Showing posts with label klci. Show all posts
Showing posts with label klci. Show all posts

Monday 9 January 2023

Why had the Malaysian stock market done so badly from 2014 to 2018?

In June 2019, the FBM KLCI had fallen in four of the last five years (2014 to 2018).  Why had the Malaysian stock market done so badly?

One of the biggest reasons had to be underlying earnings, which were the main driver of stock prices over the longer term.


Period of 5 years (2014 to 2018)

855 companies were categorised into their respective sectors 

-  To determine the profit trend and the compound annual growth rates (CAGRs) for each sector.  

-  The sector net margin for each year was also tabulated.


Findings:

Total net profit for all companies fell in 2015, 2016 and 2018 - the CAGR of the decline was 6.8%.  

Net profit margin too had contracted sharply over those five years, from an average of 11.3% in 2014 to 7.7% in 2018.

The years in which total net profit fell were also the years in which the FBM KLCI and broader-based FBM EMAS Index ended in the red.


Share prices and P/E valuations

Notably, the share prices declined but the size of the drop was lower than that for earnings.  

The result was the price-to-earnings valuations were higher in 2018 than they were in 2014.  

And this was why the stock market was underperforming - valuations were not attractive even though share prices were lower.

It also meant a turnaround was unlikely until there is a broad-based earnings recovery.


Sector Analysis (2014 to 2018)

Energy (oil and gas) sector fared the worst in terms of profits, given the sharp fall in crude oil prices and resulting collapse in global exploration and production activities.  Brent crude fell from US$110 a barrel at its 2014 peak to below US30 during the lows in 2016.  Oil prices were hovering around US $60 a barrel in 2018.

Plantation companies' profits too were affected by commodity prices falling 15.6% annually, on average, since 2014.  Crude palm oil fell from an average price of RM 2,400 a tonne in 2014 to RM 2,170 a tonne in 2015.  CPO prices recovered to RM 2,630 and RM 2,800 in 2016 and 2017 respectively before dropping back to RM 2,240 a tonne in 2018.

Construction, consumer products and services, properties, transport and logistics, utilities, telecommunications and media and even real estate investment trusts reported negative profit growth between 2014 and 2018.

Healthcare (15 companies)  was the best performing sector with a CAGR of 5.7% in their profits.

Financial services (34 companies) grew at a CAGR of 4.3% in their profits.

Technology (81 companies) expanded just 2% in their profits.

Industrial products and services (239 companies) is the biggest sector by number of companies and its profits were up only 0.4% a year.

Consumer products and services (183 companies), their profits fell 2.3% annually on average.

Property companies' profits declined at an average of 3.1% annually for the past four years.


Summary:

The energy and plantation sectors are heavily influence by external factors.

Overall, the average Malaysian company had not fared well at all from 2014 to 2018.  

Net profit margin for all sectors declined throughout the five-year period from 2014 to 2018.

Underlying earnings were the main driver of stock prices over the longer term.

Monday 23 March 2020

More than 700 companies valued at below US$100 million on Bursa

Image result for More than 700 companies valued at below US$100 million on Bursa


Mon, 23 Mar 2020

KUALA LUMPUR: The double whammy of the Covid-19 outbreak and the oil price crash has dampened investor sentiments around the globe, especially on net export oil-producing economies like Malaysia.

The FBM KLCI has plunged nearly 18% year to date (YTD). Valuation wise, KLCI’s current price-to-earnings ratio (PER) stood at 14.56 times, representing a 15.1% discount to its 10-year average of 17.15 times.

Simply put, it is the market in which investors, with cash in pockets, could cherry-pick the good bargains.

Since investor sentiment is transient in nature — they come and go like dark clouds, as such we look into how many Malaysian-listed companies lie in the affordable range, to a business-centric and well thought out billionaire investor that has US$1 billion (RM4.43 billion) cash on hand.

According to Bloomberg data, there are about 868 companies which market capitalisation (cap) is at or below US$1 billion.



Big caps at discount on valuation

Image result for More than 700 companies valued at below US$100 million on Bursa

There are 31 big-cap companies, which market cap is in between the US$500 million to US$1 billion categories.

The stock exchange, Bursa Malaysia Bhd, is among the 31 listed entities.

Bursa Malaysia closed at RM4.70 last Friday after it rebounded 28 sen or 6.33%, giving it a market cap of RM3.79 billion, less than US$1 billion. The stock exchange is trading at PER at 20.45 times compared with its 10-year average of 23 times

LPI Capital Bhd, which sits on top of the list, came in at a total market cap of RM4.31 billion. The home-grown insurer last closed at RM10.82 as of last Friday — indicating its current PER valuation stood at 13.37 times, representing a 23% discount to its five-year average PER of 17.38.

