A quick look at Nam Fatt - PN17 (1.5.2010)

Nam Fatt Corporation Berhad Company

Business Description:
Nam Fatt Corporation Berhad. The Group's principal activities are constructing bridges, heavy concrete foundations, roads, factory complexes and other similar construction activities. Other activities include building, maintaining and operating the Jiangjin Bridge on a built-operate-transfer basis, constructing projects in the oil, gas and petrochemical related industry, steel fabrication, structural steel engineering, manufacturing and trading steel doors and industrial boilers, researching, developing, producing, selling, installing and maintaining metal roofing and wall cladding, manufacturing galvanised iron roofing sheets, property development; owning and developing golf resort and its recreational amenities, property developer and property manager, resort and development, managing a golf resort and recreational clubs and investment holding. The Group operates in Malaysia, Africa and Asia.

Currency: Malaysian Ringgits
Market Cap: 28,763,370
Fiscal Yr Ends: December
Shares Outstanding: 319,593,000
Share Type: Ordinary
Closely Held Shares: 35,229,890 (11%)

16/03/2010
NAMFATT - New admission into PN17

Wright Quality Rating: LCNN Rating Explanations








A quick look at Nam Fatt - PN 17 (1.5.2010)
http://spreadsheets.google.com/pub?key=tAskkNgs3uU8eyk_WrTFcSw&output=html

Some RED FLAGS (hindsight) in the accounts of Nam Fatt at end of 2008 to note are:

Share price 
RM 0.19  or market capitalisation of 34.16 m. (The price rose to RM 0.30 from March 2009 and dropped precipitously to RM 0.09 when the news of the company's financial problem was known.)

Income statement
Negative earnings -14.09 m
Interest expense -18.73 m

Cash flow statement
Negative CFO  -41.27 m
Neglible CFI
Negative FCF  -44.10 m
CFF  -34.11 m (Borrowings increased significantly)

Balance sheet
Total Debt 499.69 m
Account Payables' Days 206.58 days  (This then increased to 714.24 days in end of 2009)
Interest cover 0.66
Total Debt/Equity 0.82
Net Debt to EBITDA 26.64  (Ideally, this should be less than 5.  Bankers do not lend if this ratio exceed this figure.)

Of interest, these commonly used parameters DID NOT raise any red flags at end of 2008:

Equity 607.44 m (What is the actual value?!)
NAV 1.59
Current ratio 1.54
Quick ratio 1.51
Account Payables' Days 82.22 days (Though this subsequently ballooned to 307.08 days in end of 2009)
LTD/Equity 0.34
Dividend 2.08 m


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Asset valuation approach in liquidation

Liquidation value is the net realizable amount that could be generated by selling a company’s assets and discharging all its liabilities.

When valuing a business for liquidation, most assets are marked down and the liabilities treated at face value. 

• Cash and securities are taken at face value.
• Receivables require a small discount (perhaps 15 percent to 25 percent off).
• Inventory a larger discount (perhaps 50 percent to 75 percent off).
• Fixed assets at least as much as inventory.
• Any goodwill should probably be ignored.
• Most intangible assets and prepaid expenses should beignored.

The residual is the shareholders’ take.

This valuation method is useful for companies being dissolved.

Buffett (2000): Derivatives - Weapons of Mass Destruction

Buffett's letter for the year 2000 discussed his views on tendencies of certain CEOs to make lofty projections of their companies' future earnings potential and the risks associated with such projections. Let us now move on to accumulating wisdom from the letter for the year 2002*.

In his 2002 letter, the master has devoted a fair deal of time and space to the topic of derivatives. Infact, the master's prognosis on the risks associated with derivatives come so perilously close to describing the current US sub-prime crisis that one would be forgiven for assuming that Mr. Buffett has access to a crystal ball.

Derivatives: Devious or delightful?

Much like most of the other inventions, derivatives too, were created for the benefit of mankind in general and commerce and trade in particular. It was especially helpful to smaller firms that did not have the capacity to bear big risks. Derivatives enabled such firms to transfer some of these risks to stronger, more mature hands. But again, like most of the other inventions, derivatives can also be put to misuse. Abuse of the same, as has become more frequent these days, could lead to dire consequences. Furthermore, the very nature of a derivatives contract makes it risky to the users. This is because unless accompanied by collaterals or guarantees, the final value in a contract depends on the payment ability of the parties involved.

