IJM Corporation Berhad

Date announced 23/11/2010
Quarter 30/09/2010 Qtr 2 FYE 31/03/2011

STOCK  IJM  C0DE  3336 

Price $ 5.69 Curr. ttm-PE 18.77 Curr. DY 1.93%
LFY Div 11.00 DPO ratio 44%
ROE 8.0% PBT Margin 25.3% PAT Margin 15.2%

Rec. qRev 785504 q-q % chg -20% y-y% chq -25%
Rec qPbt 198363 q-q % chg 11% y-y% chq 52%
Rec. qEps 8.86 q-q % chg 31% y-y% chq 74%
ttm-Eps 30.32 q-q % chg 14% y-y% chq 58%

Using VERY CONSERVATIVE ESTIMATES:
EPS GR 5% Avg.H PE 18.00 Avg. L PE 14.00
Forecast High Pr 6.97 Forecast Low Pr 4.43 Recent Severe Low Pr 4.43
Current price is at Middle 1/3 of valuation zone.

RISK: Upside 50% Downside 50%
One Year Appreciation Potential 4% Avg. yield 3%
Avg. Total Annual Potential Return (over next 5 years) 7%

CPE/SPE 1.17 P/NTA 1.51 NTA 3.78 SPE 16.00 Rational Pr 4.85



Decision:
Already Owned: Buy, Hold, Sell, Filed; Review (future acq): Filed; Discard: Filed.
Guide: Valuation zones - Lower 1/3 Buy; Mid. 1/3 Maybe; Upper 1/3 Sell.

Aim:
To Buy a bargain: Buy at Lower 1/3 of Valuation Zone
To Minimise risk of Loss: Buy when risk is low i.e UPSIDE GAIN > 75% OR DOWNSIDE RISK <25%
To Double every 5 years: Seek for POTENTIAL RETURN of > 15%/yr.
To Prevent Loss: Sell immediately when fundamentals deteriorate
To Maximise Gain & Reduce Loss: Sell when CPE/SPE > 1.5, when in Upper 1/3 of Valuation Zone & Returns < 15%/yr


Stock Data: Recent Stock Performance:
Current Price (11/19/2010): 5.69
(Figures in Malaysian Ringgits)
1 Week 3.5% 13 Weeks 3.8%
4 Weeks 13.6% 52 Weeks 22.6%

IJM Corporation Berhad Key Data:
Ticker: IJMS Country: MALAYSIA
Exchanges: KUL SIN Major Industry: Construction
Sub Industry: Miscellaneous Construction

2010 Sales 4,013,530,000
(Year Ending Jan 2011).
Employees: 4,320
Currency: Malaysian Ringgits Market Cap: 7,687,203,753
Fiscal Yr Ends: March Shares Outstanding: 1,351,002,417
Share Type: Ordinary Closely Held Shares: 413,013,832


Day's Range: 5.64 - 5.64
52wk Range: 4.28 - 5.72
Volume: 0
Avg Vol (3m): 4,512,800

Ajinomoto

Date announced 23/11/2020
Quarter 30/09/2010 Qtr 2 FYE 31/03/2011

STOCK Ajinomoto C0DE 2658

Price $ 4.22 Curr. ttm-PE 10.26 Curr. DY 4.27%
LFY Div 18.00 DPO ratio 46%
ROE 12.0% PBT Margin 9.2% PAT Margin 6.9%

Rec. qRev 77686 q-q % chg -5% y-y% chq 13%
Rec qPbt 7129 q-q % chg -38% y-y% chq -6%
Rec. qEps 8.85 q-q % chg -38% y-y% chq -10%
ttm-Eps 41.15 q-q % chg -2% y-y% chq 23%

Using VERY CONSERVATIVE ESTIMATES:
EPS GR 5% Avg.H PE 10.00 Avg. L PE 6.00
Forecast High Pr 5.25 Forecast Low Pr 3.29 Recent Severe Low Pr 3.29
Current price is at Middle 1/3 of valuation zone.

RISK: Upside 53% Downside 47%
One Year Appreciation Potential 5% Avg. yield 6%
Avg. Total Annual Potential Return (over next 5 years) 11%

CPE/SPE 1.28 P/NTA 1.23 NTA 3.43 SPE 8.00 Rational Pr 3.29



Decision:
Already Owned: Buy, Hold, Sell, Filed; Review (future acq): Filed; Discard: Filed.
Guide: Valuation zones - Lower 1/3 Buy; Mid. 1/3 Maybe; Upper 1/3 Sell.

