Sunday, 10 November 2019

TRADE OF THE WEEK #25 : MUDAJAYA GROUP BHD


Outcome
Gross Profits : RM4,608
Return on Investment (ROI) : 10%
Duration : 2 days



Despite what our trading style and profits might suggest, we are actually very conservative traders. 

We almost always miss out on the 'meaty' part of a profitable trade. We'd sell a stock at 20 sen and watch it go up to 28 sen. Or exit at breakeven point just before the stock skyrockets. It happens to us all the time. 

But as we always like to say:


Things seem clear and easy to digest when they're in the past. In the present - and by this we mean during that stressful time of active trading - you will have to make decisions based on limited information.

We frame our mindset this way: trade, meet the predetermined targets, get out. And disregard what happens next.

To take the logical thinking process further : why regret losing profits you never had in the first place? Sounds obvious, right? But yet... people think like this all the time.

When you take a profit - let's say RM500 - the most important thing is not the fact you missed out on an additional RM300 in profits had you stayed in the trade. It's actually whether that RM500 was the result of calculated planning.

"Profits from planning always beat profits from dumb luck over the long run"


Our followers know this conundrum well. When we disclose that we have exited a stock at this point, we almost invariably exited too early. Perhaps if they're really smart and devious, they could follow our trade and exit a few points above us constantly. Perhaps....😈

So it was this situation which we found ourselves in. The trade was in MUDAJYA, a well known but long-suffering stock. The construction company has had some troubles in recent years, and the market battered the stock from RM1 all the way down to 20 sen in two years. 

We ended up exiting this trade early but do we care?? The answer is... yes. Otherwise we wouldn't have written the rant above to make our point.

But to be clear, logic trumps emotion. We understood our rationale for exiting and we made peace with it. We didn't get greedy. Can't lose what you never had, eh?

Anyway : MUDAJYA is a very interesting case study. We'll explain how all the pieces fit together, and how you can formulate a trading idea just like how we did it. 

THE TRADE


The last week of October was very kind for penny stocks. We saw incredible rallies left and right, some for no particular reason. We usually don't trade penny stocks, but we make exceptions for exceptional cases.

Here's the thing about exceptional opportunities : you have to recognise them quickly, and capitalise on them. This means moving from trade identification stage to execution within minutes. This is something we can do, out of experience. You have to spend some time (and more than some money) tinkering with this kind of approach. Believe us, there's a pot of gold at the end of this rainbow if you're willing to work on it.

MUDAJYA was an exceptional case for a multitude of reasons. We will break down the different components that contributed to our decision to trade this thing. 

Be forewarned that this was not an easy trade. These components have to come together; then you have to understand the collective whole as a singular insight.

If you're too late at figuring out, you won't get good pricing. If you invest first and investigate later, you stand a chance to lose loads of money. So the optimal point of execution is somewhere in between - limited information, but decisive action at the right time.

Sheer conviction is necessary for us to come in and build a meaningfully sized position in order to make profits. If we don't have it, we would be indecisive. We'd be toast.

1) Price-volume analysis:

A rally from 20 to 30 sen in one day is nothing to sneer about. But simply buying at the peak would be a foolhardy decision, yes? So what you need to do is look at how the stock deals with a price correction.

MUDAJYA presented a golden opportunity; on 30 October, the stock suddenly broke the 30 sen mark  (from 22.5) and peaked at 33.5 during the morning session. 

What really matters next is how the stock performs at the 30 sen mark. Tantalisingly, MUDAJYA closed for the afternoon break at 31 sen.

Here we have our first set of expectations : if momentum is set to continue, the stock should consolidate temporarily at the 30 sen mark - an obvious support/resistance point - before staging a new breakout. What this really means is : better price and better volumes at higher levels.

The visualisation of this whole theme can be found in this five minute chart on 30 October.

Buy range as described via the Telegram message above

See the 'spike' on the left side? That seemed like strong volatility within a 5-minute period just before the morning session close. Someone was clearly buying large volumes at any price. As highlighted, it peaked at 33.5 before closing at 31 sen. We know it's a big deal because this involved 76,000 lots traded. That was the first indicator.

2) A positive market:

This is so incredibly awesomely important. We prefer to see the broader market to assess its 'health', and by extension, investors' enthusiasm.

