Tek Seng's Shining Solar Business

Tek Seng's Shining

Solar Business

Every now and then, there will be a "Seng" roaring back into the spotlight on Bursa Malaysia. It used to be cash-rich & asset-rich Keck Seng Holdings Berhad and biscuit maker Hup Seng Industries Berhad.

Both these two companies hogged the limelight for long periods. I should know because Hup Seng was my maiden post while Keck Seng remained one of my favourites having seen it being written from time to time.

It was then sometimes back that one "Seng" shot back suddenly when the two main Sengs were going through a period of quietness.

If you remember, Tek Seng Holdings Berhad was first featured in my blog : Every "Seng" has its day on Aug 15, 2014. Subsequently there were features of Tek Seng now and then. The reasons were Tek Seng at that time was gaining lots of attention due to its involvement in the solar business.

At that time, the Taiwanese giant solar company Solartech Energy Corp. (SEC) was taking up an equity interest in a joint-company called TS Solartech Sdn Bhd with Tek Seng.

Investors reacted positively and swiftly to this corporate exercise and Tek Seng's shares were chased up accompanied by high volumes for weeks and months. Also in the pipeline was Tek Seng's bonus warrant shares exercise where a warrant was given for every two shares.

Such frenzied buying pushed Tek Seng's share price to peak at 93 sen on Jan, 9 for the ex-date to qualify for the warrant shares. On Feb 10,  Tek Seng warrant debuted and touched a high of 48 sen.

But the first two quarters of not so impressive results saw the declining interest in both mother and warrant shares. On Aug 25, Tek Seng hit a low of 35.5 sen while its warrants touched 15 sen on Aug 16.

At that time, many investors including yours truly must be regretting for not taking profits before the ex-date of the warrants shares.

However towards the beginning of Oct, buying interest return to Tek Seng. Investors must have sniffed something judging by the continuous buying that sent its share price up steadily culminating on the first week of Nov when it announced its 3rd Qtr results.

What caught the investors's eyes was the turn around of its solar business which has become the major contributors to the group's revenue and profit as well! The Solar division contributed 56.1% towards the current quarter and profit before tax by RM9.2 million compared to RM7.5 million.

Strangely again, Tek Seng's other four divisions, Sheeting, PP Non-Woven, PVC Leather & Others also continue to record decreasing in profit before tax. In the past, the Sheeting Division used to be the major contributor when it comes to profit before tax.

So is finally Tek Seng's solar division going to see brighter shining light at the end of the tunnel in months to come? It looks that way judging to some reports when all its eight production lines are up and running, it is going to sell even more of its products.

Currently Tek Seng has been ramping up its production lines. By year end, there should be four lines running. There are plans to install another four more lines although that would take some times.

Between now and that time, will the market be flooded with new supplies as there seem to be some aggressive expansion by a few other players in the market globally.

Tek Seng investors would surely hope not. When there is over supply, prices not only drop, sometimes it will drop below the production cost as well. That is the reason many times an big glut of supplies exceeded market demand for long periods, some smallish companies could not withstand the competition anymore and hence, folded up or over taken by some stronger and larger competitors.

Yours truly is still keeping the 15,000 shares of Tek Seng. Also yours truly has been rewarded with 7,500 shares of warrant since the end of last year. Also already in my pockets are dividends totally RM2025.00 for all those years of keeping the shares. Any surge in its mother share will correspond with a similar rise in its warrant shares.

What a sweet double delight at the moment for yours truly to have a bit of business in solar business!!

A Belated Sincere Apology

to all my Hindu friends

Since I started this blog, I have made it a point to time my posting of blog nicely to ensure that each time a festival season is due, there would be a wishing from yours truly.

But for the first time, I did forget to wish my Hindu friends A Happy Deepavali wishing prior to my blogs posted before Deepavali day.

I guess as one gets older or "senior", one tends to lose memory easily. I can safely testify on this because I have been experiencing forgetfulness more often compared to my days before surpassing the golden age of 50s.

So I humbly apologize to all my Hindu friends, readers, followers and supporters for my belated wish.

always win on November 19, 2015

in an email asked :

What stocks are you currently holding. Could I also know your cost?

Dear always win,

Surely you have a marvellous name, always win or in Bahasa, Selalu Menang. Just joking, but I really like this name. This type of name is indeed seriously needed as a good omen when it comes to investing.

