Dutch Lady (3026)

This is another my favourite brand, i love their milk and yogurt drink and been drinking their milk since i dont know, maybe since i start loving milk. :p

The commodity price really hurt their Q4 earning, plus, like previous year Q4 sales normally lower than Q3. Looking at recent milk powder price trend, seems like their margin going to depress for next few months and they need to push for more sales in order to avoid slower net profit growth.

Overview of Milk industry (Dairy Commodity)

i) Global dairy product demand has increased. In particular, Asian nations’ improving economies have created desires for better, Western-style foods (more meat, more dairy). China’s basic food needs are drought-stressed.

ii) New Zealand’s milk output has been challenged by adverse weather.

iii) The U.S. dollar’s value has slumped, making foreign purchases of U.S. goods relatively cheaper.

iv) U.S. exporters (particularly cooperatives) have been giving away dairy products at prices far below global market values

Unlike automotive industry, normally they can pass a bit the impact to end user, which is us, the customer. Luckily my ex manager (my favourite boss of all time) currently managing the cost there, i might get some insight on the raw material & cost impact, if i decide to switch my other stock to DLADY. According to him, only special ingredient is imported from Netherlands, the rest mostly locally produced (the dairy product). Overall, Dlady managed to post a growth in sales in net profit FY2010.

In past 5 years, the lowest margin was 5.99%, back in 2008. Assuming that they manage to post small growth at 2.7% with net margin est at 6.5% (being defensive here), the est EPS would be 0.86. At current price of RM15.50, the forward PE ratio would be >18. Expensive!

Going forward, i think its worth to buy and hold as always reward a steady dividend to shareholders.But not at current price of course. Maybe below than RM15.00??

Dutch Lady PATMI (quarterly)

Dutch Lady Revenue (quarterly)

Dutch Lady Net Margin (quarterly)

Dutch Lady EPS and Gross DPS

Off Topic - New Company 新しい会社

OMG, always thought leaving a company is an easy thing to do, turnout harder than getting it. Playing with a lot of emotion, well tomorrow will submit resignation letter..fuh, nervous. :p

Time to brush up my Japanese.　頑張ります.

Mamee Q4 and FY10 result - My view

Wah Mamee posted a negative growth in Q4 net profit, should i be worry over it?? NO

Yes, the they posted a lower net profit, but their sales has risen by +21.29% in Q4, and +17.25 growth in sales for full year FY2010.

Looking at their financial statement, clearly shows that their gross profit still growing by ~3million in Q4, ~RM22million in FY2010 despite a tighter margin environment due to rising commodity price. The main reason why they posted lower net profit is due to higher selling and distribution expenses, means higher marketing and more money allocated to enhance their sales distribution network. To me this is short/medium term and manageable, which is inline with group target to achieve RM1billion in sales over next 5years, well 4 years left. It's normal for consumer product company to have a higher marketing expenses whenever they release a new product and brand into the market, and watch the money comes in later. (Mi Goreng Indonesia, Rice Crisp, Rio Fiesta).

Financial Results, MENA & My portfolio

All companies in my portfolio posted a good result except Mamee.

Net Profit

Mahsing (RM2.51)

Q4 yoy = +24.95%

FY10 yoy = +25.23%

Maybank (RM8.64)

Q2 yoy = +13.26%

H1 yoy = +14.83%

YTL Power-WB (RM1.14)

Q3 yoy = +3.55%

H1 yoy = +10.53%

Mamee (RM3.50)

Q4 yoy = -26.39%

FY10 yoy = -3.34%

DPS yoy = +30.00%

Leader (RM0.86)

= Yet to realease

CMMT (RM1.10)

= Don't even bother to update..consider as Fix Deposit.

Anyway, most of major companies such as Sime Darby, KLK, IOI, CIMB, UEMLand posted a positive net profit growth, however due to recent turmoil in MENA especially with recently spread to major oil producer, Libya, worldwide stockmarket has tumbled. Overall im still in bullish mode.

Recent turmoil has reduced my gain for this year. Portfolio 1 (core portfolio) YTD gain closed with +15.8%, while portfolio 2 (new portfolio) YTD result closed with -1.9%. Anyway, this index really useful for me to monitor my result. been using since late 2009.

PORTFOLIO 1

PORTFOLIO 2

Dividend Analysis - Mamee

Over the past decade, Mamee (MDD) has delivered an annual return of dividend growth to its shareholders, 28.21%, and dividend payout has grown annual by 24.67% p.a. Up until FY2010, theres no dividend policy, so for its dividend to grow at double digit growth, is very good and impressive to me.

Now, with its dividend policy of at least 50%, it will be much easier for shareholder to calculate how much return they could earn over the year. With this policy, we can see that Mamee now more committed toward shareholders, just like F&N back in 2000s. MDD has started to emphasize on health and wellness, and has worked to minimize the amount of trans fats in its snack foods (Rice Crisps), and focusing on healthy beverage product such as juice. If im not mistaken, more healthy product will be launched in future. Future earnings growth should be positive due to strong consumerism and excellent product line, and could also come from synergies associated with venture in plantation, and cost cutting. Overall, other than growth stock, MDD also good to be considered for dividend investor as well.