It was no trifling matter that on 30 October there was a slew of inexplicable movements in small cap counters. You should know that these kinds of movements are cyclical, but they are not trivial.

This kind of enthusiasm is supportive for cheap stocks, and MUDAJYA was well positioned to benefit. We noticed (as did everyone else) that the stock moved harder and faster than others. Maybe there's another reason for it?

3) A mysterious stock-related development

This was evident in the buzz generated across day trading chat rooms when a large block was apparently transacted in MUDAJYA, in what is called a Direct Business Transaction (DBT).

It was definitely worth salivating over the fact that this transaction was done at 38.5 sen a share - MUDAJYA's stock started the day at 22.5 sen on 30 October.


After wiping the collective drool off our faces, we decided to make a move. The final decision is really down to experience, instinct, and the willingness to absorb losses if this thing turned south. It was a worthwhile opportunity.

You can see our trading parameters as shown above. When we came up with that, we managed to synthesise all these bits of information - technicals, market mood, news flow - and come up with a decision quickly. Obviously being fast made all the difference, as this was intended to be an intraday or contra trade.

The stock closed at 34 sen on 30 October, slightly below its intraday high of 35.

The next day, it exploded again, giving us the freedom to exit at our chosen price point. We opted to dispose at 10% yields; no mean feat as this was achieved in less than 24 hours.


Sold at 36 sen. The stock hit 39 soon after.

Too early? Of course it was! But hindsight is 20/20.

What really mattered was having a right plan and sticking to it. It's the road to riches.

(Editor's Note : Update, 9 November 2019 - a bit more light on this MUDAJYA theme that we will keep watching)















Sunday, 3 November 2019

THIS WARRANT GAINED 400% IN 4 WEEKS - WE JUST WATCHED IT GO BY





Hindsight is a bitch.

When you have all the facts at the end of everything, it all just becomes clear. You have a full understanding of your decisions, especially if they're mistakes. If your capacity for self-forgiveness is low, you will probably develop some festering self-resentment. Don't do this.

We'll do the next best thing - analyse a trade which we had zero part in. We tend to learn a lot from this exercise; we hope you will as well.

So how bad was it? Let's put it this way; if our trading profits were car-sized, we missed out on potentially three Perodua Axias worth of profits. To take the metaphor a bit further, these cars whizzed past us. We just stood watching, dithering, numb, and in silence. They sped through a puddle, covering us in suspiciously brown-ish water.

We had all the available information. Heck, we were even presented with a big clue right from the beginning.

Our failure was that we didn't manage to connect the dots. It was a lapse in judgment, and we were too slow to act.

HINDSIGHT = SOBERING

We are almost always early when we exit profitable trades. We'd have a fantastic trading thesis, we'd execute perfectly, and then it turns out that we exited a trade far too soon.

But that 'too-early' syndrome is only evident with hindsight. When the trade was ongoing, all available information suggested that we had acted the best we could to optimise profits.

Case in point is our trade in PENTA. Oh, sweet PENTA. The stock has yielded us nearly RM20,000 in profits since we flagged it in July. We caught it at RM3 and now it's trading closer to RM5. Every move up now slightly annoys us; we've exhausted the trading strategy the moment we chose to exit.

What is worse than exiting a trade early? The answer: missing out on a simple, massively profitable trade.

It really matters to us since such trades do not come by often, regardless of how our Trade Of the Week series looks like. A single great opportunity can come in one whole month, and if we miss that, our month is basically toast.

This was a trade that did not require complicated maths or a risky do-or-die massive position. All it needed was a bit of situational analysis, and a bit of connecting the dots.

I'M LOVING ANGLES INSTEAD

We love fresh angles; the more offbeat the better. One piece of insight can lead us into obsessive research work covering the mundane and the esoteric. Oftentimes they are not very useful. But when they are, the trading profits can be astounding.

A few things that we have done in recent months: 

1) We have been in steady contact with a lady at the Department of Veterinary Services to check on poultry and egg prices (we have an angle on that...). We also bought, cooked, and compared eggs produced by different poultry companies as a taste test.

