings.

"November to March is generally the peak season for shipping lines, because of Christmas, New Year and other festivities. Therefore, seaborne freight rate increase during this period is more of a seasonal factor than an evidence of a significant economic recovery and a rebound in cargo movement to earlier levels," Subramoniam told Emirates Business.

Biji Thomas, Transport Manager at Schneider Electric FZE, Dubai, said: "Some shipping lines are increasing freight rates as they are trying to cover the losses suffered this year due to lower cargo volumes.

"However, this is just a temporary measure.

"If the cargo volumes go down further, which is quite expected because of the current lean season, we may see an increase in shipping freight rates as many carriers are downsizing and cutting down their operating expenditure."

Different shipping lines charge different freight rates depending on the origin and destination of the cargo.

However, Baltic Dry Index, a bellwether index for the cost of shipping dry bulk globally, has dived sharply from its peak last year, as economic slowdowns in major economies has led to a significant drop in demand for dry cargo globally.

London-based Drewry Shipping Consultants, in its insight into the dry bulk shipping market for the month of October, also noted: "Europe and Japan witnessed stronger iron ore demand over the month, but it was seen mainly as a temporary restocking phase rather than an upturn in market sentiments. It also phased out as the month came to a close."

More Bankrupt Americans

2009-11-09T08:34:00.007+08:00

Here's another 'pessimistic' article.

Strange. Why can't one read it as it is, instead of branding? Why the need of branding such as pessimist and optimist? Unless of course one is A Mind Less Open...

Anyway the following report caught my attention.

OCTOBER CONSUMER BANKRUPTCY FILINGS REACH NEW HIGHS, UP 28 PERCENT OVER LAST YEAR

November 4, 2009 Alexandria, Va. — The 135,913 consumer bankruptcy filings in October represented a 27.9 percent increase over last October's monthly total of 106,266, according to the American Bankruptcy Institute (ABI), relying on data from the National Bankruptcy Research Center (NBKRC). The October 2009 consumer filings represented an 8.9 percent increase from the September 2009 total of 124,790. Chapter 13 filings constituted 28.5 percent of all consumer cases in October, a slight increase from the September rate.

"The nearly 9 percent increase in consumer bankruptcy filings in October, together with a 7 percent jump reported in business cases, demonstrates the sustained stress on the U.S. economy," said ABI Executive Director Samuel J. Gerdano. ABI forecasts that total bankruptcies this year will exceed 1.4 million, the highest number since 2005.

Another interesting issue?

Flashback: Warren Buffett's Comments On US Economy

"I am not sure about exact quarters or anything of the sort. Who knows about next week or next month? We made enormous progress since a year ago. We had a real panic. And if you didn’t panic, you didn’t understand what was going on. What happened in September and October of 2008 will particularly be remembered for a long, long time. And while the governmental authorities malign things sometimes, they fortunately did some very right things, very important things. They did them properly, and they kept us from going over the cliff. The fallout from that financial panic hit the regular economy in the fourth quarter like a ton of bricks. We are coming back from that. The patient really went into the emergency room and it won’t come out of the hospital entirely for a while."

Oh.. and I hope folks won't start branding Warren as a pessimist!

And the question most is asking is why isn't the Amercian on the street being bailout?

In the posting: Doomed To Fail Again!

Wall Street is bailed out; Main Street is not. Efforts to subsidize the incomes and balance sheets of failing firms have been massive and were implemented with minimal debate, requirements, or oversight; efforts to shore up taxpayer incomes and balance sheets have been comparatively minimal, subject to extensive debate and tinkering, highly selective, and incomplete.

And the impact of such policy?

Consider this news article: Orlando shooting suspect had recently filed for bankruptcy

Orlando, Florida (CNN) -- The suspect in Friday's shooting of six people in a downtown high-rise is a 40-year-old man with economic woes that include a recent bankruptcy filing, federal records show.

In his filing last May for Chapter 7 bankruptcy, under which he sought to have his assets liquidated and his debts discharged, Jason S. Rodriguez listed his assets at $4,675 and his liabilities at $89,873.31.

His 2002 Nissan XTerra with 110,000 miles represented $4,000 of those assets. His personal property filing described the vehicle as having body damage on the right side, an air conditioner that did not work and a transmission that was slipping

A Mind Less Open...

2009-11-08T08:51:00.003+08:00

Got the following comments in the posting Total US Bank Failures Is Now 115

badmouth said...
The US economy is recovering...Why posting something that economists no longer think so important and significant? Are you still expecting double dip? Please LAH!

Hmm... nice to know that you would like everyone to know that your mouth is bad.

That's ok with me. It's your mouth and it's your rights.

Last I know, there are always two sides to a coin. It still has, no?

And there's always an alternative point of view. Views always differ.

Should we pretend that the opposite view just does not exist?

The US Economy is recovering. Well Is America Out Of Recession? In that posting the alternative point of view is ..

As ever, the numbers warrant a closer look. For one thing, this is annualised data. So the US economy actually expanded by only 0.9pc during the third quarter – a fact most newspaper reports ignored. What growth we did see resulted from a 3.4pc annualised rise in US consumption between July and September, which was in turn caused by a 22.3pc spike in spending on consumer durables.

And if the US Economy is recovering, why are the banks failing like ten pins? Bankrupt banks does not matter?

And if the US Economy is recovering, why are the unemployment still so high?

Why posting something that economists no longer think so important and significant?

If it's so no longer significant, why are you so irritated with such 'pessimist' articles?

LOL!

I get it.

The world has only one view.

And news must be 'good news', else it's not news. LOL!

And if such 'bad' news are deemed irrelevant and pessimistic... the solution is sooooooooo simple.

Just pretend they do not exist!

Now if you think this blog only highlights irrelevant and pessimistic view only, the solution is also sooooooooooooo simple. Just pretend this blog do not exist!