Written by Aishah Mustapha Thursday, 30 December 2010 15:24
KUALA LUMPUR: Could Masterskill Education Group Bhd, one of this year’s worst-performing initial public offerings (IPOs), shape up to become one of the more exciting stocks to watch in 2011?
Considered one of the high-profile IPOs this year, Masterskill has suffered a couple of beatings on the local bourse. This is despite its relatively strong fundamentals, continued earnings growth, cash-rich balance sheet and low price-to-earnings ratio (PER) that has been depressed to just seven times for 2011.
Education companies are generally known for their defensive qualities, with earnings that are relatively recession-proof due to rising demand for education, the importance society places on quality education, and the increasingly prohibitive cost of obtaining overseas degrees. The expense of a foreign education favours companies providing “twinning” degrees or local alternatives, and allows room for fee hikes.
But Masterskill found itself enduring a rough ride this year after battling issues such as share price volatility (due to a high percentage of its shares being owned by foreigners), and the looming prospects of shrinking government loans for its students. The stock is now trading at near its lowest levels of the year after several sell-downs that do not appear to reflect its strong balance sheet and earnings.
Its shares closed at a record-low of RM2.04 yesterday, down 42% from its IPO price of RM3.50, and a steep 52% from its high of RM4.25.
Although the IPO price was considered on the high side, the stock got off to a good start, helped in part by a rally in other education stocks such as HELP International Corp Bhd and SEG International Bhd.
For a few months after its listing in May, Masterskill actually performed relatively well, reaching its high of RM4.25 on Aug 5.
The first sign of trouble appeared in September, when the counter plunged a total of 89 sen, or 23%, within six trading days.
During that time no material announcements were made, which left investors puzzled.
Back then CEO Datuk Seri Edmund Santhara explained that part of the reason for the plunge was the disposal of shares by one of its foreign investors, which dragged the stock down.
Furthermore, the group faced delays in the full opening of two of its campuses in Johor and Kuching. However, Santhara maintained that the targets and plans for the year were still on course despite slight bureaucratic delays.
Since then, all approvals from various bodies have been obtained for the Kuching campus and it is up and running. The company’s expansion plans are still on track, with its Kota Bharu campus set to open in January next year. The Kota Kinabalu campus is being developed and is slated to open by end-2011. The group has also been buying up land in Kajang to develop a university college.
As luck would have it, the group took a second beating in November. Over two weeks, the counter lost 84 sen to close at RM2.06 on Nov 16. By then, another issue had cropped up in the form of a threat to the stability of payments received from student under the National Higher Education Loan Fund (PTPTN) scheme.
The 2009 Auditor-General’s Report highlighted that the PTPTN scheme could be facing a deficit of RM46 billion at the end of the 11th Malaysia Plan in 2016.
There were also concerns that the stock could see overhang pressures once the six-month moratorium on selling by its pre-IPO investors ended in November.
As a nursing and allied health education provider, Masterskill enjoys the benefit of incoming students that rely heavily on government loans. Through this, the group enjoys a healthy Ebitda margin in the mid-40% range that is significantly higher than its peers. The group is said to rely on the PTPTN scheme to provide financing for more than 90% of its students, with some estimates rising to as high as 95%.
Santhara recently told The Edge Financial Daily that this is a common feature of the health science education landscape. Other colleges that offer these disciplines also typically see a high reliance on PTPTN loans. Thus, the group is not the only player facing a threat.
It is a well-known fact that the PTPTN faces problems with its loans as many loan recipients tend to become delinquent in paying their instalments.
However, recent developments could change investors’ doubts about Masterskill.
On Monday it was reported that the Inland Revenue Board (IRB) is expected to implement an automatic salary deduction scheme for PTPTN loans beginning Jan 1, 2012. This is a practice already common in developed countries such as Australia, and ensures the government is repaid.
In order to do this, laws will have to be amended and these could be tabled in parliament by June next year, according to IRB director-general and CEO Tan Sri Hasmah Abdullah.
In an analyst briefing last month, Masterskill’s management had assured that the effect of the PTPTN issue was minimal at present.
The PTPTN is also proposing that it only fund tuition fees of up to RM45,000 per student for a three-year diploma course, compared with as much as RM60,000 currently.
This will only apply to new campuses with new programmes, such as Masterskill’s Kuching campus. The group has appealed against this decision.
CIMB Research said in a Nov 24 report, “This suggests a deficit of RM7,000 per student based on Masterskill’s average course fee of RM53,000. There are about 400 students at the Kuching campus, which translates into a total deficit of RM2.8 million. Management stressed that this amount would not impact the bottomline immediately as diploma programmes span three years. PTPTN pays Masterskill twice a year.
“Management is looking into some options to make up for the potential revenue shortfall, such as creating an internal loan scheme for students. We note that the 400 students at the Kuching campus make up only 2% of the group’s total student numbers.”
In a follow-up note on Nov 29, the research house added that Masterskill’s management believes the new scheme will not impact enrolment, but margins instead. Financially, it said the group’s earnings were still intact.
For the nine-month period ended Sept 30, the group registered a 17.9% year-on-year increase in revenue to RM234.8 million from RM199.1 million a year ago due to an increased student intake. Pre-tax profit was up 8.4% y-o-y to RM91.98 million, while net profit increased 9.5% to RM75.3 million, or 18.4 sen per share based on its expanded share base. Its Ebitda margin stands at a high 43.3% year-to-date.
The group also has healthy gross cash of around RM277.06 million and low debts of RM47.96 million. Its net cash is sizable at RM229.1 million, or 56 sen per share, appears comfortable for its expansion plans.
Masterskill has paid out seven sen in dividends so far. For the first half of this year, this gives an implied payout ratio that is relatively high at 58.4% of net profit, with a gross yield of 3.4% so far. The group’s number of active students stands at 17,613, up from 16,801 a year ago. Foreign shareholders had a sizable stake of around 61% in the group as at Nov 18.
At yesterday’s closing price of RM2.04, the stock is trading at a PER of around 8.7 times, according to Bloomberg consensus estimates.
CIMB Research has forecast net profit of RM103.7 million for this year and RM118.9 million for 2011, with earnings per share of 25.3 sen and 29 sen, respectively.
Based on these forecasts, the stock is trading at 8.1 times for this year and 7.1 times for 2011.
CIMB Research is maintaining its “outperform” call on the stock, and its target price of RM4.73, which is pegged to the research house’s target market PER of 13.8 times for 2012.
Masterskill and JCY International Bhd are the local bourse’s two worst performing IPOs this year, each down about 45% from their IPO price.
But unlike JCY, which reported an unexpected final-quarter loss and lower full-year earnings for FY2010 that were only half of analysts’ earlier forecasts, Masterskill’s financial performance has remained steady.
Santhara says the shares’ current level is an ideal price for local buyers and institutional funds to make an entry.
“We are actively in touch with analysts from both local and foreign fund houses that are keeping a keen interest in our company. Ideally we would like a better spread from both local and foreign funds, but at the moment interest from foreign funds is stronger. We believe they recognise the potential of our industry and sector, and understand the foundation of our business model,” he said.
With relatively resilient earnings and low valuations caused by the major sell-down, perhaps the group can count on a better year in 2011.
This article appeared in The Edge Financial Daily, December 30, 2010.
Thursday, December 30, 2010
G-lovely growth
Malaysia is set to post record rubber glove exports for the eighth straight year in 2010, driven by higher global demand for medical gloves.
Rubber glove exports are due to grow 23 per cent to RM8.8 billion this year, said The Malaysian Rubber Glove Manufacturers Association (Margma).
For the last 15 years, Malaysia has been the world's top supplier of rubber gloves. Last year, the country exported close to 100 billion pieces of rubber gloves to more than 180 countries.
This volume makes up two-thirds of the global market for rubber gloves. Healthcare products like medical gloves continue to see strong demand despite the current lacklustre global economic growth.
"Rubber gloves, be they natural rubber or synthetic, are a necessity in the healthcare and food-handling sectors," Margma president Lee Kim Meow said in a recent interview.
"We expect further growth on the back of rising healthcare awareness in emerging markets, especially in China, India and the Latin American countries," he said.
This is because emerging markets currently spend less on healthcare compared with developed nations like the US, Europe and Japan.
Despite the strong headwinds buffeting the industry, Lee is optimistic that next year's global glove exports from Malaysia will expand by 10 per cent to 108 billion pieces.
Latex cost, which used to be 55 per cent of the total production cost, has swollen to more than 65 per cent since the sudden spike in natural rubber prices over the last three months.
Currently, the average rubber glove selling price is at US$32 per 1,000 pieces, about 23 per cent higher than a year ago.
Lee said Margma members are likely to keep raising rubber glove prices in tandem with the rising latex prices and the weakening US dollar.
Natural rubber latex prices have risen by 65 per cent from an average of RM6 a kg from a year ago. Yesterday, it closed at RM9.89 a kg.
The US dollar, currently trading at RM3.09, has also weakened against the ringgit by 10 per cent compared with RM3.45 about 10 months ago.
Costly natural rubber latex have prompted many glovemakers to produce less natural rubber gloves and more of the synthetic variant.
This trend bodes well with Kuala Lumpur Kepong Bhd (KLK) as it seeks to tighten its grip on the world’s supply of nitrile latex, which is mainly used to make synthetic gloves.
KLK, which holds 19 per cent of Yule Catto & Co plc, supports the UK firm’s buy of Germany’s PolymerLatex Group for e443 million (RM1.8 billion). Chemical maker Yule Catto, listed on the London Stock Exchange, is the owner of the Synthomer Group’s polymers business.
Synthomer’s unit in Malaysia runs a 130,000-tonne-per-year nitrile plant in Kluang, Johor. On the other hand, PolymerLatex operates a 100,000-tonne-a-year plant in Pasir Gudang, Johor.
When asked to comment on KLK and Yule Catto’s decision, Lee replied: “We welcome the move. Our members look forward to see how Yule Catto can offer a wider variety of feedstock to work with.
By Ooi Tee Ching
“We’re actually not short of nitrile latex suppliers,” he said, adding that Bangkok Synthetics Co Ltd is planning to put up a 110,000-tonne a year plant at Rayong province in southern Thailand.
The plant is scheduled to supply nitrile latex to rubber glove makers in Thailand, Malaysia and Indonesia by the third quarter of 2012.
For the last 15 years, Malaysia has been the world's top supplier of rubber gloves. Last year, the country exported close to 100 billion pieces of rubber gloves to more than 180 countries.
This volume makes up two-thirds of the global market for rubber gloves. Healthcare products like medical gloves continue to see strong demand despite the current lacklustre global economic growth.
"Rubber gloves, be they natural rubber or synthetic, are a necessity in the healthcare and food-handling sectors," Margma president Lee Kim Meow said in a recent interview.
This is because emerging markets currently spend less on healthcare compared with developed nations like the US, Europe and Japan.
Despite the strong headwinds buffeting the industry, Lee is optimistic that next year's global glove exports from Malaysia will expand by 10 per cent to 108 billion pieces.
Latex cost, which used to be 55 per cent of the total production cost, has swollen to more than 65 per cent since the sudden spike in natural rubber prices over the last three months.
Currently, the average rubber glove selling price is at US$32 per 1,000 pieces, about 23 per cent higher than a year ago.
Lee said Margma members are likely to keep raising rubber glove prices in tandem with the rising latex prices and the weakening US dollar.
Natural rubber latex prices have risen by 65 per cent from an average of RM6 a kg from a year ago. Yesterday, it closed at RM9.89 a kg.
The US dollar, currently trading at RM3.09, has also weakened against the ringgit by 10 per cent compared with RM3.45 about 10 months ago.
Costly natural rubber latex have prompted many glovemakers to produce less natural rubber gloves and more of the synthetic variant.
This trend bodes well with Kuala Lumpur Kepong Bhd (KLK) as it seeks to tighten its grip on the world’s supply of nitrile latex, which is mainly used to make synthetic gloves.
