Looking Back On Returns

For the first quarter of 2009 I don't think I recommended to look at any one stock as I was not convinced of a rally or a substantive run. The good thing about blogging is that your views are all there to be examined, scrutinsed and criticised ... but it also allows you to reflect and note how your views evolve. Like a diary, the most notable postings started around April 24 this year (can go and check). Its fun to look at how things have turned out, bearing in mind that my assertion that stocks I like should have at least a 30% upside within 6 months, so far so good. If I can get a batting average of 65%, I am happy. There are not many runs in a year for a market like Malaysia, once its there, you have to seize the day and then exit when things are looking dowdy. Usually you can count on 2 runs a year lasting anywhere from 4 -15 weeks each time. Bull markets do not make us smarter, it makes picking winners easier.

FBM 100 Gainers and Losers In August 2009
Top 20 Gainers TR
IJM LAND BHD 23.13%
MULTI-PURPOSE 20.93%
SARAWAK OIL PALMS 18.57%
PROTON HOLDINGS BHD 12.13%
SUNWAY CITY BHD 11.51%
TITAN CHEMICALS CORP BHD 11.32%
MAH SING GROUP BHD 9.78%
BOUSTEAD HEAVY INDUSTRIES CO 9.66%
LINGKARAN TRANS KOTA HLDGS 7.57%
AXIATA GROUP BERHAD 7.14%
SELANGOR PROPERTIES BERHAD 7.14%
AEON CO (M) BHD 6.67% UBG BHD -4.94%
KUALA LUMPUR KEPONG BHD 6.40%
TAN CHONG MOTOR HOLDINGS BHD 5.95%
EON CAPITAL BHD 5.60%
AFFIN HOLDINGS BERHAD 5.56%
GUINNESS ANCHOR BHD 5.48%
AMMB HOLDINGS BHD 4.78%
PETRONAS DAGANGAN BHD 4.78%
PPB GROUP BERHAD 4.63%

Source: Bloomberg Note: TRs (total returns), CG (capital gain) & DY (div yield)

Looking Back

April 24 - Confirmation of A Bull Run For Bursa
April 24 - Stocks & Sectors I Like As CI Breaches 1,000 (Property: SP Setia, UEM Land, even Talam, Sunway City, even MK Land. Financials: AMMB, EON Cap). ... safe to say that these property and financial picks outperformed the market substantially ... so far
April 27 - Talam Coming Out Of PN17 0.08 ... had a good run for a while even at 0.14 or 0.15 at some point I believe, still the run should come when its officially out of PN17
April 28 - MK Land Is Pretty Oversold 0.28 ... now at 0.40 but went as high as 0.47, we got our 30% or more
May 1 - Sell In May & Go Away " History repeats itself for a reason, because they do, people never learn and they keep repeating their actions and decisions time in time out. This is the same posting I did 4 years back in May 2006, and repeated this in May 2008, so for all intents and purposes, I should also repost this for May 2009. Personally, I don't think this May-August will be a down period."
May 5 - Stock Picks For A Nice Trade ... these were ok performers, not spectacular, its for a quick trade, if it works good, if not, get out...
SAAG long up to 0.29
Sapuracrest long up to 1.24
IOI Corp long up to 4.50
Kulim-WB long up to 3.32
Kulim long up to 6.00
May 7 - Go Long On The Brokers .. these were good runs, TA went to 1.27 (now 1.20), Affin went to 2.04 (now 1.88), ECM went to 0.78 (now 0.63), HDBS went to 1.75 (now 1.58), Kenanga went to 0.75 (now 0.65), OSK went to 1.58 (now 1.39)
TA long up to 1.03
TA-WB long up to 0.06
Affin long up to 1.77
Affin-WC up to 0.14
ECM long up to 0.66
HDBS long up to 1.45
Kenanga up to 0.68
OSK long up to 1.38
May 29 - Why I Like Pelikan 0.98 ... possibly the best call so far, now still at 1.52, we got our 30% here
June 4 - A Timely Look At B-Land & B-Toto 3.26 / 4.74 .. both did well, especially B-Land
June 11 - Tanjong, This One Can Buy & Hold 13.00 ... now at 15.82, up 21% so far, a bit more to go to get our 30%
June 11 - Whoops! There It Is (GenM) 2.90 ... now at 2.79, not good, I would cut now ..
June 23 - I Like Green Packet At Current Levels 0.70 ... very good entry levels at 0.70, now share price still at 0.705 but I get 1 right and 1 warrant basically FREE for every 2 shares, great return, easily way past 30%
July 13 - Market Commentary - "I don't like many stocks now as I think markets do look tired, but if you point a gun to my head to force me to buy one stock to hold till rest of they year, I would probably say E&O" 1.04 ...if anybody read this closely, they would have made a bundle, went ballistic today to a high of 1.52
July 17 - Why I Would Buy Astro Now 3.62 .. 3.43 now, news did not filter out as I had hoped, wishy washy developments, sell
July 24 - Why I Am Keen On MPHB Now 1.58 ... 2.11 now, we got 33%, enough
August 4 - Why I Like DRB Hicom 1.13 ... went towards 1.30 but fizzled out, still very keen on this, can hold on
August 12 - Why I Like IJM Land 1.81 ... went to 2.05, now at 1.98, will wait for my 30%
August 21 - Why I Like Bumi-Commerce Bank 10.30 ...recent call...
August 27 - Why I Like QL Resources 3.34 ...recent call ...

