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!

Batu Kawan Berhad vs. Kuala Lumpur Kepong Berhad

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.

Batu Kawan Berhad's (hereafter called "BKAWAN") principal activities including investment holdings, oil palm plantation, chemicals manufacturing, money lending, general transportation services, letting of storage warehouse facilities, manufacture and sale of methyl chloride and manufacture of sulphuric acid products. Kuala Lumpur Kepong Berhad's (hereafter called "KLK") principal activities including the business of plantation, producing and processing palm products and natural rubber on its plantations, manufacturing, retailing, property development and investment holding. BKAWAN is major shareholder of KLK, holding 46.57% equity interests at financial ended 31 September 2011.

Side-by-side Comparison

Capitalization
Measure by size, KLK was a lot bigger than BKAWAN, almost 4 times the size of BKAWAN.

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

Balance Sheet Items
Both BKAWAN and KLK have very solid balance sheet, their Current assets is more than enough cover their Total liabilities. But BKAWAN is better, as it's Cash or cash equivalents is more than enough cover the Current liabilities and close to cover the Total liabilities. 

Ratios
Price-wise, BKAWAN is much more attractive at the moment given it sell at much lower multiple of earnings currently compared to KLK. The Net income/sales of BKAWAN is meaningless here given over 90% of it's profit before tax was contributed by it's key associate, KLK.

Earning growth rate in both companies in near-term and long-term are very much parallel due to the reason mentioned in previous sentence. These numbers is not applicable to MSC as it experienced significant loss in 2010.

Price Record
BKAWAN has much higher price growth rate in the near-term where KLK has higher price growth rate in the long-term.

Financial Summary
As over 90% pre-tax profit of BKAWAN was contributed by KLK, the title of this post is more appropriate to named as "Batu Kawan Berhad and Kuala Lumpur Kepong Berhad" instead of "Batu Kawan Berhad vs. Kuala Lumpur Kepong Berhad". When you invest into BKAWAN, you are largely invest into KLK. Let's look into financial summary of both companies as usual.

BKAWAN's Financial Summary

By looking into detail of the financial summary of BKAWAN, it doesn't grow it's sales much and grow it's operating income moderately in 2007 to 2011, performance of these two items is bumpy. Fortunately, BKAWAN still managed to achieve favorable average operating profit margin as recorded by Operating Income/Sales, 25.34%. It was great that BKAWAN involved in stock re-purchasing program which reduce it's outstanding shares, -0.9% every year.

KLK's Financial Summary

KLK has high historical growth record in the past 5 years, recorded Compounded Annual Growth Rate (hereafter called "CAGR") for 20.67% in sales, 24.1% in operating income, 22.66% in net income and earning per share and comparable moderate growth in total liabilities, 16.41%. All numbers are great except numbers of 2009. KLK doing well in return on average equity (ROAE), return on average asset (ROAA) and profit margin, all numbers achieved double digits in percentage terms except year 2009.

Given today's closing price of both BKAWAN and KLK, the market capitalization of BKAWAN is 7,725 millions and KLK is 26,240 millions, 46.57% of KLK is currently valued at 12,220 millions. By invest into BKAWAN with today quotation, you are taking 36.78% discount to invest into KLK indirectly.  

As conclusion, BKAWAN is the winner of this comparison due to it's lower valuation and favorable reason above.

How Much BKAWAN Worth?
Given the company CAGR of EPS is 18% (approximately 22.3% in the past 5 years) and Dividend Per Share is 15% in the next 10 years, the EPS of the company will be RM$2.44 in 2021 (included adjustment of 2 bad years in 10 which reduce 50% of group's net profit) and the forecast dividends received over the 10 years period totaling RM$9.11 (included adjustment of 2 bad years).

If the stock price of BKAWAN sell at 10 times earning in 2021, it is RM$24.40 and included total dividends received, it is RM$33.52 per share. Given annual 6% inflation rate in next 10 years, the discounted rate is 0.591898. So, RM$33.52 discounted to today price, it is RM$19.84 per share.

The discounted price is 6.85% lower comparing to today (06 January 2012) closing price RM$18.48. In my opinion, the stock is only discounted in narrow margin, what do you think?

2011 Portfolio Review

As I established Investment Yardstick for US and Hong Kong Market in June 2011, it is time for annual review.

Portfolio Summary

Cost is based on market open price on 1 June 2011. Gain/(Loss) calculation with dividends included.

It is 7 months review instead of full year annual review. From the table above, it is clear that none of the portfolio is doing well, all turn red except Fortune 10. My US Portfolio is beat by both Dow Jone 15 and Fortune 10, -2.82% and -5.08% respectively. My HK Portfolio is beat by both Hang Seng HK 15 and Hang Seng Mainland 12, -3.81% and -4.81% respectively. In conclusion, my investment performance in these 7 months cannot match with these index funds. Please see tables below for detail of each index fund.

US Market
Dow Jones 15

Fortune 10

Hong Kong Market
Hang Seng HK 15

Hang Seng Mainland 12

Further Analysis of Malaysia Smelting Corporation Berhad

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.