Aim:
To Buy a bargain: Buy at Lower 1/3 of Valuation Zone
To Minimise risk of Loss: Buy when risk is low i.e UPSIDE GAIN > 75% OR DOWNSIDE RISK <25%
To Double every 5 years: Seek for POTENTIAL RETURN of > 15%/yr.
To Prevent Loss: Sell immediately when fundamentals deteriorate
To Maximise Gain & Reduce Loss: Sell when CPE/SPE > 1.5, when in Upper 1/3 of Valuation Zone & Returns < 15%/yr


Stock Data:
Current Price (11/19/2010): 4.26
(Figures in Malaysian Ringgits)

Recent Stock Performance:
1 Week -2.7% 13 Weeks 5.2%
4 Weeks 2.9% 52 Weeks 31.9%

Ajinomoto (Malaysia) Berhad Key Data:
Ticker: AJI Country: MALAYSIA
Exchanges: AMN Major Industry: Food & Beverages
Sub Industry: Miscellaneous Food

2010 Sales 284,616,880
(Year Ending Jan 2011).
 Employees: 380

Currency: Malaysian Ringgits Market Cap: 259,003,740
Fiscal Yr Ends: March Shares Outstanding: 60,799,000
Share Type: Ordinary Closely Held Shares: 34,430,813

Day's Range: 4.22 - 4.30
52wk Range: 3.18 - 4.97
Volume: 76,400
Avg Vol (3m): 63,365

Malaysian Bulk Carriers Bhd

Date announced 23/11/2010
Quarter 30/09/2010 Qtr 3 FYE 31/12/2010

STOCK Maybulk C0DE  5077 

Price $ 2.95 Curr. ttm-PE 11.39 Curr. DY 5.08%
LFY Div 15.00 DPO ratio 62%
ROE 15.7% PBT Margin 80.8% PAT Margin 80.5%

Rec. qRev 109027 q-q % chg 13% y-y% chq 11%
Rec qPbt 88069 q-q % chg 164% y-y% chq 25%
Rec. qEps 8.77 q-q % chg 178% y-y% chq 26%
ttm-Eps 25.91 q-q % chg 8% y-y% chq 63%

Using VERY CONSERVATIVE ESTIMATES:
EPS GR 3% Avg.H PE 11.00 Avg. L PE 10.00
Forecast High Pr 3.30 Forecast Low Pr 2.13 Recent Severe Low Pr 2.13
Current price is at Upper 1/3 of valuation zone.

RISK: Upside 30% Downside 70%
One Year Appreciation Potential 2% Avg. yield 6%
Avg. Total Annual Potential Return (over next 5 years) 9%

CPE/SPE 1.08 P/NTA 1.78 NTA 1.65 SPE 10.50 Rational Pr 2.72



Decision:
Already Owned: Buy, Hold, Sell, Filed; Review (future acq): Filed; Discard: Filed.
Guide: Valuation zones - Lower 1/3 Buy; Mid. 1/3 Maybe; Upper 1/3 Sell.

Aim:
To Buy a bargain: Buy at Lower 1/3 of Valuation Zone
To Minimise risk of Loss: Buy when risk is low i.e UPSIDE GAIN > 75% OR DOWNSIDE RISK <25%
To Double every 5 years: Seek for POTENTIAL RETURN of > 15%/yr.
To Prevent Loss: Sell immediately when fundamentals deteriorate
To Maximise Gain & Reduce Loss: Sell when CPE/SPE > 1.5, when in Upper 1/3 of Valuation Zone & Returns < 15%/yr


Stock Data: Recent Stock Performance:
Current Price (11/19/2010): 2.89
(Figures in Malaysian Ringgits)

Recent Stock Performance
1 Week -2.0% 13 Weeks -3.3%
4 Weeks 0.3% 52 Weeks -10.8%

Malaysian Bulk Carriers
Bhd Key Data:
Ticker: MAYBULK
Country: MALAYSIA
Exchanges: KUL
Major Industry: Transportation
Sub Industry: Shipping

2009 Sales 303,707,000 (Year Ending Jan 2010).
Employees: 371

Currency: Malaysian Ringgits
Market Cap: 2,890,000,000
Fiscal Yr Ends: December Shares Outstanding: 1,000,000,000
Share Type: Ordinary Closely Held Shares: 745,849,550

