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1-20 of 29
Allied Tech, one of my forgotten stocks surged 3c today to close at 20.5c. Just 2.5c off its pre-crash high clawing back almost 5c in the last 2 weeks after announcing a good set of results and a bonus 3.5c divi & a rights issue of 1 for 2 at 7c. A steep discount to the traded price.
NOTICE IS HEREBY GIVEN that the Share Transfer Books and Register of Members of the Company will be closed at 5.00 p.m. on 24 September 2007 (the "
the purpose of determining:-
(a) in relation to Shareholders, their entitlements to the Bonus Dividend; and
(b) in relation to Entitled
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Poh Tiong Choon, ENg Kong and 8telecom slowing moving up the chain once more.
hahaha.
wah. u still remember about the Ritz dinner? civil service kinda busy right now. govt intends to push lots of our services online. so its lots of meetings and research for me.
hmm. maybe it wld be better to store ammo first for a later entry. SMB releasing their result tonite. Hopefully its good
taybc1071,
Both Miyoshi and Asti looks decent. Am not too familar with the stocks in detail but Miyoshi looks like a turnaround company. They should do well in the 2nd half of the recovery
Allied Tech, another of my kantang made a surprise 4c divi and 7c right issues. Stock will do well in the short run. NUmbers look decent esp with the increase of cash in the bank by $3m. Coy looks like hiding profits once more with more purchase of raw materials.
hi vic, would you mind to comment on Miyoshi and Asti. The current price justified to go in? Would appreciate your advice. Thanks
Rayzor, I'm waiting for the results. Made some money from it earlier but also still have a small position at 20c too. Have to see the results as I'm eagerly waiting to see if their cashflows are positive once again.
giantlow... when can have ritz dinner?? Yup, u're right, 8telecom will drift in this sentimentally poor environment. BBs will force down the price to collect from ppl. That's what I've been observing. Remember good old SMB. Feb 28, price came down from 28 to 23c in just a few days... I got squeeze a little and had to wait out 15 trading days or almost 3 weeks before it started to go back up & then April the big breakout... seen it happen too many times for such counters when they're still in the preparatory stages for future blast offs.
iTrader, PTCL is still hot on my list. Still have a low 7digit holding of it. I was sharing at the training session using PTCL as a case study why the cheong 2mths ago was potentially so strong. They haven't sold their industrial land & the estimates EPS from the sale maybe as high as 20c per share. 20c +18c NTA if all the cash goes into the bank translate to 38c NTA. That's why the stock shot up so easily, effortlessly & in large quantiites driven by big buys all the way to 35c. then the freefall begun. In one single campaign.. the freefloat from being about 50m became cornered now to -70m & back at 24-25c. With no newsflow. I'm just waiting for their results to see their core biz opreational results to see what kind of growth & their cashflow since there has been much CAPEX so far (exclude the industrial land).
hi vic,
would like to have yor comment on one of your recommendation ASA grp, im quite heavily vested on ASA on ave px of 19c. Tks in advance!!
hey my pal victorian,
8Telecom's downward trend seems to be continuing
i dun think shld enter unless the stock can stay above 16.5cents for at least 3 days
Victorian, whats your view on PTC?.At current price, how are the FA ratios faring?. Appreciate your advise.
Kilroy,
a. sentitment is one.
b. valuation play is another independent of sentiment.
Staying rangebound is fine for now. I like it this way so I can accumulate more in my own sweet time. Whipsaws are always part and parcel of the move upwards esp when there are BBs involved.
I like to stay conservative with 6mths. Why 6mths? Sentiment can stay weak for the next 2mths or 3mts depending on how US pans out this sub-prime & liquidity issues. Liquidity issue is the easiest to solve as it's crisis of confidence which BNP stated so when they froze the 3 funds redemtionto while subprime is about making the necessary one time provisions to whip clean P&L and Balance sheets this quarter & not have them revisit the market during the next 6mths time in subsquent 2 more quarters. So, in the meantime, there will be a flight of funds to quality stocks with strong cashflow & yields not just here but even in the US or Europe. There are always going to be undervalue stocks that do well in such times.
I'll be posting on CEI, another gem. Too bad I don't have much personally but in my mother's portfolio. 2.1c dividend, 3X positive operating cashflow & 3X rise in net profit. Another strong counter.