KLK, which holds 19 per cent of Yule Catto & Co plc, supports the UK firm’s buy of Germany’s PolymerLatex Group for e443 million (RM1.8 billion). Chemical maker Yule Catto, listed on the London Stock Exchange, is the owner of the Synthomer Group’s polymers business.
Synthomer’s unit in Malaysia runs a 130,000-tonne-per-year nitrile plant in Kluang, Johor. On the other hand, PolymerLatex operates a 100,000-tonne-a-year plant in Pasir Gudang, Johor.
When asked to comment on KLK and Yule Catto’s decision, Lee replied: “We welcome the move. Our members look forward to see how Yule Catto can offer a wider variety of feedstock to work with.
By Ooi Tee Ching
“We’re actually not short of nitrile latex suppliers,” he said, adding that Bangkok Synthetics Co Ltd is planning to put up a 110,000-tonne a year plant at Rayong province in southern Thailand.
The plant is scheduled to supply nitrile latex to rubber glove makers in Thailand, Malaysia and Indonesia by the third quarter of 2012.
Sunday, December 26, 2010
Brighter prospect but KNM faces legacy issues
By DANNY YAP danny@thestar.com.my
PETALING JAYA: Securing a RM2.2bil power plant project in Britain will boost KNM Group Bhd's order book to RM4.6bil, but the company will still have to address legacy issues in the next few years.
At an analysts' briefing recently, KNM said its poorer-than-expected performance in the fourth quarter of financial year (FY) 2009 was attributed mainly to provisioning for foreseeable losses in its operations in Brazil, Canada and Indonesia, coupled with a revaluation of the group's Canadian properties.
KNM incurred an unexpected loss of RM31mil in its fourth quarter ended Dec 31, 2009, which reduced its full year 2009 net profit to RM171mil, which was about half its previous year's RM336.4mil.
The result was also significantly below analysts' consensus forecast for FY09 of RM288.7mil.
An analyst with K&N Kenanga Research said KNM had entered into several contracts in the past which had low profit margins and had to honour those contracts in an environment of low oil prices.
“Most of these contracts have either been delivered or are at the tail-end. As such, we are more optimistic of KNM's performance going foward, especially with oil prices at much higher levels,” he said.
The analyst conceded that despite an overall positive consensus on KNM, the company would suffer a legacy issue as a result of not delivering on its targetted performance.
A Maybank Research analyst said KNM's net profit forecast for FY10, FY11 and FY12 was expected to be RM168.2mil, RM232.4mil and RM305.5mil respectively, supported by the new power plant contract in Britain.
The RM2.2bil power plant project from Peterborough Renewable Energy Ltd (PREL) in Britain was secured by KNM via wholly owned subsidiary, KNM Process Systems Sdn Bhd.
“Delivering losses in past contracts secured is a legacy issue when oil prices were down.
“Since then, oil prices have gone up substantially and barring unforeseen circumstance, KNM should meet our net profit targets,” she said.
An analyst with AmResearch said the strong price performance was largely driven by local investors, as foreign shareholding had remained at 21% to 22% over the past few months versus 18% early this year and the peak of 40% in June 2008.
KNM's four-year engineering, procurement, construction and commissioning contract in Britain is to develop an 80MW gross capacity biomass and waste recycling centre known as EnergyPark Peterborough.
“This brings contracts secured year-to-date to RM4.4bil and order book size ballooning to RM4.6bil, which is an all-time high,” said an analyst from HwangDBS.
He said the company's earnings were expected to gain momentum next year with potential news flow from local jobs in the near term.
The analyst has a net profit forecast of RM170mil for FY10, RM184mil for FY11 and RM254mil for FY12.
“We expect the recovery in earnings to continue in the next few quarters as the company rides on higher capacity utilisation and better margin jobs secured, post 2009,” he said.
Going forward, the research house expects the domestic market to play a crucial role in KNM's recovery story.
“Near term, we see news flow to come from its latest joint venture which is targeting potential jobs in East Malaysia, with FY11 and FY12 earnings forecasts upgraded by 24% and 9% respectively to factor in higher contract wins in 2010 and better margins on new jobs secured,” he said.
“We believe the higher valuation on KNM is supported by positive sentiment on oil and gas companies, particularly on the rising number of domestic jobs,” he said, adding that KNM was also poised to benefit from growing global opportunities.
“KNM is currently trading at FY11 price-earnings ratio of 11.9 times against local and regional peer's average of 15.4 times and 18.6 times respectively,” he said.
PETALING JAYA: Securing a RM2.2bil power plant project in Britain will boost KNM Group Bhd's order book to RM4.6bil, but the company will still have to address legacy issues in the next few years.
At an analysts' briefing recently, KNM said its poorer-than-expected performance in the fourth quarter of financial year (FY) 2009 was attributed mainly to provisioning for foreseeable losses in its operations in Brazil, Canada and Indonesia, coupled with a revaluation of the group's Canadian properties.
KNM incurred an unexpected loss of RM31mil in its fourth quarter ended Dec 31, 2009, which reduced its full year 2009 net profit to RM171mil, which was about half its previous year's RM336.4mil.
An analyst with K&N Kenanga Research said KNM had entered into several contracts in the past which had low profit margins and had to honour those contracts in an environment of low oil prices.
“Most of these contracts have either been delivered or are at the tail-end. As such, we are more optimistic of KNM's performance going foward, especially with oil prices at much higher levels,” he said.
The analyst conceded that despite an overall positive consensus on KNM, the company would suffer a legacy issue as a result of not delivering on its targetted performance.
A Maybank Research analyst said KNM's net profit forecast for FY10, FY11 and FY12 was expected to be RM168.2mil, RM232.4mil and RM305.5mil respectively, supported by the new power plant contract in Britain.
The RM2.2bil power plant project from Peterborough Renewable Energy Ltd (PREL) in Britain was secured by KNM via wholly owned subsidiary, KNM Process Systems Sdn Bhd.
“Delivering losses in past contracts secured is a legacy issue when oil prices were down.
“Since then, oil prices have gone up substantially and barring unforeseen circumstance, KNM should meet our net profit targets,” she said.
An analyst with AmResearch said the strong price performance was largely driven by local investors, as foreign shareholding had remained at 21% to 22% over the past few months versus 18% early this year and the peak of 40% in June 2008.
KNM's four-year engineering, procurement, construction and commissioning contract in Britain is to develop an 80MW gross capacity biomass and waste recycling centre known as EnergyPark Peterborough.
“This brings contracts secured year-to-date to RM4.4bil and order book size ballooning to RM4.6bil, which is an all-time high,” said an analyst from HwangDBS.
He said the company's earnings were expected to gain momentum next year with potential news flow from local jobs in the near term.
The analyst has a net profit forecast of RM170mil for FY10, RM184mil for FY11 and RM254mil for FY12.
“We expect the recovery in earnings to continue in the next few quarters as the company rides on higher capacity utilisation and better margin jobs secured, post 2009,” he said.
Going forward, the research house expects the domestic market to play a crucial role in KNM's recovery story.
“Near term, we see news flow to come from its latest joint venture which is targeting potential jobs in East Malaysia, with FY11 and FY12 earnings forecasts upgraded by 24% and 9% respectively to factor in higher contract wins in 2010 and better margins on new jobs secured,” he said.
“We believe the higher valuation on KNM is supported by positive sentiment on oil and gas companies, particularly on the rising number of domestic jobs,” he said, adding that KNM was also poised to benefit from growing global opportunities.
“KNM is currently trading at FY11 price-earnings ratio of 11.9 times against local and regional peer's average of 15.4 times and 18.6 times respectively,” he said.
Tuesday, December 21, 2010
KNM secures RM2bil biomass contract in UK
By M. HAFIDZ MAHPAR
hafidz@thestar.com.my
Project represents firm’s drive into renewable, clean energy sector
PETALING JAYA: Oil and gas process equipment maker KNM Group Bhd's wholly-owned subsidiary KNM Process Systems Sdn Bhd (KNMPS) has secured a 450mil (RM2.196bil) engineering, procurement, construction and commissioning (EPCC) contract for a biomass and waste recycling centre project in England.
KNM told Bursa Malaysia that KNMPS yesterday entered the agreement for the EPCC of works towards the development of an 80MWe gross capacity energy from biomass and waste recycling centre project called EnergyPark Peterborough in Peterborough.
The contract with Peterborough Renewable Energy Ltd spans four years.
“This project represents KNM's drive into the renewable and clean energy sector,” KNM said.
The company said it was not expected to have any material impact to KNM Group's financial performance for this year ending Dec 31.
However, the project was expected to contribute positively to its earnings for the next four financial years.
“The project is subject to certain risks mainly in the power and renewable energy industries and legislation on clean energy in the United Kingdom.
“These include changes in general economic conditions such as, but not limited to, inflation, taxation, foreign exchanges, interest rates, labour and material supply, changes in business and operating conditions such as, but not limited to, government and statutory regulations and deterioration in prevailing market conditions,” KNM said.
KNMPS is mainly involved in the design, engineering, procurement and manufacturing of process equipment, including without limitation pressure vessels, reactors, columns and towers, drums, heat exchangers, air finned coolers, process gas waste heat boilers and specialised shell and tube heat exchangers.
It also provides technical and project management services in relation to process equipment, plant facilities and general facilities for the oil, gas, petrochemicals, minerals processing and renewable energy industries.
Last month, KNMPS won a RM680mil bid to supply technical documentation, equipment and services for the development of gas condensate fields in Uzbekistan.
http://www.prel-online.co.uk/prel/index.html
Who is Peterborough Renewable Energy Ltd?
Peterborough Renewable Energy Limited was established in 2002 by a group of local business men to realise their passion for managing material in an environmentally friendly manner and to eliminate the need for landfill sites. The development of the Energypark provides the platform to turn this vision into a reality. The park comprises of zero landfill technology creating value from all materials generated. The Energypark increases the proportion of waste materials that can be recycled and provide renewable resources.The company aims to provide solutions to specific waste and energy issues faced by private and public bodies through the selection of best available technologies.
The Vision
The purpose of the Energypark is to take the materials that would normally go to landfill and turn it into either re-useable products or energy for homes.
Tuesday, December 14, 2010
Credit Suisse maintains Underperform on YTL Power
Written by theedgemalaysia.com Wednesday, 15 December 2010 13:07
KUALA LUMPUR: Credit Suisse Securities Research is maintaining its Underperform on YTL Power International on concerns about its investments in projects which are not widely adopted.
It said on Wednesday, Dec 15, YTL Power is fairly valued, as it is trading at a FY11E price-to-earnings (PE) of 15 times, which is in line with the Malaysian market P/E. It maintained its Underperform rating.
On Tuesday, YTL Power said it was investing in oil shale in Jordan with the acquisition of a 30% stake in Enefit’s Jordanian oil shale projects, marking its foray into the upstream oil business.
The consortium plans to develop an oil plant with output of approximately 38,000 barrels per day and a 900 megawatt oil shale-fired power plant. As oil shale extraction is not widely adopted yet, the output figure may be contentious.
“Main concerns with oil shale: (1) cost has been significantly higher than conventional pumped oil (2) environmental concerns.
“As oil shale is still largely ‘conceptual’, we would not incorporate any profit contribution from this project yet. The risk profile of YTL Power continues to increase as it is investing in projects that are not widely adopted, that is Wimax and oil shale,” it said.
It rose one sen to RM2.42 at midday on Wednesday.
http://www.theedgemalaysia.com/business-news/178596-credit-suisse-maintains-underperform-on-ytl-power.html
PETALING JAYA: YTL Power International Bhd's venture into oil shale projects in Jordan is likely to yield results in the long term, according to research houses.
TA Securities in a report yesterday said it was making no changes to YTL Power's earnings forecast for the financial years 2011 and 2012.
This is a long-term project which is unlikely to have a significant impact on the immediate term, it said. TA Securities forecasts YTL Power to record net profit of RM1.29bil and RM1.48bil for the financial years ending June 30, 2011 and 2012 respectively.
On Tuesday, YTL Power said it was investing in oil shale in Jordan with the acquisition of a 30% stake in Estonian state oil company Eestia Energia (EE), marking its foray into the upstream oil business.