UMW Holdings Berhad

Date announced 22/11/2010
Quarter 30/09/2010 Qtr 3 FYE 31/12/2010

STOCK UMW C0DE  4588 

Price $ 6.8 Curr. ttm-PE 12.89 Curr. DY 2.94%
LFY Div 20.00 DPO ratio 59%
ROE 14.7% PBT Margin 11.0% PAT Margin 4.8%

Rec. qRev 3087276 q-q % chg -6% y-y% chq 10%
Rec qPbt 340922 q-q % chg -23% y-y% chq 18%
Rec. qEps 13.17 q-q % chg -30% y-y% chq 15%
ttm-Eps 52.76 q-q % chg 3% y-y% chq 49%

Using VERY CONSERVATIVE ESTIMATES:
EPS GR 5% Avg.H PE 12.00 Avg. L PE 8.00
Forecast High Pr 8.08 Forecast Low Pr 5.50 Recent Severe Low Pr 5.50
Current price is at Middle 1/3 of valuation zone.

RISK: Upside 50% Downside 50%
One Year Appreciation Potential 4% Avg. yield 6%
Avg. Total Annual Potential Return (over next 5 years) 10%

CPE/SPE 1.29 P/NTA 1.89 NTA 3.59 SPE 10.00 Rational Pr 5.28



Decision:
Already Owned: Buy, Hold, Sell, Filed; Review (future acq): Filed; Discard: Filed.
Guide: Valuation zones - Lower 1/3 Buy; Mid. 1/3 Maybe; Upper 1/3 Sell.

Aim:
To Buy a bargain: Buy at Lower 1/3 of Valuation Zone
To Minimise risk of Loss: Buy when risk is low i.e UPSIDE GAIN > 75% OR DOWNSIDE RISK <25%
To Double every 5 years: Seek for POTENTIAL RETURN of > 15%/yr.
To Prevent Loss: Sell immediately when fundamentals deteriorate
To Maximise Gain & Reduce Loss: Sell when CPE/SPE > 1.5, when in Upper 1/3 of Valuation Zone & Returns < 15%/yr

Integrax Berhad

Date announced 22/11/2010
Quarter 30/09/2010 Qtr 3 FYE 31/12/2010

STOCK Integra C0DE  9555 
Price $ 1.6 Curr. ttm-PE 11.01 Curr. DY 1.88%
LFY Div 3.00 DPO ratio 21%
ROE 8.1% PBT Margin 61.6% PAT Margin 44.4%

Rec. qRev 24918 q-q % chg 6% y-y% chq 4%
Rec qPbt 15340 q-q % chg -15% y-y% chq 9%
Rec. qEps 3.68 q-q % chg -19% y-y% chq 13%
ttm-Eps 14.53 q-q % chg 3% y-y% chq 26%

Using VERY CONSERVATIVE ESTIMATES:
EPS GR 5% Avg.H PE 8.00 Avg. L PE 4.00
Forecast High Pr 1.48 Forecast Low Pr 0.94 Recent Severe Low Pr 0.94
Current price is at Upper 1/3 of valuation zone.

RISK: Upside -21% Downside 121%
One Year Appreciation Potential -1% Avg. yield 2%
Avg. Total Annual Potential Return (over next 5 years) 1%

CPE/SPE 1.84 P/NTA 0.89 NTA 1.79 SPE 6.00 Rational Pr 0.87



Decision:
Already Owned: Buy Hold Sell Filed Review (future acq): Filed Discard: Filed
Guide: Valuation zones Lower 1/3 Buy Mid. 1/3 Maybe Upper 1/3 Sell

Aim:
To Buy a bargain: Buy at Lower 1/3 of Valuation Zone
To Minimise risk of Loss: Buy when risk is low i.e UPSIDE GAIN > 75% OR DOWNSIDE RISK <25%
To Double every 5 years: Seek for POTENTIAL RETURN of > 15%/yr.
To Prevent Loss: Sell immediately when fundamentals deteriorate
To Maximise Gain & Reduce Loss: Sell when CPE/SPE > 1.5, when in Upper 1/3 of Valuation Zone & Returns < 15%/yr

