Power of Motivation

Power of Motivation

Recently I discovered that a SYT (sweet young thing - but this SYT is not a thing, but a young sweet lady) who is actively posting meaningful, inspiring, thoughtful and motivating notes on her facebook. And she does it happily from time to time. At first Kassim did not pay much attention to her postings, but as Kassim begins to know her, Kassim begins to appreciate her kind efforts to share all those good notes on her facebook. (Above is one of the samples from her)

Some of her notes are very motivating ones. Some will make you pause for a moment to reflect of the meaning of the notes. Although we could source all these from various websites, (I know most of us would be too lazy to do that), we tend to get on with our lives on a regular daily routine without a thought for some reflection. It is only when we notice certain eye-catching Motivating notes that inspire us or remind us of our wonderful lifes that we have.

So each time you come across a motivating notes anywhere, be grateful and thankful of that person(s) who take the unselfish step to put up the notes. A big syabas to them! Keep up the good work!

A personal thank you to this SYT too! I know she will be reading this post and I told her that one good turn deserves another. In this instance, my expression of appreciation of her effort, hopefully will motivate her to continue with her good efforts. (See, sometimes the motivator needs to be motivated by another motivator!)  Is Kassim confusing you? Ha ha. Share with you one more tip. This SYT has unforgettable deep dimples when she flashes her golden smiles!

Motivation can come in various forms. Kassim remembered when he ran his first Mas International Marathon in Penang in 1993. As Kassim had only been able to finish a half marathon in 2.30 hours, the confidence and strong will to finish the full marathon within the 6 hours stipulated time needed extra motivation to finish the race.

So what did Kassim do to motivate himself to finish the full marathon race? Kassim printed out an A3 size paper with just 3 words : I DID IT! The idea was to imagine and vision the finishing scene as Kassim is crossing the finishing lines and taking out the folded A3 size paper and show it to the waiting crowd, including his then little boy, spouse and several good friends that he had done it.

Did Kassim finish the race? Yes, such was the motivating factor during the race as Kassim was struggling all the way after the half way mark. Kassim eventually finished the race with just one minute to spare.

Motivation can also has an effect when it comes to investing. If a top fund manager or let us say a fund managed by Warren Buffet starts buying one local company listed in Malaysia, it is very safe to presume that many of us would be jumping into the wagon to join in the buying frenzy and thus sending the stock price north sharply.

Similarly when a few top fund managers or a few big well known fund start to sell, many of us are likely to follow them, again resulting in a sea of red.

Selling by two directors of MFCB

Recently there was a report released by  PublicInvest Research posted on Sep 30, 2014 featuring Mega First Corporation Berhad (MFCB). It initiated coverage with an Outperform call and SOP-derived  fully  diluted  target  price  of  RM3.85. 

The various reasons given were really very "motivating" factors for many readers which prompted heavy demand for MFCB's shares the moment trading started that morning. The share price went to touch a more than decade high of RM2.77 before settling down at RM2.66 on heavy volume of 4,913,100 shares.

Unfortunately, on that very day, one of its directors disposed off 60,000 shares at RM2.67 in the open market. Then on Oct 2, an announcement from MFCB reported that another director disposed 50,000 shares on Sep 29 and again another 35,000 shares on Sep 30.

Such prior and post disposal of shares by the two directors at such a short time during PublicInvest Research's report confused and rocked investors' confidence deeply. Why? If directors who hold sizable stakes in their own company sells the shares, especially when the company has been given an excellent coverage by a reputable research house, who would investors trust?

Kassim would definitely be very confused and lost. While it is the rights of anyone or investors of any company to buy and sell shares of any company, it is definitely different when it involved those directors - whom investors trust them to lead and run the company in a profitable manner.

Directors should be very mindful of their timing to sell as this will send out a very different kind of signal to investors. Perhaps the time to sell their shares would be when the company's share price are trading and consolidating at a tight range and with no research's house coverage at that time.

That is why Kassim always like those major shareholders/directors/founders of companies who are very committed in running their ships. They do not get involve in selling, instead they implement share buy backs from time to time, thus reducing the number of shares left in the open market.

Ironically, MFCB has been very actively purchasing its shares back from the open market. There are 20,488,500 shares cumulative net outstanding treasury shares as at Aug 27, 2014.

Kassim's responsibility as a blogger

As a blogger myself, I am also very mindful about the thoughts of my readers, followers and  close friends who are investors. I know some of you would have read my postings and possible be influenced or motivated by my postings to buy certain stocks which I shared.