Malaysia Smelting Corporation Berhad's (hereafter called "MSC") principal activities including the smelting of tin concentrates and tin bearing materials, the production of various grades of refined tin metal under the MSC brand name and the sales and delivery of refined tin metal and by-products.This analysis report is continuation of previous blog post titled "Malaysia Smelting Corporation vs. Perusahaan Sadur Timah Malaysia (PERSTIMA)". Let's start looking into detail of the company.

Company Events
In 2007, MSC adopted the following diversification plans:

• In March 2007, a wholly-owned subsidiary PT MSC Indonesia, acquired a 60% equity interest in PT Tenaga Anugerah for a total cash consideration of RM411,000 (USD120,000). The intended principal activity of the newly acquired subsidiary is to carry on offshore mining operations in Indonesia. Incurred RM123,000 loss for the year.
• On 18 September 2007, the Company entered into an Underwriting Agreement with its associate, Australia Oriental Minerals NL (AOM) relating to its renounceable rights issue exercise. Upon completion of the exercise in October 2007, the Company had subscribed for a total of 226,863,490 new shares amounting to approximately RM5.5 million (AUD 1.8 million) and the Company's direct shareholding in AOM has increased from 39.45% to 49.11%. Profit for the year RM1,846,000; Loss in 2006 RM2,296,000.
• The Group has a 40% equity interest in Redring Solder (M) Sdn Bhd. Redring Solder's principal activities are the manufacture and sale of both the tin lead and lead free solder products for jointing and semi-conductor applications in the electrical and electronic industries.
• In October 2007, MSC entered into a joint venture agreement with Guangxi Guilin Jinwei Realty Co. Ltd and Vertex Metals incorporation of Taiwan to enable it to own and operate a tin smelting plant in the Guangxi province. The Company's stake in this joint venture is 40%. The smelting plant is located in Linqui, Guangxi and is expected to have a targeted annual production capacity of 10,000 tonnes of refined tin and tin based products, including tin chemicals and is projected to commence operations in the second quarter of 2008.
• In December 2007, MSC acquired a strategic interest in a nickel development project in Vietnam through the subscription of 12.8% shares in the Canadian listed Asian Mineral Resources Limited (AMR) with provision to increase is shareholding further up to 18.96%. AMR's nickel project offers high grade massive sulphide nickel deposit which is being developed to become low cost nickel producer with a short lead time to production and is expected to commence in early 2009.
• In March 2008, MSC chalked up another historic milestone following its strategic entry into the gold sector with the acquisition of 18.9% interest in Beaconsfield Gold NL, a company listed on the Australian Securities Exchange. Beaconsfield is a mid-tier gold producer operating a high grade underground gold mine in Tasmania, Australia.

(All items above are taken from MSC's 2007 Annual Report)

• In April 2008, the Group proposed acquisition of a 30% interest in a high grade polymetallic copper, gold, zinc and silver project in the Philippines at an estimated cost of approximately USD18.9 million pursuant to a strategic alliance agreement with LG International Corp and Korea Resources Corporation.
• In July 2008 the Company, jointly with its 42.7% Australian listed associated
  company, Australia Oriental Minerals NL (AOM) announced the acquisition
  of a strategic 30% interest by the Company and AOM respectively in a coal
  development project in Kalimantan, Indonesia for a cash consideration of
  USD6.75 million for the 30% equity interest each. The capital required for
  this coal project was originally planned to be financed from the proposed
  rights issue. With the deferment of the proposed capital raising the Company
  and AOM will limit the investment at the existing level.
• In July to August 2008, MSC subscribed for 7 million right issue shares and underwrote another 13 million shares to increase its shareholding to 90 million shares, representing 22.48% of the enlarged paid up capital of BCD.
  

(All items above are taken from MSC's 2008 Annual Report)

Let's look at the effect of the diversification plans to the bottom line of the company in recent years:

Oops! The diversification plans drag the company's bottom line down to the bloody red in 2008 and 2010, and barely profitable in 2009. What happened in these years and what's wrong with the diversification strategy? Please see the following items:

• The Group incurred a pre-tax loss of RM28.16 million for the financial year 2008 compared with a pre-tax profit of RM120.99 million in 2007 mainly due to
  the RM55.29 million unusual charges (impairment charge and write-offs of its mining assets and its exploration and development expenses.) and RM28.98 million exchange loss.
  
• Development and construction of high grade nickel sulphide project in Vietnam by the Group's 18.20% Canadian listed associate, Asian Mineral Resources Limited was suspended in October 2008 due to the downturn in nickel prices and consequently certain losses were equity accounted in the Group's results for the year.
  
• At the Group's 22.48% listed gold associate in Australia, Beaconsfield Gold NL, development and turn-around expenses written down in 2008 further affected the Group's overall results for the year. Beaconsfield managed to achieve a successful turnaround and returned positive results in January 2009.