The value of the investment in the project will be determined after the debt to equity structure of the project is finalised. The entire project is estimated to cost around US$5bil. The consortium plans to develop an oil plant with output of approximately 38,000 barrels per day and a 900 megawatt (MW) oil shale-fired power plant.
HwangDBS said the investment would have a limited near-term impact as the construction would only commence following further analysis of the resource and environmental studies.
We expect the project to be mainly debt-funded by non-recourse project loan, with targeted mid-teen return.
The additional debt will not be consolidated into YTL Power's book given its 30% associate stake. (Its) equity portion is likely to be funded by internal funds, but other details of the planned investment are not disclosed at this juncture. HwangDBS said.
AmResearch said the project, if materialised, would introduce uncertainties to YTL Power's recurring income profile given the greenfield development's high operating costs and risks for an oil shale operation and high geopolitical risks in the Middle East.
We understand that YTL Power is venturing into this business to complement the oil trading activities of its wholly-owned Power Seraya. Assuming an equity to debt ratio of 40:60, we estimate that this could mean an investment of RM1.9bil versus the group's gross cash of RM7bil currently.
TA Securities said the key attraction of this project was the inclusion of the 900MW oil shale-fired power plant, which would help ensure the economic viability of the upstream project.
According to the IEA (International Energy Agency), the production cost for oil shale is about US$52 to US$113 per barrel versus US$6 to US$28 per barrel for conventional source in the Middle East, it said.
KUALA LUMPUR: Credit Suisse Securities Research is maintaining its Underperform on YTL Power International on concerns about its investments in projects which are not widely adopted.
It said on Wednesday, Dec 15, YTL Power is fairly valued, as it is trading at a FY11E price-to-earnings (PE) of 15 times, which is in line with the Malaysian market P/E. It maintained its Underperform rating.
On Tuesday, YTL Power said it was investing in oil shale in Jordan with the acquisition of a 30% stake in Enefit’s Jordanian oil shale projects, marking its foray into the upstream oil business.
The consortium plans to develop an oil plant with output of approximately 38,000 barrels per day and a 900 megawatt oil shale-fired power plant. As oil shale extraction is not widely adopted yet, the output figure may be contentious.
“Main concerns with oil shale: (1) cost has been significantly higher than conventional pumped oil (2) environmental concerns.
“As oil shale is still largely ‘conceptual’, we would not incorporate any profit contribution from this project yet. The risk profile of YTL Power continues to increase as it is investing in projects that are not widely adopted, that is Wimax and oil shale,” it said.
It rose one sen to RM2.42 at midday on Wednesday.
http://www.theedgemalaysia.com/business-news/178596-credit-suisse-maintains-underperform-on-ytl-power.html
YTL Power to gain in long term
Its Jordan venture will have limited near-term impactPETALING JAYA: YTL Power International Bhd's venture into oil shale projects in Jordan is likely to yield results in the long term, according to research houses.
TA Securities in a report yesterday said it was making no changes to YTL Power's earnings forecast for the financial years 2011 and 2012.
This is a long-term project which is unlikely to have a significant impact on the immediate term, it said. TA Securities forecasts YTL Power to record net profit of RM1.29bil and RM1.48bil for the financial years ending June 30, 2011 and 2012 respectively.
On Tuesday, YTL Power said it was investing in oil shale in Jordan with the acquisition of a 30% stake in Estonian state oil company Eestia Energia (EE), marking its foray into the upstream oil business.
The value of the investment in the project will be determined after the debt to equity structure of the project is finalised. The entire project is estimated to cost around US$5bil. The consortium plans to develop an oil plant with output of approximately 38,000 barrels per day and a 900 megawatt (MW) oil shale-fired power plant.
HwangDBS said the investment would have a limited near-term impact as the construction would only commence following further analysis of the resource and environmental studies.
We expect the project to be mainly debt-funded by non-recourse project loan, with targeted mid-teen return.
The additional debt will not be consolidated into YTL Power's book given its 30% associate stake. (Its) equity portion is likely to be funded by internal funds, but other details of the planned investment are not disclosed at this juncture. HwangDBS said.
AmResearch said the project, if materialised, would introduce uncertainties to YTL Power's recurring income profile given the greenfield development's high operating costs and risks for an oil shale operation and high geopolitical risks in the Middle East.
We understand that YTL Power is venturing into this business to complement the oil trading activities of its wholly-owned Power Seraya. Assuming an equity to debt ratio of 40:60, we estimate that this could mean an investment of RM1.9bil versus the group's gross cash of RM7bil currently.
TA Securities said the key attraction of this project was the inclusion of the 900MW oil shale-fired power plant, which would help ensure the economic viability of the upstream project.
According to the IEA (International Energy Agency), the production cost for oil shale is about US$52 to US$113 per barrel versus US$6 to US$28 per barrel for conventional source in the Middle East, it said.
http://biz.thestar.com.my/news/story.asp?file=/2010/12/16/business/7629488&sec=business
KNM in oil and gas joint venture
PETALING JAYA: KNM Group Bhd has on Dec 13 entered into a joint venture agreement with Petrosab Logistik Sdn Bhd to form a 51:49 joint-venture company known as KNM Petrosab Sdn Bhd (KNMP) to target oil and gas projects in Sabah.
It told Bursa Malaysia yesterday that KNM and Petrosab had invested in 51,000 and 49,000 ordinary shares of RM1 each in KNMP, and KNMP, in turn, would be forming project companies to target the projects.
KNMP had on Dec 13 invested in two ordinary shares of RM1 each in KNM Petrosab Engineering Sdn Bhd (KNMPE) as one of the project companies.
Petrosab is a joint venture oil and gas services company between Yayasan Sabah Group and Asian Supply Base Sdn Bhd.
KNM said the investments aimed to tap into various existing and future capital expenditure for oil, gas and petrochemical projects in Sabah.
However, it said the investments were subject to certain risks such as those prevalent in the oil and gas, petrochemical and energy industries.
http://biz.thestar.com.my/news/story.asp?file=/2010/12/15/business/7623170&sec=business
http://www.klse.com.my/website/bm/listed_companies/company_announcements/announcements/index.jsp
報導：葉愛雲（吉隆坡15日訊）科恩馬（KNM，7164，主要板工業）4股整合成1股后重新交易，今日一度猛漲35仙至2.68令吉，母股及憑單齊頭並進受投資者熱捧，穩踞今日熱門股前二名。
今早，科恩馬挑高4仙以2.37令吉報開后，即一路攀升，休市收在2.52令吉，揚19仙，半日交投2707萬3000股。
旗下歐式現金結算備兌憑單科恩馬-CE（KNM-CE，7164CE，主要板憑單）也遭投資者熱炒，休市時以3029萬5700股擠身熱門股項榜首，揚1.5仙至16仙掛收。
整合前報價52仙
科恩馬大股東兼董事經理李瑞興早前指出，整合股票后股票面值為1令吉，這是為了吸引更多大型機構投資者入股，及易于管理過度龐大的股票數量。
截至12月1日，科恩馬未整合前最后報價為52仙，12月2日時則以整合后價格2.08令吉迎市，但當天就跌5仙至2.03令吉。
完成整合后，科恩馬即接二連三宣佈發展大計積極改善公司前景，加上油氣領域已漸復甦及漸入佳境的訂單流量，獲券商看好該股將能從中受惠，紛紛上修目標價介于2.96至3.43令吉。
自本月2日起至昨日閉市時的10日內，該股也已上漲12%。
在一切未來收益仍未明朗改善前，僑豐投資研究雖上修目標價但依然對該股持謹慎態度，給予“短線買進”評級及上修目標價從2.22至2.96令吉。
僑豐投資研究指出，藉著地理環境及豐富深海油田的優勢，沙巴向來都是油氣領域業者的目標，科恩馬的競爭對手尚有環海資源（ALAM，5115，主要板貿易）及沿海工程（COASTAL，5071，主要板工業）等。
閉市時，科恩馬揚15%或35仙至2.68令吉，成交量4810萬1500股；科恩馬-CE則掛20仙，起5.5仙，交投7742萬8000股。
專注發展沙巴油氣計劃
科恩馬昨日向馬證交所報備將和沙巴Petrosab物流公司合作設立聯營公司，專注發展沙巴州油氣計劃。
文告指出，雙方設立的聯營公司將命名為科恩馬Petrosab公司（KNMP）。
科恩馬將持有KNMP的5萬1000股或51%股權；Petrosab物流公司則持有4萬9000股或49%股權。
KNMP初步繳足資本為10萬股或10萬令吉，該公司將成為雙方的投資控股公司。
報備文件也指出，科恩馬將負責未來的計劃融資，如有需要，科恩馬將透過發行債券或金融衍生產品籌資。
Petrosab物流公司是由沙巴州首席部長于2005年成立，是沙巴基金（ Yayasan Sabah）及Asian Supply Base的聯營公司，主要供應東馬油公司及承包商油氣相關服務。
It told Bursa Malaysia yesterday that KNM and Petrosab had invested in 51,000 and 49,000 ordinary shares of RM1 each in KNMP, and KNMP, in turn, would be forming project companies to target the projects.
KNMP had on Dec 13 invested in two ordinary shares of RM1 each in KNM Petrosab Engineering Sdn Bhd (KNMPE) as one of the project companies.
Petrosab is a joint venture oil and gas services company between Yayasan Sabah Group and Asian Supply Base Sdn Bhd.
KNM said the investments aimed to tap into various existing and future capital expenditure for oil, gas and petrochemical projects in Sabah.
However, it said the investments were subject to certain risks such as those prevalent in the oil and gas, petrochemical and energy industries.
http://biz.thestar.com.my/news/story.asp?file=/2010/12/15/business/7623170&sec=business
http://www.klse.com.my/website/bm/listed_companies/company_announcements/announcements/index.jsp
4股合1展威勢
科恩馬猛漲35仙
科恩馬猛漲35仙
報導：葉愛雲（吉隆坡15日訊）科恩馬（KNM，7164，主要板工業）4股整合成1股后重新交易，今日一度猛漲35仙至2.68令吉，母股及憑單齊頭並進受投資者熱捧，穩踞今日熱門股前二名。
今早，科恩馬挑高4仙以2.37令吉報開后，即一路攀升，休市收在2.52令吉，揚19仙，半日交投2707萬3000股。
旗下歐式現金結算備兌憑單科恩馬-CE（KNM-CE，7164CE，主要板憑單）也遭投資者熱炒，休市時以3029萬5700股擠身熱門股項榜首，揚1.5仙至16仙掛收。
整合前報價52仙
科恩馬大股東兼董事經理李瑞興早前指出，整合股票后股票面值為1令吉，這是為了吸引更多大型機構投資者入股，及易于管理過度龐大的股票數量。
截至12月1日，科恩馬未整合前最后報價為52仙，12月2日時則以整合后價格2.08令吉迎市，但當天就跌5仙至2.03令吉。
完成整合后，科恩馬即接二連三宣佈發展大計積極改善公司前景，加上油氣領域已漸復甦及漸入佳境的訂單流量，獲券商看好該股將能從中受惠，紛紛上修目標價介于2.96至3.43令吉。
自本月2日起至昨日閉市時的10日內，該股也已上漲12%。
在一切未來收益仍未明朗改善前，僑豐投資研究雖上修目標價但依然對該股持謹慎態度，給予“短線買進”評級及上修目標價從2.22至2.96令吉。
僑豐投資研究指出，藉著地理環境及豐富深海油田的優勢，沙巴向來都是油氣領域業者的目標，科恩馬的競爭對手尚有環海資源（ALAM，5115，主要板貿易）及沿海工程（COASTAL，5071，主要板工業）等。
閉市時，科恩馬揚15%或35仙至2.68令吉，成交量4810萬1500股；科恩馬-CE則掛20仙，起5.5仙，交投7742萬8000股。
專注發展沙巴油氣計劃
科恩馬昨日向馬證交所報備將和沙巴Petrosab物流公司合作設立聯營公司，專注發展沙巴州油氣計劃。
文告指出，雙方設立的聯營公司將命名為科恩馬Petrosab公司（KNMP）。
科恩馬將持有KNMP的5萬1000股或51%股權；Petrosab物流公司則持有4萬9000股或49%股權。
KNMP初步繳足資本為10萬股或10萬令吉，該公司將成為雙方的投資控股公司。
報備文件也指出，科恩馬將負責未來的計劃融資，如有需要，科恩馬將透過發行債券或金融衍生產品籌資。
Petrosab物流公司是由沙巴州首席部長于2005年成立，是沙巴基金（ Yayasan Sabah）及Asian Supply Base的聯營公司，主要供應東馬油公司及承包商油氣相關服務。
Malaysia's YTL Power buys stake in $5 bln Jordan shale project
YTL Corp unit to pay US$5bil for 30% stake in Enefit’s oil shale projects
KUALA LUMPUR: YTL Power International Bhd is investing in oil shale projects in Jordan with the acquisition of a 30% stake in Eesti Energia's Jordanian oil shale projects.