The master is also of the opinion that since a lot of derivatives contract don't expire for years and since they have to be provided for in a company's accounts, manipulation could become a serious threat. For e.g., incorporating overly optimistic projections into a contract that does not expire until say 2018 could lead to inflated earnings currently. However, if the projections fail to materialize, they could lead to potential losses in the future. In an era of short-term profit targets and incentives, such measures result in higher CEO salaries. But they hurt long-term shareholder value creation.

This is what the master has to say on the issue:

"Errors will usually be honest, reflecting only the human tendency to take an optimistic view of one's commitments. But the parties to derivatives also have enormous incentives to cheat in accounting for them. Those who trade derivatives are usually paid (in whole or part) on "earnings" calculated by mark-to-market accounting. But often there is no real market (think about our contract involving twins) and "mark-to-model" is utilized. This substitution can bring on large-scale mischief. As a general rule, contracts involving multiple reference items and distant settlement dates increase the opportunities for counterparties to use fanciful assumptions."

He further goes on to add "The two parties to the contract might well use differing models allowing both to show substantial profits for many years. In extreme cases, mark-to-model degenerates into what I would call mark-to-myth."

Highlighting other dangers of derivatives, the master finally goes on to say something that if central banks around the world, importantly the US Fed, would have paid proper heed to, it could have been probably able to avert or maybe minimize the enormous damage that is being caused by the US sub-prime crisis.

We conclude the article with the reproduction of that comment.

Weapons of mass destruction

The master says, "The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Knowledge of how dangerous they are has already permeated the electricity and gas businesses, in which the eruption of major troubles caused the use of derivatives to diminish dramatically. Elsewhere, however, the derivatives business continues to expand unchecked. Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts."

Buffett (2000): The risks associated with the twin issues of CEO's lofty projections and sustainable long-term profit growth.

Warren Buffett talked about wealth transfers to greedy promoters during IPOs in the letter for the year 2000. Let us go further down the same letter and see what other investment wisdom the master has to offer.

The master's macro bet

Usually, Buffett refrains from making precise comments about the future especially at the macro level. But if he is willing to bet a large sum on the likeliness of an event happening, then indeed we must sit up and take notice. In the letter for the year 2000, the master has made one such prediction and was willing to bet a large sum on it. The prediction was about the magnitude of growth in profits that would take place among the 200 most profitable companies in the US at that time. Since the master does not believe in short term predictions, the time horizon that was assumed was ten years.

The CEO with a crystal ball

The letter for the year 2000 came out at a time when the practice of a CEO predicting the growth rate of his company publicly was becoming commonplace. Although Buffett did not have an issue with a CEO setting internal goals and even making public some broad assumptions with proper warnings thrown in, it did annoy him when CEOs started making lofty assumptions about future profit growth.

This is because the likelihood of the CEO meeting his aggressive targets year after year on a consistent basis and well into the future was very low and hence this amounted to misleading the investors. After having spent decades researching and analyzing companies, the master had come to the conclusion that there are indeed a very small number of large businesses that could grow its per share earnings by 15% annually over a period of 10 years. Infact, as mentioned in the above paragraph, the master was even willing a bet a large sum on it.

The reasons may not be difficult to find. In free markets, the intensity of competition is so high that it is very difficult for profitable players to maintain high growth rates for consistently long periods of time. Unless the business is endowed with some extremely strong competitive advantages, competition is likely to nibble away at its market share and cut into its profit margins, thus making high growth rates difficult.

Let us hear in the master's own words his take on the twin issues of

• CEO's lofty projections and 
• sustainable long-term profit growth.

The golden words

"Charlie and I think it is both deceptive and dangerous for CEOs to predict growth rates for their companies. They are, of course, frequently egged on to do so by both analysts and their own investor relations departments. They should resist, however, because too often these predictions lead to trouble."

He further adds, "It's fine for a CEO to have his own internal goals and, in our view, it's even appropriate for the CEO to publicly express some hopes about the future, if these expectations are accompanied by sensible caveats. But for a major corporation to predict that its per-share earnings will grow over the long term at, say, 15% annually is to court trouble."