PPB Group Berhad

Date announced 22/11/2010
Quarter 30/09/2010 Qtr 3 FYE 31/12/2010

STOCK PPB C0DE  4065 

Price $ 18.8 Curr. PE (ttm-Eps) 10.70 Curr. DY 3.88%
LFY Div 73.00 DPO ratio 54%
ROE 15.9% PBT Margin 55.2% PAT Margin 50.1%

Rec. qRev 574531 q-q % chg -1% y-y% chq -38%
Rec qPbt 317086 q-q % chg -3% y-y% chq -51%
Rec. qEps 24.29 q-q % chg -9% y-y% chq -52%
ttm-Eps 175.67 q-q % chg -13% y-y% chq 28%

Using VERY CONSERVATIVE ESTIMATES:
EPS GR 5% Avg.H PE 10.00 Avg. L PE 7.00
Forecast High Pr 22.42 Forecast Low Pr 16.00 Recent Severe Low Pr 16.00
Current price is at Middle 1/3 of valuation zone.

RISK: Upside 56% Downside 44%
One Year Appreciation Potential 4% Avg. yield 6%
Avg. Total Annual Potential Return (over next 5 years) 10%

CPE/SPE 1.26 P/NTA 1.70 NTA 11.03 SPE 8.50 Rational Pr 14.93



Decision:
Already Owned: Buy Hold Sell Filed Review (future acq): Filed Discard: Filed
Guide: Valuation zones Lower 1/3 Buy Mid. 1/3 Maybe Upper 1/3 Sell

Aim:
To Buy a bargain: Buy at Lower 1/3 of Valuation Zone
To Minimise risk of Loss: Buy when risk is low i.e UPSIDE GAIN > 75% OR DOWNSIDE RISK <25%
To Double every 5 years: Seek for POTENTIAL RETURN of > 15%/yr.
To Prevent Loss: Sell immediately when fundamentals deteriorate
To Maximise Gain & Reduce Loss: Sell when CPE/SPE > 1.5, when in Upper 1/3 of Valuation Zone & Returns < 15%/yr

KPJ Healthcare Berhad

Date announced 30/08/2010
Quarter 30/06/2010 Qtr 2 FYE 31/12/2010

STOCK KPJ C0DE  5878 

Price $ 3.73 Curr. ttm-PE 17.50 Curr. DY 2.14%
LFY Div 8.00 DPO ratio 41%
ROE 16.4% PBT Margin 10.1% PAT Margin 7.1%

Rec. qRev 410237 q-q % chg 9% y-y% chq 11%
Rec qPbt 41305 q-q % chg 9% y-y% chq 15%
Rec. qEps 5.54 q-q % chg 7% y-y% chq 16%
ttm-Eps 21.32 q-q % chg 4% y-y% chq 32%

Using VERY CONSERVATIVE ESTIMATES:
EPS GR 5% Avg.H PE 12.00 Avg. L PE 9.00
Forecast High Pr 3.26 Forecast Low Pr 2.67 Recent Severe Low Pr 2.67
Current price is at Upper 1/3 of valuation zone.

RISK: Upside -78% Downside 178%
One Year Appreciation Potential -2% Avg. yield 3%
Avg. Total Annual Potential Return (over next 5 years) 0%

CPE/SPE 1.67 P/NTA 2.87 NTA 1.30 SPE 10.50 Rational Pr 2.24



Decision:
Already Owned: Buy, Hold, Sell, Filed; Review (future acq): Filed; Discard: Filed.
Guide: Valuation zones - Lower 1/3 Buy; Mid. 1/3 Maybe; Upper 1/3 Sell.

Aim:
To Buy a bargain: Buy at Lower 1/3 of Valuation Zone
To Minimise risk of Loss: Buy when risk is low i.e UPSIDE GAIN > 75% OR DOWNSIDE RISK <25%
To Double every 5 years: Seek for POTENTIAL RETURN of > 15%/yr.
To Prevent Loss: Sell immediately when fundamentals deteriorate
To Maximise Gain & Reduce Loss: Sell when CPE/SPE > 1.5, when in Upper 1/3 of Valuation Zone & Returns < 15%/yr

TSH Resources Berhad

Date announced 18/11/2010
Quarter 30/09/2010 Qtr 3 FYE 31/12/2010

STOCK TSH C0DE  9059 
Price $ 2.6 Curr. ttm-PE 16.84 Curr. DY 1.92%

LFY Div 5.00 DPO ratio 28%
ROE 8.7% PBT Margin 12.7% PAT Margin 8.5%

Rec. qRev 214265 q-q % chg 3% y-y% chq 5%
Rec qPbt 27131 q-q % chg 53% y-y% chq 1%
Rec. qEps 4.45 q-q % chg 61% y-y% chq -22%
ttm-Eps 15.44 q-q % chg -8% y-y% chq 83%

Using VERY CONSERVATIVE ESTIMATES:
EPS GR 5% Avg.H PE 10.00 Avg. L PE 8.00
Forecast High Pr 1.97 Forecast Low Pr 1.73 Recent Severe Low Pr 1.73
Current price is at Upper 1/3 of valuation zone.