Coolboy, not sure on biz oculus but looking at just the key ratios. NTA 2c. Stock rose to 45c. That's 22.5 X book ratio. There is very little fundamental basis to support even the existing price of the stock. You're better off just cutting loss since so much of the stock was traded. Lots and lots of stale bulls & ppl caught in the carnage. Let me emphasise. Play the speculatives at your own risks. Good days you make, bad days like this... u wish you never even start with to begin with. Sorry.
hi victorian,
can i get some advise on oculus? heavily vested at 42c till now. really lost.. shld i cut or still hold ou? Pls help
vic,
6 months for ActionAsia price to travel to fair value. Isnt that a little too slow? Inbetween, the price will bound to be whip-sawed and the tendency is that it will throw investors confident off even if numbers are good. How can we stay focus if what you said is true.
Currently it has a 0.18SGD resistence registered on chart. I am hopeless at FA so I hope its not too much to ask if you can translate that into any fundamental reason as to why the price cannot pass above it.
Range play between 0.10 - 0.18 seems the best for now but the current price looks to be in a holding pattern and is awaiting for something to propel it higher. What could that be?
Analysis of 2nd Quarter 2007 results vs 2nd Quarter 2006 of Action Asia
Revenue : $53,793,000 vs $24,141,000. Growth of 100%
Profit bf tax: $3,563,000 vs $283000 Growth: 1200%
Profit af tax: $3,072,000 vs $234,000 Growth of 1400%
Free operating Cashflow: $16.7m vs $8.3m growth of 100%
Cash per share: 11.4c vs 7.3c
Company is doing exceptionally well. Top-line went up 100%. Free operating cashflow also doubled. Cash per share up significantly. Lots of hiding of profit by buying lots of raw materials & consumerables. $42m vs $19.9m with large payables.
At 13c, stock is seriously undervalued at 1X book and 11.4c cash per share. I?m changing my 1.5x to a min of 2x to 2.5x book value over the next 6mths as long as they continue to generate such numbers. A blockbuster in the making.
Kilroy, given the climate, it depends a lot on how much & how long the US and European financial institutions clear their balance sheets & write off ASAP their losses. They tend to be very aggressive so 1 quarter ie now is what they are doing. Once this is out of the way in the next 2mths at least, things will settle & we can talk seriously about timeframes. Otherwise, many of these Asian companies are not affected by what is going on in US & neither should we.
When the US was booming in 2002-2006 in real estate, where were we?? in our own doldrumns around Asia. This play will play itself out quicly as it's a very local issue. It shows seriously how screwed up US in providing public housing. Even low cost housing.... can package it into an investible product. How can the poor pay 6-12% interest rates. It's a problem waiting to just happen. Thank goodness we have HDB man. Can u imagine HDB folks earning under 30k, no credit card paying 10-12% interest for housing???? vs 2% now. We'll have our own sub-prime mess in our own backyard.
vic,
thanks for putting in the tp into perspective even though I know its not easy. As for the fair value, I will wait for it. Would you by any chance have a valid time frame for those tp in which you have indicated? It will be helpful so that we can review the tp in a consistent timely manner and measure it's performance from the benchmarked target price. That way we can also know when we should lock in profit as you know the longer the money is in the market, the greater unforeseen risk its being exposed.
Kilroy,
U got it right. It's difficult to get the fair value right for the fiscal year esp when one is growth (8telecom) and the other is a recovery/restructuring stock. The trick is to buy it with as little premium as possible to NTA and to its operarating cashflow. As both have active shareholder interest/accumulation, I would use price to book as a basis to predict once the dust has settled down from the credit/sub-prime mess in the US. It's a major phychlogical barrier (look at China now : almost 5000pts and who gives a shit about subprime there)......
8telecom: target price: 26c. Price to Book of 2X. Entry price of instituional investors at 18c. So 26c is conservative. Their 2nd half results would give another indicator what would their top-line & CAPEX investment be like but I suspect it'll be the same as 1st quarter. High top-line growth, still high CAPEX and 2rd half of the FY should be a killer period going into the 1st Q or 2Q of FY08. By then, quite a massive amount of billings for the 1st phase 3G infrastucture & associated services would have been rolled out by the major telcos for the Beijing Olympics.
8telecom is an early SMB liked play. 470m shares. Same as SMB. Float is much tigher than SMB after 2years of massive accumulation. A growth play. I was wrong about my valuation of SMB. I used 1.5X book and that got me 36c & it overshoot to 50c. I sold all my SMB at 30 - 39c with an average of 35c exit price. I discounted the entry of the instituional investors that came in at 33c (out of pride I suppose) when I was already out of the stock. It then proceeded to hit 50c high. (Big error here). This one will stay speculative for the rest of the year.