That is why I am particularly carefully of the timing of my posting which involve the selling and purchasing of stocks related. I would rather share my posting immediately or soon as possible the moment I bought certain stocks. I do not want to be accused of "accumulating" first in a comfortable way and then releasing my posting "promoting" that particular stocks, hoping others would join in to buy and push up the share price higher.

Imagine I had been inviting readers to join me to invest in Mercury Industries Berhad for the long term. Then two weeks later, I post to inform about my entire disposal of Mercury. And it so happen after my disposal, Mercury shares came down. How would you (as my followers or my readers) feel? Especially when you are still holding on to Mercury shares?

Would you ever trust me again? See, my responsibility as a blogger is more than you, readers and followers and friends. You can sell and buy quietly without anyone knowing, but I can't.

An email from Pn Lee Bee Swan

Pn Lee expressed her joys of being able to purchase 1000 shares of Harrisons Holdings Berhad at RM3.41 on Oct 14, 2014. She asked if it is still a buy at RM3.79 (on Oct 23) and what are the other undervalued counters. She would like to invest in Mercury Industries Bhd but at what price?

First, I would not know how the price direction of Harrisons is going to perform in the future. If the performance is good, it would reflect in the share price. The recent "mini-correction" of the global stock market also hit many counters on Bursa Malaysia. Many counters became attractive and "undervalued" overnight.  But which one is more undervalued and offer higher opportunity for faster chances of share price rebounding?

Mercury's last traded price is RM1.37 on Oct 24, 2014. My last purchase of Mercury shares was at RM1.59 for 4,500 shares on June 2. Although my purchase qualified for the 10 sen dividend paid recently, theretically I am still staring at a paper loss if compared to the current price of RM1.37.

Yet I am not bothered at the slightest. Unless Mercury's earnings shrink in the future, that would be a different story. But if Mercury's earnings improve or at least maintain the 16 sen earning annually, than the current price is definitely a steal due to the depressed market sentiment.

So Pn Lee, shall I welcome you to join Kassim to be the owner of Mercury?

Star's strange decision - paying more dividends than it earned

Star's strange decision

- paying more dividends

than it earned

According to my good friend working at The Star, he told me that the company recently celebrated its 43rd Anniversary celebration in September. Ever since the company announced a one month ex-gratia bonus on its birthday celebration bash more than a decade ago, it has always maintained that bonus payment on its every birthday. As a matter of fact, it has became a norm among staff that a one month ex-gratia bonus is always there when Star celebrates its' birthday celebration.

This time, my friend did not really enjoy the food dished out on the celebration day. Why? Well, all good times must come to an end, sometimes. For the first time, Star did not make any announcement of a one month ex-gratia bonus payment on that day and up to today, at time of posting. Most staff were quite shocked and disappointed. This must be the first time the celebration's "buffet spread" was not really an enjoyable one.

Days before the birthday celebration, management had taken the trouble to address the staff about the company's drastic cost-saving initiatives. Various measures were being implemented such as scaling down its Sarawak operation, staff VSS, eliminated a top management post, considering using thinner 42gsm newsprint (vs. 45gsm currently) to lift yield per ton by 5-6%.

It is believed that Star has also ceased publishing its business Shanghai and entertainment magazine Faces.

Another reliable source told me that Star has also not send its non-sales support advertising team for its bi-annual team building seminar due this year. The last one was held in Bukit Gambang, Pahang in 2012.

With so many initiatives and measures to cut cost, employees would be very much in a position to understand and support the company's moves.

But Star's decision to pay a nine sen dividend for its 1st Half Year's earnings is rather strange. Star only managed to earn an earning per share of 7.54 sen. Isn't it better to pay out a maximum dividend of 7.54 sen or less to its shareholders if the company is in the drive to cut cost? We all know that in the financial world of survival, do not spend more than you can earn and you will be quite all right, at least. 

Shareholders would happily accept even if a dividend of 7.54 sen or less is given. But Star is paying out more than it earned. So the extra money must come out from its coffers. Why pay extra to its shareholders?

To calculate how much Star is paying out, I am using simple calculation of 9 sen dividend minus 7.54 sen earned for the first half 2014, there is a extra of 1.46 sen or RM14.60 to be paid out to per share. Mutiply this RM14.60 by 738,563,602 shares and the amount is a whopping RM10.7 million plus!