2) We have been to several furniture dealerships to test (poke, touch, and feel) out some items that were manufactured by a listed furniture company that we really like. Why do Americans, and Western Hemisphere white folks in general, like our exported chairs so much?

3) We have test drove several variants of new car model(s) to assess their appeal to the target market to support our growth projections for a listed automotive company. We interrogate their salesmen about it. We do the car door test to determine its sexiness - a purely qualitative exercise.

4) Whenever we go to a shop/restaurant/supermarket that has a point of sale payment terminal made by a listed company that we absolutely love, we interrogate the cashiers about the product. Is it better than that other terminal made by the dominant industry incumbent? How user friendly is it, to the customer and the vendor? Since it looks like you have different payment terminals, which is the one you end up using more?

We are generally lazy (if we're not in manic obsessive mode), but these types of real life engagements keeps us grounded. We respect the companies behind these products. Our experiences are tangible, and obviously they give us a better understanding of those companies. We don't consider stocks as just a bunch of numbers.

You may find us weird and have a renewed desire to hide yo wife and kids, but be assured: we're only interested in facts and figures that can give us that small piece of advantage in our investing and trading activities.

We are... contextual predators.

The world offers so much context, if only we'd look at it more.

 "We didn't take the cash salary. We opted for equity plus free detachable warrants instead". Source.


THROUGH IT ALL, SHE OFFERS ME PROTECTION(ISM)

In this case study, the sector to pay attention to is.... garments. Clothes. Baju dan seluar.

Garment manufacturers are becoming a very real beneficiary of the US-China trade war, with orange-face Trump blessing these companies with a once-in-a-lifetime opportunity. With Chinese manufacturers being hit by tariffs and sanctions, garment companies in Asia and ASEAN are the ones picking up the slack. 

As client orders flow into this region, Malaysian manufacturers also stand to benefit as they have enough capacity to take up contracts, and the quality control needed to deliver apparels up to a certain standard.

We will discuss two of these companies. Magni-Tech Industries Bhd, a clear market leader and ridiculously expensive stock for good reason, set tongues wagging after reporting outstanding quarterly earnings on September 10. Ours touched the floor.


Magni-Tech has two manufacturing facilities in Vietnam, which is of course the primary beneficiary of the trade war diversion. The cheap labour force over there sure helps too.

So with demand rising and expenses laughably low, margins are expected to be fat. It's a very, very compelling story, and the linkage between Magni-Tech's fundamentals strength and an appealing macro angle should be enough to propel it skywards.

But don't take our word for it. Here's the price chart up to September 10.


And.... after September 10.


The story is compelling. As a theme, it was good enough to push Magni's stock up by 32% in one month.

THE SMALL DEETS MATTER

A very significant factor in this story is a minor detail - this company discloses its earnings outside of the normal reporting season; most companies disclosed their earnings by late August, with a cutoff date of 31st August. Magni-Tech reports in early September.

But this trade is not about Magni at all; it just provided an opening for another stock. That company is Prolexus Bhd (PRLEXUS), which crucially reports outside of the normal earnings season as well. 



We think you may have an idea of where we're getting at. Both Magni and PRLEXUS are garment manufacturers. Assuming improving fundamentals and overall demand increase for apparel (as was evident in Magni's performance), PRLEXUS stands to benefit too.

The fact that both report outside of the earnings season was a quirk which would prove to be very profitable for investors of PRLEXUS. Between 10 September and end of the month (when PRLEXUS releases its earnings), there was an opportunity to put on a sizeable trade to capitalise on the garment/trade war angle. 

And the best part? PRLEXUS had cheap warrants. They're not very liquid, but it's a good approximation of the mother share movement. At five sen apiece as of 10 September, there was not much further downside. We could, and should have built up a large position. The payoff potential was too good to ignore relative to the risk.

So we have the following ingredients that usually makes up a perfect trade:

A compelling thematic. A quirk in the system. A perfect instrument to trade. A low risk wager. 

But we failed to connect the dots. So let's see what happened eventually.

THE TRADE THAT DIDN'T HAPPEN

Hindsight suggests that this should have been a blinding obvious trade to us. We'd like to think we are trained to capture these kinds of opportunities.

To illustrate the strength of this angle, check out the price performance between Magni and PRLEXUS during that 'golden period' between Magni's earnings (10 September) and PRLEXUS's expected earnings (30 September at the latest).