YTL would invest US$5bil to buy the 30% block in the Jordanian oil shale project, Bloomberg reported.
Eesti Energia and its Jordanian partner Near East Investment (NEI), together with YTL Power, will develop an oil plant with output of about 38,000 barrels per day.
Construction will commence following further analysis of the resource and environmental studies.The plant will utilise Eesti Energia's leading proprietary oil recovery technology, which has more than 30 years of industrial production in Estonia.
As the new strategic partner, YTL Power would contribute its experience in developing and operating large energy production and trading assets in emerging markets, it said in a statement yesterday.
According to the new shareholding structure, Eesti Energia owns 65%, YTL Power 30% and NEI 5% of the oil shale projects in Jordan.
Eesti Energia is the national energy company of Estonia which is internationally known as Enefit while YTL Power is the utility subsidiary of YTL Corp Bhd.
We are delighted to have the opportunity to invest alongside Enefit, with its leading expertise in oil shale fired power generation and technology for oil recovery, said YTL Power executive director Datuk Yeoh Seok Hong. Chong said YTL Power first became interested in the upstream side of the oil business after acquiring Power Seraya from Singapore's Temasek Holdings in 2008.
"This (the investment in Jordan) fits well with our strategy of investing in natural resource-based energy infrastructure," said Datuk Yeoh Seok Hong, executive director of YTL Power, in an emailed statement.
"We are going into Jordan on a holistic basis, which means we are going to be involved in every part of the project," YTL Power's director of financial analysis Lucius Chong said.
"This is our first time in the country and the first time we are working with oil shale, which is why we have entered into a partnership with Eestie Energia."
Enefit chief executive officer Sandor Liive said YTL's presence would make a great contribution to the realisation of these projects which would put Jordan for the first time on the way to energy independence.
Eestie Energia is the world's largest producer of shale oil. The Estonian government had considered listing a minority stake in the power company, but shelved the IPO due to market instability.
In May, Jordan Oil Shale Energy Company, a subsidiary of Eesti Energia, signed a concession agreement with Jordanian government for the mining of oil shale from Attarat um Ghudrun oil shale deposit in Jordan.
This was the first surface mining oil shale concession to be awarded by the Jordanian government, Bernama reported.
http://biz.thestar.com.my/news/story.asp?file=/2010/12/15/business/7622017&sec=business
http://www.btimes.com.my/articles/shal/Article/#ixzz189b4JyeF
约旦和爱沙尼亚政府于2010年5月11日签署一项协议，允许爱沙尼亚能源公司（Eesti Energia）-在国际上以Enefit商标经营 - 进行约旦油页岩的勘探与加工。 该协议签署之前，约旦政府已于5月4日对协议进行了预先批准。
油页岩被认为是世界上非常规石油的主要来源，是传统石油储备的两倍多。
这项协议巩固了爱沙尼亚能源公司作为世界上最大的油页岩开采商的地位，同时也代表着约旦能源供应方面的重大进展。
约旦的油页岩
约旦是中东地区以油页岩作为唯一能源资源的少数几个国家之一。 然而，约旦凭借其油页岩资源可以轻松满足其电力和石油方面的能源需求。 自2003年以来，约旦一直依赖来自埃及的石油进口和天然气供应，在此之前，其石油及天然气能源的供应则依赖于伊拉克。
约旦拥有世界第七大油页岩储备（次于美国、俄罗斯、刚果、巴西、意大利和摩洛哥），其探明储量超过400亿吨。 已发现超过20个靠近地表的矿藏点，覆盖约旦60%的国土。
除了爱沙尼亚能源公司，其他大公司也正调查在约旦开采油页岩的可能性，其中包括壳牌、巴西石油公司和道达尔。
爱沙尼亚能源公司在约旦的油页岩项目
爱沙尼亚能源公司将在约旦 Attarat Um Ghudran 矿床中提取油页岩，该矿床是约旦主要矿床之一。 这项工作将由约旦油页岩能源公司负责实施，该公司是爱沙尼亚能源公司和约旦投资集团（由Munir Atalla 所拥有的Near East Investments）共同出资建立的子公司。 Near East Investments持该子公司24%的股份。
爱沙尼亚能源公司的油页岩项目主要包括以下两个项目：
石油项目： 无底合成原油日产量约38,000桶（油桶）。
电力项目： 油页岩直燃发电能力达900兆瓦。
此项工作涵盖约26亿吨油页岩的特许区域，该区域可生产15亿桶页岩油，并赋予爱莎尼亚能源公司额外约18亿吨油页岩（可生产11亿桶页岩油）的优先购买权。
预计在8-10年内这些项目所生产的能源将可供使用。
为了保证该项目的长期性，爱沙尼亚能源公司已与约旦政府签署一项为期44年的特许协议，以确保财政和监管上的稳定性。
凭借其Enefit 280技术，爱沙尼亚能源公司能够利用十分有限的水资源来进行油页岩的开采，这种技术特别适合约旦的气候条件。 至于发电用水，爱沙尼亚能源公司已获得授权进行特许范围内的水资源勘探和开采（在现有的水源开采权下），以及对特许范围之外的水源进行勘探（在约旦法律的标准需求下）。
爱沙尼亚能源公司 —世界领先的页岩油生产商
爱沙尼亚能源公司是世界上最大的油页岩开采商，也是爱沙尼亚最大的发电厂商，可通过油页岩提供爱沙尼亚超过90%的电力。在爱沙尼亚，油页岩的商业化开采和加工始于1916年。
爱沙尼亚能源公司在其纳尔瓦石油回收厂每年可生产约100万桶页岩油。迄今为止，已生产超过2亿桶的页岩油。它是世界上最大的油页岩火力发电厂的经营者。
爱沙尼亚能源公司已与其战略伙伴Outotec开发了用于液体燃料生产的先进的固体热载体技术 ，应用此项技术的工厂目前正在爱沙尼亚建设，并将于2012年投产。
爱沙尼亚能源公司也向希望利用本国油页岩储备的国家销售其关键专有技术。在摩洛哥，爱沙尼亚能源公司与摩洛哥国家能源部门（ONHYM）于4月27日签署了谅解备忘录– 赋予爱沙尼亚能源公司探测摩洛哥油页岩矿床的专有权，如果可行，将获得这些矿床的开采权并发展其油页岩产业。
油页岩被认为是世界上非常规石油的主要来源，是传统石油储备的两倍多。
这项协议巩固了爱沙尼亚能源公司作为世界上最大的油页岩开采商的地位，同时也代表着约旦能源供应方面的重大进展。
约旦的油页岩
约旦是中东地区以油页岩作为唯一能源资源的少数几个国家之一。 然而，约旦凭借其油页岩资源可以轻松满足其电力和石油方面的能源需求。 自2003年以来，约旦一直依赖来自埃及的石油进口和天然气供应，在此之前，其石油及天然气能源的供应则依赖于伊拉克。
约旦拥有世界第七大油页岩储备（次于美国、俄罗斯、刚果、巴西、意大利和摩洛哥），其探明储量超过400亿吨。 已发现超过20个靠近地表的矿藏点，覆盖约旦60%的国土。
除了爱沙尼亚能源公司，其他大公司也正调查在约旦开采油页岩的可能性，其中包括壳牌、巴西石油公司和道达尔。
爱沙尼亚能源公司在约旦的油页岩项目
爱沙尼亚能源公司将在约旦 Attarat Um Ghudran 矿床中提取油页岩，该矿床是约旦主要矿床之一。 这项工作将由约旦油页岩能源公司负责实施，该公司是爱沙尼亚能源公司和约旦投资集团（由Munir Atalla 所拥有的Near East Investments）共同出资建立的子公司。 Near East Investments持该子公司24%的股份。
爱沙尼亚能源公司的油页岩项目主要包括以下两个项目：
石油项目： 无底合成原油日产量约38,000桶（油桶）。
电力项目： 油页岩直燃发电能力达900兆瓦。
此项工作涵盖约26亿吨油页岩的特许区域，该区域可生产15亿桶页岩油，并赋予爱莎尼亚能源公司额外约18亿吨油页岩（可生产11亿桶页岩油）的优先购买权。
预计在8-10年内这些项目所生产的能源将可供使用。
为了保证该项目的长期性，爱沙尼亚能源公司已与约旦政府签署一项为期44年的特许协议，以确保财政和监管上的稳定性。
凭借其Enefit 280技术，爱沙尼亚能源公司能够利用十分有限的水资源来进行油页岩的开采，这种技术特别适合约旦的气候条件。 至于发电用水，爱沙尼亚能源公司已获得授权进行特许范围内的水资源勘探和开采（在现有的水源开采权下），以及对特许范围之外的水源进行勘探（在约旦法律的标准需求下）。
爱沙尼亚能源公司 —世界领先的页岩油生产商
爱沙尼亚能源公司是世界上最大的油页岩开采商，也是爱沙尼亚最大的发电厂商，可通过油页岩提供爱沙尼亚超过90%的电力。在爱沙尼亚，油页岩的商业化开采和加工始于1916年。
爱沙尼亚能源公司在其纳尔瓦石油回收厂每年可生产约100万桶页岩油。迄今为止，已生产超过2亿桶的页岩油。它是世界上最大的油页岩火力发电厂的经营者。
爱沙尼亚能源公司已与其战略伙伴Outotec开发了用于液体燃料生产的先进的固体热载体技术 ，应用此项技术的工厂目前正在爱沙尼亚建设，并将于2012年投产。
爱沙尼亚能源公司也向希望利用本国油页岩储备的国家销售其关键专有技术。在摩洛哥，爱沙尼亚能源公司与摩洛哥国家能源部门（ONHYM）于4月27日签署了谅解备忘录– 赋予爱沙尼亚能源公司探测摩洛哥油页岩矿床的专有权，如果可行，将获得这些矿床的开采权并发展其油页岩产业。
http://www.in-en.com/oil/html/oil-1703170380647460.html
油页岩（又称油母页岩）是一种高灰分的含可燃有机质的沉积岩，它和煤的主要区别是灰分超过40%，与
碳质页岩的主要区别是含油率大于3.5%。油页岩经低温干馏可以得到页岩油，页岩油类似原油，可以制成汽油、柴油或作为燃料油。除单独成藏外，油页岩还经常与煤形成伴生矿藏，一起被开采出来。
目前，世界大部分油页岩分布区地质勘探程度低，很难对全球的油页岩资源量正确预测，只有部分国家对本国油页岩矿床进行了详细的勘探和评价工作。就目前的勘探情况而言，美国是世界上油页岩资源最丰富的国家，查明地质资源量为33400亿吨，折合页岩油为3036亿吨。
2004～2006年，我国对油页岩资源进行了国内首次评价，查明地质资源量为7199亿吨，折合成页岩油为476亿吨。我国在煤炭开采过程中产生的油页岩达到近千万吨，仅抚顺西露天矿油母页岩每年排弃量就达800万吨，排弃占用大量耕地，严重影响了矿区周围的生态环境。
资源 油页岩产油率低于6％者属贫矿,高于10％的属富矿。世界已探明的产油率在 4％以上的油页岩储量，折合页岩油约470Gt,超过已探明的石油储量。美国西部格林河流域拥有世界上储量最大的油页岩矿藏；中国的油页岩资源也较丰富, 仅次于美国、巴西、俄罗斯等国,其中最负盛名的为抚顺矿区，与煤共生，探明油页岩储量3.6Gt，平均产油率约5.5％；茂名油页岩矿，可采储量4Gt， 平均产油率6.0％。
http://baike.baidu.com/view/172038.html?goodTagLemma
Saturday, December 11, 2010
My Stock Portfolio 11 Dec 2010
My stock portfolio date 11 December 2010.. As I am still in the learning stage and learning from mistake, the return of my portfolio is nothing to shout with merely 2-3% return..
