Take Profit On HARNLEN

1. Share price increased 45% since I highlight this stock. On 1-Oct-2013 when I wrote about HARN LEN, the share price at that was only RM1.00. At that time, the news is that Harn Len Corporation (HARNLEN) sold its 2410 ha of land in Sabah for RM184.6m cash to Boustead. Recall at that time I mention that "If you look at the share base of 185.5m, the cash of RM184.6m translated into about RM1.00 per share. Since this Company still owns 12,200 ha of plantation land in other states, its share price is unjustifiably trade near RM1.00."

2. Announced special dividend of 20 sen yesterday. This confirms The Star news previously on 3-Oct-2013 that the potential amount of special dividend works out to near 21 sen. You can read more here

http://www.thestar.com.my/Business/Business-News/2013/10/03/Harn-Len-upbeat-on-proposed-land-sale.aspx

3. Lack of short term excitement after the special dividend announced. I still believe HARNLEN is worth RM1.80 in the long run but you must know that this is the minimum value of all of its estate. This value will only be realized in the long run. Ex the dividend of 20 sen, my new Target Price will be RM1.60.

4. Time to lock in profit after good 45% gain. At this juncture, I think the 45% gain should be good enough for me and hence I close position on this stock. I will switch this money to TSH, a promising counter, will write about it next time.

BIMB result not bad, but share price upside only 7%

BIMB released its 9 months earnings this afternoon. Here's some of the highlights:

1. 9M13 earnings grow 19% YoY to RM219m. If we look at 3Q13 alone, the earnings growth is 25% YoY to RM75m. In its announcement to Bursa, BIMB mentioned that "The higher profitability was mainly achieved on the back of higher operating results of RM32.5m, and RM49.6m improvement in allowances for impairment on financing and advances, investment and other assets, as well as the non-recurrence of provision for contingent liability.
2. Considered not bad as it makes up 70% of consensus. Consensus looking at RM313m FY13E Full Year Earnings on average.
3. Only another 7% upside to go based on Consensus Target Price of RM4.82. Conclusion is good result, but if buy now should have limited upside. But not for sell also because it is still delivering satisfactory earnings growth.

DRB-HICOM taking over KONSORTIUM?

1. Update. Both DRB-Hicom and Konsortium Logistik are suspended this morning for whole day on Friday 25-Oct-2013. Note that DRB-Hicom last price is RM2.46 and Konsortium is RM1.51.
2. Takeover soon? Looking at the coincidence that the two are suspended on the same day, it is possible that DRB-Hicom could be taking over Konsortium Logistik.
3. Related to Budget 2014? Surprisingly, today is also the budget day. Given that DRB-Hicom is somehow Government linked, we may see this deal is somehow related to Budget 2014. I could not find the reasons at this juncture, but it could be another petrol price increase.... But to sooth things out, bus ticket prices to be reduced? Anyway, this is still too preliminary, wait for the Budget to see what happen.

HARN LEN worth RM1.80?

1.    The price that it sold its land is already RM1.00 per share. On 27-Sep-2013, Harn Len Corporation (HARNLEN) sold its 2410 ha of land in Sabah for RM184.6m cash to Boustead. If you look at the share base of 185.5m, the cash of RM184.6m translated into about RM1.00 per share. Since this Company still owns 12,200 ha of plantation land in other states, its share price is unjustifiably trade near RM1.00.

2.     Will HARNLEN sell its other plantation estates? HARNLEN has suffered consecutive 3 quarter of net losses due to low CPO prices, so it may make economic sense that the owner may want to sell its estates to another Company to realize its investment.

3.       HARNLEN is worth RM1.80 if the estates were to be sold. Assuming a very low land valuation of RM25,000 per ha for the remaining 12,200 ha of its land, this share is easily worth RM1.80. The 12,200 ha of land is already at deep discount of 65% to the Sabah estate price (due to the low FFB yield) in this calculation. This means its 12,200 ha land worth RM305m or RM1.60 per share. But of course we need to take care of its net debt of RM148m or RM0.80 per share.

4.    Conclusion: Land sold at cash (RM1.00) + Remaining estates (RM1.60) – Net Debt (RM0.80) = RM1.80 per share.

5.     Short term will be volatile, but the value should emerge soon. Investors sentiment may be clouded by US Government Shutdown Concern, but value investors know the trick to buy when the market is in fear. Grab this opportunity before too late.

The return of foreign investor to Malaysia?

1. Yesterday, foreign buying turned net buyers with RM159m after about 2 weeks of consecutive net seller.
2. This could be caused by positive economy data from China which shows that exports rose more than consensus estimate.
3. Conclusion: It's time to buy again... Stocks that I am looking at include PPB Group, Zhulian and Fibon.

The Store 9M13 EPS increased 29% YoY

1. Background. The Store Corporation Berhad (Code: TSTORE or 5711) is a leading operator of supermarkets, departmental stores and hypermarkets in the country. The Group has been listed on Bursa Malaysia since 1994. Overall, the Company focus on retail operations with presence throughout every state in Malaysia.
2. 9M13 EPS increased 29% YoY to 23.30 sen. According to its announcement to Bursa, the increase was mainly due to the improvement in revenue, saving in operating cost which derived from the consolidation of certain underperforming outlet with the outlet in the vicinity as well as increase in the other income.
3. 4Q13 should be weak. Last year in 4Q12 TSTORE registered 2.7 sen EPS. Conservatively can assume it manage to get the same 2.7 sen EPS in 4Q13 will make up FY13 forecast EPS of 26.0 sen.
4. Target Price of RM2.47. Assuming 9.5x PE on its FY13 EPS of 26.0 sen. From its current market price of RM2.20, upside is about 12%.

Time to take profit on MAS

1. Entry at about 30.5 sen. I recommended MAS as stocks to watch on 19-Jun-2013. The post is with the title "3 STOCKS to BUY NOW... Foreign investors turned into net buyers". At that time MAS was trading at about 30.5 sen.

Original link: http://wallstreetklci.blogspot.com/2013/06/3-stocks-to-buy-now-foreign-investors.html

2. MAS share price up recently after Government says looking to sell MAS shares but depend on the price. 

3. 10% gain within 2 months from 19-Jun to 15-August today. For this kind of high risk stocks with little fundamental, I think 10% return is good and it's time to take the chips off the table.

4. Recap of what I wrote last time about MAS as per below...

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MAS (Target RM0.34-RM0.35) WARNING: Only for daredevil
>> Nothing much to talk about on this Company fundamental.
>> But due to its strong backing from government, I think this stock unlikely to fall below RM0.30.
>> Technical RSI is only 33 now (very close to oversold level of 30).
>> Expect small rebound to RM0.34-RM0.35 in the next 1 month. Once hit, take profit fast.

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