Hong Chew Eu

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Retired Group CEO of i-Bhd. Now a full time blogger

Joined Aug 2020

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A month ago, I wrote about the price spike in Heitech Padu and wondered whether it was going to be some news that would provide a quantum leap in business. https://www.i4value.asia/2022/05/heitech-padu-my-investment-dilemma.html#more

The price had jumped from about RM 1.00 per share to RM 1.15 per share. I had some Heitech shares that I bought sometime back at about RM 1.04 per share and I told myself to exit when the price went up to RM 1.30 per share.

Unfortunately, the high price did not sustain fell to below RM 1.00 per share a week later. I figured that the price spike was just some speculative play. Then just before the Lunar New Year it spiked again to RM 1.20.

This time instead of listening to myself to hold until the price went up to RM 1.30, I thought that I better not miss this round of speculative play. So last Fri I sold it at RM 1.20 per share.

You can imagine my disappointment when the price went as high at RM 1.56 yesterday. I left RM 0.36 per share on the table. What a idiot. Can anyone offer an advise on what to do the next time?
2 days · translate
Pintaras Jaya incurred a loss in 2023 but this is due to a “perfect storm” of lower revenue and higher costs. Its performance in Malaysia over the past few years was affected by the slowdown in the property and construction sector. As such the bulk of the contribution over the past few years has been from its Singapore operations.
https://i.postimg.cc/DzJd8mDL/Pintaras-valuation.png
As the leading foundation and sub-structure contractor in Malaysia, I expect the
Group to rebuild the Malaysian business. When this happens, I expect the market to re-rate it.

For more insights refer to page 22 of https://notice.shareinvestor.com/email/newsletter/invest/pdf/Vol195_Invest-16Feb.pdf
1 week · translate
AmBank is one of the smaller Bursa banks in terms of total assets or market cap. For those of you who have been following the 1MDB case, Ambank took a hit in 2021 to “settle the 1 MSB issues”. You can see this clearly in its ROE trends. https://i.postimg.cc/DyN6wjBC/Ambank-ROE-NIM.png

Notwithstanding the IMDB issues, its return is slightly lower than the sector median. One of the reason for this is its lower Net Interest Margin (NIM) relative to the sector median. I am sure this has nothing to do with 1MDB

From a relative performance perspective, Ambank did better than my reference bank - Affin. Of course the share price of Affin had move recently due to the news about the Sarawak Stage govt increasing its stake. https://www.i4value.asia/2024/02/is-affin-value-trap.html#more

But there is no such news catalyst for Ambank. So Ambank will have to improve its returns and do better than the sector median for its share price to move higher. Can they do this?
1 week · translate
Alliance Bank is the smallest Bursa Malaysia bank. While smaller than Affin Bank, its performance as measured by the ROE is far better than that of Affin. https://www.i4value.asia/2024/02/is-affin-value-trap.html#more
When you look at the ROE trend of Alliance, you can see that it had recovered from the Covid-19 years and overtaken its pre-Covid-19 peak But the market price has yet to reflect the better performance. https://i.postimg.cc/fyVxJQ5N/Alliance-bank.png
Does the market know something that I don’t or it it merely being irrational?
2 weeks · translate
If you are looking for performance among the Bursa banks, then of course you would chose PBBank as it had the better ROE trends. You can see from the chart that Affin has the worse ROE trend.
https://i.postimg.cc/L5VcCMRP/PBB-vs-Affin.png
But if you are looking to make money, shouldn’t the focus be on companies trading at a discount to its value with some catalyst? The asset value or book value of banks is a good indication of their business value as most of the assets are marked to market prices. So PBV can give a picture of whether a bank is over or underpriced.


In this context, PBBank has a PBV greater than 1 whereas Affin is trading below its book value. Affin has been in the news lately about the Sarawak State government planning to increase its stake in the bank. This can be catalyst for re-rating if the purchase goes through. https://www.i4value.asia/2024/02/is-affin-value-trap.html#more

On the other hand, PBBank no longer has its founder Chairman. Will its historical performance that is probably due to its corporate culture be sustained? More importantly, where is the catalyst for re-rating?
3 weeks · translate
Yes of course. But this is a good catalyst for Affin
3 weeks · translate
The Bursa property companies had a tough few years. Covid-19 affected my companies in Malaysia and the property companies were no exception. But the problems for the property companies started long before Covid-19 with a soft market that began with the govt efforts to curb speculation in the 2016/17.

But I think there is light at the end of the tunnel and as such many property companies could be under priced from a fundamental perspective. One example is Glomac that is currently trading at a discount to its intrinsic value. It is not a value trap. You can read about it from page 19 of the newsletter. https://notice.shareinvestor.com/email/newsletter/invest/pdf/Vol193_Invest-02Feb.pdf
3 weeks · translate
The share price of Affin has gone up by about 25% since the start of the year from about RM 2.10 per share to as high as RM 2.69 per share. This is due to news about the Sarawak State government increasing its stake in the bank. Since there is no final announcement about the size of the stake and the price, I suspect this is a counter with many speculators.

To be transparent I invested in Affin years ago at an average price of RM 2.66 per share. Affin has not been a performing bank. The chart shows the ROA trends for 4 banks – Affin, CIMB, Maybank and Public (PBB). You can see that Affin delivered the worst returns. https://i.postimg.cc/Xqgrbj9v/Affin-ROA-vs-others.png

I think that the entry of the Sarawak State government, may be a catalyst for improving performance that would result in a re-rating. If this happens, my purchase price of RM 2.66 may look very reasonable considering that the Book Value is in excess of RM 4.00 share.
https://www.i4value.asia/2024/02/is-affin-value-trap.html#more
Suddenly from being an idiot, I may yet turn out to be a genius.
3 weeks · translate
We have been told that to minimize risk, we should have a portfolio of stocks. Does it mean that we can have any stocks (assuming that they are fundamentally sound and cheap) https://www.i4value.asia/2022/01/how-to-construct-winning-stock.html#more

Take the example of Bursa construction/property company Naim and Bursa oil and gas company Dayang. You can see from the revenue trend chart that there is not much correlation between them. Actually there was a negative 10% correlation.

But then Naim owns about 25% of Dayang and probably influened its decision making. So are they uncorrelated stocks?
https://i.postimg.cc/L5GkR9p9/Dayang-vs-Naim.png
From a statistics perspective, as long as 2 stocks are not 100% correlated, having them in a portfolio will result in a lower volatility compared to their individual volatility. If you looking for less volatility, then having them both is better than just investing in one.

Of course, the big picture question is if part of the performance of Naim is tied to the performance of Dayang, would it be better to look for another oil and gas stock?
3 weeks · translate
It is not a question of whether you "like" a company. It is whether you can make money from it. It is not a love affair.
3 weeks · translate
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