Action Asia: A recovery play. I would use a conservative 1.5X to book hence 20c is the conservative target for the year. At the rate it is generating operating freecashflow like printing presses & if 2nd half results confirm the same thrend, I would revise to 2X book hence 26c. Anything above that would go into the speculation zonal area.
Good example on how operating cashflow nos can drive coy's share prices even if net profit is low. Ekraan, A Malaysian stock I am eyeing tks to my sifu's spotting. It generated 2 quarters of RM24-32m positive free cashflow with net profits being depressed from earlier quarters of high CAPEX investments. Trading at 27c then, it was just 0.2X to NTA of $1.4. In just 2 market days just as I was about to get my hands to it. It drove out from 27c to 39c......39c to 54c in the 2nd day and now hovering at 40odd cent amist all this chaos. (imagine how much balls banged after reserach all done!! Very much like Penguin effect after I finish my research) This is what cashflow can do to shareprices. This is what I am expecting Action Asia to do. Now trading below book. Even better.
Most of my early stocks picks did hit 2X eventually like 2nd chance...50c or 2X book, PTCL 2X at 36c, EK 1.8X at 35c, Penguin, 40c 2X, Nippecraft, 0.5X to 1X at 18c. I never did hit the max for all but close to them just using price to book valuation. later stocks included Sim Siang Choon 2X at 30c,(sayang, got out too early), Guangzhuo 1.9X at 45c (sayang got out early at 31c for a quick large contra play from 24c to 27c too tempting initially. should have paid up haha), East tech when it was nearing NTA of 24c.
Anyway, now most ppl wouldn't have much mood to look at the screens as cash preservations is key. It's the ones with the cash that would be eagerly looking around at the favourite counters to buy. Rule of thumb for me. No matter how sentimental the stock is it to one.... just remember the number of stale bulls holding on to the stock which it's traded high with large vols. U may thing you get it cheap..... but the rise up will be tough.
Last years or early speculatives like Pineagritech are so yesterday...the yesterday stocks in the top30s will be high risks. Look for those whose play hasn't even begun & yet to begin cos BBs flushed with cash will look for new kills for the expected end of the year buffet.
vic,
This could be difficult but not sure if you can help with this. The info are good info but what would be useful esp for me would be for the stocks that you have highlighted, are you able to derive the following:
1. Fair value of the stock that it should be for the fiscal year.
2. A Target Price you are looking at with a est time horizon that it should reach barring all unforeseen event.
8telecom: Part III: Conclusion & recommendations
Recommendation
a. A 10-year old company which holds patents and proprietary technologies that is important in an industry like telecommunications due to the technology-scape of the sector. Thus, with the patents and proprietaries, 8Telecoms has relatively barricaded others to entry.
b. Revenue growth has been on an increasing trend. However, net earnings have been in decline since FY04. Margins were good in FY04 only to face a drastic drop to the single digits for net margins in FY05 & FY06 from a high of 22.9% Looking at the NTA, the company is not cheap to purchase while management?s creation of shareholder?s value is not satisfactory since for every dollar of equity capital, only earnings of 1.4cents is generated. The 3G story and actual acheivements as seen in the 1st quarter results maybe the tunring point in terms of earnings growth after 2 years of unsatisfactory growth.
c. Net operating cashflow has been increasing through FY04 to FY06 which is a good indication that management have been able to convert earnings into cash while net cashflow have been volatile.
d. The individual shareholders has taken up a much larger position compared to the institutional/brokerage funds in FY05 with the free float at 62.851m vs 63.759m, with the same number of shares for 2 consecutive years. The vendor sale of 27m shares to institutional investors and high network individuals seem to be a key potential future catalyst for future share price movement adding in more depth of blue chip shareholders.
Thanks to Rosanne for her excellent 1st cut coverage of 8telecom as of July for me to add on and make the necessary add ons.
Vested and all the best.