YTLPOWR I started invest in stock market since 2007, the first stock I bought is ytlpowr... Holding until now for around 3 years, it's about 40% return after including dividend and capital gain.. Recently, I am using dividend reinvest into ytlpowr again.. For this counter, I am holding for long term as I am confident with its management team. The profit is sustainable althought it invested in telecomunication and oil share sector which is vary from core business.. After the license for 700 Mh spectrum fail on MCMC clarification, the video on demand project fall apart.. The share price retrace back to 2.4 level.. If its share price drop below 2.2, i will start accumulating again..
KNM is the second stock I invested in Bursa at 2008 while the market is in bull market and aiming for flipping.. This is cyclical stock and the timing I enter is bull market.. As I don't have much experience in stock market and listen to news. After the recression, I lost 70% from this counter. Thinking of cut loss before.. However, recently the business prospect for this counter getting bright and the company return to profit quarter.. Besides, it secures big project from uzbekistan RM680 millions.. The main concern for this counter is the debt issue which is RM1 billion.. Will continue to monitor this counter but temporary hold it as the company prospect and profit started to recover.. KNM secures new biomass contract RM2bil in UK. The business prospect getting better and better.. I have recover my lost to only 40% date 22 dec 2010.. Expect to full recover by end of next year.
Genting, I have make better profit from this counter when I bought into it at 2008...80% return from this counter after holding for 2 years plus.. Genting has a lot of cash which is in the net cash position.. Will continue to hold this company as the earning is improving and the business prospect is good as genting Singapore bring great profit for this company..
MEGB, after doing much researches, we found out that this counter is oversold as the PTPTN issue and delay opening in new campuses.. The PTPTN issue is overblown and the financial statement is healthy.. The cash is sufficient in settle all the debt.. I decided to buy this counter as the company is in recession proof business... Recently, buying into this counter again as the P/E and dividend yield is getting attractive for me.. With the entry price I will get 6% dividend yield and expect more student enrollment by year end and new expansion campus will slash to open soon.
OSKVI - this is the worst investment I have made in 2007.. To date, I have lost 80% from this counter.. I made a big mistake by listen to the news. Although the company financial statement is healthy.. But continuous lost in 2 consecutive years don't look good.. Will cut loss when the price is right..
YTLPOWR I started invest in stock market since 2007, the first stock I bought is ytlpowr... Holding until now for around 3 years, it's about 40% return after including dividend and capital gain.. Recently, I am using dividend reinvest into ytlpowr again.. For this counter, I am holding for long term as I am confident with its management team. The profit is sustainable althought it invested in telecomunication and oil share sector which is vary from core business.. After the license for 700 Mh spectrum fail on MCMC clarification, the video on demand project fall apart.. The share price retrace back to 2.4 level.. If its share price drop below 2.2, i will start accumulating again..
KNM is the second stock I invested in Bursa at 2008 while the market is in bull market and aiming for flipping.. This is cyclical stock and the timing I enter is bull market.. As I don't have much experience in stock market and listen to news. After the recression, I lost 70% from this counter. Thinking of cut loss before.. However, recently the business prospect for this counter getting bright and the company return to profit quarter.. Besides, it secures big project from uzbekistan RM680 millions.. The main concern for this counter is the debt issue which is RM1 billion.. Will continue to monitor this counter but temporary hold it as the company prospect and profit started to recover.. KNM secures new biomass contract RM2bil in UK. The business prospect getting better and better.. I have recover my lost to only 40% date 22 dec 2010.. Expect to full recover by end of next year.
Genting, I have make better profit from this counter when I bought into it at 2008...80% return from this counter after holding for 2 years plus.. Genting has a lot of cash which is in the net cash position.. Will continue to hold this company as the earning is improving and the business prospect is good as genting Singapore bring great profit for this company..
MEGB, after doing much researches, we found out that this counter is oversold as the PTPTN issue and delay opening in new campuses.. The PTPTN issue is overblown and the financial statement is healthy.. The cash is sufficient in settle all the debt.. I decided to buy this counter as the company is in recession proof business... Recently, buying into this counter again as the P/E and dividend yield is getting attractive for me.. With the entry price I will get 6% dividend yield and expect more student enrollment by year end and new expansion campus will slash to open soon.
OSKVI - this is the worst investment I have made in 2007.. To date, I have lost 80% from this counter.. I made a big mistake by listen to the news. Although the company financial statement is healthy.. But continuous lost in 2 consecutive years don't look good.. Will cut loss when the price is right..
| Stock Name | Shares Quantity |
| KNM | 5 |
| YTL Power | 3.452 |
| Genting | 0.5 |
| OSK VI | 0.5 |
| MEGB | 2 |
Friday, December 10, 2010
Basic financial statements interpreted
FOR a non-finance person, evaluating a company's financial can be daunting, let alone understanding it to form an opinion. The most basic form of financial statements comprises the Profit & Loss Account or sometimes referred to as Income Statement and the Balance Sheet.
Another two statements that make a complete financial information for reporting purposes comprise the Statement of Retained Earnings and Statement of Cash Flow.
The objective of a financial statement is to provide information about the financial position, performance and changes in the position of an enterprise.
The Balance Sheet represents the financial position or net worth of a business entity on a specified date. The presentation is based on a fundamental accounting equation of Assets = Liabilities + Shareholders Fund. The main categories of assets are usually listed first, usually in order of liquidity. Next follows liabilities, short and long term, which represent payables and borrowings held by the entity.
The difference between the assets and liabilities (Assets Liabilities = Shareholders Funds), is known as Shareholders Funds, or sometimes referred to as owner's equity, that entails the company's capital plus retained earnings. Borrowings (liability) or owner's money (owner's equity) are the two means used for financing an asset.
Mathematically, over a period of time, if the assets grow bigger than the liabilities, it would mean that the entity has made a profit (which represents the essence of the Profit & Loss Account); this is reflected via an increased asset base (taking shape in many forms from cash, inventories, accounts receivable, fixed assets or investments).
Reverting to the Balance Sheet equation, the Shareholders Fund will reflect the increment. Since the entity's capital remains constant (unless the new assets are caused by new share issues), the increment is credited to a special account called Retained Earnings, as the name denotes.
Next, the Profit & Loss Account represents summarised transactions of an entity's performance over a given period, showing its profitability (or losses). Acting as the management's scorecard, it identifies the revenues and expenses undertaken which results in either a profit or a loss, based on the fundamental accounting concept of: Revenue Expenses = Profit (or Loss if expenses exceed revenue).
This in return will drive the direction of the Shareholders Fund (in particular Retained Earnings sub-category), for good (profit) or for worse (loss).
The particulars of a regular company's Profit & Loss Account would look as in Table 1.
There is also a category of item to be on the lookout called Unusual Item, which represents non-recurring non-revenue based transaction undertaken by the entity that results in a profit or loss. Examples of MAS selling aircraft, discontinuing a business line, incurring losses from natural disaster, writing down of investment value, are a few, which should be evaluated separately from the results from operations.
Due to its importance, EPS or Earnings Per Share is also required to be disclosed at the end of the Profit & Loss account. It presents the earnings divided by the total ordinary shares outstanding.
This single measure differentiates the efficiency in the earnings between companies, and represents the most important criteria in determining the price of the entity's shares and is used as a component to derive the all important PE or Price to Earnings ratio.
A large Retained Earnings balance as compared to the total Shareholders Fund, will denote a profitable company (accumulation of profits over the years), and a negative Retained Earnings (or Retained Loss) reflects the opposite. In extreme cases, the Retained Loss (debit balance) can overtake the Share Capital (credit balance), thus resulting in a negative Shareholders Fund. One surely would not want to invest in such a company.
Some listed companies, when the Retained Earnings gets so large (coupled with other factors such as inability to pay out dividend), reward the shareholders via Bonus Issue exercise, whereby part of the retained earnings are converted into new shares, accruing to existing shareholders.
This not only represents a short cut of the dividend payout, but also a tax free option via capital returns.
Raymond Roy Tiruchelvam, who has problems reconciling his gross habits with his net income is a financial planner with SABIC Group of Companies.
Another two statements that make a complete financial information for reporting purposes comprise the Statement of Retained Earnings and Statement of Cash Flow.
The objective of a financial statement is to provide information about the financial position, performance and changes in the position of an enterprise.
The Balance Sheet represents the financial position or net worth of a business entity on a specified date. The presentation is based on a fundamental accounting equation of Assets = Liabilities + Shareholders Fund. The main categories of assets are usually listed first, usually in order of liquidity. Next follows liabilities, short and long term, which represent payables and borrowings held by the entity.
The difference between the assets and liabilities (Assets Liabilities = Shareholders Funds), is known as Shareholders Funds, or sometimes referred to as owner's equity, that entails the company's capital plus retained earnings. Borrowings (liability) or owner's money (owner's equity) are the two means used for financing an asset.
Mathematically, over a period of time, if the assets grow bigger than the liabilities, it would mean that the entity has made a profit (which represents the essence of the Profit & Loss Account); this is reflected via an increased asset base (taking shape in many forms from cash, inventories, accounts receivable, fixed assets or investments).
Reverting to the Balance Sheet equation, the Shareholders Fund will reflect the increment. Since the entity's capital remains constant (unless the new assets are caused by new share issues), the increment is credited to a special account called Retained Earnings, as the name denotes.
Next, the Profit & Loss Account represents summarised transactions of an entity's performance over a given period, showing its profitability (or losses). Acting as the management's scorecard, it identifies the revenues and expenses undertaken which results in either a profit or a loss, based on the fundamental accounting concept of: Revenue Expenses = Profit (or Loss if expenses exceed revenue).
This in return will drive the direction of the Shareholders Fund (in particular Retained Earnings sub-category), for good (profit) or for worse (loss).
The particulars of a regular company's Profit & Loss Account would look as in Table 1.
There is also a category of item to be on the lookout called Unusual Item, which represents non-recurring non-revenue based transaction undertaken by the entity that results in a profit or loss. Examples of MAS selling aircraft, discontinuing a business line, incurring losses from natural disaster, writing down of investment value, are a few, which should be evaluated separately from the results from operations.
Due to its importance, EPS or Earnings Per Share is also required to be disclosed at the end of the Profit & Loss account. It presents the earnings divided by the total ordinary shares outstanding.
This single measure differentiates the efficiency in the earnings between companies, and represents the most important criteria in determining the price of the entity's shares and is used as a component to derive the all important PE or Price to Earnings ratio.
A large Retained Earnings balance as compared to the total Shareholders Fund, will denote a profitable company (accumulation of profits over the years), and a negative Retained Earnings (or Retained Loss) reflects the opposite. In extreme cases, the Retained Loss (debit balance) can overtake the Share Capital (credit balance), thus resulting in a negative Shareholders Fund. One surely would not want to invest in such a company.
Some listed companies, when the Retained Earnings gets so large (coupled with other factors such as inability to pay out dividend), reward the shareholders via Bonus Issue exercise, whereby part of the retained earnings are converted into new shares, accruing to existing shareholders.
This not only represents a short cut of the dividend payout, but also a tax free option via capital returns.
Raymond Roy Tiruchelvam, who has problems reconciling his gross habits with his net income is a financial planner with SABIC Group of Companies.
