HAIO surges after earning report? Fundamental, technical or hybrid analysis for HAIO? RHB, Affin or OSK for HAIO? Buy Hold for HAIO?

Shares of HAI-O ENTERPRISE BHD surged in early trade on Wednesday, Dec 23 after it reported a strong set of earnings. It was up 42 sen to RM7.92 at 9.15am. There were 106,500 shares traded. However, the 30-stock FBM KLCI fell 1.84 points to 1,258.58. There were 28.73 million shares done valued at RM32.25 million. Hai-O reported net profit of RM20.18 million in its second quarter ended Oct 31, a jump of 85% from RM10.89 million a year ago, as more consumers bought its health and wellness products. The company said revenue rose 51% to RM132.37 million from RM87.29 million. Earnings per share were 24.23 sen compared with 13.38 sen. It declared dividend of 10 sen per share. It also proposed a bonus issue of up to 16.89 million new RM1 shares on the basis of one bonus share for every five existing shares held. It also proposed a share split involving the subdivision of each Hai-O share into two 50 sen shares.

Let me share some analysis report done by different Investment Bank.
RHB Research Institude Sdn Bhd.
Date: 12/23/2009
Share Price: RM7.5
Fair Value: RM9.9

Affin Investment Bank.
Date: 12/23/2009
Share Price: RM7.5
Target Price: RM11.06

OSK
Date: 12/23/2009
Share Price: RM7.5
Target Price: RM8.95

Technical Analysis:

Base on the report from 3 different expert, valuation result showed 3 different target price with RM8.95, RM9.9 and RM11.06. HAIO was traded between RM8.37 - RM8.83 on 12/31/2009. From the technical, it showed very bullish for HAIO. But is it too late to enter the market? Dear investor, are you able to make some wise choice?

Citigroup buy or not buy? Technical Analysis on Citigroup? (PART 2)

I posted an article about some technical analysis I applied on Citigroup stock a few weeks back (http://ilearn2invest.blogspot.com/2009/12/citigroup-buy-or-not-buy-technical.html). Citigroup share price dropped significantly due to the TARP repayment announcement. Below was the summary i put in one of my comment before.

Citigroup Inc. announced the pricing of 5.4 billion common shares and 35 million tangible equity units as part of agreement with the U.S. government and its regulators to repay U.S. taxpayers for $20 billion government holds in TARP trust preferred securities and to terminate loss-sharing agreement with the government. The common stock priced at $3.15 per share, generating net proceeds of approximately $17 billion. Tangible equity units priced at $100 each, generating net proceeds of approximately $3.5 billion (about $2.8 billion counted as equity.) Upon completion of the offerings and the repayment of the $20 billion of the TARP trust preferred securities and the termination of the loss-sharing agreement, Citi will no longer be deemed to be recipient of exceptional financial assistance under TARP. The U.S. Treasury (UST) announced it would extend its lock-up period on the sale of its 7.7 billion share common equity stake to 90 days from 45 days after the completion of this offering. The tangible equity units are comprised of prepaid stock purchase contract and junior subordinated amortizing note. Each stock purchase contract has settlement date of December 15, 2012 and will settle for between 25.3968 and 31.7460 shares of Citi common stock, The amortizing notes will pay holders equal quarterly installments of $1.875 per amortizing note, which in the aggregate will be equivalent to 7.50% cash payment per year with respect to each $100 stated amount of tangible equity units.


From the last technical analysis on Citigroup, the result showed it was trending down (12/14/2009) and no up trend signals. The summary was to keep waiting for a few more days. Let us review on the stock price base on technical analysis today (12/31/2009).

Citigroup - 3 months

There was some up trend in the signal on 12/31/2009. Current support level was ~USD3.2; resistance was ~USD3.44 for the past 2 weeks. Could it be any consolidation before a breakout trend? Dear investor, are you in or out?

Citigroup buy or not buy? Technical Analysis on Citigroup?

In one of my regular coffee session, one of the investor brought this topic up. He told me he plan to buy some of the banking stock. He is looking at BAC, WFC and C.

"BAC and C are quite exciting. But if you are a trader, C give you wider price range swing and probably could use some technical to help you up.", I told him.

"That is what I think so.", he said.

The investor sent me below article this morning. One of the investor (Cramer) talk about 6 reasons to buy citigroup (from source: http://www.cnbc.com/id/34419773/):

1. Wells Fargo, as a result of buying Wachovia, has too much mortgage exposure. More mortgages mean more potential foreclosures, and that will hurt earnings. Citigroup shouldn't have that problem.
2. Citigroup does more business overseas, where its reputation is much more intact. Cramer said the international footprint would make Citi a great call on worldwide trade expansion.
3. The government's 34% stake, totaling 6 billion shares, in Citigroup is not an issue, especially when the average daily trading volume is in the hundreds of millions of shares. Whether Washington slowly sells its position or holds on for a higher price, Cramer called it a non-issue.
4. Citi has already dropped significantly ahead of the offering, Cramer said, much more than it deserves. That gives investors a great, great entry point.
5. The share price is just $3.70, a near lottery-ticket price with somewhat similar potential. While the dollar amount doesn't matter, Cramer does bless this as a single-digit speculation play, the kind that investors seem to love so much.
6. Cramer thinks Citigroup could triple in price over the next three years. As the company cleans up his balance sheet, the resultant profits will restore its book value. And banks trade as a function of book value. So the refrain going forward is, "$12 by the end of 2012."