8telecom: Shareholder Structure/changes and trading vols/patterns since march 16 March 2007
1 Year Stock Price 6-mth Stock Price
High: 0.205 High: 0.200
Low: 0.060 Low: 0.085
Shareholding Structure/Composition
16 March 2007 07 March 2006
Size of Holdings No. of No. of Shares No. of No. of Shares
Shareholders Shareholders
1-999 - - - -
1,000-10,000 612 2,709,000 663 2,932,000
10,001-1,000,000 786 64,049,000 846 63,272,000
1,000,001 and above 16 412,146,250 17 412,700,250
Total 1,414 478,904,250 1,526 478,904,250
16 March 2007 07 March 2006
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Manfaith Investments Ltd Citibank Nominees (SG) Pte Ltd (NEW) OCBC Securities Pte Ltd Raffles Nominees (SG) Pte Ltd Kim Eng Securities Pte Ltd Westcomb Securities Pte Ltd Phillip Securities Pte Ltd Ho Sing Ming (NEW) Ho Wah Onn (NEW) Phee Cheng Koon (NEW) Ramesh S/O Pritamdas Chandiramani Sng Ching Ngee Oh Lian Teck (NEW) Ng Boon Guat Boon Kok Hup (NEW) Ye Tianyun (NEW) Chan Kwok Weng (NEW) Chiang Liew Chin (NEW) Koh Wee Meng (NEW) Chin Poh Gean (NEW) |
356,904,250 19,300,000 7,277,000 ? 1,092,000 2,695,000 + 2,020,000 4,124,000 + 493,000 3,050,000 + 1,300,000 3,342,000 ? 1,252,000 2,000,000 2,000,000 1,950,000 1,500,000 + 350,000 1,391,000 + 65,000 1,450,000 2,141,000 ? 1,000,000 1,088,000 1,050,000 1,000,000 1,000,000 1,000,000 907,000 |
Manfaith Investments Ltd Orlit Enterprises (SG) Pte Ltd (OUT) OCBC Securities Pte Ltd Mayban Nominees (SG) Pte Ltd (OUT) Kim Eng Securities Pte Ltd Phillip Securities Pte Ltd DBS Nominees Pte Ltd (OUT) HL Bank Nominees (SG) Pte Ltd (OUT) Westcomb Securities Pte Ltd Raffles Nominees Pte Ltd UOB Kay Hian Pte Ltd (OUT) Hong Leong Finance Nominees Pte Ltd (OUT) Ng Boon Guat Ramesh S/O Pritamdas Chandiramani Sng Ching Ngee Teoh Boon Teck (OUT) DBS Vickers Securities (SG) Pte Ltd (OUT) Meren Pte Ltd (OUT) Ng Lee Cheng (OUT) Teo Geok Eng (OUT) |
356,904,250 11,875,000 7,277,000 5,280,000 4,124,000 3,342,000 3,150,000 3,090,000 3,050,000 2,695,000 2,480,000 2,176,000 2,141,000 1,500,000 1,391,000 1,200,000 1,025,000 900,000 815,000 730,000 |
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Total Top 20 Shareholders |
416,053,250 |
Total Top 20 Shareholders |
415,145,250 |
|
Free Float |
62,851,000 |
Free Float |
63,759,000 |
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Freefloat latest year |
Shareholder report date in latest Annual Report |
Vol traded after latest AR till 080807 |
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62,093,000 |
16-Mar-07 |
232,286,000 |
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last 6mth Price Range from AR |
10 yr highs |
Share float from AR |
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|
0.09-0.22 |
3yr 34c 04 |
-170,193,000 |
cornered |
Key salient observations from March 16th 2007.
a. Major changes in shareholder structures in the top 20 with 11 new top 20 shareholders. 5 Existing shareholders also adding new shareholdings
b. Freefloat as of march 16th was 62m. From then to present 8 August 2007, 170m shares was traded this 4 1/2mths with 4 whipsaws/false breakouts from 14c to 22c.
c. Entry of institutional investors at 18c on July 4th taking 26m shares from vendors.
d. in the 4 sell downs in the last 2 weeks, bulk of the selling has taken place and volumes in the last 4 days have been just about 2m or 500lots per day. The aimless drifting also shows clearly stock is cornered so BB will just take advantage of poor sentiment to drive prices down to forced further panic selling etc.
f. OCBC securities has provided a 4.7m financing quota for 8telecom while UOB Kayhian a C grading hence single counter limits per margin account is $1m. As with Action Asia, that?s a lot of firepower for holding purposes.
See public announcement on sgx website below on 5.64% or 27m vendor sale.
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_8B47F113C87231CB482573100022D58B/$file/8Telecom_Press_Release.pdf?openelement
8telecom: Part I. Coy, financials
I?m starting coverage and daily/weekly commentaries on 8telecom. One of my growth stocks that I see in the league of SMB with the right timing in the next few months as the float tightens and sentiment improves. It had recently announced institutional investors taking a 6% at 17-19c stake in the company on the 4th July. As with SMB after the announcement of a vendor sale to instutional investors, the stock hover for close to 2 mths before taking off from 34c to 50c high. I expect 8telecom to behave no differently given its 5year high in 2003 was 32c so there will be some rough ride upwards in the quest to clear the stale bulls in light of the softness of the markets in the coming weeks if not months. Excesses have to cleared off from the financial mess from subprime etc before the real markets from the goods and service segment takes over?