YTL’s Yes unlikely to ruffle feathers
Written by Aishah Mustapha
Monday, 06 December 2010 14:38
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KUALA LUMPUR: While YTL Communications Bhd’s official entry into the telecommunications sector has generated a lot of buzz, it may take some time before it leaves a lasting mark on the incumbents, said market observers.
There certainly has been a lot of anticipation riding on YTL Comm’s new WiMAX network called Yes ahead of its launch on Nov 19.
Listed on the Main Market, YTL Power International Bhd, which has a 60% stake in YTL Comms, saw its share price run up a week ahead of the launch.
On Nov 9, the counter jumped 25 sen or 11% to close at the year’s high of RM2.60. Last Friday, it closed at RM2.47.
Meanwhile, WiMAX counter Green Packet Bhd, which has a stake in Packet One Networks Sdn Bhd (P1), closed at 79.5 sen on the same day.
However, many take the view that Yes may not leave an immediate impact on the industry. For one, the lack of 4G phones could pose a threat to YTL Comms’ voice and SMS offering despite its low tariff, according to an analyst.
“The nine sen pay-as-you-go is the lowest in town. But they are only offering one 4G phone next month. Although subscribers can make calls from the PC, users still need a phone. Right now, people want smart phones. There may be more offerings later but in the short term, there won’t be much impact,” he said.
YTL Comms is reportedly working on a Samsung phone that runs on the popular Android operating system.
Under the current pricing scheme, users pay nine sen for 3MB of data, or a one-minute call or one SMS, with rebates given as usage increase. Users need to spend a minimum of RM30 a month in order to maintain the account. Devices offered currently are a USB dongle and a mobile router.
“YTL Comms’ launch of its WiMAX service should not inflict big losses on the broadband or voice market share of the incumbent telcos despite its pricing flexibility and all-in-one bundled offering,” said CIMB Research.
OSK Research said it does not expect Yes to dramatically alter the steady revenue and subscriber market shares of the incumbent operators given that the mobile voice market is now saturated with multiple SIMs.
However, a price war has not been ruled out given Yes’ bundled “all-in tariff” (voice, data & SMS) which is significantly below the current headline voice tariffs in the market, it said.
According to CIMB Research, YTL’s Yes network is the cheapest for 3GB of data and below. Thus, heavy data users are better off with other incumbents. Of the incumbents, CIMB Research highlighted that P1 still offered the cheapest rate for mobile broadband above 10GB.
OSK investment puts “light data users” at 1.5GB data and below.
“From a broadband perspective (both mobile and fixed broadband services), we believe the impact would be modest given that Yes’ pay-per use plan is likely to appeal only to light data users with less than 1.5GB monthly usage. Our comparison indicates that Yes’ effective cost (measured in terms of sen/MB) falls within the existing market range of 0.46 sen-2.27 sen for usage of more than 2.5GB/month,” it said.
An industry observer added that YTL Comms’ trump card could be its speed and coverage, compared to WiMAX operator P1. It now has 65% coverage of the population in major states such as Selangor, Kuala Lumpur, Penang and Johor. On the other hand, P1 targets to reach 65% by 2012.
To up the ante, YTL Comms said it plans to offer 80% of coverage by next year. Meanwhile, 3G operators such as Maxis and Celcom have more than 90% population coverage.
The wireless broadband market is also still up for the taking, the industry observer noted. According to data from the Malaysian Communication and Multimedia Commission (MCMC), wireless broadband subscription as of the first half of 2010 stood at 1.4 million.
ADSL, a common form of fixed broadband, is at 1.61 million subscriptions. The total broadband penetration rate for the population is only at 11.2%
In terms of WiMAX subscribers, incumbent operator P1 in Peninsular Malaysia had chalked up 218,000 subscriptions as of Sept 30. Its target for this year was to get 280,000 subscribers or 62,000 more subscriptions for the current quarter. For 3Q10, it added 22,000 subscriptions. Year-to-date, it has added 80,000 subscriptions.
P1 has garnered much attention due to it running in the red since launching the network two years ago. Its CEO Michael Lai maintained recently that Green Packet would break even at the Ebitda (earnings before interest, tax, depreciation and amortisation) level by next year.
For 3QFY10 ended Sept 30, Green Packet managed to taper down its losses quarter-on-quarter to RM28.91 million in losses after tax.
Meanwhile, its revenue strengthened to RM100.9 million from RM90 million the previous quarter.
A telco analyst said that this is normal for an operator, especially in a competitive telecommunications sector.
“Technically, they have only launched the network two years ago.
If you look historically, even Maxis took years before it was making profits. Today, competition is even tougher. As for YTL, it will be the same story,” the analyst said.
The group will spend RM2.5 billion over five years on the network.
Research houses put the breakeven target for YTL Comms between 300,000 and 600,000 subscriptions based on average revenue per user (ARPU) of RM100 and by comparing it with P1’s performance.
Analysts are still waiting for better earnings visibility before factoring in YTL Comms’ contribution to parent YTL Power. So far, the contribution is negligible. YTL Comms’ management has said that its pre-registered users on the Yes network are “more than its expectations”. Apart from that, management has maintained that the RM2.5 billion investment is for the long term and has yet to divulge any internal targets.
Monday, 06 December 2010 14:38
Bookmark and Share
KUALA LUMPUR: While YTL Communications Bhd’s official entry into the telecommunications sector has generated a lot of buzz, it may take some time before it leaves a lasting mark on the incumbents, said market observers.
There certainly has been a lot of anticipation riding on YTL Comm’s new WiMAX network called Yes ahead of its launch on Nov 19.
Listed on the Main Market, YTL Power International Bhd, which has a 60% stake in YTL Comms, saw its share price run up a week ahead of the launch.
On Nov 9, the counter jumped 25 sen or 11% to close at the year’s high of RM2.60. Last Friday, it closed at RM2.47.
Meanwhile, WiMAX counter Green Packet Bhd, which has a stake in Packet One Networks Sdn Bhd (P1), closed at 79.5 sen on the same day.
However, many take the view that Yes may not leave an immediate impact on the industry. For one, the lack of 4G phones could pose a threat to YTL Comms’ voice and SMS offering despite its low tariff, according to an analyst.
“The nine sen pay-as-you-go is the lowest in town. But they are only offering one 4G phone next month. Although subscribers can make calls from the PC, users still need a phone. Right now, people want smart phones. There may be more offerings later but in the short term, there won’t be much impact,” he said.
YTL Comms is reportedly working on a Samsung phone that runs on the popular Android operating system.
Under the current pricing scheme, users pay nine sen for 3MB of data, or a one-minute call or one SMS, with rebates given as usage increase. Users need to spend a minimum of RM30 a month in order to maintain the account. Devices offered currently are a USB dongle and a mobile router.
“YTL Comms’ launch of its WiMAX service should not inflict big losses on the broadband or voice market share of the incumbent telcos despite its pricing flexibility and all-in-one bundled offering,” said CIMB Research.
OSK Research said it does not expect Yes to dramatically alter the steady revenue and subscriber market shares of the incumbent operators given that the mobile voice market is now saturated with multiple SIMs.
However, a price war has not been ruled out given Yes’ bundled “all-in tariff” (voice, data & SMS) which is significantly below the current headline voice tariffs in the market, it said.
According to CIMB Research, YTL’s Yes network is the cheapest for 3GB of data and below. Thus, heavy data users are better off with other incumbents. Of the incumbents, CIMB Research highlighted that P1 still offered the cheapest rate for mobile broadband above 10GB.
OSK investment puts “light data users” at 1.5GB data and below.
“From a broadband perspective (both mobile and fixed broadband services), we believe the impact would be modest given that Yes’ pay-per use plan is likely to appeal only to light data users with less than 1.5GB monthly usage. Our comparison indicates that Yes’ effective cost (measured in terms of sen/MB) falls within the existing market range of 0.46 sen-2.27 sen for usage of more than 2.5GB/month,” it said.
An industry observer added that YTL Comms’ trump card could be its speed and coverage, compared to WiMAX operator P1. It now has 65% coverage of the population in major states such as Selangor, Kuala Lumpur, Penang and Johor. On the other hand, P1 targets to reach 65% by 2012.
To up the ante, YTL Comms said it plans to offer 80% of coverage by next year. Meanwhile, 3G operators such as Maxis and Celcom have more than 90% population coverage.
The wireless broadband market is also still up for the taking, the industry observer noted. According to data from the Malaysian Communication and Multimedia Commission (MCMC), wireless broadband subscription as of the first half of 2010 stood at 1.4 million.
ADSL, a common form of fixed broadband, is at 1.61 million subscriptions. The total broadband penetration rate for the population is only at 11.2%
In terms of WiMAX subscribers, incumbent operator P1 in Peninsular Malaysia had chalked up 218,000 subscriptions as of Sept 30. Its target for this year was to get 280,000 subscribers or 62,000 more subscriptions for the current quarter. For 3Q10, it added 22,000 subscriptions. Year-to-date, it has added 80,000 subscriptions.
P1 has garnered much attention due to it running in the red since launching the network two years ago. Its CEO Michael Lai maintained recently that Green Packet would break even at the Ebitda (earnings before interest, tax, depreciation and amortisation) level by next year.
For 3QFY10 ended Sept 30, Green Packet managed to taper down its losses quarter-on-quarter to RM28.91 million in losses after tax.
Meanwhile, its revenue strengthened to RM100.9 million from RM90 million the previous quarter.
A telco analyst said that this is normal for an operator, especially in a competitive telecommunications sector.
“Technically, they have only launched the network two years ago.
If you look historically, even Maxis took years before it was making profits. Today, competition is even tougher. As for YTL, it will be the same story,” the analyst said.
The group will spend RM2.5 billion over five years on the network.
Research houses put the breakeven target for YTL Comms between 300,000 and 600,000 subscriptions based on average revenue per user (ARPU) of RM100 and by comparing it with P1’s performance.
Analysts are still waiting for better earnings visibility before factoring in YTL Comms’ contribution to parent YTL Power. So far, the contribution is negligible. YTL Comms’ management has said that its pre-registered users on the Yes network are “more than its expectations”. Apart from that, management has maintained that the RM2.5 billion investment is for the long term and has yet to divulge any internal targets.
Will YTL’s ‘Yes’ affect Green Packet?
Will YTL’s ‘Yes’ affect Green Packet?
Written by Sam Koh
Monday, 06 December 2010 10:49
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KUALA LUMPUR: When a new player enters a market, the ground moves. More so when the new entrant is a deep-pocketed giant like YTL Corp Bhd, backed by one of Malaysia’s richest tycoons, Tan Sri Francis Yeoh.
It comes as little surprise then that the recent entry of YTL Communications Bhd into the WiMAX market has affected investor confidence in Green Packet Bhd, the parent company of the country’s first WiMAX operator, P1. But will the landscape change? Is this akin to David versus Goliath, although the David in this case — Green Packet — had a first mover advantage?
Fears of YTL’s entry adversely affecting Green Packet has sent the latter’s shares slumping.
Green Packet’s shares traded within a range of 90 sen to RM1.03 from July until early November, before falling since the middle of last month to 79.5 sen last Friday, just off a 12-month low of 78 sen. That’s nearly half of its 52-week high of RM1.52 set in January.
To be sure, the recent share price drop also coincides with weakness in the broader market as investors take money off the table amid rising uncertainty in the global economy due to the sovereign debt crisis in the eurozone and geopolitical risks on the Korean peninsula.
Green Packet, led by CEO Puan Chan Cheong (left), is feeling the heat after the entry of YTL Comms, backed by Yeoh’s YTL Corp, into the WiMAX domain. Its stock has fallen to close at 79.5 sen last Friday.
Still, it would appear that sentiment for the stock was affected, at least in part, by the launch of YTL Comms’ Yes mobile broadband-cum-voice service on Nov 19. This is not surprising since YTL Comms operates on the same platform as P1 and, thus,
is naturally viewed as a close competitor. And it is a formidable one at that with its deep pockets.
