Fusion Investor Chatbox

This chatbox is for fundamental, technical and related discussions on investing in Bursa Malaysia. Registration is required to join. Please email me at fusion.investor@gmail.com with your preferred name and password and I will inform you when registration is confirmed.

Disclaimer: As usual, you are solely responsible for your trading & investing decisions.

Monday, July 7, 2008

Parkson HK Share Split Approved

I noticed this morning that there was no "live" price for Parkson HK (3368.HK) and yet the HKSE is opened for trading.

Found an announcement
to HKSE at 5.30PM last Friday, that at the Special EGM convened, the shareholders have unanimously approved Parkson HK 1-to-5 share split.




As expected, this is not a new information. It was reported in the news last month that Parkson HK was planning the share split here - http://www.tradingmarkets.com/.site/news/Stock%20News/1686299/

"SHANGHAI, Jun 16, 2008 (SinoCast via COMTEX) -- Parkson Retail Group Limited (SEHK: 3368) brews to divide its current HKD 0.1 share to five HKD 0.02 ones with a view to improving the share turnover and enlarge the shareholder base.

Its shares will amount to 7.5 billion after the division, which is scheduled to take effect on July 7, 2008, according to a statement on June 11."

So, it seems we should see new Parkson HK price which is 5 times smaller, with 5 times larger number of shares tomorrow.


UPDATE (10:15AM): I just noticed that Parkson HK is now traded under 2945.HK, not 3368.HK. The share price is now HKD10.x instead of HKD5x.x (i.e. 5 times smaller), and appears to have jumped on opening after the split.

Sunday, July 6, 2008

The People's Leader: A personal experience

Last night, Pakatan Rakyat held a ceramah perdana at the Expo Seberang Jaya/Permatang Pauh at 9 PM. The venue is basically a "padang" with a platform stage for the guest speakers. Unfortunately, I didn't bring a camera, as the pictures would have spoken a thousand words. So, I will try to share my experiences with you.

Firstly, the event promotion was rather low key. My brother in law who went with me didn't know about it until just 2 days prior. I saw it a few days earlier via a single banner at a junction in Permatang Pauh, confirmed with Internet. A friend was invited last minute. Very low key.

But judging by the attendance, the event was anything but low key. It was jam-packed, like sardines in a tin can! We were there at 8.45 PM and already, I estimated conservatively several thousands of people already.

By 9.30 PM, it was easily over 10,000 people, and possibly 15,000 people. One of the speakers asked if there were 30,000 people and the crowd roared "Ada"!! (although I think this is an exageration). For a lowly promoted event, this was easily one of the largest turnout I have ever seen for this area, far exceeding any expo turnout!

To give you an idea of how packed it is, sitting space was at a premium. We were eventually seated on the grass padang, and our knees were rubbing against another. This is at a padang larger than several football fields.

And if you think this is attended by just Malays, you would be wrong, even though there was a Malay majority there. There were many Chinese and Indian attendees as well, at least more than usual (where "usual" means past Expo attendees).

It is interesting to contrast the attendance with that of the PM who happened to return to Kepala Batas the same day to give out some monetary rewards to the attendees with television coverage. I noted with huge irony that the number of attendees shown on TV was probably fewer than 100! A stark contrast.

The ceramah started at 9 PM, with brief talks by a few of the lesser PR speakers first. Later, a convoy of cars arrived. The atmosphere suddenly changed to become electrified! I knew this means that Anwar together with Penang Chief Minister Lim Guan Eng had arrived. The previously seated and calm crowd suddenly stood up in unison with huge anticipation, trying to get a better view of their leader. The crowd response to Anwar and LGE was simply amazing!

After their arrival and seating with pictures taken by the press, Datin Wan Azizah spoke first and briefly. Before she spoke, I was afraid that her soft-spoken voice might not be able to captivate the crowd as they were still shuffling. I was pleasantly mistaken! She is able to captivate the crowd, temporarily calm them down, deliver a brief, strong and emotional speech when needed, and the crowd was pleasantly surprised by the new Wan Azizah with a strong voice, which I'm sure is the result of her recent Parliamentary experience. The crowd roared when she finished.

LGE spoke next, and I found myself personally amazed at his great delivery in Bahasa. He is not only fluent, colloquial but the Malay majority crowd actually listened to what this guy has to say. He clearly captivated the audience for the full 20-30 minutes. The roar was even louder and came from everyone, regardless of religion or race.