The master reasons, "That's true because a growth rate of that magnitude can only be maintained by a very small percentage of large businesses. Here's a test: Examine the record of, say, the 200 highest earning companies from 1970 or 1980 and tabulate how many have increased per-share earnings by 15% annually since those dates. You will find that only a handful have. I would wager you a very significant sum that fewer than 10 of the 200 most profitable companies in 2000 will attain 15% annual growth in earnings-per-share over the next 20 years."

Adding further, the master says, "The problem arising from lofty predictions is not just that they spread unwarranted optimism. Even more troublesome is the fact that they corrode CEO behavior. Over the years, Charlie and I have observed many instances in which CEOs engaged in uneconomic operating maneuvers so that they could meet earnings targets they had announced. Worse still, after exhausting all that operating acrobatics would do, they sometimes played a wide variety of accounting games to "make the numbers." These accounting shenanigans have a way of snowballing: Once a company moves earnings from one period to another, operating shortfalls that occur thereafter require it to engage in further accounting maneuvers that must be even more "heroic." These can turn fudging into fraud. (More money, it has been noted, has been stolen with the point of a pen than at the point of a gun.)"

Buffett (2000): IPOs usually result in transfer of wealth and that too on a massive scale from the ignorant shareholders to greedy promoters.

In Warren Buffett's letter for the year 2000, he talked about how investors, in their irrational exuberance, tend to gravitate more and more towards speculation rather than investment. Let us go further down the same letter and see what other investment wisdom he has to offer.

IPO – It’s Probably Overpriced

If it is out there in the corporate world, it has to be in the master's annual letters. Over the years, Mr. Buffett has done an excellent job of giving his own unique perspective of the happenings in the business world. Whatever be the flavour of the season, you can rest assured that it will be covered in the master's letters. Since the letter for the year 2000 was preceded by the famous 'dotcom bubble' and the flurry of IPOs associated with it, the master has spent a fair deal of time in trying to give his opinion on the same. And as with other gems from his larder of wisdom, strict adherence here too could do investors a world of good.

On IPOs, the master goes on to say that while he has no issues with the ones that create wealth for shareholders, unfortunately that was not the case with quite a few of them that hit the markets during the dotcom boom. Unlike trading in the stock markets, IPOs usually result in transfer of wealth and that too on a massive scale from the ignorant shareholders to greedy promoters. The master feels so because taking advantage of the good sentiments prevailing in the markets, a lot of owners put their company on the blocks not only at expensive valuations that leave little upside for shareholders but most of these companies end up destroying shareholder wealth.

Hence, while investing in IPOs, two things need to be closely tracked. 

• One, the issue is not priced at exorbitant valuation and 
• second, the company under consideration does have a good track record of creating shareholder wealth over a sustained period of time. 

Thus, if an IPO is only trying to sell you promises and nothing else, chances are that you are playing a small role in making the promoter, Mr. Money Bags.

Master's golden words

Let us hear in the master's own words his take on the issue. He says, "We readily acknowledge that there has been a huge amount of true value created in the past decade by new or young businesses, and that there is much more to come. But value is destroyed, not created, by any business that loses money over its lifetime, no matter how high its interim valuation may get."

He further adds, "What actually occurs in these cases is wealth transfer, often on a massive scale. By shamelessly merchandising birdless bushes, promoters have in recent years moved billions of dollars from the pockets of the public to their own purses (and to those of their friends and associates). The fact is that a bubble market has allowed the creation of bubble companies, entities designed more with an eye to making money off investors rather than for them. Too often, an IPO, not profits, was the primary goal of a company's promoters. At bottom, the ‘business model’ for these companies has been the old-fashioned chain letter, for which many fee-hungry investment bankers acted as eager postmen."

To conclude, the master says, "But a pin lies in wait for every bubble. And when the two eventually meet, a new wave of investors learns some very old lessons: 

• First, many in Wall Street - a community in which quality control is not prized - will sell investors anything they will buy. 
• Second, speculation is most dangerous when it looks easiest."

Buffett (2000): Discounted cash flow approach to valuations is the single most important tool in valuing assets of any kind. 'A bird in the hand is worth two in the bush.'

Warren Buffett described his reluctance to invest in tech stocks and the key reasons behind the same (in his 1999 letter to shareholders). Let us move further to the next year and see what the master has to offer in terms of investment wisdom at the turn of the millennium i.e., in his letter from the year 2000.

