Monday 30 June 2014

Senai-Desaru" Expressway"

This is part of Senai-Desaru between Cahaya Baru and Penawar. As can be seen from the photo above, it is a "single carriageway two-lane expressway", without divider in between.

Expressway is defined as:

- A wide road for fast-moving traffic, especially one in the US that goes through a city, with a limited number of places at which drivers can enter and leave it. (Cambridge)

- A highway designed for fast traffic, with controlled entrance and exit, a dividing strip between the traffic in opposite directions, and typically two or more lanes in each direction. (Oxford)

- A high-speed divided highway for through traffic with access partially or fully controlled (Merriam-Webster)

- A highway with several lanes (=lines of traffic) going each direction, built so traffic can travel at high speed for long distances. (Macmillan)

Are expressway users who pay toll being short-changed?

Sunday 22 June 2014

Good to be Seni Jaya Corporation minority shareholders?

As of 31 March 2014, Seni Jaya Corporation Berhad (SJC) has short term placements of RM27.4m and cash of RM4.8m (total RM32.2m).

I am not very sure of the total value of its properties held by the group but I am not surprised if the value is above RM20m.

These 3 assets alone could possibly worth RM52.2m or more, before including its business.

At 93sen/share, its market cap is RM37.7m.

According to 2013 annual report, 2 of its executive director, Dato' Blace Teo @ Teo Swee Cheng and Datuk Anne Teo each received total salary of RM2m (RM1m each)  in 2013.

The group's revenue was RM27.0m and RM26.3m in 2013 and 2012 respectively.

Net profit was RM3.1m and RM3.6m in 2013 and 2012 respectively.

EPS 7.76sen/share and 8.9sen/share in 2013 and 2012 respectively

It looks cheap at first glance. But after comparing the executive directors' remuneration against SJC's revenue, net profit and market cap, I give it a pass.

It had been paying dividend of 5sen/share since 2008 but the amount was slashed to 2sen/share in 2013 despite the large cash pile. Why?

(In comparison, the highest paid executive director in Media Prima, the biggest integrated media player in Malaysia was RM1.8m-RM1.85m. Media Prima recorded revenue and net profit of RM1.7b and PATAMI of RM214.1m in 2013.)

Tuesday 10 June 2014

Abitrage opportunity in IJM and IJMLAND

Given the proposed privatisation of IJMLAND by IJM, there could be an arbitrage opportunity for existing IJM holders if the shareholders plan to hold IJM for long term, at least until the completion of the privatisation, and provided the acquisition goes through.

Based on IJM at RM6.80 and IJMLAND at RM3.38, sell IJM and buy 2xIJMLAND shares. You will get back the same amount of IJM shares eventually and get 40sen dividend for free!

Friday 6 June 2014

Shell reduced appointment of proxy to attend AGM from two to one

In Shell Refining Company (F.O.M) Berhad's 2012 annual report

In Shell Refining Company (F.O.M) Berhad's 2013 annual report

Why reduced number of proxy to 1? I think the question should be raised to the board in the upcoming AGM.

Wednesday 4 June 2014

Eversendai an oil & gas stock?

Those who follow Eversendai close enough may understand the reason behind the disappointing share price movement of the counter since its listing in 2011. Consistently being too bullish, overpromised but under-delivered could be the likely reason why investors losing faith in the company.


KUALA LUMPUR: Eversendai Corp Bhd will make an application to Bursa Malaysia to reclassify the company, given the fact that it has ventured into the oil and gas (O&G) industry.

The company was listed on the Main Market of Bursa Malaysia in July 2011 under the construction sector.
Last year, it established the O&G division, as part of its strategic plan to double its revenue to RM2 billion by 2017, with the aim of delivering stronger profits.

Its order book replenishment has been slow. Excluding the RM580m of contract it secured from related party, the new contracts came in slower than its burn rate of RM1b/year. It is not impossible but will be tough to achieve the target revenue of RM2b by 2014

The company has clinched three contracts worth RM605 million in the O&G industry.

The first contract, worth RM24.7 million, was awarded by Petronas Carigali Iraq Holding B.V. to its wholly-owned unit Eversendai Technics RMC FZE last year.

Through Eversendai Offshore RMC FZE, it won two jobs worth RM580 million from Vahana Offshore (S) Pte Ltd to build lift boats. Vahana Offshore is privately held by Eversendai founder Tan Sri A.K. Nathan.

“I do realise we are classified in the wrong sector. We will make the necessary arrangements to reposition the company on Bursa Malaysia since we are already in O&G,” Nathan said.

It just secured its second oil & gas job. And out of the RM1.7b order book, only about 1/3 is oil & gas related order. Is the group classified in the wrong sector and isn't it too soon to apply for reclassification? The move is understandable as companies in oil & gas sector generally commands better valuation than construction sector.

Eversendai has tendered for US$850 million (RM2.7 billion) worth of O&G-related contracts in the Middle East.

At group level, the company is bidding for between RM10 billion and RM12 billion worth of construction projects.

Its current order book is worth about RM1.7 billion.

Nathan controls 70.95 per cent of Eversendai, an integrated structural steel turnkey and power plant contractor.

According to Bursa Malaysia filings, he has been actively accumulating shares in small numbers since March last year.

The other shareholders in Eversendai are the Employees Provident Fund and Lembaga Tabung Haji, with about 8.07 per cent and 5.2 per cent equities, respectively.

Nathan said he has plans to reduce his stake in the future to enhance liquidity in the company’s shareholding.
“I will release shares in time to come to put more liquidity in the market. But I will do it only if the share price is right,” he said.

Meanwhile, analysts said Eversendai’s share price, which has been hovering between RM1.02 and RM1.13 in the past month, is undervalued. Its initial public offering price was RM1.70.

They are advising investors to hold their position in the company. Their high estimate for Eversendai is RM1.90. Sharen Kaur

More professionalism is needed in writing the article. See page below which is self-explanatory