And when it came to Anwar's turn, it was fitting that his was the climatic delivery. Simply stunning and superb. And I can't find the right words to describe it. You just had to be there.

Many times, the audience roared with him and many times, you can hear a pin-drop in the deafening silent atmostphere. Perhaps I am exagerating, since this is my first time listening "live" to Anwar surrounded by tens of thousands of people, but his was the best.

Mind you, it was an open air ceramah in a padang. No free drinks, no free meals, and everyone were either sitting on the grass, road, pavement, and whatever space we could find. And our sole intention being there is to just listen to this great man talking. And the huge crowd of tens of thousands just listened intently. I didn't realize it, but an hour passed just like that.

After he finally finished at 11.20 PM, the crowd roared Reformasi with him, and we started to make our way back. What normally took a minute to walk from where we are to the road turns out taking 35 minutes simply due to the massive crowd! Fortunately, the crowd was orderly throughout, and there was not a single problem that I could see and sense. Thank goodness, we didn't have any FRU problems - in fact, I didn't even see one. Instead, the Traffic Police did their best to direct traffic as smoothly as possible, but the Expo just wasn't designed for so many people, that it was a massive jam in a place never known for traffic jam in all the years I was there.

For a few moments as we made our way out, my thinking mind wondered what might happen if we had a stampede, as the crowd were just so many. To give you an example of how it felt - the night was cool, I felt the cold wind blowing at my ears (since I was taller than the average person there), and yet at the same time, I was sweating below the neck as the crowd was so close with together for nearly half an hour. Interestingly, there was no sense of fear, just calmness as we patiently made our way out.

To me, it is not important to give a blow by blow record of what Anwar spoke. Those who opened their ears and their eyes since March 8 election or prior will readily identify with everything that he has to say. He was simply magical. To me, he didn't speak of anything new that I didn't already know, yet, he makes my understanding clearer that went beyond reading Internet news, listening to his press conference, etc. He was clearly a different Anwar, from the Anwar of the Press Conference.

To say that the crowd was there simply due to the fuel hike is missing the point, although it was a major motivation for everyone there. There is no question many were hugely angered with the fuel hike. Anwar has the charisma, and that night, there was no question in the minds of the attendees there, that it is definitelyAnwar (and not Abdullah) who is the legitimate Prime Minister of Malaysia.

The grass-root support for him was unmistakeably strong that night, even if one is blind. The roar of reformasi was extremely loud and strong. This was in stark contrast to the public support for Abdullah who silently made his way back to Kepala Batas on the same night. It was a tremendous experience that I don't think there is adequate words to describe that night.

Whilst I was deeply touched by the event, I also feel fear for Malaysia. There is no doubt in my mind that for all the attendees there last night, Anwar is their rightful leader. They look to him as their only hope against the present corrupt government who no longer cares about the Rakyat's sufferings, as evidenced by the huge fuel hike and more.

Yet, those in power will not just make way for Anwar peacefully. I pray that everyone will be as safe as they can during this transitionary period, which sadly, I don't know when it will end. But at Seberang Jaya/Permatang Pauh last night, he was definitely the People's Leader.

Take care.

Saturday, July 5, 2008

SD1 or SD2?

It's now all over the news.

Much has been written about Bala's latest SD2 so, I won't try to write more. Instead, here are some of the links that I found useful in understanding what happened and the bigger picture. I encourage you to look deeper than the superficial, especially the details, the sequence of events, the timing, the press conferences. In other words, imagine that you are the jury, and these are the evidences given to you in a jury trial court. I noticed after the initial black-out, MSM finally improved the speed and extent of their coverage, so the Internet version is useful to compare.

Full SD1
- http://anwaribrahimblog.com/2008/07/03/press-statement-and-statutory-declaration-on-relationship-between-najib-and-altantuya/

Full SD2
- http://rockybru.blogspot.com/2008/07/i-did-1st-july-sd-under-duress-bala.html
- Worthy to mention that in para 3, he retracted para 8, 25, 28, 49-52 ("Najib's paragraph) which specifically refers to Najib (except para 8 which refers to a VIP). In Para 4, he explicitly reverse the statements relating to Najib's paragraph. And in the 2nd last paragraph, he retracted the entire contents of his SD dated 1 July. And this SD is signed 4 July.