Buffett's acquisition spree

The year 2000 was the year that could easily go down in Berkshire's history as the ‘year of acquisitions’. Sensing favorable market conditions, the master completed two transactions that were initiated in 1999 and bought another six businesses during 2000, taking the total to eight. This steady stream of acquisitions is perhaps what inspired him to once again bring his theory of valuations out from the closet and present it before his shareholders. However, while the underlying principles of his theory remained the same, it came cloaked in a different analogy.

What Aesop taught Buffett?

This time, the master has turned to Aesop for help and likens the process of performing valuations to his famous saying - 'a bird in the hand is worth two in the bush'. Without getting too much into details, suffice to say that the master reaffirms his faith in the discounted cash flow approach to valuations and believes it to be the single most important tool in valuing assets of any kind, right from stocks to as exotic assets as royalties and lottery tickets.

Let us read the master's own words on his thoughts -

"The formula we use for evaluating stocks and businesses is identical. Indeed, the formula for valuing all assets that are purchased for financial gain has been unchanged since it was first laid out by a very smart man in about 600 B.C. (though he wasn't smart enough to know it was 600 B.C.)."

"The oracle was Aesop and his enduring, though somewhat incomplete, investment insight was ‘a bird in the hand is worth two in the bush’. To flesh out this principle, you must answer only three questions. 

• How certain are you that there are indeed birds in the bush? 
• When will they emerge and how many will there be? 
• What is the risk-free interest rate (which we consider to be the yield on long-term US bonds)? 

If you can answer these three questions, you will know the maximum value of the bush 3/4 and the maximum number of the birds you now possess that should be offered for it. And, of course, don't literally think birds. Think dollars."

"Aesop's investment axiom, thus expanded and converted into dollars, is immutable. It applies to outlays for farms, oil royalties, bonds, stocks, lottery tickets, and manufacturing plants. And neither the advent of the steam engine, the harnessing of electricity nor the creation of the automobile changed the formula one iota 3/4 nor will the Internet. Just insert the correct numbers, and you can rank the attractiveness of all possible uses of capital throughout the universe."

Buffett (1999): Regardless of the environment and the pressure one has, it always make sense to stick to one's circle of competence. "If your facts and reasoning are right, you don't have to worry about anybody else."

Warren Buffett would much prefer an environment of lower prices of equities than a higher one. We would now have a look on what the master has to offer in his 1999* letter to shareholders.

Taking leaf from history

If gold in the 1970s and the Japanese stock markets in the 1980s was one's ticket to becoming a millionaire, then one wouldn't have gone too wrong investing in tech stocks or to be more specific, the NASDAQ in the 1990s. Not surprisingly then, investors who did not have a single tech stock in their portfolios would have had a high probability of lagging the overall markets. The master's aversion to tech stocks is now legendary and he too was caught at the wrong end of the tech stick. While he did reasonably well in the earlier part of the 90s decade, in the year 1999, the numbers finally caught up with him and he recorded, what he himself termed the worst absolute performance of his tenure. It was not as if the master made some big mistakes but some of the businesses that his investment vehicle operated had a disappointing year and the problem got magnified because of the great success stories elsewhere, notably the tech sector.

It is seldom that investors of caliber of Buffett go wrong and when they do, it does provide a lot of fodder for the media. Quite expectedly then, magazines and newspapers pounced on the story and titles like 'Has the Buffett era ended?’ or ‘What's wrong Mr. Buffett?’ were not very uncommon to find. The master however refused to buckle under pressure and maybe followed the dictum of his mentor Benjamin Graham who had once famously said - "You're neither right nor wrong because other people agree with you. You're right because your facts are right and your reasoning is right-and that's the only thing that makes you right. And if your facts and reasoning are right, you don't have to worry about anybody else."

The master had reasoned that tech stocks did not come inside his circle of competence and he had hard time valuing them as he was not aware what such businesses would look like 5 to 10 years down the line. Investors can indeed draw one big lesson from this event. Regardless of the environment and the pressure one has, it always make sense to stick to one's circle of competence. Only those people who are able to do this on a consistent basis can increase their chances of earning attractive returns on their investments on a consistent basis.

And was the master proved right? Indeed! Other investors lapped up tech stocks on the premise that although they did not understand the business fully they would surely find another buyer to whom they will sell. Although this trend did last for a few years, when the bubble burst, it left a lot of financial destruction in its wake. The master surely had the last laugh.