With US$1 billion in hand, the billionaire investor can even afford to buy out utility companies, namely YTL Power International Bhd (RM4.1 billion), Malakoff Corp Bhd (RM3.32 billion) and Gas Malaysia Bhd (RM3.21 billion).

The three utility giants’ stock price fell in the range of 7% to 30% YTD, to close at 53.5 sen, 68 sen and RM2.50 last Friday.

Shares in Astro Malaysia Holdings Bhd saw its price dropped by more than half year-on-year (y-o-y) to 73 sen, valuing it with a total market capitalisation of RM3.81 billion. The stock is currently trading at a PER valuation of 5.98 times, according to Bloomberg. The media stock’s PER valuation is indeed at a 73% discount to its five-year average PER of 22.3 times.

It is worth noting that many of these companies are trading substantially lower than their net asset values. The list of companies includes Malaysia Building Society Bhd, FGV Holdings Bhd, Oriental Holdings Bhd, Affin Bank Bhd, Lotte Chemical Titan Holding Bhd, Alliance Bank Malaysia Bhd, DRB-Hicom Bhd and AirAsia Group Bhd.

A random check on all the stocks’ valuation, in comparison to end-October 2008 period (the heights of the global financial crisis), four out five of the stocks have suffered lower PER valuation during the 2008 selldown period.




Mid-large cap choices

Image result for More than 700 companies valued at below US$100 million on Bursa
There are 124 companies that are valued between US$100 million and US$500 million.

A billionaire investor, who has US$1 billion in hand, could afford a buyout of some oil and gas giants, Bumi Armada Bhd, Velesto Energy Bhd and Sapura Energy Bhd, which have been succumbed to irrational selldown after the meltdown on the crude oil prices.

Remarkably, shares in Supermax Corp Bhd was the only one yielded positive among the top-31 companies within the category. Supermax which gained 7% YTD, closed at RM1.49 last Friday — valuing the rubber glove maker at RM1.96 billion. Valuation of Supermax which was widely viewed as one of the beneficiaries for the pandemic containment efforts stood at 18.85 times PER, 33% higher than its 10-year average of 14.18 times.

Companies that sit above the RM2 billion mark within this category include Aeon Credit Service (M) Bhd, Shangri-La Hotels (Malaysia) Bhd, Allianz Malaysia Bhd and UMW Holdings Bhd — which saw their share price slid between 13% to 68% y-o-y.

In particular, Aeon Credit is trading at a single PER of 7.86 times based on last Friday’s closing of RM8.58. The valuation is at a 17% discount to its five-year average of 9.47 times.

While Shangri-La Hotels’ stock price was holding up strong at RM4.85 despite the concern on the Covid-19 outbreak that will affect occupancy rate. The five-star hotel group is trading at PER of 33.7 times, which is a 12% premium to its five-year average of 29.92 times.

Meanwhile, Allianz Malaysia, which used to trade above six times average PER in the past five years, is currently trading at a 32% discount at 4.31 times PER at RM12.02. Interestingly, Allianz’s net tangible assets (NTA) currently worth about RM11.89 per share — indicating that the investor gets to own 98% of the tangible assets for every ringgit invested into the insurance company.

Some of the notable consumer-related companies within US$100 million-US$500 million market cap range, includes Guan Chong Bhd (RM1.78 billion), Leong Hup International Bhd at RM1.68 billion, 7-Eleven Malaysia Holdings Bhd (RM1.49 billion), Aeon Co (M) Bhd (RM1.40 billion) and Padini Holdings Bhd (RM1.35 billion), which saw their share price tumbled 9% to 47% YTD. This group of companies, except for Leong Hup which was newly listed last year, were trading below their five-year average PERs.

Among the semiconductor companies that are within US$100 million and US$500 million range, Malaysian Pacific Industries Bhd (RM1.81 billion) was the only one traded at a premium to its historical values, which stood at 13.44 times PER, representing a 7% premium relative to its five-year average of 12.48 times.

Meanwhile, Frontken Corp Bhd, VS Industry Bhd and Pentamaster Corp Bhd are all traded at a discount to their historical values. Their share prices had plummeted 20% to 45% YTD.



Cheaper companies but cheaper quality

Image result for More than 700 companies valued at below US$100 million on Bursa

With US$1 billion in hand, billionaire investors will be spoilt for choice at bargain prices for stocks with a market cap of US$100 million or less.

There are 713 companies valued at below US$100 million, based on last Friday’s closings, according to Bloomberg.