PKR's team was shocked, and came out with a press statement here.
- http://anwaribrahimblog.com/2008/07/04/press-alert-press-conference-on-p-balasubramaniam-retracts-staturory-declaration/

Many, many bloggers have analyzed what happened and provided their take there. Some have written more than one article, but I will only link the latest one at the time of writing this article. Below are some of the ones that I find thought provoking. If you have others, please feel free to drop me a comment.

Haris Ibrahim:
http://harismibrahim.wordpress.com/2008/07/04/under-duress-when-he-swore-the-sd-yes-but-when-1st-july-or-4th-july/

Susan Loone:
http://sloone.wordpress.com/2008/07/05/these-photos-will-tell-you-when-bala-was-under-duress/

Malik Imtiaz:
http://malikimtiaz.blogspot.com/2008/07/why-balasubramaniams-first-declaration.html

DAP Lim Kit Siang:
http://blog.limkitsiang.com/2008/07/04/altantuya-najib-link-pi-balasubramaniam-sd1-vs-sd2/

Various bloggers:
http://jelas.info/2008/07/05/bala-on-thursday-bala-on-friday/
http://magickriver.blogspot.com/2008/07/balas-bombshell-press-conference-part.html

Of course, Malaysiakini is an indispensable source. Unfortunately, I still cannot logged into Malaysia Today for several days already.

I'm sure by now, some of you have felt that all this coverage is either stupid, unnecessary, completely fed-up, etc. etc. etc. Here are a couple of links that expresses that - http://rights2write.wordpress.com/2008/07/04/enough-is-enough/, http://niamah.blogspot.com/2008/07/and-now-for-something-completely.html

DSAI of course has indicated that there is more evidence to come. He wants to test the resolve and commitment of the present government to do the right thing. Which means the sad reality is that we most likely can expect these issues to drag on. Leopards don't change their spots overnight. In other words, it won't get better tomorrow. It won't stop tomorrow. And so, it is understandable that some will be impatient and want to see this issue stopped overnight as the longer this drags on, the worst it becomes for Malaysia.

But in our rush to return to the "old stable Malaysia", we must remember the sad but inescapable fact, that despite the huge dissappointment with the Abdullah administration after 2004, at least 50% of Malaysians still and deliberately chose to ACTIVELY voted for BN government to continue on the historic day of March 8, 2008.

Yes, at least 50%.

It was an ACTIVE vote of support, not passive.

To these 50%, they PREFER to see BN government continue, not PR.

They didn't want a change in government.

Else, they would have voted for a change.

These numbers are real, despite the vote rigging accusations. For every 1 million voters, 500,000 did vote for BN.

What does it tell you?

Do you think these 50% are convinced of the need to change?

If not, WHY not?

More importantly, do you think if everyone keeps quiet tomorrow, will this 50% suddenly switch and vote for a change in government in the next election?

Isn't the reverse more likely to happen?

That if we keep quiet, more are likely to swing to BN with greater majority on the next election?

Are we not even more fed-up with the extent of corruption in Malaysia?

Isn't our Judiciary corrupt? Isn't our AG corrupt? Isn't our IGP corrupt? Isn't our Police corrupt? Aren't our MPs corrupt? Isn't our Military Intelligence corrupt? Isn't our MSM controlled and biased? etc.

Is the situation improving?

Or is it getting worse?

And if it's getting worse, how can we be quiet?

Some will say that corruptions happen everywhere, so, what's new?

If it happens everywhere, does it make it right?

Ironically, the strongest force in the universe is not love nor hate. It is apathy and indifference.

"Indifference is the strongest force in the universe. It makes everything it touches meaningless. Love and hate don't stand a chance against it. " -- Joan Vinge

"First they came for the Jews. I was silent. I was not a Jew.
Then they came for the Communists. I was silent. I was not a Communist.
Then they came for the trade unionists. I was silent. I was not a trade unionist.
Then they came for me. There was no one left to speak for me."
-- Martin Miemoller

Some urged DSAI to stop playing politics and quickly produce evidence so that there is a quick "justice to Altantuya". But is this issue just about one VVIP lying? Or is this issue much bigger than just a single MP?