This whopping RM10.7 million plus if divided equally amongst its 1500 employees (a rough guess) comes to a RM7,000.00 plus per employee! Imagine how happy employees would be if this windfall is given to them instead of the shareholders. Motivation to help and go in line with the company's objectives would be strongly supported by its employees!

However, it is the shareholders that would be pleased to receive this "additional" amount of dividend particularly those several major shareholders. Imagine if you own 51 per cent, there is an extra of RM5 miliion in dividends! How useful in this times when prices of everything is up except the stock market!

On one hand, the company tried to share its cost-cutting initiatives with its loyal employees, on the other hand, it paid out more money to its shareholders than it earned. See, talking the walk and walking the talk are seriously hard to understand.

This led me to ask this question : Is Star interested in taking care of its shareholders rather than its employees?

How would you feel if you are an employee of The Star?

How would you feel if you happen to be an employee and as well a shareholder of the company? My dear friend happens to be an employee and a shareholder as well. This time, he can't really have the best of both worlds.

As Deepavali is around the corner, Kassim takes the opportunity to wish all Hindus a Happy Deepavali Day.

I hope to make this occasion a very joyous one with this message taken from the internet.

May This Diwali be as bright as ever.

May this Diwali bring joy, health and wealth to you.

May the festival of lights brighten up you and your near and dear ones lives.

 May this Diwali bring in u the most brightest and choicest happiness

 and love    you have ever Wished for.

 May this Diwali bring you the utmost in peace and prosperity.

 May lights triumph over darkness.

 May peace transcend the earth.

 May the spirit of light illuminate the world.

 May the light that we celebrate at Diwali show us the way

 and lead us together  on the path of peace and social harmony

 WISH U A VERY HAPPY DIWALI

Tek Seng - What Now?

Tek Seng - What Now?

For several weeks, the usually very quiet hardly traded stock, Tek Seng Holdings Berhad has been gaining momentum in terms of trading volume and rising share price. At first, my instinct told me that something was brewing at Tek Seng. Something was going on. When it released its 2nd Qtr results with an earning per share of 4 sen plus, I thought that was the main reason.

But no, that wasn't the main reason. Tek Seng continued its rally again and again with the rare occasion of the share price pulling back by just a little bit. Then it surged a few more sen again. Finally, it dawned to us that the massive interest for Tek Seng was because due to an announcement on Bursa Malaysia on Sept 11. (Note that on that day, Bursa Securities issued an Unusual Market Activity (UMA) query regarding the recent rise in price and volume of Tek Seng's shares).

The announcement was a Memorandum of Understanding (MOU) between Tek Seng and Solartech Energy Corp (SEC). SEC is a public listed company listed on Taiwan Stock Exchange. Established in 2005, SEC is the pioneers in the solar PV industry and is principally engaged in the manufacturing of solar cells such as multi-crystalline and mono-crystalline solar cells, solar modules and systems.

Both parties are going to negotiate to form a strategic alliance whereby SEC is proposing to invest up to RM100 million in TS Solartech Sdn Bhd (Tek Seng holds 86.1 %, the other balance is not known although Kassim would like to believe that most probably, SEC holds the other 13.9 %).

Now why is it suddenly that SEC is keen to increase its participation in TS Solartech Sdn Bhd? There must be several reasons.

One of it must be the eventual potential rising business for the solar power business. Being the main suppliers, it would be foolish to see the other 86.1 % holder reaping massive profits should the solar power business kicks off. Why not buy up or increase the stakes while the solar business is still so so? SEC must be seeing more than us in the solar business. Hence, the willingness to increase their participation.

Secondly, I believe that by having the majority stakes, SEC would be having management control of TS Solartech Sdn Bhd. It is easier to make decisions when you hold the upper hand in any company.

Thirdly, there is the possibility that through TS Solartech, the company would stand to reap possible potential business revenue should it expands beyond Malaysia's market, i.e. the South-East Asian market. After all, Kassim believes that not many companies are in the solar business in Malaysia.

To know whether how the solar business will be in the future, take no further than across the causeway. We all know our "kiasu" or "scared to lose" Singaporean neighbours. When their government plans something, it is not for the next few years, but for the next ten or even twenty years ahead. One of its massive projects, the Mass Rapid Transit system (MRT) commenced with its planning in the 1960s with the aim of meeting the rise in transportation demands not in the next few years, but for the next twenty and thirty years later!

So it came not as a surprise when the Singapore government is looking at solar usage as the one future power supply. The Focus Malaysia reported this recently.