While there have been a lot of theories floating around on the master's aversion to tech stocks, in the letter for the year 1999, he has laid out a few reasons on why he would not consider investing in tech stocks. Let us read the master's own words what he has to say on the issue.

Buffett in his own words


"Our problem - which we can't solve by studying up - is that we have no insights into which participants in the tech field possess a truly durable competitive advantage. Our lack of tech insights, we should add, does not distress us. After all, there are a great many business areas in which Charlie (Buffett’s business partner) and I have no special capital-allocation expertise. For instance, we bring nothing to the table when it comes to evaluating patents, manufacturing processes or geological prospects. So we simply don't get into judgments in those fields.”

He further says, “If we have a strength, it is in recognizing when we are operating well within our circle of competence and when we are approaching the perimeter. Predicting the long-term economics of companies that operate in fast-changing industries is simply far beyond our perimeter. If others claim predictive skill in those industries - and seem to have their claims validated by the behavior of the stock market - we neither envy nor emulate them. Instead, we just stick with what we understand. If we stray, we will have done so inadvertently, not because we got restless and substituted hope for rationality. Fortunately, it's almost certain there will be opportunities from time to time for Berkshire to do well within the circle we've staked out."

Buffett (1997): Would much prefer an environment of lower prices of equities than a higher one.

"Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices."




Warren Buffett talked about the discipline in investing by using a baseball analogy in his 1997 letter to shareholders. Let us go further down the same letter to see what other investment wisdom he has to offer.

Have you ever wondered, "Why is it that whenever departmental or garment stores announce their yearly sales, people flock to these places and purchase goods by the truckloads but the very same people will not put a dime when similar situation plays itself out in the stock market." Indeed, whenever one is confident of the future direction of the economy, like we currently are of India, corrections of big magnitudes in the stock market can be viewed as an excellent buying opportunity. This is because just as in the case of departmental or grocery stores, a large number of stocks are available at 'sale' during these corrections and hence, one should not let go of such opportunities without making huge purchases. This is exactly what the master has to say through some of the comments in his 1997 letter to shareholders that we have reproduced below.

"A short quiz: If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef? Likewise, if you are going to buy a car from time to time but are not an auto manufacturer, should you prefer higher or lower car prices? These questions, of course, answer themselves."

"But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the "hamburgers" they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices."

Simple isn't it! If someone is expected to be a buyer of certain goods over the course of the next few years, he or she will definitely be elated if prices of the goods fall. So why have a different attitude while making stock purchases. Having such frames of reference in mind helps one avoid the herd mentality and make rational decisions. Hence, the next time the stock market undergoes a big correction; think of it as one of those sales where good quality stocks are available at attractive prices and then it will certainly be difficult for you to not to make an investment decision.

Buffett (1997): "All men's miseries derive from not being able to sit quiet in a room alone."

Warren Buffett's 1996 letter to shareholders provided advice to investors who want to build their own portfolios. Let us now proceed to the letter from the year 1997 and see what investing gems lie hidden in it.

A mathematician’s wisdom true to investing

"All men's miseries derive from not being able to sit quiet in a room alone", said the noted mathematician Blaise Pascal. These words ring true in the world of investing if not anywhere else. As much as the fundamentals of the company are important while making investment decisions, key consideration has to be given to the price as well. For even the best of businesses bought at expensive valuations are not likely to lead to attractive returns.

This is where discipline plays a key role. In an environment where prices are rising and each man and his aunt is making money, it is very difficult to remain sane especially with regards to valuations. As the master himself admits that although it is not possible to predict when prices will come down and to what extent, one can do a world of good to one's investment returns if good businesses are bought at decent prices. In fact, the master is believed to have waited as much as few decades for some of his investments to come down at valuations that he was comfortable with and the ones that he believed incorporated a sufficient margin of safety.

What’s your margin of safety?

So, what is the master preaching?

In his 1997 letter to shareholders, Warren Buffett has compared this predicament to a game of baseball and this is what he has to say on the issue:

Though we are delighted with what we own, we are not pleased with our prospects for committing incoming funds. Prices are high for both businesses and stocks. That does not mean that the prices of either will fall – we have absolutely no view on that matter – but it does mean that we get relatively little in prospective earnings when we commit fresh money.”