Haris shared an open letter to DSAI which prompted me to write this article here - http://harismibrahim.wordpress.com/2008/07/05/an-open-letter-to-anwar-ibrahim/

The author of the open letter asked for quick justice for Altantuya.

And I will end this article by asking for justice for ALL MALAYSIANS.

Show the world your true feelings this Sunday. March peacefully. As you are there, always remember that a peaceful march must be your first priority. Remember the only message that you need to send to the entire world is your presence this Sunday, notwithstanding all the intimidations that you will get. Don't be a hero. Never provoke and never retaliate. Violence is never the answer. But the message must be sent. Action speaks louder than words. Being there is the loudest action that you can shout to the government. Let's pray for the safety of everyone.
Remember, "People should not fear the government. It is the government who should fear the People". - Haris (http://harismibrahim.wordpress.com/2008/07/04/people-should-not-fear-their-government-the-government-should-fear-the-people/)

Friday, July 4, 2008

PARKSON Observations

At lunch time, Parkson HK closed at HKD50. This is very close to its key support level at HKD 49.45. The stock is currently trading below its 200 day EMA for over 6 weeks now - the longer it trades below this, I believe the harder it will be to recover.


Interestingly, PARKSON KL has broken its key support $5 much earlier. The low for today is $4.24. It appears that Parkson local expects Parkson HK to break its support.

From a Sum of Parts valuation, Parkson HK at HKD50 is worth $5.58. This assumes a NIL value for Parkson Vietnam and NIL value for Parkson Malaysia. At 20% discount, it is worth 80% x 5.58 = $4.46.
I must say I am deeply amazed at how Parkson KL price fell faster and ahead of Parkson HK price. It is as if the traders in KL markets knew what Parkson HK will do next. Of course, this is a small sample, since my observation is based on recent fall, and perhaps it can also be explained by other factors as well.
Parkson HK is now at a critical level. If the support breaks, we could see more falls ahead. On the other hand, if in the less likely event that it recovers, the buy at $4.24 this morning might turn out to be very cheap indeed.
To me, this market is more suited to a trader with a successful sell stop discipline, than an investor, due to the high level of uncertainty surrounding Parkson HK's future prospects over the rest of this year and quite possibly the next year.

Thursday, July 3, 2008

DSAI's bombshell - Balasubramaniam's Statutory Declaration

Today has been an incredible and unbelievable day! Yes, I was shocked too by the news and what happened to Bursa. Who isn't?

Ok. Bursa first. (Bear in mind I'm writing this at 4.30 pm, and have no plans to update this article.)

At 9 AM, we were surprised to discover that Bursa was shut down for trading, apparently for the morning session only. Then, we were to find out that it is also going to be shut down for the afternoon session also. And then, we were surprised to hear that it could be reopen at 3.30 PM. There was a brief trading session, but then, it was halted again!

In my opinion, this is extremely unprofessional for at least 2 major reasons. First, the widespread expectation that there should have been a back-up system kicking in when the primary system didn't work. Think Disaster Recovery situations when a company like Bursa is expected to be up and running even if disasters - natural or man-made - occurs.

Second, to allow trading temporarily at 3.30 PM and then to halt a few minutes later is ridiculous! I understand Bursa is calling for a press conference to explain.

But this is a relatively minor matter, compared to what DSAI disclosed this morning at a press conference at 11.30 AM.

I want to document a few things here on a bombshell for future reference.

Malaysian Insider News

First, when I checked before 9 AM, the Malaysian Insider did mention that DSAI will call a press conference at 11.30 AM, but gave a different reason which did not mention Altantuya and Najib link. Unfortunately, I don't have a screenshot of the reason mentioned. The next time, I will take a screenshot. (Update: They have atoned themselves and now has a better coverage than MSM).

Kudos to Haris Ibrahim Blog

Whereas Haris Ibrahim's blog did, and at a much earlier time too. (http://harismibrahim.wordpress.com/2008/07/03/news-that-will-rock-the-nation/). "I am reliably informed that at 11.00 30 am this morning, Anwar Ibrahim will hold a press conference at PKR’s spanking new HQ at Merchant Square, Tropicana to reveal evidence linking Najib to Altantuya."
Naturally, I was very dissappointed with the Malaysian Insider for giving a different reason for the press conference since being an online newspaper, I had hoped that it would paint the truth, the whole truth and nothing but the truth.

