United Malayan Land vs. Daiman Development

The author published the analysis report here is for his own reference only. It is not an indication of the author's business interests for companies being analyzed. It is definitely not an investment advice, please see the full disclaimer located at the bottom of the blog post.


United Malayan Land Berhad's (hereafter called "UMLAND") principal activities including property development, property investment, investment holding and leasing of lands. Daiman Development Berhad's (hereafter called "DAIMAN") principal activities including property development, property investment, sale of building materials, operation of golf, sports and recreation clubs, operation of bowling centre, nursery operation and investment holding.


Side-by-side Comparison

Capitalization
Measure by size, UMLAND is slightly larger than DAIMAN, 476 millions and 389 millions


Income Items
Important items under this section is per share earnings and dividend, DAIMAN is the all-time winner for both per share earning and dividend except averaged earned per share in 2009 to 2011 period.

Balance Sheet Items
DAIMAN have very solid balance sheet compared to UMLAND, Cash or cash equivalents almost can cover the Total liabilities, it is a cash-rich company which liquidity per share is 0.46.

Ratios
By look at Price ratios, DAIMAN is more attractive at the moment given it sell at lower multiple of 2011's earnings and much lower Price/book value per share, even UMLAND achieved slightly higher dividend yield.


DAIMAN advantages are much higher profit margin, almost double of UMLAND as shown by Net income/sales, but lower return on book value measured by Earnings/book value per share, which may due to the adoption of higher leverages by UMLAND.


UMLAND has much better earning growth rate compared to DAIMAN, please take note that DAIMAN achieved negative earning growth in 2009-2011 compared to 2005-2007.
 
Price Record
UMLAND and DAIMAN has comparable growth rate in near-term price record, but UMLAND achieved better growth in long-term, which may due to it's price start from a low base.

Financial Summary

UMLAND's Financial Summary

By looking into detail of the financial summary of UMLAND, the historical growth records doesn't look good, merely single digit growth, especially making a loss in 2008. The bright side of data above is UMLAND achieved acceptable 5 years average profit margin which recorded 15.9% and 14% for operating margin and net margin.

DAIMAN's Financial Summary

DAIMAN has better historical growth record compared to UMLAND, recorded CAGR for 13.58% in sales and 17.4% operating income, but low and unstable net income and earning per share, 6.7%. The bright side of this company is the management buyback it's own shares in the market which reduce 2.2% of it outstanding shares. Also, DAIMAN achieved impressive 5 years average profit margin which recorded 34.2% and 29.78% for operating margin and net margin, which more than double of UMLAND.


As conclusion, the ultimate winner of this comparison is DAIMAN.


How Much DAIMAN Worth?
Given the company CAGR of EPS is 6% (approximately 6.7% in the past 5 years) and Dividend Per Share is 5% in the next 10 years, the EPS of the company will be RM$0.235 in 2020 (included adjustment of 2 bad years in 10 which reduce 30% of group's net profit) and the forecast dividends received over the 10 years period totaling RM$0.64 (included adjustment of 2 bad years).


If the stock price of DAIMAN sell at 8 times earning in 2021, it is RM$1.88 and RM$2.53 (included total dividends received) per share. Given annual 6% inflation rate in next 10 years, the discounted rate is 0.591898. So, RM$2.53 discounted to today price, it is RM$1.50 per share.


The discounted price is 23.7% lower comparing to today (30 March 2012) closing price at RM$1.85. The stock is overvalued! What do you think?


I'd love to hear comments from you!

CB Industrial Product Holding vs. Muar Ban Lee Group

The author published the analysis report here is for his own reference only. It is not an indication of the author's business interests for companies being analyzed. It is definitely not an investment advice, please see the full disclaimer located at the bottom of the blog post.


CB Industrial Product Holding Berhad's (hereafter called "CBIP") principal activities including investment holdings, manufacturing and trading palm oil mill equipment and related spare parts, provision of engineering support, commissioning and contracting works for palm oil mills, cultivation of oil palm and production of crude palm oil and palm kernel, constructing mills, factories, building, composting efflluent plants and contracting works. Muar Ban Lee Group Berhad's (hereafter called "MBL") principal activities including manufacturing oil seed expeller and related parts and automated kernel crushing plants and related parts.


Side-by-side Comparison

* Data of both companies above is extracted from it's unaudited 4Q report of 2011. MBL was listed in 2009.

Capitalization
Measure by size, CBIP was a lot bigger than MBL, approximately 9 times the size of MBL.


Income Items
Important items under this section is per share earnings and dividend, CBIP is all time winner in per share earnings and dividend.

Balance Sheet Items
CBIP have adequate balance sheet, it's Current assets is close to cover the Total liabilities, however MBL have very solid balance sheet, as it's Cash and cash equivalents is more than enough cover their Total liabilities. MBL is a cash-rich company.


Ratios
Price-wise, both companies traded equally at multiples of their most recent earning. MBL more attractive at the moment given it sell at much lower multiple of book value per share currently compared to CBIP. The Net income/sales of CBIP is slightly better than MBL. CBIP achieved much better return on book value per share compared to MBL, 12% different. From the surface, this may due to CBIP's adoption of leverages measured by Total liabilities/book value, 0.75. But when look closely, merely 102 millions out of 261 millions of Total liabilities is bank borrowings.


