AIRASIA
The result is better than I expected. Its operation in Indonesia and Thailand is improving despite the escalating oil prices. The environment for airline industry has become more and more challenging in this year. The record-high oil price and tough competitions in the industry will kick out some of the players, and those who survive——and I think AirAsia is surely one of the them——will benefit from it.
As I said, I will gradually increase my investment in AirAsia (up to the limit of 25% of my portfolio’s value). Currently, the only thing that worried me is the continuous drop of AirAsia’s load factor, which is about 68% in this quarter. However, I’m in confidence that it would be improved in next year, as a result from the ASEAN's sky liberation.
AKN
It surprised me with a proposal to sell off the businesses in Paramount Discovery. Its acquisition of Paramount Discovery about two years ago is one of the main reasons I invested in AKN. However, the proposed selling price of RM126.9 million is about four times higher than the acquisition price about two years ago. This means AKN will have a gain of about RM100 million in this transaction, which is equal to earning per share of about 80 sen.
This will help AKN to reduce its debts, cut the financial cost (hence improve its profitability), and achieve a healthier balance sheet. I hope these will boost AKN share price to a high level after the transaction is done, because I’m considering to withdraw my investment from AKN then.
RUBHD
The revenue and profit remain stable, as expected. Its reaction to WSIA remains uncertain. The scheduled tariff hike in Jan-2009——which is expected to boost its profit next year by at least 30%——remains the key reason for me to hold RUBHD.
But then a shockin news was announced last week, that Ranhill Berhad made a take-over offer on RUBHD. The offer price is only RM3.50 per share, which is 20% below its NTA. I really hope that this privatisation will fail, because RUBHD definitely worth much more than RM3.50!
SUPERMX
Revenue and profit is growing as expected. But the profit margin is decreasing, which is a warning signal to me. Although I feel that its current share price is very cheap as compared to its value, I'll rather stop accumulating Supermx. This is simply because the value of Supermx already made up a high percentage in my portfolio (about 25%). Currently, I need some diversification in order to reduce the risk of making mistake.
TITAN
As expected, Titan remain profitability despite the high oil price, and the polymer-naphtha spread is quite stable. I’m very happy to see the start-up of the butadiene plant and propylene plant has been carried out smoothly. Also encouraging is the increasing output from the Indonesia’s plant. The next step of Titan is the debottlenecking process of its polypropylene plant, which is expected to boost its Polypropylene capacity for another 100 KTA, by the end of this year.
"Value-Stocks" Portfolio - TAFI & ADVPKG
Advpkg had declared a tax-exempt dividend of 4.5 sen per share. This means I’m enjoying a net dividend yield of about 8% this year, which is higher than I expected. Maybe due to this higher dividend, its share price has been advance for more than 20% from my buy-price. However, I’m in the opinion that its current share price of about 70 sen is still under-valued.
Despite the declining revenue and profit,TAFI's share price remain quite stable.
1 comment:
Oops..... I have a mistake again.
For the AKN, the disposition of the businesses under Paramount Discovery will not generate RM 100 million profit for it.
I've done the wrong calculation because I thought AKN is selling off the entire Paramount Discovery. In fact, it is Paramount Discovery that selling three of its subsidiaries. The initial investment in these subsidiaries is actually RM 88 million.
My new estimation, the profit generated from the disposition is only about RM 35 million.
However, I hope AKN can keep these subsidiaries instead of selling them....
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