As you can see, PRLEXUS immediately outperformed Magni after Magni's earnings. There are many reasons for this; the main one is that the stocks are priced differently. Compared to Magni at RM6.30, PRLEXUS had some ways to go from just 50 sen. So did PRLEXUS-WA, which had been trading at a pittance.

Theoretically, we would have been comfortable with 3,000 lots of PRLEXUS WA at 5 sen. RM15,000 is a manageable amount, and we could have bought them on 11 September. The stock and warrant were in and out of our watchlist (which you can view in our Telegram Channel). We certainly noticed Magni's movement post earnings; we simply forgot that PRLEXUS should react to the same fundamentals and compelling story.

And then PRLEXUS released their quarterly earnings, and of course they were good.


To cut a long story short, here's the PRLEXUS chart from September 10 to its post-earnings peak in early October. That big gap is the immediate reaction after its earnings.


And PRLEXUS-WA over the same period:


!!!!

That's a price increase of 21 sen within one month. A single, crummy month. 

The gains would have been astounding; a 400% return on investment. Assuming our theoretical entry point of 5 sen for a RM15,000 investment, that would have turned into RM78,000. (Editor's Note: at least now you know that these kinds of opportunities exist eh??)

The insightful trader would have made his or her year from just trading this. And when did we finally manage to connect the dots? At the peak this movement; that angle has run its course.

This is the real power of finding the right stock at the right time. These little bits of extraordinary circumstances would sometimes present themselves on a platter. It was a great story for a great trade.

Stories can be worth something, and sometimes they are worth A LOT.








Sunday, 20 October 2019

TRADE OF THE WEEK #24 : GUAN CHONG BHD



Outcome
Gross Profits : RM10,500
Return on Investment (ROI) : 31.5%
Duration : 3 days

Support. Resistance. Support. Resistance. You hear this a lot in group chats and investment forums. It's no different on this blog.

The collective wisdom of the markets sometimes would propel a stock upwards and onwards, until it suddenly hits a roadblock. At certain price points, there are clearly sellers waiting to dump their positions and exit.

Everyone understands the following. We have written it in such a way that even a 5-year-old would understand (just replace 'stock' with 'bananas').

1) Support - price point where people keep buying the stock.
2) Resistance - price point where people keep selling the stock.

Conventional charting wisdom dictates that round numbers tend to be key points for support and resistance. Let's take RM1, which for a stock can be a resistance point until one day it becomes a support point. The sellers have been exhausted, and in a market of more buyers, the stock goes up. Easy peasy.

This example also applies at different price points. Market psychology suggests that people are obsessed with round numbers. So it is somewhat natural (and intuitive) to encounter support and resistance points at RM1.10, RM1.20, RM1.50, RM2, and so forth.

In this ongoing battle of buyers versus sellers, somebody will lose money. Hence you will encounter certain patterns that are easily understood for most of us with a basic knowledge of charts.

In this case, we're talking about the 'zig-zaggy M pattern'. It's also known as 'head and shoulders' in charting parlance, but we feel our term is equally descriptive and just as silly.

We go out of our way to try and not offend people, but we get dirty looks when we say that we reject the majority of what constitutes 'technical analysis'. Hence terms like 'bearish engulfing' and 'falling star' are as arcane to us as 10th century Sanskrit. 

We do not have a vendetta against technical analysis. We're also too lazy to evangelise and offer our approach as a better one instead (Editor's Note : it arguably isn't. Who knows?). 

We're just saying that we use an approach that works for us. Believe us, we've read the literature and applied all the popular indicators, be it Bollinger Band, RSI, SMA, EMA, or IM4U. We are failed technical analysts.

Our primary skill is in price-volume analysis. Applying this knowledge via trial and error in our trading activity has made us pretty decent in what we do. It's basically why we managed to achieve a 31% gain in three days, as well as RM10,000 in profits (yes, in three days). We know exactly how much that skill is worth.

Now, back to the zig-zaggy M pattern and why it was just one piece of the puzzle for this trade.

WHO DOESN'T LOVE CHOCOLATES?