Mass Media Coverage

I have harped before about how biased the MSM reporting is and this episode is no exception.http://fusioninvestor.blogspot.com/2008/06/msm-blackout-on-rpks-bombshell.html

The Mass Media coverage is again extremely dissappointing.

Again, at the time of writing (4.30 PM - at least 5 hours after DSAI's press conference), none of the MSM painted a clear picture of what the SD and DSAI's press conference is all about.

The only MSM that alluded to something was The Star, but the quality of reporting is extremely poor relative to the Internet. I am referring only to the English and Bahasa language MSM.

You may check this yourself, although as time passes, things will change. At 4.30 PM, I checked the following links and found no reference to DSAI's bombshell.
- http://www.nst.com.my/
- http://thestar.com.my/news/story.asp?file=/2008/7/3/nation/20080703123900&sec=nation (this has a 3 paragraph statement, a picture of Balasubramaniam, and a statement that says "More to follow" - I will comment later).
- http://www.bharian.com.my/Current_News/BH/Seksyen/indexberita_html?mysec=Mutakhir
- http://www.utusan.com.my/
- http://www.sun2surf.com/
- http://www.theedgedaily.com/cms/index.jsp

I am also dissappointed with The Edge. Being a business newspaper, I had expected it to alert its readers about a very material piece of news that will have a material market impact.

As for The Star.

Whilst it is good to see that it tries to report it, it naturally fails to mention the name of the politician involved. So, you still lose the sense of "importance".

The Internet

And sadly, we must continue to rely on the Internet for "the truth, the whole truth and nothing but the truth" about what DSAI actually said to the press and what the SD content is all about!

Ironic isn't it?

That when a press conference is called, MSM blacks it out?

Anyway, the full link of DSAI's press statement and a copy of the SD here - http://anwaribrahimblog.com/2008/07/03/press-statement-and-statutory-declaration-on-relationship-between-najib-and-altantuya/

Balasubramaniam's Statutory Declaration

For me, it's important to read the entire SD, but a few paragraphs deserves mention. I will repeat the facts below, so that readers have a full appreciation of what is being written in the SD, and can form their own informed opinion. As you read this, remember that the DPM has said repeatedly to the press and to MSM that he was never acquainted with Altantuya.

Paragraph 25

25. During this discussion and in an attempt to persuade me to continue my employment with him, Abdul Razak Baginda informed me that :-

25.1 He had been introduced to Aminah by Datuk Seri Najib Tun Razak at a diamond exhibition in Singapore.

25.2 Datuk Seri Najib Tun Razak informed Abdul Razak Baginda that he had a sexual relationship with Aminah and that she was susceptible to anal intercourse.

25.3 Datuk Seri Najib Tun Razak wanted Abdul Razak Baginda to look after Aminah as he did not want her to harass him since he was now the Deputy Prime Minister.

25.4 Datuk Seri Najib Tun Razak, Abdul Razak Baginda and Aminah had all been together at a dinner in Paris.

25.5 Aminah wanted money from him as she felt she was entitled to a USD$500,000.00 commission on a submarine deal she assisted with in Paris.

Paragraph 28

28. Whist I was talking to Aminah, she informed me of the following :-

28.1 That she met Abdul Razak Baginda in Singapore with Datuk Seri Najib Tun Razak.

28.2 That she had also met Abdul Razak Baginda and Datuk Seri Najib Tun Razak at a dinner in Paris.

28.3 That she was promised a sum of USD$500,000.00 as commission for assisting in a Submarine deal in Paris.

28.4 That Abdul Razak Baginda had bought her a house in Mongolia but her brother had refinanced it and she needed money to redeem it.

28.5 That her mother was ill and she needed money to pay for her treatment.

28.6That Abdul Razak Baginda had married her in Korea as her mother is Korean whilst her father was a Mongolian/Chinese mix.

28.7 That if I wouldn’t allow her to see Abdul Razak Baginda, would I be able to arrange for her to see Datuk Seri Najib Tun Razak.

Paragraphs 48 to 52

48. I was transported to Bukit Aman where I was interrogated and questioned about an SMS I had received from Abdul Razak Baginda on the 19.10.2006 which read “delay her until my man arrives”. They had apparently retrieved this message from Abdul Razak Baginda’s handphone.