I still remember not long time ago, the CEO requested approval from investor to increase common stock. Most of the investor do not like it, it might further dilute the stock.  Below are the summaries of the change in one of the CEO letter (http://www.citigroup.com/citi/fin/data/ceoletter090910.pdf):

• Increased the number of authorized shares of common stock from 15 billion to 60 billion;
• Eliminated the voting rights of the holders of common stock on any amendment(s) to the restated certificate that relates solely to the terms of any series of preferred stock so long as such series of preferred stock is entitled to vote on the amendment(s); and
• authorized (but do not require) the Board of Directors to effect a reverse stock split, at any time prior to June 30, 2010, at one of seven reverse split ratios as determined by the Board of Directors.

Frankly speaking, I do know how to use fundamental approach to value Citigroup. Please let me know if you know how to do that ;) But to make our life more exciting, below is some of the technical analysis I used for Citigroup. From the analysis graph (3months or 6 months data), it showed that Citigroup is trending down on 12/14/2009. There is no up trend signal yet. Base on technical, we probably need to wait couple days more for up trend signal.

Citigroup - 3 months

Citigroup - 6 months

701Panduan is Malaysia Online Directory

701Panduan is Malaysia Online Directory

Logo 1

Logo 2

Logo 3

Opportunities in Foreign Markets by OSK (CDL, Cambridge REIT, SMRT, Genting)

I went down Singapore last week and met up with a few old friends. As expected, they are very Singaporean after 10 years working there. "boh lah, where got impact... i don feel recession here...shopping mall, lang muar muar", "Singaporean buying power sih beh gao lat...." i missed those lines, sound very very familiar and warm ;) But one fact, most of the people talked about investment nowsday. It is either investment in equity or some on going "hu ha" project at Singapore like Genting, LVS and some other shopping mall. "There is one saying in Singapore, only poor like us invest in stock, all rich people invest in property"... Well, no matter what type of investment, i think let me probably share some of the information i got during the OSK seminar right before i went down to SG.

The presenter, Jonathan Ng, highlighted supply over demand issue for REIT in Office sector. But there is a new dawn for retail sector.

Singapore Outlook:

Weighting on Singapore REITs: NEUTRAL
Sector Focus: office, industrial, retail, hospitality
Top picks: CDL Hospitality Trust and Cambridge Industrial Trust

Weighting on Land Transport: OVERWEIGHT
Top picks: SMRT

CDL:

• Only hotel REIT listed on SGX – Owns 5 4-star hotels/1 retail mall in Singapore, and 1 hotel in New Zealand.
• Pays at least 90% of earning as dividends – offers investor 7% yield based on FY10 earnings estimates
• Best proxy to a structural revival in Singapore tourism.

Cambridge REIT:

• Highest yielding industrial REIT listed on SGX – Owns 43 industrial properties in Singapore.
• Pays at least 90% of earnings as dividends – offers investor 12% yield based on FY10 earnings estimates
• Dividends well supported by rental guarantee (16 months security deposits), long leases and step-up rent agreements (+2% pa); interest costs are hedged till 2012.

 Singapore MRT:

• Core business included rail, bus and taxi operation in Singapore. Pays at least 70% of earnings as dividends – offers investors 5% yield based on FY10 earnings estimates.
• Opening of circule line and strong population growth will underpin ridership growth.
• Defensive plays with low beta, strong earnings resilience and trading at lower range of its 14-20x trading band. Currently trading at 14.5x FY10 P/E multiple.

Singapore Genting:

• Trading Buy on Genting Singapore. Fair value and recommendation: Target Price at SGD 1.25
• Genting Singapore will enjoy a duopoly casino market structure in Singapore until Jan 2019
• Benign competitive environment, low casino tax rate and excellent accessibility should help accord the stock a scarcity premium
• Key risk: i) Economic downturn and/or health pandemic will lead to decline in visitors arrivals and lower gaming spend, ii)intense regional competition, iii)volatility in asset pries and hence wealth effect
• Current valuation of 16.8x FY11 EV/EBITDA is at a premium to industry average of 8x-14x. Las Vegas Sands valuation peaked at 37x EV/EBITDA 3 months after the opening of Venetian Macau vs Genting Singapore’s current 16.8x. On a fundamental perspective, Genting Singapore valuation are already trading at a 40%-50% premium to the industry average 11x EV/EBITDA
• Any downside is earning delivery could result in a relatively steep de-rating as share price has performed favorably YTD (+87%)

Dear investor, check out below pictures i took at ION Mall Orchard Road. Long queue for Louis Vuitton and Prada shop. But i do not see those long queue at Malaysia. Is REIT a good investment for you? What is your thought?