Earning growth rate of CBIP was really impressive. No comparable data for MBL as it was listed in 2009.


Price Record
CBIP has much higher price growth rate in the near-term (taking consideration of it's recent bonus issue 1 for 1) and long-term.


Financial Summary

CBIP's Financial Summary

By looking into detail of the financial summary of CBIP, the company achieved impressive historical results, growing it's sales and profit every year except 2009 which gain lower sales and profit. Rates of return and profit margins are impressive also especially in 2011. As 50 millions of 127 millions of pre-tax profit of CBIP was contributed from oil palm plantation & milling segment based on the unaudited 4Q2011 report, the disposal of two main plantation subsidiaries of the company and acquisition of 94% of 32,812 hectares oil palm plantation land located in Kalimantan Tengah, Indonesia (related reply to Bursa Malaysia) will have significant impact to the capital allocation and future profitability of the company, the historical results of company have no indication to it's future profitability, further analysis required after the completion of disposal and acquisition.

MBL's Financial Summary

By looking into detail of the financial summary of MBL, the company achieved impressive result, growing it's sales and profit every year except 2011 which gain lower profit. 3-year average of return on average equity is 16% and profit margin is 24%, the management is doing the job well given the company adopt minimal leverages.
As CBIP required further analysis in third quarter of 2012, I will value how much MBL worth in this post.


How Much MBL Worth
Given the company CAGR of EPS is 15% (approximately 18.9% in the past 3 years) and Dividend Per Share is 15% in the next 10 years, the EPS of the company will be RM$0.193 in 2021 (included adjustment of 2 bad years in 10 which reduce 40% of group's net profit) and the forecast dividends received over the 10 years period totaling RM$0.66 (included adjustment of 2 bad years).


If the stock price of MBL sell at 5 times earning in 2021, it is RM$0.96 and included total dividends received, it is RM$1.62 per share. Given annual 6% inflation rate in next 10 years, the discounted rate is 0.591898. So, RM$1.62 discounted to today price, it is RM$0.96 per share.


The discounted price is 11.38% lower comparing to today (27 March 2012) closing price RM$0.85. In my opinion, the stock is discounted in moderate margin, what do you think?

Tracking Malaysia's Public Listed Companies Announcements Using News (RSS) Feeds

Note on 08 Jun 2015: The RSS service is not longer supported. 

If you are tracking announcements of more than ten Malaysia's public listed companies in your portfolio, you would know the current process of tracking is very inefficient and time-consuming.

Given web syndication technologies such as RSS and Atom, it is far more efficient to deliver announcements from the targeted companies to your favorite news reader such as Internet Explorer, Microsoft Outlook, Mozilla Firefox, Mozilla Thunderbird or other feed readers.

Picture above is how the announcement feed of public listed companies display in Google Reader and on the right is how it display in my blog using Blog List gadget. (The companies being tracked is just shown as samples, the author may or may not had interests on it, please see the full disclaimer located at the bottom of the blog post.)

At the moment, the web syndication system was created for personal use only. However, I am happy to open it to my valued readers, please let's me know if you are interested in this services.

I'd love to hear your comments!

Edited on 28 Mar 2013: The service above open to public for FREE today, please see the user guide on how you can make use of it too. :)

How Much Money Do You Need to Retire Comfortably?

Please see the full disclaimer located at the bottom of the blog post.

Most of us have a thought on retirement plan in our late twenty or late thirty, but it is just a rough idea in our mind. When we are working hard on our businesses or our investments, have a crystal clear idea of the financial outcome we want to achieve is crucial to reach the destination we aimed for. Do you know how much money do you need to retire comfortably?

In my opinion, a good retirement plan shall target for annual income equals to 13 times of the last drawn salary prior to retirement. Why 13 times? It is equivalent to your 12 months basic salary plus 1 month bonus, don't you want to have bonus even after you retired? Let's say in our hypothetical example, the last drawn salary is $10,000, targeted annual income after retirement is $130,000.

Why $10,000? I think $10,000 is the minimum monthly income you need to have your retirement comfortably. Let's do the math.

Given input for Today's Amount is $3,000, Annual Inflation Rate is 6% (conservative measure), Number of Years is 20. The first result (Reduced Amount) is $935.41, which represents the value of $3,000 in 20 years. The second result (Required Amount) is $9,621.41, which is amount of money that you need in 20 years to match the purchasing power of $3,000.

How do you still making $130,000 annually when you are retired? It is not a top secret, just start accumulating assets that produce recurring passive income such as rental income, dividend income, interest income, business income, etc.

Table above is that rate of return and total asset required to achieve annual income $130,000. In this case, if your accumulated assets produce 12% return annually, your total asset value must at least worth $1.083 million. So, $1 million is a good number to start to establish your asset portfolio. Warren Buffett had written a great section regarding asset classes available for investors, please see The Basic Choices for Investors and the One We Strongly Prefer (A text that I extracted from 2011 Berkshire Hathaway Shareholder Letter).

Lastly, you may have higher or lower requirement for targeted annual income after retirement which different from $130,000, please do your own math using Inflation Calculator and Retirement Fund Calculator.

I'd love to hear your comments!