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

MK Land's Pretty Oversold

Judging from my recent postings, readers may think I am into speculative stocks. Not really, but when the timing is right, certain stocks are worth a ride. These stocks, including Talam, are not your buy and hold kind of stocks, but owing to the confluence of certain important factors, they make decent rides. The other stock that I have mentioned last week which I like is MK Land. Following the high profile, high flying reputation in the last few years, MK Land has had to tone itself down to work down some pressing debt issues. MK Land has taken a backseat while working through that over the last 12 months.

The timing to exit some non strategic businesses is welcomed but prices could be depressed, thus its better to take time. Still, its better to exit the hotels, resorts, nursing college and biscuits businesses. The stock has been walloped so bad. If funding was a bit looser, the owner would be dying to privatise the company. The current share price is still below 30sen. The RNAV is RM1.80!!!!!!!! I suspect if the controlling shareholders have no problem with "over-leveraging already", they would have taken the company private. Seriously, 40-50 sen is a no brainer, now that it has sold off some pieces of land, and should be exiting some non-core businesses soon.

If we wait for everything to fall into place, you would be entering MK Land at 50 sen.

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The principal activities of MKLAND are those of investment holding and the provision of management services. The principal activities of the subsidiaries are property development and property investment, operator of hotel, golf and country club, resort and theme park, provision of educational services and investment holding.

The more notable property project is the Damansara Perdana township project. The project consists of 962 condominium units, 269 units of serviced apartments and 107 units of shops and office suites. The township is strategically located along the Leburaya Damansara Puchong and the Sprint Highway. It is also adjacent to IKEA and Tesco. In addition, MKLAND's flagship project is the RM3 bn Bukit Merah Laketown development in Perak. It consists of a range of resort facilities such as the Marina Village, Waterpark, Eco Park, and the Bukit Merah Lake.
Malaysian Rating Corporation Bhd (MARC) has maintained MK Land Holdings Bhd's BBB+ rated RM60 million outstanding bonds on MARCWatch Negative. The company was first placed on MARCWatch Negative on May 7, 2008 due to liquidity concerns following the deferrment of scheduled payments to build up its sinking fund account.

MK Land has since met the timeline to place RM30 million into the sinking fund account before August 25, 2008 and Tranche 1 bonds has been fully repaid. The company's liquidity position has remained strained despite moderate improvement in profitability measures for the six months ending Dec 31, 2008.

To address its upcoming final redemption of the rated bonds in September 2009 of RM60 million, the company had announced on Jan 20, the disposal of 23 acres of land located in Damansara Perdana in Petaling Jaya, Selangor.

For the first half of financial year ended Dec 31, 2008, the company had recorded a pre-tax profit of RM18.2 million, erasing a pre-tax loss of RM16.8 million previously, due to improved sales of development properties.

However, it registered negative net cash from operations of RM2.3 million Its cash and bank balances and deposits with licenses banks remained at RM29 million relative to short-term borrowing of RM300.2 million which includes the outstanding bonds and RM137.9 million of bank overdrafts.

MK Land's revenue increased 82.3% to RM124.6 million for the six months ended Dec 31, 2008, from RM68.4 million a year earlier. It returned the company to the black with a net profit of RM10.1 million or 0.84 sen a share from a loss of RM18.3 million previously. While the profit was boosted by other operating income of about RM8.9 million, the management pointed out that property sales have improved since last July, which was the start of the company’s current financial year ending June 30, 2009 (FY09), despite the difficult market condition.

“We achieved total sales of RM150 million to date (within seven months since July last year) which is significantly higher than the sales recorded in the corresponding period in FY08,” said Mustapha Kamal. According to him, sales for the quarter ended Sept 30 last year amounted to RM59.3 million. The numbers had remained steady in the quarter ended Dec 31, 2008, with sales of RM60.5 million. Meanwhile, “in-hand sales” since the start of the year amounted to RM30.4 million.

Mustapha Kamal stressed that the RM150 million sales came mainly from projects such as the Armanee condominium and Metropolitan Square, not low-cost housing projects that have low or zero margin. Thus, when these sales translate into revenue, it will contribute decent profits to the group. On another note, Mustapha Kamal said he had no choice but to acquire a 9.2-hectare land in Petaling Jaya from MK Land for RM150 million cash last month. He said that MK Land, which was looking to raise funds, couldn’t find a buyer who would offer a fair price for the land.

According to him, MK Land needed the cash flow to kick-start or resume work on certain projects in order to generate the revenue and to avoid delaying the delivery of certain projects, which will result in the company paying “late ascertained damages”.

“I have to sell my privately owned properties before I could pay the RM150 million to MK Land,” he said. MK Land will use proceeds from the land sale to generate more cash flow in order to help repay a RM60 million bond due in September. The bond is deemed to be the last hurdle for MK Land, the management said, as the group’s remaining RM445 million borrowings are essentially project financing, which will only be redeemed as and when the company sells and develops the projects in stages.

He is confident that MK Land is on the path to recovery. He said the company has several projects in the pipeline, in locations such as Damansara Perdana, Damansara Damai, and Jelapang, Ipoh.These projects have obtained the necessary approvals from the authorities and involve 5,639 units of properties with a combined gross development value (GDV) of RM4.1 billion. Depending on the economic situation, the GDV of these projects could be realised within three to five years.

p/s photos: Park Ji Yoon