He further states, “Under these circumstances, we try to exert a Ted Williams kind of discipline. In his book ‘The Science of Hitting’, Ted explains that he carved the strike zone into 77 cells, each the size of a baseball. Swinging only at balls in his ‘best’ cell, he knew, would allow him to bat .400; reaching for balls in his ‘worst’ spot, the low outside corner of the strike zone, would reduce him to .230. In other words, waiting for the fat pitch would mean a trip to the Hall of Fame; swinging indiscriminately would mean a ticket to the minors.”

Discipline in investing is the key

Finally, he asserts, “If they are in the strike zone at all, the business ‘pitches’ we now see are just catching the lower outside corner. If we swing, we will be locked into low returns. But if we let all of today's balls go by, there can be no assurance that the next ones we see will be more to our liking. Perhaps the attractive prices of the past were the aberrations, not the full prices of today. Unlike Ted, we can't be called out if we resist three pitches that are barely in the strike zone; nevertheless, just standing there, day after day, with my bat on my shoulder is not my idea of fun.”

Now, Mr Tan Teng Boo has so many things to sell you other than his newsletter.

Tan Teng Boo’s i Capital Global Fund & i Capital International Value Fund Review (And An Update to ICAP)

Apr 29th, 2010 by AhYap

A few years ago, Tan Teng Boo had only one thing to sell you, his newsletter.

Later he launched his first public fund known as theiCapital.biz Berhad (ICAP) listed in KLSE which I did a long review long long time ago. [iCAP review]

But last few years, he subsequently launched 2 other funds to sell to you, namely the iCapital Global Fund and theiCapital International Value Fund.

Due the the iCapital Global Fund big minimum investment requirement (USD200k!), many are kept out of the boat and so he launched his “International” fund in Australia later that requires only AUD20,000 minimum, so more people can join the “global investing” boat.

Now, Mr Tan has so many things to sell you other than his newsletter.

Some of these stuffs are good stuffs to buy, some are …

Read more:  at Ah Yap's Blog


Related:

A reputation build over 30 years can be destroyed in 5 minutes.

Investment Policies (Based on Benjamin Graham)

Quote: 'Profit from the information and inefficiencies of the market'

A quick look at Parkson (30.4.2010)

Parkson Holdings Berhad Company

Business Description:
Parkson Holdings Berhad. The Group's principal activity is operating department stores. It also operates as an investment holding. As 30-06-2009, the Group has 42 stores in China, 33 stores in Malaysia and five stores in Vietnam. Operations are carried out in Malaysia, the People's Republic of China, Vietnam and other countries.

Wright Quality Rating: CCNN Rating Explanations








A quick look at Parkson (30.4.2010)
http://spreadsheets.google.com/pub?key=t89GdOvB0Z7c0P09gMecXmg&output=html

A quick look at Dutch Lady (30.4.2010)

Dutch Lady Milk Industries Berhad Company

Business Description:
Dutch Lady Milk Industries Berhad. The Company's principal activities are manufacturing and distributing sweetened condensed milk, milk powder, dairy products and fruit juice drinks. Its dairy products are distributed under the brand names of Dutch Lady, Frisian Flag, Frisolac, Completa, Calcimex and Joy. Operations are carried out in Malaysia. It distributes its products within the domestic market and to overseas markets.

Wright Quality Rating: DAA8 Rating Explanations




A quick look at Dutch Lady (30.4.2010)
http://spreadsheets.google.com/pub?key=teeozl-_jloC9wXtgg35Puw&output=html

A quick look at TMC Life (29.4.2010)

TMC Life Sciences Berhad Company

Business Description:
TMC Life Sciences Berhad. The Group's principal activities are providing Gynaecological and fertility problem management services. Operations are carried out in Malaysia.

Wright Quality Rating: LCNN Rating Explanations



A quick look at TMC Life (29.4.2010)
http://spreadsheets.google.com/pub?key=tZErp0UQF1zpu_9EEqrifSQ&output=html

A quick look at Notion Vtec (30.4.2010)

Notion Vtec Berhad Company

Business Description:
Notion Vtec Berhad. The Group's principal activity is manufacturing high volume precision components and tools. Other activities include providing management services and investment holding. Operations are carried out principally in Malaysia.