49. They then proceeded to record my statement from 8.30 a.m. to 6.00 p.m. everyday for 7 consecutive days. I told them all I knew including everything Abdul Razak Baginda and Aminah had told me about their relationships with Datuk Seri Najib Tun Razak but when I came to sign my statement, these details had been left out.

50. I have given evidence in the trial of Azilah, Sirul and Abdul Razak Baginda at the Shah Alam High Court. The prosecutor did not ask me any questions in respect of Aminah’s relationship with Datuk Seri Najib Tun Razak or of the phone call I received from DSP Musa Safri, whom I believe was the ADC for Datuk Seri Najib Razak and/or his wife.

51. On the day Abdul Razak Baginda was arrested, I was with him at his lawyers office at 6.30 a.m. Abdul Razak Baginda informed us that he had sent Datuk Seri Najib Tun Razak an SMS the evening before as he refused to believe he was to be arrested, but had not received a response.

52. Shortly thereafter, at about 7.30 a.m., Abdul Razak Baginda received an SMS from Datuk Seri Najib Tun Razak and showed, this message to both myself and his lawyer. This message read as follows :- ” I am seeing IGP at 11.00 a.m. today …… matter will be solved … be cool”.

Amazingly mind boggling isn't it?

So, what are the implications from this latest Bombshell?

Will DPM continue to deny his acquaintance / relationship with Altantuya?

How will the public and markets react to this news? If there is a denial, how will they react to the denial?

Is this just the DPM, the IGP, the AG, the Prosecutor Team we are talking about or much bigger than the 4 of them?

Paragraph 28 refers to something Bala spoke to Aminah, and Aminah (Altantuya) is no longer around to confirm the conversation. Paragraph 25 refers to Razak, and so far, Razak is still alive and in theory should be able to either confirm or deny. And both Bala and DSAI are of course still alive and in theory are able to provide more elaboration if necessary. Will we continue to have "stability", or is it now obvious that the participants on both sides have clearly crossed the line a long time ago and there is no looking back?

What about newsflow? Is this the last bad news to come out? Or will there be more newsflow in the future? Has the tone of the political chess game came down? Or will it continue to escallate and become much worse?

Do you find yourself "hoping" that things will improve? Do you find yourself "justifying" that since it has already fallen so low, how much more can I lose? Many highly intelligent people has tried to predict bottoms and failed miserably. Do I think I have superior intelligence than the smartest people on earth to be able to predict a bottom accurately?

Be safe.

Wednesday, July 2, 2008

RESORTS Q1/08 Financial Statements

As a few of the fellow chatters are interested in RESORTS, it might be useful to show here some snapshots of the latest Quarterly Financial Statements. Full report (PDF file) can be downloaded from Bursa website here - http://announcements.bursamalaysia.com/EDMS/annweb.nsf/LsvAllByID/482568AD00295D07482574570038D61E


INCOME STATEMENT



Quick comments:

Nothing major sticks out like a sore thumb here when comparing Q1/08 to Q1/07.

Revenue grew slightly.

Cost of sales marginal growth.

Gross Profits okay.

Other Income and expenses steady.

Profit from Operations Good.

Finance cost small and improved.

No more big loss from Star Cruises.

Taxes okay.

In short, diluted earnings of 5 sen for Q1/08 looks okay.


BALANCE SHEET





Quick Comments:

There's no question Resorts Balance Sheet is very strong.

Total cash recorded under Current Assets is $3.2 Bn.

Under Fixed Assets, there is another $1.4 Bn of what comprises mainly quoted securities. The "other long term investments" recorded at $0.5 Bn does not reflect unrealized gains (per 2007 Annual Report, although I'm not sure what the value is today).

However, the sharp eyes amongst you will have noticed that the sum of these 4 items have actually decreased from Q1/07. The question is where did that money go?

A quick look at the current liabilities showed 2 improvements.
1. Trade payables dropped from $0.49 Bn to $0.405 Bn.
2. Short Term borrowings also dropped from $0.18 Bn to $0.08 Bn.

Overall, Net Assets dropped slightly from $1.43 to $1.37, or from $8.2Bn to $7.9Bn, or $0.3 Bn drop.

It is clear this is more than explained by the bigger drop in Fixed Assets from $6Bn to $5.4Bn, or $0.6 Bn drop.