The company is Guan Chong Bhd, or GCB for short. We had been tracking it for about five months, and are generally aware of the business fundamentals. The company is generally awesome.
But the trade was not really about the fundamentals; it's about the charts. And the resistance point here is one epic, multi-month battle of wills.

The chart below is from January to end of September 2019. We omitted the October breakout - we figured you know where this is going.

"Is it more of a zag ziggy M or a zig zaggy M?"

We are not as smart as proper technical analysts or the buy-and-hold heroes. Our capital base is limited, as is the number of opportunities we allow ourselves to be involved in. We wouldn't survive a pullback from RM4 to RM3.40, which happened here. There would be nothing to buy if we were wiped out.

So we designate zones - these are points in which we'd consider a trade. We don't try and catch long term falling knives. If it hits RM3.40, we have no clue if it's destined for RM3.20 or RM5. Those who say they know are probably friends with Marty McFly.


These zones are not trivial : they represent a commitment to trade and to risk our capital. We treat them as if they're sovereign borders. Anything out of this zone is a no man's land - or we should say, no uncle's land

Zones 1 and 2 are essentially resistance points for GCB's stock. One is in April-May, the other in September. That price point is RM4. As you can see, the stock has failed to turn that resistance point into a support point. The day-to-day price movement is erratic : the stock is expensive and illiquid, so it doesn't exactly permit orderly trading - the opposite in fact, which is panicky trading.

The price consolidation in Zone 1 culminated in failure - the stock failed to break out. Market conditions at the time were not exactly favourable either, hence the downward movement.

In late August however, the stock gapped up strongly on GCB's latest quarterly results, plus a bonus issue proposal

We were not in a hurry to trade this. What we want is for the stock to show its mettle and hit the RM4 mark again.


IN THE ZONE

Take a closer look at Zone 2.

Zone 2 (Zone 2)

This crucial range is where the stock tries to prove itself. Call it consolidation or base building; it's yet another battle between buyers and sellers. In this range note that there were at least four attempts to break the RM4 mark. 

And when it did break, jumping all the way to RM4.16 on 17 September 2019, it fell back. the correction was swift. Many would have given up; it's just another false breakout, right?

That was a key point for us; we took it as a signal. We kept watching and bided our time.

Notice that there were clearly two support points in this zone; one at RM3.90 and one at RM4. A breakout is followed by consolidation. Then another breakout happens, followed by another consolidation at higher prices.

It was time to prepare an assault. Keep this aphorism in mind, we came up with it ourselves:

"If the stock wanted to blardy fall, it would have blardy fallen a long time ago"


THE TRADE

As always, we prefer to go into call warrants to maximise our profit potential, and to get returns that are commensurate with the risk we're assuming.

As it so happens, there was a lonely, cheap call warrant to buy. We like fresh issuances - if no one's in it yet, we'd love to get an exposure.

GCB had a few newly listed call warrants by late September. Our pick was GCB-CI, more due to the pricing than anything else. With new call warrants, you can almost be assured that the warrant will track the stock closely. There will be liquidity provided by the issuer. Why? Because nobody's buying it yet!

Transaction records indicate that we were probably the third/fourth account holder to ever buy GCB-CI. And we ended up buying massive sizes, due to the sheer conviction of our view towards the stock.

The source of this conviction? Buying at what we felt to be a fairly obvious breakout point. Know that we didn't try to be smart. We didn't try to be cute by accumulating a ballsy position when the stock is declining. This trade is not a falling knife.

The obviousness (Editor's Note : In hindsight, it is. But not at the time!) was in GCB's price move on 2 October 2019. As a rule, we know that breakouts can be swift. For a fairly illiquid stock like GCB, there would be a fast move in prices - history suggests so, given what it looked like during previous rallies for the stock.

The following is Zone 3 : the breakout zone.

For all we know, this story was the trigger. On 2 October, the stock breaks out from RM4 to RM4.10. If there was a time to put on a big trade in GCB, at any point over the past five months, this was it.

Remember that this whole consolidation in GCB stock took six months to achieve. Any breakouts to new all time highs can reasonably be expected to be a strong and fast move. This is where our call warrant pick comes in.

The trick is to acquire early, and acquire big. Because of the high risk involved, the profit opportunities better be worth it.

And so we did.