(All items above are taken from MSC's 2008 Annual Report)

• Consequent upon a decision made in 2009 to reposition the Group to focus on its original core business of tin, MSC has initiated a programme to divest some of the Group's non-tin investments and assets.The Group's non-tin investments comprise 22.12% interest in a listed gold and copper associate in Australia, BCD Resources NL; a 18.22% interest in a Canadian listed nickel associate, Asian Mineral Resources Limited; a 30% interest in a polymetallic mine (producing copper, zinc, gold and silver in concentrates) in the Philippines; a 76.91% Australian listed subsidiary, Australia Oriental Minerals NL (AOM); and a 53% effective interest in a coal development project in Indonesia.
• PT MSC Indonesia and the Company's 40% associate, PT Tenaga Anugerah, commenced tin mining operations during the second half of the year, with one gravel pump mine operating in Bangka Island and three cutter-suction dredges for offshore operations. The Group expects to commence generating positive results from these operations in the first half of 2010.
• The Company's joint-venture company named Guilin Hinwei Tin Co. Ltd for smelting and refining of tin, and the production and sale of tin and tin-based products in the People's Republic of China has not made much progress as GGJR has not been able to fulfill certain obligations within the specific time frame.
  

(All items above are taken from MSC's 2009 Annual Report)

• Rationalisation efforts were undertaken in respect of the Group's other tin interests held through its subsidiary, PT MSC, which is developing on-shore tin operations in Indonesia, and its 18.54% interest investment in TMR Ltd/PT Tenaga Anugerah (PT TA) which undertakes off-shore tin mining operations in Indonesia. These investments are expected to generate positive results in 2011.
• The divestment of the Group's interest in BCD was completed and the Group ceased to be a shareholder.
• AMR has been actively pursuing equity and debt funding to complete the nickel mine development project in Vietnam. Pending the conclusion of the proposed fund raising exercise, MSC will continue to evaluate its options on how best to maximize its value by divesting its investment in AMR.
• The agreement for the sale of the coal development project in Indonesia has been executed and the disposal is expected to be completed in the first half of 2011.
• The divestment of the Group's interest in KM Resources Inc may take a bit longer than expected. As a result of rising copper, gold, silver and zinc prices, the valuation of KM Resources Inc has also risen and MSC is seeking to enhance shareholder value by ensuring it sells the project at prices reflecting this increase in value.
  
• After providing for exceptional items totalling RM154.48 million, the Group recorded a loss before tax of RM78.46 million compared with a Group net profit before tax of RM109.84 million in 2009. The exceptional items mainly comprised the loss incurred on the disposal of investments in BCD and impairment provisions on the Group's non-tin assets. The 2009 net profit included a surplus of RM65 million on the valuation of the Group's interest in KM Resources Inc.
• On January 27, 2011, MSC listed in secondary listing on the Singapore Stock Exchange, a total of 25 million new shares was issued, raising the enlarged issued and paid up share capital of MSC to RM100 million, comprising 100 million MSC shares. Total proceeds of approximately SGD43.75 million (equivalent to RM104 million) will be used mainly for development of new mines and the balance for expansion of current operations and general working capital.

(All items above are taken from MSC's 2010 Annual Report)

From all items above, it was clear that the adoption of the diversification plans is a mistake. Fortunately, a decision made by management in 2009 to reposition the Group to focus on its original core business of tin, the Group has initiated a programme to divest the Group's non-tin investments and assets.

It is anticipated that the Group will take at least 5 years from 2009 to complete this divestment plans to unlock the investments and provisions, normalize the level of gearing and better use of capital resources of the company.

Tin Industrial Usages and Applications

Diagram above is taken from London Metal Exchange

For more information, please see Tin's Application and Future Markets for Tin section of MSC's 2010 annual report at page 41 to 44.

Tin Historical and Future Price

Tin price of cash seller and settlement graph above is taken from London Metal Exchange

From the graph above, you can see the current market price of tin is far from the peak of early 2011 and slightly below the peak of mid 2008. In worst time, the tin price can fall down to US$10,000 approximately as it happened in early 2007 and 2009. This indicated fluctuation of tin price is high.

Table above is taken from London Metal Exchange

From the table above, tin futures of 3 months and 15 months traded at price higher than current price (Cash). This is the indication of growth potential of tin's market price.

In conclusion, I think the tin price is in upward trend. Unless the debt crisis of euro zone explode to critical stage in 2012, this trend should be continue.

How Much MSC Worth?
It is challenging to value MSC properly given the Group's bumpy results in recent years. I will attempt to value it using much conservative numbers.

Given the company CAGR of EPS is 12% (approximately 12.09% in the past 5 years) and Dividend Per Share is 10% in the next 10 years, the EPS of the company will be RM$1.118 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$2.78 (included adjustment of 2 bad years). Please take note that the 2011 EPS is RM$1.00 (at least 25% discount from expected) and 2011 Dividend is RM$0.30 is used in the calculation.

If the stock price of MSC sell at 5 times earning in 2021, it is RM$5.59 and included total dividends received, it is RM$8.37 per share. Given annual 6% inflation rate in next 10 years, the discounted rate is 0.591898. So, RM$8.37 discounted to today price, it is RM$4.95 per share.

The discounted price is 19% higher than yesterday (27 December 2011) closing price RM$4.01. In my opinion, the stock is in bargain, what do you think?