I view the drop in Fixed Assets favorably since Fixed Assets is normally a playground for valuation "games" amongst experienced accountants. Personally, I like to see RESORTS trimming its fixed assets.

However, I note there is capital commitment to the tune of $0.66 Bn ($0.21 Bn contracted, $0.45 Bn Not yet contracted).

RESORTS has 5.9 Billion shares. Net Cash ($B) = 0.90 + 0.51 +1.11 + 2.13 - 0.08 = $4.57 Bn, or 77 sen per share.

Overall, nothing too worrying sticking out like a sore thumb.


CASHFLOW STATEMENT




Quick comments:

Operating Profit Before Working Capital Changes increased, which is good.

They've used the cashflow to reduce their current liabilities (payables and loans) which is good.

RESORTS continue to invest $0.09 Bn in Q1/08 into Plant, Property Equipement like prior year.

They also bought back shares this year.

My quick glance at the price charts show that Q1/08 prices are higher than Q1/07 prices, although one needs to closely examine at what prices they've bought back. Somehow, I don't think they are doing a good job here, since prices now (July 2) is at this year's low. Whilst buybacks are generally seen as positive because they reduce the number of shares outstanding and increase earnings per share, the price they pay to buy back is also very important. Still $0.03 Bn hardly dents the Net Cash, but something to watch out for.


VALUATION

Valuation is actually complex, but a very quick and dirty one is to look at current price of $2.50, less net cash of $0.77 = $1.73. If we assume yearly earnings is $0.05 x 4 = $0.20, then, this implies a business P/E of 1.73 / 0.02 = 8.6, which is getting in the region of a "value" buy. If exclude the net cash, the quick and dirty P/E is $2.50 / 0.2 = 12.5, which is also getting "interesting".


FUTURE PROSPECTS

Short term challenging but within the general view of "steady". Nothing terribly exciting, but not bad. Very solid business. Genting Highlands business is secularly cyclical, but when the good times comes back, business will be bomming bigger than ever before, although exactly when is unclear.


Disclaimer: As usual, buy/hold/sell at your own risk.

SAPCRES News

For future reference. Full link here - http://www.btimes.com.my/Current_News/BTIMES/Tuesday/Latest/20080701174516/Article/index_html

_____________

SapuraCrest bidding for RM7b jobs

Published: 2008/07/01

SAPURACREST Petroleum Bhd is bidding for oil and services jobs worth between RM6 billion and RM7 billion, comprising 70 per cent local and 30 per cent overseas.
(Seng comment: Looks like Sapcres is relying to secure more local jobs than overseas.)

Its chief executive vice-chairman, Datuk Shahril Shamsuddin, confirmed that one of the local jobs was the Gemusut deepwater exploration but declined to disclose the value.

He, however, said it expected to know the outcome by year-end.
(Seng comment: A lot of things can happen by year-end. E.g. markets can fall or rise, causing all boats to fall or rise.)

The oil and gas services provider already has presence in India, Australia, Indonesia, Thailand, Cambodia, Myanmar and Vietnam, he told reporters after the company’s annual general meeting today.

Its current order book of RM5 billion will last for about 30 months.
(Seng comment: This is a decent order book size, but much depends on the margins. At 5%/10%/20% net margins, it translates to $250M/$500M/$1 Billion. If past net of tax margins are any indication, then, it's not a pretty picture since it is closer to $250M, which is small relative to its market capitalization including warrants of around $1.7 Billion.)

The order book includes RM3 billion three-year extension to an on-going contract with Petronas Carigali Sdn Bhd and the RM600 million contract from Murphy Oil Co Ltd for the Kikeh project in Sabah.
(Seng comment: I know nuts about actual specific detailed oil and gas business, but these to me seem like decent trophy names of clients for Sapcres - Petronas and Murphy Oil, although you probably can't read too much into it.)

Others include RM500 million regional contract from Carigali-PTTEPI Operating Company Sdn Bhd and a RM200 million one-year extension to an on-going contract with Exxon Mobil Exploration and Production Malaysia Inc.

Meanwhile, its chief executive officer, Izzet Ishak, said overseas operations contributed up to 30 per cent to the company’s revenue now.

“We hope to increase it to 50 per cent in two years and maintain it,” he said. — Bernama