Wright Quality Rating: DBNN Rating Explanations


A quick look at Notion Vtec (30.4.2010)
http://spreadsheets.google.com/pub?key=th-zb5N9aeSPqWRxjfjDsnA&output=html

A quick look at DXN (30.4.2010)

DXN Holdings Bhd Company

Business Description:
DXN Holdings Bhd. The Group's principal activities are manufacturing and selling health supplements and other products on a multi-level marketing basis. Other activities include property development; manufacture and sale of biodiesel and other incidental products; travel agent and tour operator; information technology consultancy and advisory, and wholesale and retail of stationeries, household items, gifts and accessories. It is also involved in the provision of management services and investment holding. Operations are carried out in Malaysia, India, the Philippines, the United States of America, Australia, United Arab Emirates, Thailand, Mexico and other countries.

Wright Quality Rating: LBC0 Rating Explanations


A quick look at DXN (30.4.2010)
http://spreadsheets.google.com/pub?key=tNWqXrnJuK8PSKHQj0su_UA&output=html

A quick look at KPJ (30.4.2010)

KPJ Healthcare Berhad Company

Business Description:
KPJ Healthcare Berhad(KPJ). The Group's principal activity is the operation of specialist hospitals. Other activities include investment holding, provision of management services, project management and engineering maintenance services for specialist hospital, pathology and laboratory services, marketing and distribution of pharmaceutical, medical and consumer healthcare products and provision of information technology related services, operation of private nursing college and rental of software. It operates in Malaysia ,Singapore and Indonesia.

Wright Quality Rating: CBNN Rating Explanations




A quick look at KPJ (30.4.2010)
http://spreadsheets.google.com/pub?key=topP51LjhiJSMZi6ki0eWQA&output=html

A quick look at Chin Teck Plantations (30.4.2010)

Chin Teck Plantations Berhad Company

Business Description:
Chin Teck Plantations Berhad. The Group's principal activities are cultivating oil palms, and producing and selling fresh fruits bunches, crude palm oil and palm kernel. It also operates as an investment holding company. As at 31-08-2009, the Group has an additional 856 hectares of old and low yield palms that were planted, which results to 1,433 hectares of replanted and immature area. Operations are carried out wholly in Malaysia.

Wright Quality Rating: DAD8 Rating Explanations



A quick look at Chin Teck Plantations (30.4.2010)
http://spreadsheets.google.com/pub?key=ts2ELx0y0T1PyujEygq8qNA&output=html

Transmile still grappling with turnaround

Transmile still grappling with turnaround

Transmile Group MD Liu Tai Shin (right), and Group COO Robert Hyslop at the press conference today. — Picture by Choo Choy May

By Lee Wei Lian

KUALA LUMPUR, April 29 — Cargo airline Transmile Group Bhd is working on resolving its debt woes and was given till April 16 to settle its debts with Malaysian Trustees Bhd (MTB), failing which the latter would seek a winding up petition.

Transmile Managing Director Liu Tai Shin said today that although the April 16 deadline had lapsed, the company had yet to receive a winding up notice from MTB.

“We’ve not received any further notice,” he told reporters after the company’s annual general meeting today.

Transmile’s debts amounting to RM532 million with some 20 local and foreign banks have been in default for 30 months and Liu said the company is working with advisors to restructure the debt.

Liu said that Transmile’s focus will be on resolving its debt issues.

“Our target is to get rid of all our debt problems,” he said.

He also said that the lawsuit filed against the former management that was announced on Tuesday was partly to help the company regain credibility.

“We have a bad reputation which we need to address,” he said. “It is not about getting money back. From the company’s perspective, we need a closure.”

Transmile came into the spotlight after an accounting scandal was exposed in mid-2007 which resulted in a steep drop in the company’s share price.

The company said on Tuesday that its board of directors is suing former chief executive officer Gan Boon Aun and former chief financial officer Lo Chok Ping for breaching their duties by grossly overstating the company’s revenue.

Liu declined to give a timeframe on when Transmile — which recorded a pre-tax loss of RM270.6 million in 2009 as compared with a loss of RM121.2 million in 2008 — is expected to be turned around.

He said that the company faced difficulty in disposing four planes worth an estimated RM386 million as potential customers faced troubles in obtaining financing.

“We have four planes on the tarmac that are not flying,” he said.