Case in point, although late to the market, YTL Comms has been impressive with the pace of its network rollout, achieving 65% population coverage right off the bat with some 1,500 base station sites installed over the course of the year. The company claims to have spent RM2.5 billion in total capital expenditure to-date and plans to add another 1,000 sites to bring coverage up to 80% by end-2011.
By comparison, P1 has paced its rollout in lockstep with the growth of its subscriber base. As at end-September — two years and three months after its commercial launch — the company had 815 sites after spending a total of RM534 million since its launch. It is targeting to hit 1,050 sites by the end of this year. That would bring its coverage to just about 45% of the population.
Meanwhile P1 has said it intends to spend another RM500 million in capital expenditure on an additional 1,500 sites, which will expand its coverage to 65% by 2012.
Having said that, YTL Comms’ pricing strategy suggests that it is targeting a different market segment than P1.
Yes is offering a flat rate of nine sen for either a minute of voice call, an SMS or 3Mb of data. This pay-as-you-use pricing model is ideal for casual surfers and, in particular, the mobile broadband market segment where the average data consumption is estimated at roughly 2Gb to 3Gb per month.
P1’s primary target market, on the other hand, is the fixed-broadband segment — currently accounting for an estimated 90% of its subscriber base — where users are much more data intensive.
The average data consumption is estimated at more than 10Gb per month. YTL Comms may not be a cost-effective competitor in the fixed-broadband market, now dominated by Telekom Malaysia’s Streamyx and P1. For instance, based on YTL Comms’ rates, 10Gb of data will cost some RM210 compared with P1’s RM99 per month package that comes with 20Gb of fair usage, albeit at a much slower connection speed.
Yes a strong mobile
broadband competitor
The mobile broadband segment is a rapidly growing market. To achieve true mobility, wide coverage is required. As such, the main players at present are the cellular operators, who have their GPRS/EDGE networks to fall back on outside of 3G coverage areas.
Celcom, Maxis and DiGi collectively added some 672,000 new mobile broadband subscribers in the first nine months of this year, compared with less than 260,000 new subscribers for fixed broadband over the same period. Currently, there are roughly 1.6 million mobile broadband subscribers in the country.
Growth in this market segment is expected to continue at a rapid clip for the foreseeable future, driven by rising affordability and ownership of laptops and netbooks, coupled with the need for connectivity on the go. Most recently, the success of Apple’s iPad has further reinvigorated consumer demand for the tablets market segment.
Like the cellular operators, YTL Comms offers the Yes Go USB dongle for users to connect to its network. In addition, it also sells the Yes Huddle, a Mi-Fi wireless router that connects up to five devices. Its pay-as-you-use pricing is attractive for data usage of up to roughly 3Gb, which is the average mobile broadband data consumption.
Plus, YTL Comms’ WiMAX network boasts three to five times the speed of 3G networks operated by all the cellular players. Anecdotal evidence in the early days supports this claim, although it remains to be seen if the high speeds can be maintained as the number of users on its network grows.
P1 too has set its sights on the mobile broadband market. But with comparatively low network coverage, it has yet to make a major push in this direction — although this would certainly happen over the next year or two. The company has the launch of a Mi-Fi device slated in 1Q2011 and is at present, bundling its portable W1GGY modem with its home broadband packages.
Elsewhere, although YTL Comms is offering very attractive voice and SMS rates complete with a 018-prefix, take-up rates may not be high in the near to medium term due to the lack of WiMAX handsets.
For a start, it will be selling the Yes Buzz handset, manufactured by Samsung, later this month and plans to introduce a smartphone sometime next year. But the lack of choice will certainly be a hindrance. User migration for voice services has also been very sticky, even with the introduction of mobile number portability.
P1 sticking to 280,000 subscribers target by end-2010
Despite the entry of Yes into the market, P1 remains confident, with just one more month to go, that it will hit the target subscriber base of 280,000 by the end of the year.
New sign-ups in 4Q2010 have been boosted by its new marketing campaign, which was launched in late October. Indeed, anecdotal evidence shows that subscriber acquisitions, which had dropped in the run-up to the Yes launch, picked up pace again over the past week.
At this pace, Green Packet has said it believes it is on track to achieve operating break-even by 1Q2011. The company has been registering lower earnings before interest, tax, depreciation and amortisation (Ebitda) losses for the past three consecutive quarters on the back of a growing subscriber base and revenue contribution. Average revenue per user is holding steady at about RM80 to RM81 per month.
To be sure, P1 is still grappling with its fair share of problems with network congestion. But market observers are optimistic it will be able to hold its own in the increasingly competitive broadband market. The ability to bundle fixed and mobile broadband services at an attractive cost per megabit is a strong advantage, particularly once the company expands its coverage area to 65% of the population by 2012.
Separately, the company’s software and solutions business has been doing well on the back of rising worldwide sales for its licences and “Customer Premise Equipment” (CPE). The company has sold nearly as many CPE in the first nine months of this year — with sales of over 231,000 units — as the whole of 2009. It has orders in hand for over 530,000 units. The company is also upbeat on the progress made in the lucrative US software market, which it hopes will come to fruition next year.
Rising contributions from the software and solutions arm will help bolster the company’s bottom line.
This article appeared in The Edge Financial Daily, December 6, 2010.
Written by Sam Koh
Monday, 06 December 2010 10:49
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KUALA LUMPUR: When a new player enters a market, the ground moves. More so when the new entrant is a deep-pocketed giant like YTL Corp Bhd, backed by one of Malaysia’s richest tycoons, Tan Sri Francis Yeoh.
It comes as little surprise then that the recent entry of YTL Communications Bhd into the WiMAX market has affected investor confidence in Green Packet Bhd, the parent company of the country’s first WiMAX operator, P1. But will the landscape change? Is this akin to David versus Goliath, although the David in this case — Green Packet — had a first mover advantage?
Fears of YTL’s entry adversely affecting Green Packet has sent the latter’s shares slumping.
Green Packet’s shares traded within a range of 90 sen to RM1.03 from July until early November, before falling since the middle of last month to 79.5 sen last Friday, just off a 12-month low of 78 sen. That’s nearly half of its 52-week high of RM1.52 set in January.
To be sure, the recent share price drop also coincides with weakness in the broader market as investors take money off the table amid rising uncertainty in the global economy due to the sovereign debt crisis in the eurozone and geopolitical risks on the Korean peninsula.
Green Packet, led by CEO Puan Chan Cheong (left), is feeling the heat after the entry of YTL Comms, backed by Yeoh’s YTL Corp, into the WiMAX domain. Its stock has fallen to close at 79.5 sen last Friday.
Still, it would appear that sentiment for the stock was affected, at least in part, by the launch of YTL Comms’ Yes mobile broadband-cum-voice service on Nov 19. This is not surprising since YTL Comms operates on the same platform as P1 and, thus,
is naturally viewed as a close competitor. And it is a formidable one at that with its deep pockets.
Case in point, although late to the market, YTL Comms has been impressive with the pace of its network rollout, achieving 65% population coverage right off the bat with some 1,500 base station sites installed over the course of the year. The company claims to have spent RM2.5 billion in total capital expenditure to-date and plans to add another 1,000 sites to bring coverage up to 80% by end-2011.
By comparison, P1 has paced its rollout in lockstep with the growth of its subscriber base. As at end-September — two years and three months after its commercial launch — the company had 815 sites after spending a total of RM534 million since its launch. It is targeting to hit 1,050 sites by the end of this year. That would bring its coverage to just about 45% of the population.
Meanwhile P1 has said it intends to spend another RM500 million in capital expenditure on an additional 1,500 sites, which will expand its coverage to 65% by 2012.
Having said that, YTL Comms’ pricing strategy suggests that it is targeting a different market segment than P1.
Yes is offering a flat rate of nine sen for either a minute of voice call, an SMS or 3Mb of data. This pay-as-you-use pricing model is ideal for casual surfers and, in particular, the mobile broadband market segment where the average data consumption is estimated at roughly 2Gb to 3Gb per month.
P1’s primary target market, on the other hand, is the fixed-broadband segment — currently accounting for an estimated 90% of its subscriber base — where users are much more data intensive.
The average data consumption is estimated at more than 10Gb per month. YTL Comms may not be a cost-effective competitor in the fixed-broadband market, now dominated by Telekom Malaysia’s Streamyx and P1. For instance, based on YTL Comms’ rates, 10Gb of data will cost some RM210 compared with P1’s RM99 per month package that comes with 20Gb of fair usage, albeit at a much slower connection speed.
Yes a strong mobile
broadband competitor
The mobile broadband segment is a rapidly growing market. To achieve true mobility, wide coverage is required. As such, the main players at present are the cellular operators, who have their GPRS/EDGE networks to fall back on outside of 3G coverage areas.
Celcom, Maxis and DiGi collectively added some 672,000 new mobile broadband subscribers in the first nine months of this year, compared with less than 260,000 new subscribers for fixed broadband over the same period. Currently, there are roughly 1.6 million mobile broadband subscribers in the country.
Growth in this market segment is expected to continue at a rapid clip for the foreseeable future, driven by rising affordability and ownership of laptops and netbooks, coupled with the need for connectivity on the go. Most recently, the success of Apple’s iPad has further reinvigorated consumer demand for the tablets market segment.
Like the cellular operators, YTL Comms offers the Yes Go USB dongle for users to connect to its network. In addition, it also sells the Yes Huddle, a Mi-Fi wireless router that connects up to five devices. Its pay-as-you-use pricing is attractive for data usage of up to roughly 3Gb, which is the average mobile broadband data consumption.
Plus, YTL Comms’ WiMAX network boasts three to five times the speed of 3G networks operated by all the cellular players. Anecdotal evidence in the early days supports this claim, although it remains to be seen if the high speeds can be maintained as the number of users on its network grows.
P1 too has set its sights on the mobile broadband market. But with comparatively low network coverage, it has yet to make a major push in this direction — although this would certainly happen over the next year or two. The company has the launch of a Mi-Fi device slated in 1Q2011 and is at present, bundling its portable W1GGY modem with its home broadband packages.
Elsewhere, although YTL Comms is offering very attractive voice and SMS rates complete with a 018-prefix, take-up rates may not be high in the near to medium term due to the lack of WiMAX handsets.
For a start, it will be selling the Yes Buzz handset, manufactured by Samsung, later this month and plans to introduce a smartphone sometime next year. But the lack of choice will certainly be a hindrance. User migration for voice services has also been very sticky, even with the introduction of mobile number portability.
P1 sticking to 280,000 subscribers target by end-2010
Despite the entry of Yes into the market, P1 remains confident, with just one more month to go, that it will hit the target subscriber base of 280,000 by the end of the year.
New sign-ups in 4Q2010 have been boosted by its new marketing campaign, which was launched in late October. Indeed, anecdotal evidence shows that subscriber acquisitions, which had dropped in the run-up to the Yes launch, picked up pace again over the past week.
At this pace, Green Packet has said it believes it is on track to achieve operating break-even by 1Q2011. The company has been registering lower earnings before interest, tax, depreciation and amortisation (Ebitda) losses for the past three consecutive quarters on the back of a growing subscriber base and revenue contribution. Average revenue per user is holding steady at about RM80 to RM81 per month.
To be sure, P1 is still grappling with its fair share of problems with network congestion. But market observers are optimistic it will be able to hold its own in the increasingly competitive broadband market. The ability to bundle fixed and mobile broadband services at an attractive cost per megabit is a strong advantage, particularly once the company expands its coverage area to 65% of the population by 2012.
Separately, the company’s software and solutions business has been doing well on the back of rising worldwide sales for its licences and “Customer Premise Equipment” (CPE). The company has sold nearly as many CPE in the first nine months of this year — with sales of over 231,000 units — as the whole of 2009. It has orders in hand for over 530,000 units. The company is also upbeat on the progress made in the lucrative US software market, which it hopes will come to fruition next year.
Rising contributions from the software and solutions arm will help bolster the company’s bottom line.
This article appeared in The Edge Financial Daily, December 6, 2010.
