Every "Seng" has its day
One of the most famous saying phrase is "Every dog has its
day". It was reported that this phrase is over 450
years old. The phrase became popularised from one Hamlet by William Shakespeare
in the early 1600's. It is also believed that there are various forms of it
that originated earlier.
So what it the actual meaning of this quote in our
current era? The meaning is quite simple to understand. It means everyone gets a chance
eventually or that everyone will eventually be successful during some period in
their life.
But over to Bursa Malaysia, Kassim would like to add
in a new phrase : Every
"Seng" has its day. In case
regular readers are going to think that I am going to share more comments about
that famous Keck
Seng or Hup Seng again, I am sorry to say you are not right in your
guesses this time.
Agreeable that there are many "Seng"
companies on Bursa Malaysia but there are only a handful of more famous
"Seng" companies that usually hog the limelight now and then. You
tell me, who hasn't heard of Keck Seng, Hup Seng or Hap Seng? In fact, readers would be tired if I am going to
post another blog about Keck Seng or Hup Seng again.
This time, the "Seng" company I am going to
mention is a very quite and hardly known company called : Tek Seng Holdings Berhad. I bet many investors don't even know what business
Tek Seng is doing at all. Unless of course you are an investor who is prepared
to going for long term with the company.
Tek Seng Holdings Berhad
According to a website : http://klse.i3investor.com,
Tek Seng is principally engaged in manufacturing and trading of polyvinyl
chloride related products and polypropylene (PP) non-woven products and letting
of properties. The Company's main business activities are three areas: manufacture
of PVC sheeting and PP non-woven; trading of PP non-woven, and trading of PVC
leather. Other business segment includes trading of plastic products and
materials. Its range of products include packing film, pattern printed plastic
sheet, table cloth, shower curtain, raincoats, inflatable toys, advertising
banners and others.
Tek Seng also produces PVC leather product that go
into fabrication of bags, diary, shoes and car seats, among others. It
distributes its products in Malaysia, Indonesia, Myanmar, Republic of South
Africa, Singapore, Yemen and other countries.
Tek Seng has a track record of more than 30 years in
the plastics industry. Currently the second generation including three siblings
are in the management team. Loh Kok Beng, the eldest son took over the
management of the business from his late father Loh Phah Seng @ Loh Boon Teik
(the original founder) from 1989.
I do not know if any there are any other listed
companies on Bursa Malaysia that are involved in this PVC products, but surely
the demand for such products must be there in the market going by the usual
profits Tek Seng is making. Other than only a reported loss of 0.04 sen for its
4th Qtr 2014, Tek Seng has been making profits every quarter since the 3rd Qtr
2006 (According to malaysiastock.biz website).
If you calculate the quarter from 3rd Qtr 2006 to 1st
Qtr 2014, there are a total 31 quarters and Tek Seng has managed to record 30
quarterly profits! That is quite a remarkable achievement for any listed
company.
Granted. Its profits is an average of 3 to 4 sen plus
per year only, but Tek Seng has that ability to consistency maintain that
profits through difficult times and major crisis that happen sometimes now and
then.
After a bonus issue of 1 for 4 implemented in 2006, Tek
Seng's share price traded below 40 sen most of the times, occasionally below 30
sen and even below 20 sen during the 2009 world financial meltdown.
Yet if you had invested in Tek Seng after the
implementation of the bonus issue in 2006 and bought the share at around 40
sen, you would have received a total of 17 sen dividends since 2007. Yes, Tek
Seng has been paying regular dividends since Financial Year 2004. (There was no
dividend for Financial Year 2013, the first time since Financial Year 2004).
Yet despite these continuous profits, the management
did not rest on their laurels. Tek Seng decided to venture into the solar
business. In 2001, Tek Seng's 86.1% subsidiary, TS Solartech Sdn Bhd was formed and deals in solar cells, solar panels,
solar modules and solar related products.
The solar business has yet to record any profits as it
requires several years for digestion period for it to become viable. But Tek
Seng's other divisions such as its PVC products remains stable due to its
versatility, cost effectiveness and an excellent record of use. Other than the
domestic market, the consumption from overseas still represents a promising
market due to the large population size and growth. Tek Seng is also a leading
one-stop PVC products supplier in the region.
