Triumphal Associates Bhd

This week, Triumpl had become a member of my value-stock portfolio.

According to its latest quarterly reports, Triumpl's net-working-capital per share is about RM1.50. I bought it at 75 sen per share, a 50% discount from its net-working-capital.

Other supporting points for buying Triumpl:

• nearly zero debt position.
• uninterrupted dividend payment for more than 10 years. (though the yield was quite low)
• low PE ratio. (about 5, three years average)
• cash per share about 34 sen. (about 45% of my buy price is for the cash)

The company's balance sheet condition is very similar to that of UMS Holdings Bhd (another company in my value-stocks portfolio). Triumpl also had very high inventories and receivables as compared to its profit. However, the level of these items are quite stable throughout the years.

Why ASW, ASB, ... can have superior return over private mutual funds?

A lots of people just can't stop questioning the sustainability of the "superior return?" of PNB funds.

When people ask me this question, I really don't know how to answer it. They start a question from a wrong point -- It's like asking why a man can always walk faster than a car.

How can you call that 7~8% p.a. of those PNB's fixed-priced funds a superior return?

Come on.... those funds (ASB, ASW, ASM, ASD) are invested mostly in equities, not bonds. Go ahead and compare their performance with some equity-based mutual funds out there.

(PNB's set the KLIBOR as the benchmarks for these fund, it doesn't mean that their performance should be compared to those money-market funds or bond funds.The benchmark itself is not a correct indicator to gauge the fund's performance. )

Know what I'm thinking?

These fixed-priced-funds of PNB have lower annual-management-fees and trustee fees compared to those private equity funds. So, their long-term average return (after cost) should be a bit higher than those private funds out there, provided that PNB's fund managers post at least an average investment skills. But, guest what, historical data shows that these PNB funds' performance are actually below average!

Thanks to our BN government, it had successfully made the people sooooooo hate about him, that they will always critic on whatever he did without any further judgement.

People look at our EPF, which is mostly invested in government securities and bonds (equity accounted for < 30% of EPF investments), they critic that the 5% dividends are too low and ask for a higher return. Now we have funds that are mostly invested in equity, and people start questioning the sustainability of its unbelievable high 7% return....

Hey, what do you expect?.... A fund that mostly invested in government securities can generate 7%, and the equity-based funds generate only 5% return instead?

Malaysian... use your brain please! Do your homework and think independently, Don't just follow what other people's saying!

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How to estimate the NAV of ASW2020.

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Amanah Saham 1Malaysia, a new fixed-priced-fund by PNB was launched yesterday. And I found that a lots of people feel uncomfortable with the "fixed priced" policy.

"How can the redemption price be fixed at RM1 while the NAV is fluctuating?"

(Just wonder why nobody ask the same questions on EPF. They work the same way too. Each dollar you put into your EPF account, plus dividend each year, can be withdraw with no risk of loss. Isn't it true that the NAV of EPF funds also fluctuate with the market? )

Seems that people may feel better if they know the NAV of those fixed-price-fund. So, this article suggests a method for estimating those NAV.

Although the NAV is not disclosed in the fund's annual report, it can be estimated indirectly through the following steps:

1. First, you can find a list of its 20 largest holdings from the fund's annual reports, together with their weights in terms of % of Total NAV.
2. Then, look for the annual reports of those companies. You should be able to find out the number of the company's shares that are held by the ASN's fund.
3. Find out the share price of the stocks on the balance sheet date of the fund.
4. Multiply the term-2 and 3 above, you'll get the market value of the company's share held by the fund.
5. from the term-1 and 4 above, the NAV of the fund can be calculated.
6. divided the NAV by the unit in circulation, you get the NAV per unit.

That's it.

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For illustration, I had done some calculation on ASW2020.

Example 1:

1. According to ASW2020's 2008 annual reports, Maybank accounted for 7.77% of its total NAV on 31-Aug-2008. (financial year end).
2. From the annual reports of Maybank, we know that ASW2020 held 76.5 million shares of the company.
3. The share price of Maybank at 31-Aug-2008 was RM7.85.
4. Thus, the ASW's holding on Maybank worth RM600.5 million on that date.
5. So, the NAV of ASW = RM600.5 / 0.0777 = RM7.73 billion.
6. divided by the unit in circulation, 7.795 billion, we have the NAV per unit = RM0.99.

Example 2:

1. According to ASW2020's annual reports, Tenaga accounted for 6.60% of its total NAV at 31-Aug-2008.
2. From the annual reports of Tenaga, we know that ASW2020 held 66.5 million shares of the company.
3. The share price of Tenaga at 31-Aug-2008 was RM7.90.
4. Thus, ASW's holding on Tenaga worth RM526 million on that date.
5. So, the NAV of ASW = RM526 / 0.066 = RM7.97 billion.
6. divided by the unit in circulation, 7.795 billion, we have the NAV per unit = RM1.02.

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There are always some errors in the calculations. Some possible causes are:

• The financial year end of ASW and the holdings company are different. Thus number of share held by ASW reported in the companies's annual report may be different from the figures in ASW's report.
• The market values in ASW's report may be recorded using average price of the last few trading-days of its financial year end, instead of the closing price on 31-Aug. (need clarificaton here...)

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