Market sipeh boring...
80% market will down now, fasten your seat belt, Personally I like HOVID and CANONE.
Let's hear what Grandpine on 2nd quarter outlook:
Summary of Mr Chen’s point in Grandpine Millionology 2nd Quarter report convention in KLCC.
1. Technically FBMKLCI is not doing well as it had formed another death crossed after the 1st time which was 6 months ago.
2. Emerging market is being hammered by the strengthening USD due to the speculation of rate hike.
3. The hike of German Bund yield and US Treasuries.
4. The political issue as well as the 1MDB will causes jittery in the market.
5. Impact of GST and diminishing disposable consumption power will causes the quarter report earnings to get hit badly.
What shall we do? Hedge by using Put warrant, however do not put all the eggs in 1 basket! The risk of doing so is very high, put warrant is just an instrument to hedge and its not a way to make big money.
Shares being mentioned
1. Hovid 7213
a. Company previously producing herbal tea but had diversified into Generic Drugs/medicine production.
b. Drugs/ Medicine is not affected by lower disposable income and will not affected by GST, however it is benefited by lower disposable income as their medicines are generally cheaper.
c. Benefit from Pattern Cliff.
d. New production line is about to commence its production which will increase 30% of its production of high margin capsule. The new production is following FDA standard which will be able to get contracts from U.S companies.
e. Company is applying FDA approval for Toccovid, not sure when will get approval but will have lots of potential if it is able to get approval from FDA.
f. Benefit from strengthening of USD as it is exporting more than 55% of its product to overseas.
g. More fund management companies are seen in the annual report of 2014 compared to 2013. There are lots of growth fund invested in Hovid because this company is able to provide growth potential.
Hovid has stable financial which is free from economy cycle as well as providing growth to the investors. It is a defensive stock that provide growth!
In the past, it is almost 100% success rate for the company price to move up from it is about to fulfil the mainboard changing requirement listing until it fulfil the mainboard requirement listing and change to mainboard.
2. OCNCASH 0049
is 1 of the company that is about to fulfil the requirement, it had hit net profit of Rm16m in the past 4 years and hitting Rm6m will get it qualified to mainboard changing listing.
a. The company had hit Rm2.2m on the 1st quarter where it is still lack of RM3.8m to hit the mainboard listing.
b. Company is involving 2 business. 1 is in Felt insulation for car which is a necessities. 2nd is Non-Woven Cloth which is a raw material for napkins, Diapers, as well as surgical mask.
c. Company new factory in Indonesia is commencing where they will increase 1 new production line into 2 production line there while shifting 1 production line of old rented factory to the new factory. Will shift 1 production line from Malaysia to Thailand as the new business in Thailand is growing
d. Management mentioned non-woven is where the growth is as the company is getting new customers and also benefit from the branch out of from Japan customers to South East Asia.
e. Company is producing non-woven cloth which is the essential ingredient for surgical mask, will this company become the stocks that move due the MERS other than glove stock
f. It was being told by the company's investor relation manager that they have only 1 competitor in malaysia that is able to produce the same product as OCNCASH.
3. Canone 5105
a. Canone had bought 32.9% of KianJoo when there are family feud in KianJoo
b. In 2014, Canone is about to sell 32.9% of KianJoo by RM3.30 end up KianJoo owner appeal in High court which had blew off the deal, however the Court had rejected the appeal.
c. As we calculated, if Canone able to sell KianJoo by RM3.30 and divided by dilution of share for the new investment, then Canone will have RM2.50 per shares.
d. Market may not be aware of the court case appeal were rejected, and maybe the market has yet to factor in the potential of selling the shares of Kianjoo.
e. Though Canone still have borrowings by now but it will be net cash after selling the stake in KianJoo.
f. When will Canone move? It will move when there is new offer for KianJoo’s share and provided the price is RM3.30 or even higher.
g. It’s a discounted share.
4. REV Asia (0173)
a. Previously called Catcha but had changed name to REV
b. ICAR owned carlist.my which is wrote in its website as No 1 car site where the website has been modernise recently which is much prettier and have 165,012 cars listed for sale, where we compared to Mudah has 81,320 while Motor traders has only 49017 cars only.
c. Owned 24.11% or 52,500,000 shares of ICAR Asia which is now traded at 0.97 AUD where 1 Aud is equal to RM148m
d. RM148m divided by 134m shares hence this asset is worth about RM1.11 which is having discount of 44%.
e. However the company had recently cancel the selling of its ICAR as it had recently bought over Thailand number automotive site which will bring lots of growth to the company. As a result, it had great potential of growth.
f. ICAR is making money by doing free standard ads, but you can pay RM50 for premium ads and also RM100 for even better premium ads. This create good income for the company for doing advertisement.
g. ICAR is now getting more user friendly by having feature account apps for their dealer to control and observe their advertisement and selling car which they charge RM200 per month hence it is a very good recurrent income that had been launched not long ago.
h. They have another features of bump up by charging RM8 per day for making their car in the top search session.
i. Company is potential to break even by this year. REV is a deeply discounted stocks that is also providing strong growth!