Ever since the MOU's news was out, the share price of Tek Seng has persistently stayed at the 80 sen plus level until late last week.  It has since then consolidated at 75 sen plus, suggesting that there should be few losers since the start of the great Tek Seng rally from its low of 27 sen done on Oct 7, 2013. Since the beginning of Aug 2014, the rally started aggressively.

Each time there was a several sen up rally, the pullback was the one or two sen only. Such more rally up and less pullback pattern resulted in the share price touching a high of 88.5 sen.

During the great rally, the record massive trading volume also indicated that many types of investors had joined the wagon. There must be thousand of short-term speculators and contra players and also new long term investors. As such, the current 75 sen level must be seeing new group of long/short term investors entering into the foray now.

Should the MOU be successful and comes into fruition, what is the next playing field for investors? For one, investors need to read how the details and terms of the MOU turns out to be. It will have a massive bearing on the share price of Tek Seng. Should Tek Seng be seem as one of the big beneficiary following the successful MOU, the share price of Tek Seng will definitely resumes its rally again.

What it the MOU doesn't turn out to be successful and lapse as both sides do not agree with their respective terms and conditions? I foresee new selling pressure on Tek Seng as there will be investors ditching the company. But my experience also told me that Tek Seng would not drop back to its 27 sen level since Oct 2013.

The whole episode has already helped to enhance the business profile of Tek Seng into the limelight. The Tek Seng of today is not the same as the Tek Seng of yesterday. Tek Seng today is a much different animal now, especially with the great potential future business in solar. Furthermore, the other existing divisions are also in the black most of the times, albeit sometimes a bit of profits.

Kassim believed that Tek Seng's great rally is a convergence of several happenings that followed events along the way. The first was its impressive 2nd Qtr 2014 results of 4 sen plus. The second was the announcement of the MOU. The third was perhaps the news that the Singapore government is looking at the solar usage. The action and intention of the Singapore government has created an awareness of the future of solar. Hopefully, the fourth would be a final successful MOU which will see an signing agreement between Tek Seng and SEC that would see Tek Seng as one of the main beneficiary.

Taiwan Sec is very likely to achieve a successful deal with Tek Seng as (according to a report) U.S. had imposed heavy anti dumping tax (35.89%) on Taiwan solar exports recently, resulting in a major drawback in sales as customers from U.S. are worried about the inflated pricing. As a result several Taiwanese firms have expressed interest in opening/ investing in plants overseas.

Should the last happens, investors would be warned to advise to fasten your seat belts and witness another round of rally between long term investors vs short term and contra players in the Tek Seng saga.

From the email :

Tiong Yong Soon in his email immediately after reading my post : Every "Seng" has its day, commented : Today is a hot day for Tek Seng. It is another year high!  More to come?

Well, as we all know, the Tek Seng's rally continued to dumbfound us again and again!

A big thank you to you, Shee Leong Liew for emailing to me to explain what YSP stands for. For the benefits of all YSP Sah shareholders, YSP stands for Yung Shin Pharmaceutical Industry Co. Ltd; name of its mother company in Taiwan.           

  

Revisiting YSP Sah

Revisiting YSP Sah

YSP Sah stands for Y.S.P. Southeast Asia Holding Berhad as the front page of its company annual report 2013 showed. Though I must admit that I do not know Y.S.P. stands for what? A famous blogger once put it as You Shall Pass for one of his blogs.

And I couldn't agree more than that. YSP Sah has indeed passed the great, great test as a consistent profitable company since the 3rd Qtr 2006. (This data is obtained from the website page of www.malaysiastock.biz.) If you include the latest 2nd Qtr 2014, there are a total of 32 consecutive quarters of profits! During these periods, we witnessed several world financial crisis that would have sent many companies reporting losses, albeit big or small.

YSP Sah must be in the right sector. According to its chairman, Datuk Dr. Anis  Bin Ahmad, Malaysia has been experiencing several years of 8-10 per cent annual growth in the pharmaceutical industry, which is reinforced by Frost & Sullivan as an industry worth US1.8 billion in 2013.

Furthermore, the Malaysian Government's Budget 2014 allocation for the health sector and the pharmaceutical subsector was RM2.28 billion, up 14.5 per cent from 2013. All this will inevitably cascade down to result in better uptake for the pharmaceutical subsector, such as YSP Sah.

