UCHITEC - U SEE THAT II *VALUECAP*

UCHITEC had released their Annual Report on 19 April 2016. Indeed there are surprises in the Top 30 Shareholders. This post will be an additional to the previous UCHITEC post. The theme of the Annual Report 2015 "Flourishing from Strength to Strength" with pictures of ripe and ready to harvest paddy. Maybe the management is hinting the share price is going to turn to goldish yellow~ haha. Let's dig in~

1. Fundamental Analysis:

Revenue and Net Profit for UCHITEC from 2011 to 2015

The best part about UCHITEC is its revenue and net profit is consistently high. The average of net profit margin and EPS of 44.66% and 11.94 cents respectively for 5 years. The dividend yield for UCHITEC is even higher than the FD rate, which is 6.09%, which we can see a lot of local fund houses and foreign fund houses investing in it. In its latest Annual Report 2015, the management maintains the dividend allocation of minimum 70% of the net profit, the highest i encounter so far[1]. 

Net Cash per Share and Earnings Per Share

Another highlight will be its high net cash per share. The net cash per share is 0.4592, almost 30% from the closing price on 25 April of 1.73. 83% of its trade receivables are denominated in USD (RM8,57 mil) vs the 60% of its trade payables denominated in USD (RM13.66 mil). Eventhough the USD trade payables is higher than USD trade receivables, its short term deposits is enough to cover the shortage of RM5.09 mil as their USD short term deposits totals up to RM20.11 mil. Recently our Ringgit is showing some strength, which will ease the burden too. 

By comparing 2014 and 2015, the revenue from Europe and US had increased 19% and 52% respectively. UCHITEC is successful at attracting, retaining and developing their employees. They had been actively offering Employee Share Option Scheme (ESOS) as a token of gratitude to their employees for their tireless efforts for the company. At least they are taking the welfare of their staffs, compared to the market nowadays whereby a lot of people are losing their job.

ValueCap Sdn Bhd actually emerges as their top 30 shareholders, alongside with other local and international fund houses. Look at the list below, you will see more than 20 fund houses, for example, Lembaga Tabung Haji, Public Islamic Opportunities Fund, Amanah Saham Bumiputera, Manulife Investment Fund etc etc.

A Thought from Pasar Malam

Today evening time, i went to Shah Alam Pasar Malam, known to be the longest night market in the whole Malaysia. While i was enjoying the popular Malaysian food there, then something struck my head. Actually stock picking is just like buying food in pasar malam. 

Pasar Malam - Night Market

There are a lot of stalls in the pasar malam. Just like there are a lot of counters in our FBMKLCI. Some of the food are good, really good; some of the food are not good, but still there are a lot of people visiting their food, but just for a short period of time. Some of the counters are fundamentally good while some of the counters are just speculative counters, they are hot in a short period of time but wont last for long.

Buying myself a drink is just like picking a stock. Of course, i aimed those stalls with customers. When we are picking a stock, it is important that we pick some counters with active volume. The counters without volume will be difficult for us to buy or to sell. Since the weather is hot nowadays, everybody is drinking cold drinks. They are the most popular food now. Malaysia market is interesting because any national story or local agenda might boost up the share prices. Previously we had GST theme, lately we have plantation theme and also USD exports theme. As long as we read more global or national local news, we can invest based on the themes.

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Summary of March 2016

This is the first week of April 2016. Our FBMKLCI seems to be ready to welcome the bull market, but we still need for some confirmation. Coming ahead is the OPEC meeting on 17 April 2016 which we might see the fluctuation of the Brent Crude Oil. And also the foreign funds investing in our equity market which will further boost or strengthen our Ringgit. You can refer to my previous post, "FBMKLCI - Malaysia BULLeh" by clicking in this link.

Below table is my Gainvestor Portfolio for March. This statistics does not mean anything, it does not mean any hold/buy/sell decision, it is just to summarize and track the Gainvestor Portfolio.

Summary of Gainvestor Portfolio for March 2016

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A Tale of Selling Umbrella

This is a translated post from my Mandarin post, 卖伞的启发故事 . So, if you had read it in Mandarin, then you can disregard this post. All the contents and pictures are exactly the same as my Mandarin post.

Nowadays, the weather is blazing hot, so let me tell you a story, "A Tale of Selling Umbrella"

There was once a businessman who was selling umbrellas. He bought a lot of umbrella with his money and planned to set up a stall to sell all of the umbrellas. After he bought the umbrellas, of course, he needed to conduct homework, such as conduct market survey and study weather forecast. Although the weather forecast is just reporting the forecasted weather ahead, he also learnt necessary knowledge, the direction of wind, the density of the cloud, the location of the busiest street, etc. He always heard a lot of speculations about the rain would be falling on which day. But normally, he would filter those assumptions by analyzing the possibilities. He was not easily influenced and affected by speculations. He clearly understood that, he is responsible of making his own judgement.

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FBMKLCI - Malaysia BULLeh

Let's kick start the April post with participation statistics for our FBMKLCI. Let's focus at the foreign funds.

Bursa Malaysia Trading Participant Statistic for the Past 8 Weeks [1]

For the month of February and March, foreign funds had been in net buy position, RM433.2 Mil and RM6,081 Mil for respectively. for the past 2 months, the foreign funds had been actively trading in our FBMKLCI. We can also track the daily participation statistics through this link. If the foreign funds are coming in, meaning to say our MYR will be stronger and stronger.

The reason being, if the foreign funds want to invest in Malaysia, first, they will take their currency and exchange it to MYR in order to invest in Malaysia. So when the MYR's demand is getting higher and the supply is still the same, that's when we see the MYR getting stronger. With the weekly chart, there is a huge bearish engulfing. So i expect the MYR to get further stronger and might breach 3.80.

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