Hartalega

We are expecting the Group to maintain its net profit margin at around 20% despite bracing for headwinds of lower average selling prices (ASP) of gloves.


Earnings outlook/Revision

We lowered our earnings forecast for FY15F by 7% to factor in the lower average selling prices (ASP) of gloves as we expect that the increased competition in the nitrile gloves industry would keep selling prices subdued.

Double-digit earnings growth in FY16F. Earnings forecast for FY16F was nudged marginally higher by 1.5% as we update the installed production capacity figures for FY16. We are expecting FY16F earnings to grow by double-digit on the back of significant earnings contribution from NGC.


Valuation & Recommendation 

Maintain HOLD with a slightly higher target price of  RM7.00 (previous target price: RM6.98), following our upward revision of earnings for FY16F. We derive our target price by pegging FY16 EPS at PER of 16 times.

While we remain convinced on its growth prospect that underpinned by its expansion ahead, we still wary over the stiff competition in the nitrile gloves industry. Yet, we reckon that the high operational efficiency of the Group would aid to mitigate the adverse effect of lower ASP of gloves. Overall, we maintain our neutral view on the company.

JFApex Securities 30.9.2014

HARTA Quarter Report History

No.	Financial		Revenue		Profit Before		Net Profit		EPS	Div	NTA
	Quarter		(RM,000)		Tax (RM,000)		(RM,000)		(Cent)	(Cent)	(RM)	PBTM
1	30/06/2014		279,198		75,651		57,087		7.55	4	1.34	27.1%
4	31/03/2014		280,373		70,272		49,157		6.63	3.5	1.27	25.1%
3	31/12/2013		267,820		74,673		57,876		7.81	3.5	1.23	27.9%
2	30/09/2013		280,953		82,300		63,273		8.55	3.5	1.18	29.3%
1	30/06/2013		278,014		81,917		62,912		8.56	4	1.1	29.5%
4	31/03/2013		269,772		81,318		62,293		8.52	3.5	1.05	30.1%
3	31/12/2012		259,565		78,368		60,529		8.28	3.5	0.99	30.2%
2	30/09/2012		255,019		76,282		58,597		8.01	3.5	0.94	29.9%
1	30/06/2012		247,678		69,914		53,358		7.3	0	0.9	28.2%
4	31/03/2012		240,217		64,460		50,012		13.73	6	1.7	26.8%
3	31/12/2011		241,951		63,902		50,703		13.93	6	1.61	26.4%
2	30/09/2011		229,542		59,551		46,127		12.68	6	1.53	25.9%

Billionaire Hedge Fund Manager Explains To MBA Students How He Makes A Ridiculous Amount Of Money

JULIA LA ROCHE FINANCE  OCT. 1, 2014

Closely-followed hedge fund manager John Paulson spoke to a room of MBA grads and students on Tuesday evening about hedge fund compensation among other topics. 

Paulson, who shot to fame after making billions betting against subprime during the housing crisis, was part of a panel at NYU Stern called the “Future of Finance” with Citigroup CEO Michael Corbat and Warburg Pincus Joe Landry. The Wall Street Journal’s Francesco Guerrera was the moderator. 

Earlier on in the panel, Paulson discussed how the hedge fund industry has changed since he launched Paulson & Co., which now manages over $20 billion of assets.

It’s a big number even by today’s hedge fund size standards. Compared to  decades ago, however, it’s absolutely massive.

Paulson pointed out that in the early 90s, a large fund would have about $100 to $200 million. These days, the largest funds have billions in assets.

The larger AUM also contributes to a manager’s yearly take-home pay.  

When Paulson discussed the massive paychecks some of the top fund managers take home you could see folks in the audience grin.

Fund managers are paid through a compensation structure commonly known as the “2 and 20,” which stands for a 2 percent management fee and a 20 percent performance fee charge. More specifically, “2 and 20″ means a hedge fund manager would charge investors 2 percent of total assets under management and 20 percent of any profits.

“So hedge funds have grown, the fee structure has stayed the same. The capital of the partners has become a more and more significant part of the earnings of the hedge fund managers. The total compensation to hedge fund managers has really grown enormously.” 

Paulson pointed out that Institutional Investor’s Alpha magazine has a list featuring the estimates of the top 25 highest earning managers. He said that he lowest paid, No. 25, took home about $300 million and the top five averaged excess of $2 billion. 

“After this little ah quick John Paulson math, I am tempted to send my résumé,” panel moderator Guerrera joked.

Also, Paulson ranked No. 3 for the “rich list.” His take home pay in 2013 was $2.3 billion. He was just behind Steven Cohen and David Tepper. 

http://www.businessinsider.my/john-paulson-compensation-2014-9/#.VCuEKGeSySo

Warren Buffett losing US$700 million in Tesco & iCapital International Value Fund

This fund started investing in July 2009. Its performance in AUD since then is shown below together with the benchmarks MSCI ACWI index and ASX200.

Table: 1 Jul 2009 to 31 Aug 2014

		Total Return		% Change
	Currency	01-Jul-2009	31-Aug-2014
ICIVF	A$	1.0000	1.4639	46.39
MSCI ACWI	A$	1204.2423	461.3982	50.71
ASX200	A$	306.1537	5625.9000	45.22

Commentary

Mindful of the rich valuation many markets are trading at, Capital Dynamics (Australia) Ltd continues to maintain the high cash level of your fund. Is this right?

Patience is more than inactivity; it is working diligently without being anxious. Although constantly on the lookout for new opportunities, Capital Dynamics (Australia) Ltd needs to have the patience to wait for the right investment to fall into the right price range.

Unfortunately, many amateur and professional investors succumb to all sorts of pressure to avoid subpar quarterly performance or personal pressures to avoid the feeling of being left out as the market surges. They make the classic mistake of seeing investment opportunities because they want it to be there, not because they’re actually there.

An investor who has fallen into this trap, in other words, will start to gradually twist the facts, skew his own perception of the situation, and even erode his own standards for investment, just to make that investment opportunity available.

In this day and age, patience is in short supply now, which is precisely why it is a valuable core strategy. As we wait, it is interesting to note that the Oracle of Omaha, Warren Buffett, is getting hit in the Tesco debacle, having lost over US$700 million on his US1.7 billion investment, which was made in 2007. 

What is not known to many, however, is the fact that Capital Dynamics (Australia) Ltd sold all of your fund’s holdings in Tesco Plc way back in 2011. Less than a year later, Tesco dumbfounded investors by issuing a profit warning for the first time in 20 years, and reported a decline in annual profit last year. While not a massive $320 billion global conglomerate and lacking the resources and manpower Buffett has, Capital Dynamics (Australia) Ltd, a relatively small investment firm, is proudly rooted in Asia but with a global perspective and capabilities.


The NAV and distribution history of i Capital International Value Fund can be viewed at www.capitaldynamics.com.au or www.funds.icapital.biz.


Those who invested in this fund would have received this report.