The above were views on stocks and sectors that I like, not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

p/s photo: Fiona Xie

I Like Green Packet At Current Levels

Besides spotting good shares, the entry levels are important as well, especially when you talk about a momentum driven market like Malaysia. When the trend is negative, most shares get driven down as well, thus providing better entry levels for stocks with good prospects. I like Green Packet quite a bit. Its certainly one of the more innovative among the small companies. Investing in smaller companies brings forth a lot more risks (search for "small caps" in my blog), hence I will more than often shy away from them.

Why I like Green Packet... its the wifi/broadband market. The market in Malaysia for wifi/bb is still fragmented and offers a lot of opportunities thanks to the pathetic offering and service by the main players. Even izzit has managed to take substantial ground off the established telcos. Green Packet guided that its WiMax subscriber base has grown at a tremendous pace and already reached 50,000 by end of May. This represents a 5-folds improvement from 9,500 at end 2008.

Its 52 week high-low is RM2.51-0.60. I would be keen at levels below 70 sen. As I mentioned before, my yardstick remains a potential 30%-50% upside within 6 months. It won't be making a profit this year, but in this business, I see them ratcheting up subscribers to go past the critical mass levels by end of this year, which is where the value is.

I like their coverage, I like their aggressive marketing plan, I like the way their sales units interfaced with potential customers. I like the attitude of the sales force that work for the company. I get a strong sense that they are making good penetration, and that every potential client that walks by has a very good sign up rate and closure rate.

Management guided that in February and March 2009, the sign up for Wimax has seen an aggressive growth, clocking in as high as 500 subscribers per day but slowed since then. In May 2009, it was hovering between 300-350 subscribers per day. I like the pricing plans they have. I like that the modems can be free or be paid in installments.

The group has secured more than 400 sites currently and target to increase coverage sites to 700 by the end of 2009 to cater for up to 250,000 subscribers. Management said barring any delay, the deployment of coverage sites can hit 800 by year end as it has two turnkey vendors - Alcatel-Lucent and China's ZTE Corp to deploy the sites. Green Packet already rolled its services in Klang Valley, Johor Baru, Alor Setar, Penang, Kuantan, Kuala Terengganu and Ipoh. The company plans to extend services by penetrating into another seven states, including Melaka, Negeri Sembilan, Pahang, Terengganu, Kelantan and Perlis.

P1 also formed a partnership with Sunway Group last year, a
collaboration known as Wireless@Sunway, to be the preferred
technology  partner for broadband connectivity and communications
requirements in the Sunway township. P1 completed deployment of
the first phase of the Wireless@Sunway project, providing wireless
broadband Internet access to more than 80 per cent of Sunway
home and business users, students and visitors, thus making Bandar
Sunway the first integrated wireless broadband-enabled township in
the country.

Kuala Lumpur City Hall and the Malaysian Communications and
Multimedia Commission also picked P1 to set up the WiFi-WiMAX
KL Wireless Metropolitan Project (Wireless@KL). The
Wireless@KL network currently offers more than 100,000 users
free wireless broadband access in Kuala Lumpur.

China and India markets are not going to yield much to Green Packet's bottomline anytime soon. Let's look beyond that for now. The company has already delisted its associate company, GMO Limited from the Alternative Investment Market (AIM) of the London Stock Exchange in May. The cost savings from the listing fee is approximately USD300,000 per annum. Now that is sensible.

The prospects for the company does not come without investments cost. Capex YTD amounted to RM250mn and the group is committed to spend another RM230mn by the next two year to complete its Phase1 and Phase 2 Wimax implementation plan to cover 40% of the population. Green Packet's total capex could reach RM1bn over the next four years. The group has RM200mn cash as at 31 May 2009 and will have to raise funds. Fund raising is not necessarily a bad thing, and I quite like the business model. The company has issued three private placements and raised about RM300mn since its IPO in 2005. Currently, Green Packet is proposing a rights issue of 208.3mn shares of 50sen/share together with 208.3 free detachable new warrants on the basis of 1 rights share and 1 warrant for every 2 existing ordinary shares held. The company expects to raise between RM98.8mn and RM104.2mn for its Wimax network. I would be supportive of subscribing to the rights and warrants.

Given the market's euphoria over YTL-e solutions RM2.5bn investment in wifi/bb, I favour Green Packet's P1 head start anytime man.


p/s photos: Han Ye Seul