In terms of expansion plans, the company is branching out to the oil and gas sector, and started a Singapore to Labuan service which it hopes will help it return to profitability.

It also intends to open a new route to Balikpapan in Kalimantan.

In Transmile’s press statement, Liu said: “Despite major issues faced we are still doing business and developing new routes to strengthen the group’s presence in the region and generate revenue.”

LPI

A quick look at Unisem (29.4.2010)

Unisem (M) Berhad Company

Business Description:

Unisem (M) Berhad. The Group's principal activities are manufacturing and selling semiconductor devices and other related services which includes principally packaging and test services . The Group operates in Malaysia, the United Kingdom, the People's Republic of China, Indonesia and United States of America.

Wright Quality Rating: CBC9 Rating Explanations

Announcement Date		Date of Change		Shrs Acquired/ (Disposed)		Director/Substantial Shareholder	Shrs Held After Change
20-Apr-10		16-Apr-10		370,000		John Chia Sin Tet	165,972,700
14-Apr-10		13-Apr-10		1,430,000		John Chia Sin Tet	165,602,700
29-Mar-10		25-Mar-10		(1,000,000)		John Chia Sin Tet	164,172,700
29-Mar-10		25-Mar-10		(1,000,000)		Yen Woon @ Low Sau Chee	135,420,000
25-Mar-10		24-Mar-10		(1,000,000)		John Chia Sin Tet	165,172,700
25-Mar-10		24-Mar-10		(1,000,000)		Yen Woon @ Low Sau Chee	136,420,000
09-Mar-10		05-Mar-10		(1,000,000)		Lembaga Tabung Haji	28,121,500

A quick look at Unisem (29.4.2010)
http://spreadsheets.google.com/pub?key=tBPdagB5NlJavnA0VzMF6Kw&output=html

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Unisem looks to better performance this year

By V. Sivaji
22.3.2010

Unisem (M) Bhd, the country's leading semiconductor packaging and test services company, expects revenue to grow 44 per cent this year, bringing performance back to pre-crisis levels, as demand for semiconductor equipment recovers.

It is targeting RM1.5 billion revenue for this year. In the financial year ended December 31 2009, revenue declined 16 per cent to RM1.04 billion from RM1.23 billion previously.

However, its net profit surged more than threefold to RM61.8 million last year compared with RM19.8 million in 2008.

Unisem chairman and managing director John Chia anticipates the Asia-Pacific region to be the biggest market for the semiconductor industry, with Western economies and India lending strong support.

"Big corporations, which held back spending on upgrading of their computer systems last year, will start spending this year," Chia said when met at Unisem's Employees' Service Award 2008/09 ceremony in Ipoh.
The company expects half of its revenue to come from its factory in Ipoh, with the rest contributed by facilities in Chengdu (China), Batam (Indonesia), Wales (the UK) and Sunnyvale (California).

The Ipoh plant is currently operating at maximum capacity, with a workforce of over 4,400.

"We intend to employ another 300 to 400 workers to sustain our production needs and meet maximum capacity. What a difference a year has made as 2009 was a difficult year during which stringent cost-control measures were placed. But we managed to get through the rough patch," Chia said.

"Throughout 2009 we did not retrench any of our employees, but took prudent measures to control our costs and overheads."

Chia is confident that all of Unisem's plants will see positive growth this year, projecting its Ipoh plant to lead the way with 40-50 per cent growth.

"Even though 2009 was sluggish for many, our plant in Chengdu saw growth of 60 per cent. And, this year, we expect 100 per cent growth coupled with China's economic growth and stimulus packages."

Chia said the workforce in China has increased from 800 to 1,500, while its facility in Batam is expected to see 40-50 per cent increase this year.

Unisem has set up a subsidiary, Unisem Advanced Technologies Sdn Bhd (UAT), to offer "wafer bumping" whereby customers will receive seamless integration of various services, including wafer backgrinding, wafer probe, dicing, final test and flip-chip assembly.

"We are now offering services not offered by our competitors, thus, putting Unisem in a stronger position," said Chia.

An Owner's Manual: Owner-related Business Principle by Warren Buffett

In June 1996, Berkshire’s Chairman, Warren E. Buffett, issued a booklet entitled “An Owner’s Manual*” to Berkshire’s Class A and Class B shareholders. The purpose of the manual was to explain Berkshire’s broad economic principles of operation.

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