RISK: Upside -262% Downside 362%
One Year Appreciation Potential -5% Avg. yield 2%
Avg. Total Annual Potential Return (over next 5 years) -3%

CPE/SPE 1.87 P/NTA 1.46 NTA 1.78 SPE 9.00 Rational Pr 1.39



Decision:
Already Owned: Buy, Hold, Sell, Filed; Review (future acq): Filed; Discard: Filed.
Guide: Valuation zones - Lower 1/3 Buy; Mid. 1/3 Maybe; Upper 1/3 Sell.

Aim:
To Buy a bargain: Buy at Lower 1/3 of Valuation Zone
To Minimise risk of Loss: Buy when risk is low i.e UPSIDE GAIN > 75% OR DOWNSIDE RISK <25%
To Double every 5 years: Seek for POTENTIAL RETURN of > 15%/yr.
To Prevent Loss: Sell immediately when fundamentals deteriorate
To Maximise Gain & Reduce Loss: Sell when CPE/SPE > 1.5, when in Upper 1/3 of Valuation Zone & Returns < 15%/yr

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Inflation does matter in China and the world

Inflation does matter in China and the world
By Huang Shuo (chinadaily.com.cn)
Updated: 2010-11-15 16:58

The growth rate of China's consumer price index (CPI) was 4.4 percent year-on-year in October, a 25-month high. The rate is up 0.8 percentage points from September. This is an alarming statistic for a country that for the past three decades has had steady economic growth. Inflation risks do matter for China.

In particular, the new factor of a rise in prices, main promoter for CPI growth, took up 3 percentage points of the 4.4 percent surge. Prices of agricultural products and food have been playing major roles in contributing to the CPI hike. Food prices surged by 10.1 percent compared with the same period of last year as a result of the price hike in international agricultural products, and the recent flood in South China’s Hainan province affected vegetable prices and oil prices, adding to the product costs, said Sheng Laiyun, spokesman for the National Bureau of Statistics (NBS).

In addition, daily essentials such as eggs and vegetables are leading the price increases in China's consumer market, followed by meat, oil and white sugar.

As the industry generally expected that about 4 percent would be the proper answer for CPI, the final data released by the NBS on Nov 11, 2010, was 0.4 percentage points higher than estimated, which astonished the public and drew lots of attention from domestic and foreign experts.

Consumer prices associated with social stability are the top concern of the public in China. The increase of CPI indicates that the surge in commodities prices is ongoing in the consumption market, closely linked with the daily lives of ordinary people. China’s income per capita still lags behind the United States, the European Union, and even some other emerging economies. How to increase income and stabilize or lower the prices in the market, especially for daily essentials, should be attached great importance by the government.

Livelihood is like the basis for constructing a building, which lays the firm foundation for a harmonious society. Whether people can lead a good life decides the quality of governance by central and local authorities. High consumer prices pose an unstable economic factor to improving the living standard of people.

More regulations are expected for the soaring Chinese CPI. As to that situation, the People’s Bank of China, the central bank of China, has noticed and adopted a measure increasing the required reserve ratio by 50 basis points and coming into effect on Nov 16, 2010, in order to ease the pressure from the second round of quantitative easing policy (QE2) by the Federal Reserve of the US and increasing liquidity caused commodity prices to rise in China. But is it enough to merely depend on national economic regulatory authorities?

Every economy released loose monetary policies to conquer the challenges brought by the international financial crisis in 2008 and get out of the recession. But side effects are inevitable. Rising inflation is one of the consequences. As a result, countries with expansion policies on issuing more currencies should work together and reach agreements to confront the emerging side effect -- inflation.