One of its star performers in terms of sales growth was SunTen Traditional Chinese Medicine segment with a 23.1 per cent increase compared with 2012. Other segments also posted impressive gains resulting in pre-tax profit of RM22 million compared with RM20 million in 2012.

YSP Sah's profits come from its three major business segments i.e. Investment holding, Trading and Manufacturing. The Investment holding segment is measured by the dividend income received from its subsidiary. Pleased to say that so far, all these three segments have been holding on their own profits' levels.

All these years of consistent profits has allowed YSP Sah to gradually built up a sizable cash hoard of RM56 million vs borrowings of only RM11 million according to its latest 2nd Qtr 2014 report. Trade and other receivables is an impressive RM58 million vs Trade and other payables of only RM26 million.

YSP Sah reported a sterling set of results for its 1st Qtr 2014 ended March 31. It posted a 23% jump in net profit to RM5.45 million (eps of 4.1 sen) compared with RM4.4 million in the previous corresponding period. However, YSP Sah reported an eps of only 0.72 sen for its 2nd Qtr 2014 ended June. It was the lowest ever reported eps since the 3rd Qtr 2006!

The poor shocking results sent its share price spiralling from its RM1.80 plus to the current RM1.50 at the time of posting. Kassim can only assume that there are quick and super fast investors who would dump their shares immediately after a poor set of quarterly result. These type of investors do not want to wait for another poor set of consecutive quarterly results.

The YSP Sah of today is definitely different from the YSP Sah of yesterday. The slow and steady rise of its share price means that its Employees' Share Option Scheme ('Esos") offered to its employees is now priced higher than its previous. On Aug 1, 2014, YSP Sah announced it made an offer of options to seven of its directors and eligible employees. The Exercise price of options (2,000,000 "Esos") offered was RM1.49. On that day, YSP Sah was traded at RM1.62.

Although YSP Sah is no longer in the radar of analysis' coverage anymore, one could still not miss the company if one is a regular reader of The Edge and Focus Malaysia. YSP Sah was featured in The Edge issue dated June 2,2014 with a headline : YSP Sah continues slow and steady growth. Just recently, Focus Malaysia wrote about the company in the issue dated Aug 23, 2014 with the headline : YSP Sah sees improved results from product focus.

YSP Sah has continued to reward its loyal shareholders with a 6 sen dividend since 2006. Its dividend was further increased to 6.5 sen for 2012 and 2013. All these dividends were paid out despite the facts that YSP Sah's annual earnings per share during all those years is something not much to shout about.

Investors looking for fast growth will not find YSP Sah an appealing investment. In fact, YSP Sah is more suitable for those more conservative and contended (with regular dividends) types of investors willing to ride patiently with the company for the long haul.

Regular readers would have known that Kassim discovered YSP Sah by chance due to his spouse using one of its products due to her backpain problem. For those new readers, you can refer to my blog dated : August 9, 2013 : Customer-turned-Stake Holder of YSP Sah.

I was so confident of the company that I bought a 10,000 shares at between RM1.04 and RM1.05 on June 5, 2012. It has since turned out to be a good investment. Having received three years of dividends totalling RM1,900.00 (600.00 in 2012, 650.00 in 2013 and 650.00 in 2014), my investment cost is now only RM8,667.09 (Capital: RM10,567.09 minus Dividend: RM1,900.00). At the closing price of RM1.50 on Sept 15, Kassim is sitting on a good paper profit of RM6,100 plus or an impressive return of 58% for a holding period of more than three years.

Yes, Mr. YSH Sah, you have passed as far as Kassim is concerned.

Delloyd Ventures Berhad - Who is with me?

During my previous, I asked minorities of Delloyd Ventures Berhad to stay with me by not giving up the shares to the offerors at RM5.20.  So do you want to know how was the response?

I am most pleased to let you know that I have received tremendous response from many minorities to support my call. Many emailed to me to express their support and urged for unity so that the offerOr would be forced to offer an even higher price. A few even thanked me for taking the lead to try to unite the minorities to be united. How "orange-touch" my heart felt. In case you are wondering what is the meaning of "orange-touch", it is literally translated from the Hokkien dialect meaning "Kam-ton", it means the heart felt so touching!

Are you listening, Mr Offerors?

Well, the truth is nobody emailed to me regarding the above! I am just joking about with my above statement. But does this mean that minorities shareholders are not united? I do not have the answer. Only time will tell. At the time of posting on Sept 15, Delloyd shares traded at RM4.98.

I also take this opportunity to wish all Malaysians a Happy Malaysia Day!