DPS for FY2010 is done based on est EPS of 32.25 (151.33mil shares)

Payout Ratio FY2010 is est 50% (being conservative)

Ex-CPO Westinghouse

Fuh.. training course by ex CPO of Westinghouse was very interesting today, and tomorrow the last day. By far, the best training i ever had. Worth paying thousand of ringgit, luckily i didn't have to pay any. :p

Anyway, no time to monitor market but i bought another Maybank @8.45. Hope correction will over soon.

Mamee founders collecting the share..a very good indication. =)

News

Mah Sing has RM3b projects in the pipeline

Mah Sing's group MD says there will be sustained demand in mid-tier to high-end properties, both landed and high rise in the residential, commercial and industrial segments.

Mah Sing Group Bhd (8583), Malaysia's fifth largest property developer by revenue, is ready to roll out RM3 billion worth of new launches this year on positive domestic economic outlook.

Group chief executive and managing director Tan Sri Leong Hoy Kum said he was bullish on sales moving fast paced as ripple effects from recent government initiatives will bring more to buy properties.

Speaking to Business Times, Leong said initiatives under the Economic Transformation Programme and 10th Malaysia Plan should boost property demand with expected increase in job creation, urbanisation, the standards of living and income level.

He expects wealth creation from the local stock market to also have an impact on the property sector as gains are invested in physical properties.
"The property market has done well in 2010 and we are confident that the momentum is sustainable into 2011 as the current buying pattern is backed by fundamentals of the economy and purchasers," Leong said.

Leong feels there will be sustained demand in mid-tier to high-end properties, both landed and high rise in the residential, commercial and industrial segments.

Mah Sing's new launches will comprise a mix of landed residential, niche size serviced residences, shop offices, retail units, small office/home office and industrial.

Leong said projects featuring lifestyle elements and community living with facilities like a clubhouse and pool will continue to do well.

To meet the demand in this segment, Mah Sing will offer Garden Residence in Cyberjaya, Kinrara Residence in Puchong, One Legenda and Hijauan Residence in Cheras, and Legenda@Southbay on Penang island.

These projects will feature superlink homes, semi-detached homes and bungalows.

Mah Sing will also offer smaller units for serviced residences and condominiums in the second half of this year to provide easier entry for investors, leading to higher take-up rates. Here, it will roll out M-City@Jalan Ampang, Leong said.

The company will also launch Icon Residence and Ferringhi Residence in Penang, and Austin Suites in Johor Baru, Johor.

For commercial projects, Mah Sing intends to launch Star Avenue in Damansara, and Icon City in Petaling Jaya in the first half of this year.

Meanwhile, the third industrial project under the iParc series, iParc3@Bukit Jelutong, will be launched by mid-year.

Leong said in line with the company's strategy of a fast turnaround, it will preview these new projects soon, while scouting for prime land.

"Although our landbank is enough to sustain us for the next seven years, we are looking for sizeable pieces of land and we have the balance sheet to fund the acquisition," he said.

Mah Sing, which has a cash pile of RM233 million, made 10 land transactions involving 118ha for RM756 million last year.

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Impact of SRR hike is minimal

Tags: AmResearch | Banking | Brokers Call

Written by Financial Daily

Monday, 14 February 2011 11:43

Banking sector Maintain overweight: In the recent monetary policy statement, Bank Negara Malaysia (BNM) said the large and volatile shift in global liquidity is leading to a build-up of liquidity in the domestic financial system. While the liquidity has been manageable, going forward, additional policy tools, such as the statutory reserve requirement (SRR) and macroprudential lending measures, may be considered to avoid the risks of macroeconomic and financial imbalances. BNM had lowered the SRR by three percentage points (ppt) since the start of the global financial crisis in 2008. This brought the SRR to a historical low of 1% currently from 4% in November 2008. We have done a sensitivity analysis to gauge the impact on banks’ earnings, assuming the SRR rate is increased by 1%. We estimate possible downgrades to banks’ net earnings ranging between 0.3% and 2.2%. The ones which may be affected the most would be EON Capital Bhd (EONCap) (-2.2%), Alliance Financial Group Bhd (AFG) (-2.1%), Malayan Banking Bhd (Maybank) (-2.1%) and Public Bank Bhd (PBB) (-1.4%). For EONCap and AFG, it would be due to the small earnings base, while for Maybank and PBB, it would be due to the large deposit base (PBB’s local market share of deposit is estimated to be the highest at 14.6% while Maybank’s is the second highest at 14.0%). We estimate every 1ppt increase in SRR rate would reduce the amount available for lending by RM7.65 billion, just for the eight banks alone. However, we believe this is representative of the bulk of the banking system, as the local market share of these eight banks is estimated at 67.8% for deposits and 75.2% for loans. Thus, we would conclude that a reduction in liquidity of RM7.65 billion for the eight local banks is not expected to have a major impact on the system liquidity of RM255 billion currently, or the overall lending ability of the banking system. To sum up, we expect minimal changes to our banks’ net earnings arising from the possible rise in the SRR. We will be building in an SRR hike of 1ppt to 2% from our current assumption of 1% when we review our earnings estimates in the upcoming results. Further, based on the current loan-to-deposit ratio and the liquidity in the banking system, we conclude that an SRR hike is not expected to affect current liquidity or the lending ability of the banking system. Banks’ share prices have taken a beating last week, which we believe to be in line with the generally weaker regional market. However, we remain positive about the banking sector. We believe a stronger top line growth in terms of loans growth and non-interest income arising from sustained capital market activities from a successful execution of the Economic Transformation Programme is not yet fully reflected. Our buys are CIMB, Maybank, Hong Leong Bank Bhd and RHB Capital Bhd. — AmResearch, Feb 11