The author can be reached at larryhuangshuo@gmail.com.

http://www.chinadaily.com.cn/business/2010-11/15/content_11552427.htm

China rate rises no panacea to curb inflation: PBOC adviser

China rate rises no panacea to curb inflation: PBOC adviser
(Agencies)
Updated: 2010-11-18 11:06

China should not solely rely on interest rate rises to curb inflation, an academic adviser to the People's Bank of China said in remarks published on Thursday.

Zhou Qiren, who is also a professor at Peking University, said the government must take steps to tackle supply-side strains that have been a key factor pushing consumer prices.

Loose monetary policy in 2009 has created excessive liquidity and helped fuel prices of various products, he said.

"Much liquidity and fewer goods are the reasons behind inflation. Raising interest rates cannot change such a situation," he was quoted by the China Securities Journal as saying.

Zhou warned that liquidity had been channeled from the real estate market to other sectors of the economy, after Beijing took harsh measures to prevent a property bubble.

China's CPI hit a 25-month high of 4.4 percent in October, fuelling expectations of further tightening measures.

The PBOC has ramped up its efforts to tighten monetary conditions in the past month, increasing bank reserve requirements and surprising markets on Oct 19 by announcing the first rate rise in nearly three years.

http://www.chinadaily.com.cn/business/2010-11/18/content_11570306.htm

Related readings
: Gold drops on China interest rate hike rumor, stronger dollar
 Stocks down on mainland rate worries
 Rising food costs boost China's inflation rate to 25-month high
 Oct consumer confidence falls due to inflation, rate hike

Rise of the middle class

Rise of the middle class
By Tang Jun (China Daily)
Updated: 2010-11-18 15:12

Society will be more stable when one third of the Chinese population has material means to become social backbone

Many scholars and individuals are showing concern about what kind of social structure will bring the best stability.

According to sociological theories, a modern society can be divided into four ranks: the wealthy, the middle class, labor and the disadvantaged. The middle class creates the ladder between the well-to-do and the poverty-stricken, thus easing the antagonism between them, by granting those at the bottom the hope of rising to a higher level.

Generally speaking, in a modern society, the middle class contains 60 to 70 percent of the population, leaving about 15 to 20 percent at either end of the ladder. Such a large middle class ensures stability for a society.

How do we define the middle class? There are three standards: material wealth, job status and self-identity.

Concerning material wealth, a middle income, sufficient to maintain a comfortable but not luxurious lifestyle, is the first pursuit of the middle class. In the present social situations, a typical middle-class family tends to own a car and a house, together with certain financial products.

The xiaokang (literally moderate prosperity) standard introduced by the government is essentially the Chinese version of the middle class. Sufficient wealth accumulation is the first prerequisite to be xiaokang.

Job status is another essential. In this society, a salary is still the most important income source for most individuals; therefore a stable job is the pursuit.

With the rise of knowledge capital, intellectuals and technicians are taking more pride in gaining a position through their knowledge or technical skills.

Self-identity is also indispensable. Being middle class means having access to a decent and relatively comfortable life and having the will to strive forward. This is beneficial to both the people and society.

During the past 30 years, a middle class has come into being in China. According to Professor Lu Xueyi of the Chinese Academy of Social Sciences, 23 percent of the population belong to the middle class; five years ago it was 18 percent. He estimates that the number will increase by 1 percent every year. If that growth rate can be maintained the middle class could reach 40 percent of the population by 2020.

However, that will not be achieved without problems. Ever since reform and opening-up in late 1970s, our changes in social structure have lagged 15 years behind economic development; that's the origin of many of our social problems.

The middle class, with a strong sense of social responsibility, should be the backbone of society. The awareness of being a responsible citizen offers strong support for society. However, the middle class in China is still immature in this respect and society needs them to meet their social obligations.

Of course, the rise of the middle class in any society is in dire need of rational support from the government. On their road to industrialization and modernization, many developed countries offered support or subsidy to blue-collar workers, helping them to own and accumulate capital. After World War II, many countries also used the policy "houses for residents", which proved very successful.

Owning a house has long been considered a prerequisite of entering the middle class, and when more and more people find it hard to reach this standard, it is impossible for them to remain silent.

The present tendency of economic growth is unfriendly to many people, especially to the supporting pillar of industry - migrant workers, whose number has reached 200 million. We hope the "inclusive growth" in the 12th Five-Year Plan (2011-2015) will solve these problems.

Three decades ago, Deng Xiaoping said: "Let one part of the people get rich first." Today might we make a similar statement for the 12th Five-Year Plan period - let one third of the Chinese people become middle class first.