Jokes aside, I still have a number of  counters left or 'unlisted" on my blog. When I say "unlisted', I mean I have yet to share it with all my readers. Of course there are very few losing counters as well. The lucky thing is that these very few losing counters were bought at very small quantities only.

From time to time, I would be "listing" the counters in my future blogs.

The dilemma of when to sell

The dilemma of when to sell

Numerous articles/comments/views have been shared by so many stock gurus - local and abroad about when is the right time to sell shares. Many times, I have also been asked by my friends/followers when is the correct time to sell their shares especially those with some profit margin to cash in.

I wish I have a super crystal ball to show me so that I won't have to worry of the potential headache should I advised them to sell and only to see the share price rising further ahead.

Most of investors must have experienced this before. If you have been following my blogs since day one, I am sure you will know that three of my previous stocks, Hup Seng Industries Berhad, Keck Seng (M) Berhad and Pharmaniaga Berhad went on to scale new highs again and again AFTER I had sold them off for an already superb profit.

The potential headache occurs when our share starts to record higher and higher paper profits. While one is thrilled to see its share gaining higher paper profits, one is also in a dilemma.

What if the share price starts to experience massive profit taking and hence the paper gain would be retreating back again?

What if the share price experiences a sharp u-turn suddenly and retreat back to its original price? Or worse still, below its original price!

What if after selling the share for a profit, the share continues to ascent even higher to new records high?

Such is the dilemma for EVERY INVESTOR when there is paper profit to be realised. Such is the peer pressure to take profit when there is opportunity to do so that in my survey among my group of investors, many are likely to lock in their profit at around a 10-30% gain.

On numerous occasions, I congratulated them for their 10-30% profit and I poked this simple question : Why are you taking profit at this level? The  answer is : A 10-30% margin is a good one! Well, my fellow friends, there is no right or wrong once you have realised a profit from your investment.

An investor with this type of mentally thinking will never experience massive major profit because he never allow the share price to possible scale new highs again and again. How many of us has experience MORE than 100% return from its investment?

For one to be able to achieve a MORE than 100% return, one must have that strong heart of steel to hang on to its running winning stocks for long periods. During those periods, there were bound to be the share price pulling back due to profit taking or market correction or even a poor quarter earning result. Even with continuous excellent quarterly results, the rising share price will also experience occasional pull-backs due to various factors, internal or external ones.

Personally when I buy a stock, I do not aim for a 10-30% return. I aim for 50-100% or more because I believe winning a few bigger and massive amount  of wins are better than trying to win several 10-30% returns. But that is easier said than done.

As I said earlier, to achieve that kind of massive returns, one must possess the hearts of steel and sadly very few have that. The fear of paper profit turning to paper loss is enough to prompt many to take profits as quickly as possible even though the profit realised is only a 10-30% range.

Focus Lumber's share price in new territory

Of late, my 2015's most favourite stock, Focus Lumber Berhad has seen its share price inching up higher by the weeks and is now at near its all time high of RM2.50 plus minus range. (I hope I am right about this).

My average cost price per Focus Lumber share is around RM1.50. So at this stage, my paper profit easily exceeded 60% should I decided to give my remisier a call to sell.

Am I excited about this? I would be telling you a lie if I say I am not. Yes, I am feeling excited about the rising share price of Focus Lumber. I have many reasons to feel so.

When I first started to invest in Focus Lumber and more subsequently, I was actually placing my reputation at stake as I know many of my friends and followers would also be buying this share as well following my articles about Focus Lumber.

I would never know if any of my friends/followers have bought more than me. Only they know themselves and they would not be telling me less I ask them for "ang pow" should they profit tremendously from Focus Lumber later. (Seriously I was just joking about that statement only).

A few have told me they have taken profit before the share price crossed the RM2 mark. Some had sold a certain portion of the shares along the way. Some are still with me. A few have reminded me that should I sell, they want to be the first to know. Some have jokingly said they would take profit when it touched the RM2.50 mark. Well, it crossed that price on Nov. 11, 2015. (I am wondering if they are true to their words).

By the last week of Nov, Focus Lumber should be announcing its 3rd Qtr results. How would it turn up to be? But judging from its sharp run up price, investors must be confident of another set of good results, hence the strong buying interest that pushed up the price.

Until then, let us wait and hope.