Out of the top 31 market cap companies within this category, there are five loss-making companies.

Interestingly, companies in which NTA is significantly higher than their respective share prices include MNRB Holdings Bhd, MPHB Capital Bhd, Sunsuria Bhd, Muhibbah Engineering (M) Bhd, Malayan Flour Mills Bhd, Can-One Bhd. Share prices in these companies have tumbled 25% to 66% YTD.

MNRB’s NTA at RM2.97 per share is about close to five times higher than Friday’s closing price of 52 sen. While Can-One’s NTA stood at RM9.01 per share, close to four times higher than its share price of RM1.93, and MPHB’s NTA of RM1.88 per share is more than two times higher than its last trading price of 56.5 sen.

In terms of price valuation, all of the companies were traded below their five-year average PER, except for Amverton Bhd and Ayer Holdings Bhd which are both involved in property development.

Amverton, which has a valuation of RM438 million, saw its share price closed at RM1.20 — implies current PER of 85 times, three times higher than its five-year average of 28 times.

Ayer Holdings current PER stood at 29 times, representing 22% higher than its five-year average of 23 times, as of last closing price of RM5.20, valuing the company at RM389 million total market capitalisation.



https://www.theedgemarkets.com/article/more-700-companies-valued-below-us100-million-bursa
















Thursday 5 March 2020

KLCI 30 Component Stocks (Market PE, DY, ROE)


Company Market Cap (b) PE DY ROE Price
10.32 19.22 2.25 5.76 6.22
11.152 7.18 5.41 8.47 3.7
37.112 27.18 2.35 8.42 4.05
44.653 9.79 5.56 8.11 4.5
18.843 31.04 1.14 15.31 3.34
32.5 22.68 4.35 230.38 4.18
16.33 11.7 6.91 7.19 2.75
18.88 9.46 4.41 5.61 4.87
23.527 20.23 3.7 15.83 9.45
21.068 51.32 1.32 16.63 6.23
33.903 12.74 3.2 9.64 15.64
18.177 9.44 2.65 9.63 15.84
49.134 89.03 0.54 2.47 5.6
26.397 40.31 1.9 7.04 4.2
23.48 43.99 2.3 5.15 21.72
42.074 27.7 3.72 21.58 5.38
95.889 11.7 6.68 10.05 8.53
33.077 23.19 4.45 4.11 7.41
33.065 49.14 1.99 101.04 141
69.878 12.68 4.06 12.64 18
45.28 16.08 3.18 9.41 5.66
21.935 26.44 3.85 13.87 22.08
32.372 16.73 5.01 14.61 16.36
19.625 41.68 1.03 13.25 4.86
25.834 22.41 1.54 5.38 18.16
22.897 9.22 3.59 9.63 5.71
13.603 14.57 5 6.42 2
33.321 378.12 0.35 0.66 4.84
71.882 15.87 4.21 7.81 12.64
14.682 39.46 1.31 14.38 5.73
KLCI (Total) 960.890 17.70 3.55% 8.83%
Company Earnings (m) Dividends (m) Equity (m) DPO
536.9 232.2 9321.9 0.43
1553.2 603.3 18337.7 0.39
1365.4 872.1 16216.3 0.64
4561.1 2482.7 56240.2 0.54
607.1 214.8 3965.1 0.35
1433.0 1413.8 622.0 0.99
1395.7 1128.4 19412.1 0.81
1995.8 832.6 35575.3 0.42
1163.0 870.5 7346.7 0.75
410.5 278.1 2468.6 0.68
2661.1 1084.9 27605.2 0.41
1925.5 481.7 19995.1 0.25
551.9 265.3 22343.4 0.48
654.8 501.5 9301.8 0.77
533.8 540.0 10364.2 1.01
1518.9 1565.2 7038.5 1.03
8195.6 6405.4 81548.7 0.78
1426.3 1471.9 34704.3 1.03
672.9 658.0 665.9 0.98
5510.9 2837.0 43598.8 0.51
2815.9 1439.9 29924.8 0.51
829.6 844.5 5981.4 1.02
1935.0 1621.8 13244.1 0.84
470.8 202.1 3553.6 0.43
1152.8 397.8 21427.3 0.35
2483.4 822.0 25788.2 0.33
933.6 680.2 14542.5 0.73
88.1 116.6 13351.9 1.32
4529.4 3026.2 57995.2 0.67
372.1 192.3 2587.4 0.52
KLCI (Total) 54284.3 34083.1 615068.3 0.63




Summary:

KLCI 1491.03    5.3.2020

1.  The total market capitalization of the KLCI 30component stocks is RM 960.89 billion.
2.  The PE of the KLCI 30 component stocks is 17.70, giving a Earnings Yield (E/P) of 5.65%.
3.  The DY of the KLCI 30 component stocks is 3.55%.
4.  The ROE of the KLCI 30 component stocks is 8.83%.
5.  The total earnings of the KLCI 30 component stocks is RM 54.28 billion.
6.  The total dividends distributed by the KLCI 30 component stocks is RM 34.08 billion
7.  The total equity of the KLCI 30 component stocks is RM 615.07 billion
8.  The DPO of the KLCI 30 component stocks is 0.63.
9.  The Price to Book Value ratio of the KLCI 30 component stocks is 1.56



Thursday 18 January 2018

KLCI 18.1.2018 (Market PE 17.76)

KLCI Component Stocks

Company Price  EPS  DPS  BVPS  PE DY P/B ROE
AMBANK (1015) 4.74 0.43 0.18 5.40 10.92 3.71 0.88 8.04
ASTRO (6399) 2.64 0.14 0.12 0.13 18.75 4.73 20.63 110
AXIATA (6888) 5.57 0.06 0.08 2.79 87.58 1.44 2.00 2.28
CIMB (1023) 6.79 0.46 0.20 5.31 14.67 2.95 1.28 8.72
DIGI (6947) 4.82 0.19 0.21 0.07 25.13 4.34 68.86 274
GENM (4715) 5.52 0.40 0.17 3.40 13.68 2.99 1.62 11.87
GENTING (3182) 9.61 0.62 0.12 9.10 15.46 1.3 1.06 6.83
HAPSENG (3034) 9.68 0.43 0.35 2.46 22.61 3.62 3.94 17.41
HLBANK (5819) 17.9 1.03 0.45 11.40 17.31 2.51 1.57 9.07
HLFG (1082) 17.78 1.37 0.38 14.91 12.95 2.14 1.19 9.21
IHH (5225) 6 0.10 0.03 2.71 59.82 0.5 2.21 3.7
IOICORP (1961) 4.64 0.16 0.10 1.18 29.2 2.05 3.93 13.47
KLCC (5235SS) 7.9 0.49 0.36 7.11 16.22 4.51 1.11 6.85
KLK (2445) 25.26 0.94 0.50 10.87 26.83 1.98 2.32 8.66
MAXIS (6012) 6.05 0.27 0.20 0.88 22.11 3.31 6.87 31.09
MAYBANK (1155) 9.85 0.72 0.52 6.80 13.74 5.28 1.45 10.54
MISC (3816) 7.44 0.55 0.30 8.16 13.59 4.03 0.91 6.71
NESTLE (4707) 107 2.47 2.70 2.87 43.32 2.52 37.28 86.06
PBBANK (1295) 20.92 1.41 0.58 9.30 14.85 2.77 2.25 15.14
PCHEM (5183) 8.2 0.52 0.19 3.44 15.77 2.32 2.38 15.11
PETDAG (5681) 24.92 1.53 0.70 5.96 16.26 2.81 4.18 25.71
PETGAS (6033) 17.94 0.90 0.62 6.23 20.04 3.46 2.88 14.38
PMETAL (8869) 5.6 0.15 0.10 0.47 37.01 1.7 11.91 32.19
PPB (4065) 17.4 1.12 0.25 17.78 15.56 1.44 0.98 6.29
RHBBANK (1066) 5.25 0.44 0.12 5.74 12.02 2.29 0.91 7.61
SIME (4197) 2.71 0.47 0.23 5.66 5.71 8.49 0.48 8.38
SIMEPLT (5285) 5.51 0.00 0.00 0.00 0 0 ###### 0
TENAGA (5347) 15.8 1.22 0.61 10.09 12.97 3.86 1.57 12.07
TM (4863) 6.11 0.21 0.22 2.00 28.45 3.52 3.05 10.72
YTL (4677) 1.5 0.07 0.09 1.43 20.75 6.33 1.05 5.06

Price, EPS, DPS and BVPS in RM


18.1.2018

KLCI                                  1824.81
Market PE 17.76
Market DY 3.04%
ROE 10.27%
P/BV 1.82


Historical Data

DateMarket PEMarket DYKLCI
10.12.2017 
2.11.2017
16.5
17.1
3.29%
3.10%
1721.25
1742.49
3.1.201417.13.20%1804.03
7.6.201316.23.47%1775.59
11.1.201316.63.17%1682.70
19.10.201217.72.90%1666.35
15.12.201115.13.42%1464.11
6.1.201117.23.00%1568.37
5.10.201017.55.70%1462.27
10.2.201018.83.03%1246.17
3.7.200910.23.71%