YES 4G 宽频价钱表
YES 4G Internet Price Lists
YES 4G 宽频的价钱也算蛮公道的，我会再做个更明确的分析与大家分享，以下的是我拿 YES, Maxis & U Mobile 这三间公司的宽频(Broadband)来做个比较, 你们就可以更清楚的知道结果了。
消费者的你们，你们会选择什么呢？
今天，我尝试进入他们的官方网站，可是还是上不到，这也可以知道他们的浏览量太够力，对于我这个小小的股东来说，这是一件好事来的，证明还有很多人关注 YES 4G。我也听过他们的覆盖(Coverage)网站看看我家是否在 YES 4G 覆盖范围之内。
宽频资料来源: http://www.soyacincau.com/
去查查你的地区是否被覆盖: http://coverage.yes.my/
官方网站: http://www.yes.my
YES 4G
YTL revealed YES 4G mobile service in Malaysia, which will be commercially launched on 19th November. They are currently allowing customers to pre-register their yesID and mobile number. YES 4G provide our mobile internet via a few devices. They have the conventional USB dongle (Go), WIFI hotpsot (Huddle), Phone (Buzz) which is capable of wireless tethering and Home Gateway (Zoom) to whet you appetite. YES 4G will provide 300mB/month 3 years for free to public University student such as UTM, UTAR, UPM, UM, KTAR & USM.
What YES 4G can giving us?
SPEED
4G network is 3 to 5 times faster than 3G simply because it was designed for the Internet of today. 3G however was built for voice. So when 3G networks try to move data on old technology, it becomes slow and congested. YES 4G is an all-IP network that is designed with the Internet in mind. This enables us to provide a faster and more reliable mobile Internet experience. They are also able to provide 100% digital, Quality-of-Service (QoS) voice calls. So what you get with YES 4G is consistency and quality, even when you're running network-intensive activities like multi-party video conferencing and streaming HDTV on the go.
MORE SAVINGS
Enjoy the lowest rates without having to commit to expensive monthly plans and long-term contracts. YES 4G will give you the lowest rates for data, calls, and SMS without conditions.
COVERAGE
YES 4G know that it takes more than 65% of population coverage to turn Malaysia into a truly connected nation. Right now, we're expanding our coverage to be in more places, even as you're reading this.
YES 4G Website: http://www.yes.com.my/
Consumers to benefit from greater competition in 4G space
| KUALA LUMPUR: Competition among wireless Internet service providers in Malaysia is set to intensify, especially with the entry of YTL Communications Sdn Bhd and its offering of YES 4G Internet services, but consumers will benefit from greater product offerings and lower prices. YTL Communications, a subsidiary of YTL Power International Bhd, launched its YES 4G mobile Internet service with voice last Friday. The 4G technology, which is three to four times the speed of 3G, will further spur innovation in the internet space especially among wireless Internet service providers according to Edzard Overbeek, the Asia Pacific and Japan president of Cisco Systems Inc, the technology provider to YTL’s YES. “For already established content and Internet service providers (like Astro and TM), competition will definitely intensify in this space and there will be some pressure for those companies. But these are very solid organisations as well and the way they will respond is that they will find new services,” Overbeek tells The Edge Financial Daily. “They will find new ways to attract new customers and they will find new ways to outcompete some of the entrants that are entering the game. But in the bigger picture, this will bring the industry to a higher level because as competition intensifies, people will get more creative,” he added.
Overbeek said that with 4G, consumers would be able to access rich media like high-definition (HD) content without wired Internet connections, where rising demand is seen today. The predecessor to 4G technology, 3G is also able to provide video feeds but not in HD quality because of the latter’s smaller bandwidth. 4G technology via WiMAX is able to provide theoretical bandwidth speeds of up to 100Mbps. “Applications are moving from traditional static ones to full HD feeds. And that is what’s happening where the Generation Y in Malaysia say they are very comfortable using video. “If that population gets into both business and now into this new 4G environment, I would say you would want to provide solutions for this new upcoming Generation Y. Sometimes companies only focus on what happens today, but you need to be prepared for what eventually comes tomorrow,” Overbeek said. “If they are in their minds attached to all these social media, they are very used to video and all that then you better step up to that because the attractiveness of you as a company will start to decrease if you don’t have those features,” he added. Overbeek said that despite the increasing mobility of data consumers today, wired and wireless connectivity to the Internet would continue to coexist. “We don’t think that mobile will be the sole access technology, but fibre will also be an access technology as well. Until today, when governments build cities they are still putting fibre beneath the ground. “Fibre has an ‘unlimited’ bandwidth and it depends how much light you put in it. Both of them are absolutely vital in this industry,” he explained. Currently, the only other company offering mobile Internet connectivity with 4G WiMAX is Bursa Malaysia-listed Green Packet Bhd, which started out as a small outfit and subsequently grew. Green Packet, which is still loss-making, said it expects to be profitable by 1QFY2011 ending Dec 31. The company last week announced that its net loss shrank by more than half to RM13.7 million against RM31.8 million in the previous corresponding period. Revenues improved to RM100.9 million from RM63 million in 3QFY2009. Basic loss per share was at 2.1 sen from a loss of eight sen per share. The company which had said that it “welcomes” competition from newcomer YTL Power into the industry, stressed that it offers a differentiated product offering from YTL. This would still enable it to compete healthily in the expanded industry, it added. Green Packet has also focused its product expansion overseas in emerging markets to counter rising competition at home. However, technology analysts said they do not discount steep competition in future, which will eventually lead to a decline in profitability for WiMAX. Analysts said that the entry of “heavyweight” YTL would heat up the competition which would be good for consumers. They will eventually benefit in terms of lower prices and enhanced product offerings.
|
Learning from other
Saturday December 11, 2010
Up Close and Personal with Tadashi Yanai
By EUGENE MAHALINGAM
eugenicz@thestar.com.my
IT was a warm Wednesday morning as this writer was escorted up the elevator to meet Tokyo-based Fast Retailing Co's chairman and chief executive officer Tadashi Yanai, at his hotel suite in Kuala Lumpur. Tadashi, who heads Japan's largest clothes retailer, is also the country's richest man with a net worth of US$9.2bil, according to Forbes.
An intimidating bodyguard stood at the entrance to Tadashi's suite. Inside, the man himself was surrounded by an ensemble comprising public liaisons, media correspondents and more bodyguards.
Tadashi greeted me with the traditional Japanese bow and the entire interview was aided by a translator.
When I was around 17 or 18 years old, I told myself that I didn't want to work my entire life. I was not interested in business at all, said the soft spoken gentleman.
Tadashi was in Malaysia last month to officiate the opening of the first Uniqlo store here. Uniqlo is one of the fashion brands under Fast Retailing.
The globe-trotter
Tadashi was born in 1949, the same year his father founded Men's Shop Ogori Shoji in Ube City, Yamaguchi Prefecture, selling men's clothes.
As a young man between the late 1960s and early 1970s, Tadashi had the opportunity to travel the world, gaining valuable insights from observing the way international brands operated.
Though he wasn't interested in the retail clothing business (at least not then), Tadashi was born into it and couldn't help but be fascinated by the industry and how different it was in the various parts of the world.
For me, travelling the world and seeing how the various businesses operated was indeed a precious experience, Tadashi said, adding that among the more famous stores that he visited were American clothing and accessories retailer, Gap and prominent British retailer, Marks & Spencer.
I studied how the business worked and how it succeeded. The idea was to bring these experiences back to Japan and make it a success here, and then replicate it in other parts of the world.
Building an empire
With that, gone was the never wanting to work for a living attitude as it was only natural to take over his father's business.
Tadashi took over the helm of his father's business in 1984 and opened the first Uniqlo store that year in Hiroshima City titled Unique Clothing Warehouse, specialising in casual clothing.
The chain grew rapidly and in 1991, Tadashi changed the name of the company from Ogori Shoji to Fast Retailing. By 1994, there were more than 100 retail stores in Japan.
The turning point came in 1998 when Uniqlo pushed fleece wear for 1,900 yen, selling two million units. The fleece boom continued and in 1999, Uniqlo sold over eight million outfits.
By 2002, the first overseas Uniqlo outlet was opened in China along with four outlets in London.
The brand's popularity continued and it opened its first stores in the United States, Hong Kong and South Korea by 2005.
To date, there are more than 700 Japan-based Uniqlo stores and a fast growing collection of overseas offerings.
The Look West policy
According to various reports, Tadashi has set an ambitious target to open 1,000 stores in China by 2020. The reports have quoted him as saying that China has transformed itself from a developing country to the world's largest growth centre.
But apparently, that's only just half the total target, according to Tadashi.
I want to open 1,000 stores within the Asean region in the next 10 years. So, by 2020, we would have a total of 2,000 stores both in Asean and China.
Asean has great growth potential, even more than China. Comparatively, it's one whole region versus one country, meaning that the (Asean) population is significantly larger (than that of China's) and will offer better (growth) opportunities.
Tadashi said the growth potential for Asean had only just begun ... could be as big as China some day.
Tadashi is highly optimistic of Malaysia's outlook. He has visited Malaysia numerous times between 1960s and early 1970s.
I actually visited Malaysia some 40 years ago. I went to Singapore and then travelled here by bus, Tadashi recalled.
Back then, there was jungle everywhere. But today, there are many skyscrapers everywhere! The country is so well developed. It's exciting to see how much the country has grown.
Tadashi said he had seen similar positive growth in other Asean countries, hence his policy to look to this part of the region for business opportunities.
He summed up the company's strategy moving forward by paraphrasing an old business philosophy of Malaysia's former prime minister, Tun Dr Mahathir Mohamad.
Many years ago, Dr Mahathir propagated the Look East Policy, encouraging Malaysia to learn from more advanced economies such as Japan for inspiration.
However, Japan's economy has not been doing too well recently while Asean markets have been booming. That's why I say that for Fast Retailing, we now have to adopt a Look West Policy,' because economies in that part of the region, on our west, are doing better than us, Tadashi enthused.
But the ultimate goal for Fast Retailing, said Tadashi, was to have a store everywhere in the world.
The dream is to be able to provide truly great clothing around the globe. To do that, we need to be in every part of the world.
Never about the money
Tadashi humbly said he never imagined that he would one day join the ranks of the wealthiest. But making money was never the biggest part of the plan, he admitted.
I never pursued wealth. It just came naturally. To me, it has always been about the business, managing it, growing it and benefiting society.
I believe that if you pursue wealth, you will always be chasing it, said Tadashi, who takes his inspiration from the founders of well-known Japanese conglomerates such as Panasonic and Honda.
Tadashi added that a person pursuing success should not be afraid of taking risks and making mistakes.
If you want to succeed, you have to experience failures. To me, the worst people in the world are those that neither succeed nor fail. These people don't do anything and accomplish nothing.
The second worst types are those that continuously fail. They never learn from their mistakes and never succeed, he said.
Tadashi added that in a rapidly-changing global environment, failure was one of the costs of success.
The world is constantly changing. To succeed in this environment, you need to make mistakes, fail, learn from them and move on.
In light of the changing global marketplace, taking risks was vital, said Tadashi.
I have always been a risk-taker. But I only take them (risks) as long as the company doesn't go bankrupt. You need to constantly evaluate the situation. If you don't take risks, you will never profit.
Tadashi said trust and credibility are important traits in growing a successful business.
Also, for him it's basically his way or the highway at the office.
I consider myself a strict boss at the office. I think it is necessary if you need to do what's right. A lot of managers out there say a lot of things but they never do it.
If I say something, whether at the office or in public, it will be executed and I will do it. That's what sets me apart from others.
Work and play
According to Tadashi, from Mondays to Fridays it's strictly business, while the weekends are reserved for his second biggest passion golf. And his favourite pastime? Work, he said.
I know that to a lot of people, work is work and play is play. But to me, my work is my playground. I find it fun and enjoying. To be able to do something where you can contribute to society is an enjoyment, said Tadashi.
Still, when time does afford him the luxury to relax, Tadashi likes to read a good book and listens to jazz music.
I like reading books on business management by people that actually run their own businesses, he said.
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