The author is a researcher and secretary general of the Social Policy Research Center of the China Academy of Social Sciences.

http://www.chinadaily.com.cn/business/2010-11/18/content_11571957.htm


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Coastal Contracts Bhd

Date announced 19/11/2010
Quarter 30/09/2010 Qtr 3 FYE 31/12/2010

STOCK COASTAL C0DE  5071

Price $ 2.32 Curr. PE (ttm-Eps) 4.22 Curr. DY 1.29%
LFY Div 3.00 DPO ratio 7%
ROE 36.4% PBT Margin 27.9% PAT Margin 27.9%

Rec. qRev 192091 q-q % chg 39% y-y% chq 37%
Rec qPbt 53601 q-q % chg 10% y-y% chq 11%
Rec. qEps 14.80 q-q % chg 11% y-y% chq 11%
ttm-Eps 55.04 q-q % chg 3% y-y% chq 40%

Using VERY CONSERVATIVE ESTIMATES:
EPS GR 2% Avg.H PE 5.00 Avg. L PE 4.00
Forecast High Pr 3.04 Forecast Low Pr 1.90 Recent Severe Low Pr 1.90
Current price is at Middle 1/3 of valuation zone.

RISK: Upside 63% Downside 37%
One Year Appreciation Potential 6% Avg. yield 2%
Avg. Total Annual Potential Return (over next 5 years) 8%

CPE/SPE 0.94 P/NTA 1.53 NTA 1.51 SPE 4.50 Rational Pr 2.48



Decision:
Already Owned: Buy Hold Sell Filed Review (future acq): Filed Discard: Filed
Guide: Valuation zones Lower 1/3 Buy Mid. 1/3 Maybe Upper 1/3 Sell

Aim:
To Buy a bargain: Buy at Lower 1/3 of Valuation Zone
To Minimise risk of Loss: Buy when risk is low i.e UPSIDE GAIN > 75% OR DOWNSIDE RISK <25%
To Double every 5 years: Seek for POTENTIAL RETURN of > 15%/yr.
To Prevent Loss: Sell immediately when fundamentals deteriorate
To Maximise Gain & Reduce Loss: Sell when CPE/SPE > 1.5, when in Upper 1/3 of Valuation Zone & Returns < 15%/yr

----

Prospects

Given that offshore shipbuilding activity is slowly perking up, Coastal Group has modest optimism of clinching new contracts to add to its vessel sales order book. The Group also expects steady income stream from its ship chartering division through continued utilisation of the Group’s fleet in coastal transportation and in various oil and gas support services. It is anticipated that future participation in the offshore structure fabrication business will be earnings-accretive and reduce the Group’s dependency on shipbuilding orders. The Group’s strong financial footing paired with low level of borrowings will further shield it from major financial distress.

With more deepwater oilfield developments off the western coast of Sabah coming on stream, Coastal Group is looking to enter a new phase of growth by diversifying into offshore structure fabrication to gain industry knowledge of the oil and gas engineering, procurement and construction business. Central to this plan are the Group’s strong foundation in marine structures and the geographical proximity of the Group’s 52-acre fabrication yard to the heart of Sabah’s growing oil and gas activities. Upgrading of infrastructure is currently at advanced stage to expand the fabrication yard’s capabilities.

Oil prices have risen above USD85 a barrel as improvement in the manufacturing sector in the U.S. and China, the world’s two biggest economies, boosted optimism that growth in global oil consumption will remain strong. Also, the U.S. Federal Reserve’s second round of quantitative easing to unleash more dollar into the economy had weakened the U.S currency’s value, which in turn made the dollar-denominated crude oil relatively cheaper for buyers using other currencies. This latest oil price development in the current environment of depleting oil reserves and increasing long-term energy demand will drive up offshore exploration, development and production activities going forward. The resultant capital investments in upstream oil and gas sector would spur additional requirements for offshore support vessels (“OSVs”).

Barring adverse changes in the global and regional economic outlook, Coastal Group is on track to deliver solid revenue and earnings growth in 2010, backed by the strong revenue visibility of the shipbuilding division’s vessel sales order book.

The Mood of Investors

Airtime: Fri. Nov. 19 2010
Sharon Sager of UBS Private Wealth Management tells CNBC's Maria Bartiromo how she's developing strategies for clients who have become more conservative.


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