Description
The Group's principal activities are manufacturing and selling communications materials and providing installation services for various telecommunication engineering products. Other activities include manufacturing and installing telecommunication and other towers, constructing telecommunications pipes network, designing, integrating and installing hardware and software, and investment holding. The Group operates in China and supplies key tower communication to all the major telco providers China Telecom, China Unicom, China Mobile, China Netcom. The company?s major growth area is the installation of 3G towers in support of the major roll out of 3G services by the major telcos prior to Beijing Olympics.
For the latest 1st quarter, the group reported a large 152% growth in turnover resulting from huge orders in the telecommunications tower segment as well as a scale up in the
Telecommunications Electronics Manufacturing Services (TEMs) operations on the back of the impending 3G launch in China before the Beijing Olympics
Financials
|
Current Price |
0.19 |
P/E : 25.38 |
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Shares O/S |
478,904,250 |
1CNY:0.200303SGD |
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Mkt Cap |
90,991,808 |
1SGD:4.99244CNY |
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SGD / Year End Dec |
FY06 |
Q107 |
Q107 vs Q106 % changes |
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Revenue |
51,241,513 |
14,632,735 |
+152% |
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|
Gross Profit |
12,801,565 |
2,821,668 |
+13.3% |
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|
Net profit before income tax |
3,585,023 |
711,476 |
12% |
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Revenue Growth |
11.89% |
- |
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Net earnings Growth |
-18.50% |
- |
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Gross Margin |
24.98% |
19.28% |
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Net Margin |
7.00% |
4.86% |
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NTA |
0.11 |
0.11 |
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Price/NTA |
1.76 |
1.74 |
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ROE |
1.41% |
0.27% |
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EPS (cts) |
0.75 |
0.74c |
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DPS (US cts) |
0.102 |
- |
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Operating CF |
7,025,828 |
6,907,048 |
|
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|
Investing CF |
16,627,753 |
324,691 |
|
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|
Financing CF |
10,892,477 |
1,406,127 |
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|
|
Net CF |
1,290,552 |
8,637,867 |
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Price/Cashflow |
70.51 |
- 10.53 |
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|
Cash/Share(cts) |
4.84 |
2.95 |
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Debt/Equity |
1.03 |
0.87 |
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-------------------------------
Commentaries
The company has highlighted in the 1Q results commentary the production capacity of the TEMs segment has been tripled and the group plans to double the production capacity of its telecommunications tower segment to cater to the increasing demand. This explains why the cashflow has turned negative as compared to 2 years of positive cashflow as the company has started CAPEX activities in the last few months to support the huge 3G equipment required by their customers. Debt levels have gone down from positive cashflow used to pay off debt. The increasing CAPEX requirements bodes well for the coy?s growth in both the top-line & bottomline.
See 8telecom 1st quarter results:
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_AD333EF58068A593482572DB00354004/$file/8Tel_1Q_Results.pdf?openelement
Competitive Edge
- One of the China's largest producers of grid-type telecommunications pipes; thus, able to capitalize on its strong position in a huge domestic market like China
- One of Zhejiang province's largest telecommunications engineering suppliers and producers of telecommunications steel towers; production and supply of telecommunications pipes
- Holds 17 patents and four proprietary technologies; the patents translate to value-add as this means they are able to charge more than usual as no one else has the same exact technology.
- Clientele base includes the 4 Chinese telecommunications giants such as China Telecom, China Unicom, China Mobile, China Netcom.
- Key supplier of Tower for 3G communication rollout by telco providers
Management Team
Ye TianYun (Chinese)
- Executive Chairman & CEO
- Founder of 8Telecom; 1997
- Qualification: Bachelor Degree (Computer Science & Technology); Technical Economics and Management (Business Adminstration)
Dong Guomin (Chinese)
- Executive Director; appointed in October 1998
- Qualification: Bachelor Degree (Business Economics); Technical Economics and Management (Business Adminstration)
Chen Xiangjing (Chinese)
- Executive Director; Appointed in August 1998
- Qualification: Bachelor Degree (Business Adminstration), (Computer Science & Technology)
Yu Chunxiang (Chinese)
- Executive Director; Appointed in April 2001
- Qualification: Bachelor Degree (Technical Economics); MBA
Lien Kait Long (-)
- Independent Director. Appointed on 25 May 2004.
- Qualification: Bachelor of Commerce; Fellow member of the CPA Australia; Fellow member at the Institute of Certified Public Accountants of
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http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:money_flow_index