If 20% of the above amount were to turn bad, the loss would be RM207 million. That would reduce Muhibah's Shareholders' Funds to RM372 million and push up its Debts to Equity ratio to 1.2 times. Based on the research note from Kenanga, it seems that the amount to be written off from one customer, APH is about RM370 million. As a result, Muhibah's Shareholders' Funds would be reduced to RM209 million and its Debts to Equity ratio pushed up to 2.1 times. If I paid more attention to these two items, I would not have posted on Muhibah. However, I wish to point out that my post did not end with an unqualified recommendation to buy. To wit:
Although trading at a high PE multiple & having a relatively weak financial position, Muhibah is a stock worth tracking. Its financial performance has improved steadily over the past 4 quarters. More improvement is likely given the activity in the construction and O&G sectors. The main selling point of this stock is the improvement in the technical outlook. The stock is almost at the point of starting its next upleg.
Nevertheless, I would like to apologize for anyone who has gone into this trade because of the post, especially since I failed to highlight the severe Debtors' Collection problem experienced by Muhibah.
17 comments:
muhibah can't be that bad! What about the big order book?
all analysts should close shop
Alex,
You are nice guy!
No worry, no one are perfect.
No one can guarantee 100% win even buffet!!
Thanks for all the thought
Cheers
Please ignore all the negative comment from those troublemaker. I enjoy reading your post everyday.
"No one force him to read, why he want to read when he don't like to. He should directly go and buy his own stock. Why he still come here read?"
I am glad he admit Alex is an analyst!
Hi Alex,
Good analysis, Thanks
To Buyer & Jimmy,
Thank you for your kind words. This reminds me of the old saying: Success has many fathers while failure is an orphan.
To Pulasan,
What more can I say...
I'm new to yr blog. Being in the market for more than 27 years, having experience the up & down of the market yr writing is really interesting to follows.
The main point in the market is to make money be it analytical or otherwise.Never blame anyone for the decision made.I pickup the stock tdy even before I came across yr blog and looks like I'm going to lose if I were to contra. But for long term might be different.
Keep up yr frank comment don't bother others might feel or says.
Thanks. zein
Hi Alex ,
What do you think about HSL and KKB? This 2 Sarawak companies seem having well run business and strong financial position but the share price just can't go up anymore.
Tx for ur precious opinion!
I salute u sifu Alex, not many willing to admit their mistake when they r wrong, but you r an exception, keep up the good work!
It's very hard to find someone who r all rounded nowsaday, who can read both TA and FA.
Hi Alex
Like I said before, there is no perfect trade. We do not know what news is coming out tomorrow.
Your analysis on Muhibah was correct and the first rule we must acknowledge is to put a stop loss on any trade we make.
You have done the first step of highlighting a probable trade for us. To buy or not to buy is purely our own decision.
Thanks Alex. Keep up the good work.
Hi Alex
I notice you are rather prompt in your replies. This blog takes up a lot of your time ya?... very kind of you ..
Hi Alex,
I am proud of you being honest to your readers and have bravely admitted the overlooking.
Good job! Thumbs up for you!
Hi Alex,
I salute you!
Your blog is updated most of the time, on average 1 article/ day. It come FREE!
And yet, I believe thus blogger who follow your call is the decision maker for our trading/investment call. We should not blame anyone.
Good job, Alex
muhibbah's share (trading halt for one hour) until 11.39a.m, Muhibbah confident of receiving receivables.
Hi,Alex,
Kudos to you for being able to retain your sanity amidst all the uncalled for remarks.In times of such uncertainty,it's good to know that there's still a blog which could provide clear and unbiased interpretation of what has happened.
Thanks,Alex.
Hi luckystock2
My take on:
1) HSL (Hock Seng Lee)
At RM1.68, HSL is trading at a PE of 13 times (based on annualized EPS of 12.76 sen). That's full value for a medium-size construction company. Chartwise, it looks toppish, with its 50-day SMA line crossing below the 200-day SMA line.
2) KKB
At RM1.88, KKB is trading at a PE of 6.1 times (based on annualized EPS of 30.5 sen. That's undemanding.
Chartwise, KKB is moving sideway with strong support at RM1.80. The sharp spike in early 2011 is creating some confusion in the SMA lines (50-day vis-a-vis 200-day). I would ignore that & stick with a neutral outlook provide it does not break the horizontal line at RM1.80.
Based on the above, I prefer KKB to HSL.
Dear All,
I read occasionally this blog.
I am not very impressed. Alex's take is only so so.
Alex you still need to brush up quite a bit.
Keep up.
Hi sky
In the interest of constructive criticism & readers' feedback, I have passed through this comment. However, it would be much better if you can be more specific in the area which I am lacking in. You may also suggest specific actions to take in order to bring about improvement. All suggestions are welcome.
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