Tek Seng is a company that will not qualify in my
buying's list criteria due to its borrowings compared to its cash and cash
equivalents. In fact, I came to know about Tek Seng through a good friend
(selling insurance) who was meeting one of the Tek Seng's siblings about
insurance. He asked me to do a research on Tek Seng.
It was from his request that I did some research about
Tek Seng. I would have given Tek Seng a solid report card for everything except
that the company was carrying some rather borrowings which was (in my opinion)
more than the small amount of cash it has. But what stood out was its
consistent 3 sen plus dividend for a stock that traded at less than 40 sen at
that time.
So my friend asked if he should invest or not
following my "report". Although I am usually not comfortable to
invest in companies with borrowings, but due to Tek Seng's consistent generous
dividends and low price of below 40 sen at that time, I decided to put in some
money (for its dividend's sake).
On April 28, 2008, Kassim purchased 15,000 shares of
Tek Seng at 39 sen. After the purchase with the rare occasions of the share
crossing the 40 sen level, Tek Seng's share mostly traded at below 40 sen and
sometimes below 30 sen. Since then, Kassim had received a total gross dividend
of 12.5 sen or RM1875.00 (12.5 sen x 15,000 shares). My total purchase
(including broker's fees) is RM5,897.76 minus RM1875.00 (Dividends) and my cost
is RM4022.00. If I am to sell out at today's closing price of 46.5 sen on Aug
15, my profits
would be around RM2900.00 plus (46.5
sen x 15,000 shares is RM6975.00 minus broker's fees and my cost of RM4022.00).
In term of
percentage, it is a good return of 72% for a holding period of 6 years!
According to the Hokkien Chinese, the pronunciation
word of "Seng" means successful.
For Kassim, I couldn't agree more. "Seng" has been very successful
for me when it comes to investing. I have taken good profits from my
investments in Hup Seng and Keck Seng. If I am to cash out today, I would be
still enjoying some good profits as well. It would mean Kassim has been triple
"Seng" (successful in Hokkien) in his investments in these three
"Seng" companies, i.e. Hup Seng, Keck Seng and Tek Seng!
Kassim is willing to go for the longer term with Tek
Seng at the moment.
Any Tek Seng shareholders willing to be with me?
Every "Seng" has its day
Most of the times, Tek Seng's volumes was also very
subdued ..... until one day, the famous phrase of "Every dog has its
day" sprang to life!
On Aug 11, 2014, Tek Seng
opened at 38.5 sen and closed at 48 sen with heavy volume of 15,560,000 shares.
Tek Seng closed up 8 sen on that day!
Why the sudden unusually volume that triggered the
share price to shoot up by as much as nearly 30 %? Why the sudden massive chase
for Tek Seng's shares?
There was no material announcement from the company.
Neither was there any expected good news regarding its coming 2nd Qtr results
announcement. Or could it be that the solar division is turning around this
time into the black? Or is there a possible takeover or merger or perhaps a
privatisation exercise?
At the moment, minority shareholders can only wait.
alwayswin111 asked me on Aug 12 this simple question:
"How about you. Are you holding any KSENG?"
Kassim's reply :
Personally no. I sold my 5,000 shares (Before the
bonus exercise of 1 for 2) on July 6th 2010 at RM4.96. Had I hold on, my 5,000
shares would be 7,500 shares x the current price of RM6.45 and that will be
RM48,375.00 - instead of RM24,800.00 (RM4.96 x 5,000 shares). See, the power of
holding on to good shares sometimes is indeed very rewarding.
My spouse still hold 1,500 shares. It was on her
behalf and the first 1,000 shares of Keck Seng bought at RM1.65 on Nov 2, 1999.
You can refer my to previous blog dated : Friday, Aug
23, 2013. The title is : The next “mini Public Bank”
company. I Have. Have you?
This comment has been removed by the author.
ReplyDeleteIt appears as though it was a phenomenal day in Alaska.I think you making the most of your time there on the grounds that it is so cool to meet knew individuals everywhere throughout the world and they can leave best audit in your site.
ReplyDelete--------------------------------------------
Commercial solar installation