Rio Fiesta - Mamee

I wonder when they will start selling this product?? More than happy to switch from twister to fiesta if the taste is good.

update - Ok, Fiesta already in the market. Just bought the orange juice, different than twister which is sweeter, Fiesta's has stronger orange juice taste. I always like juice market as it promoted as healthier drink, cyclical to consume and good margin. With Fiesta, we shall a see a better earning growth in their beverage division.

Made a mistake for entering MBB too early, nvm..so long the fundamental of the company still ok, im fine.

A bit blur with current sell off, but i believe just another profit taking. This year start following leno on return tracking. Will not combine fresh capital with old one. So far, portfolio 1, YTD gain is +20.6%, thanks to Mahsing while portfolio 2 is -1.7%, thanks to Mamee for its stability. :p

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Maybank eyes 30pc Islamic financing growth

Maybank Islamic Bhd aims to achieve 30 percent growth in Islamic financing for this financial year ending June 30, 2011.

Chief executive officer Ibrahim Hassan said that during the last financial year, the bank attained a similar growth figure to RM36 billion.

It was challenging to achieve the current target but it was achievable, supported by both consumer and corporate segments, he told reporters after the signing of a RM100 million Commodity Murabahah Term Financing-i (CMFT-i) with Universiti Teknologi Malaysia here today.

Currently, 69 percent of the bank's financing portfolio is contributed by the consumer segment, while balance from the corporate segment.

"In the long-run, we are targeting a mixture of 60 per cent consumer and 40 per cent corporate," he added.

Maybank's deputy president and head of community financial services, Lim Hong Tat, said the bank was on track to achieve a significant financing growth for the corporate segment with good prospects seen in the education sector.

The CMFT-i facility, coupled with other financing facilities approved since July 2010 for several government-linked institutions and corporations amounting to RM2 billion, would be the catalyst to boost the bank's Islamic financing portfolio for this financial year.

"Our latest CMFT-i reinforces Maybank Islamic's market leadership as the largest Islamic financing provider in Malaysia as well as in keeping with our aspiration to be the largest Islamic bank in Asean by 2015," he added.

He said that since July last year, the bank had participated in two syndicated/club deals as participating financiers with participation amount of RM1.1 billion for government projects.
-- BERNAMA

Malayan Banking Berhad

This bank has returned back on it's track record, overall i like it since the valuation wise appeared attractive to me, plus they always reward shareholder a steady dividend every year except during heavy impairment loss in 2009. Though, i'm still not convince with their acquisition of Bank in Pakistan, but i really like BII and the latest acquisition, Kim Eng. I think i should have some exposure in Indonesia through Maybank. At home, Maybank posted a solid earning with domestic saving grew at healthy rate and its Islamic Banking division also shows a good progress.

I qued at 8.82. Amen

Update- Bought Maybank RM8.82.

Mamee - All Matched

Ok, finally i bought my first batch of Mamee at RM3.57 today, pretty safe now as founders and family are accumulating this stock, not to mention it's share buyback policy. Even if the price going down, i think i can sleep well with this counter...hopefully, amen. :p

Happy CNY 2011

Commodity

Mamee Cost Breakdown

If we compare cost breakdown between Mamee and CI Holdings, i think CI Holdings will be more effected by rising commodity as sugar does not really a significant cost factor to Mamee. Cooking oil also at manageable level but flour price is quite a concern to me as flour contribute 11% in their cost breakdown. However, wheat price is still lower than 2008 price while sugar is trading at 10 years high. As Mamee does not use subsidised flour, i think they are more well prepared in cost controlling. Will avoid CI Holdings for time being as i want to wait for next quarter. The cost impact of sugar should be reflected in 2 quarter result, will see whether they are as good as F&N at cost management. Maybe i should start accumulate mamee first?

Mamee cost breakdown