Buy and sell concluded : 2 to 4 October

It turned out quite well for us. Not only did we underestimate the strength of GCB's movement, we sold too early as usual. Not that we have cause for complaint: via GCB-CI, we essentially rode GCB's stock from RM4.10 to RM4.53.

And we got our gains.


 You know how we feel about chicken dinners....








Wednesday, 16 October 2019

A BRIEF, CRYPTIC NOTE ON POULTRY STOCKS - LEONG HUP & TEO SENG


This message was originally written on 4 October, 2019

We like to to entertain distant possibilities and far-fetched notions. It's essential in our trading activities.

Think about a poultry counter like Leong Hup International (LHI). Today it's about 90 sen. Been rising a bit lately; prospects look good.

Let's set aside the fundamentals argument for a moment; we all have access to the same publicly available info. We can talk cock about chicken prices until the chickens come home. 

Let's think about the stock, or a number of stocks in poultry. It is hardly a secret that we like the sector, and we are already holding a long term position in a poultry counter.

Just take a moment and think about poultry stocks. Then, entertain some attractive possibilities. In this example it's LHI  and TEOSENG, a unit of LHI, also publicly listed.

LHI had hit a rough patch after re-listing last May. Chicken prices fell steeply due to an oversupply situation. The stock fell to 72 sen; some ways off of its RM1.10 IPO price.

Now let's say things are recovering, which seems the case for chicken and egg prices. From 72, LHI stock is now back at 90 sen.

What do you think will happen if LHI hits RM1.10 again? Here's what we think:

The stock will rally strongly. There will be latecomers and new big buyers coming in. We figure it's the institutional funds that are hungry to get yields. This has already been supportive of LHI prices in the near term. LHI offers a very attractive dividend policy (30% of net profits) to shareholders. Anyone would want a piece of that, plus potential capital gains.

So if LHI hits RM1.10 at some point, likely from improving fundamentals and new buying interest, we expect the stock to go even further, possibly RM1.30. In a down market, these are the kinds of opportunities people will flock to. The KLCI is at a four year low: do you think most people are still buying KLCI counters to get dividends?

The poultry sector is a defensive sector. At the very least, people won't stop eating KFC, or two eggs for breakfast.

So with this in mind, all that's left is to craft a trade. It can be LHI stock, TEOSENG stock, or any of the associated warrants.

Best case scenario is a poultry sector explosion, bringing everything to the stratosphere after some recent struggles. As an associate, TEOSENG will benefit too. It's not too far off from an all time high, believe it or not. Chicken prices are at multi year lows; we wonder what would happen if it recovers just a bit?

We foresee some positive movements in these counters, with a targeted timeline of until the end of this year. We have already bought into our position. They are for safekeeping, like a cozy rooster's nest.

Best thing is, these are not simplistic, speculative trades. The two companies are cash gushers. Their profits can be a bit lumpy, but they are still profits.

It's not a chicken and egg problem. These are gems that the market is starting to rediscover.

Sunday, 13 October 2019

HERE IT IS : THE COMPLETE LIST OF STOCKS TO WATCH FROM BUDGET 2020


To our audience who don't give a hoot about our long-winded stories that go nowhere and all that, here's a treat for you - just the list of stocks that we think would be affected in some way from the Budget 2020 speech last Friday. 

We'll keep the summaries short and highlight the relevant passages from the Finance Minister's speech (which you can read in its entirety here).

To be extra cute, we will also arbitrarily mark the stocks to indicate their must-watch-ness on Monday (14 October) and the rest of the week. 

* - "Can watch lah if bored"
** - "Can get the heart rate up abit only"
*** - "Uncle says you need to watch this"


SIMEPLT*
WESTPORTS*
IJM**
OPCOM***
OCK***
BINACOM***
SEDANIA**
GHLSYS**
REVENUE**
SOLARVEST
GENM*
OWG*
TOPGLOV**
HSSEB**
GAMUDA***
LITRAK**
LBSBINA***
MAHSING**
UEMS**
BJTOTO**
MAGNUM**
EKOVEST***
IWCITY***


A few caveats here:

1) These are just stocks that may be linked to the Budget 2020 announcements. They are not buy recommendations, and the potential impact is not necessarily a positive one. It's a watchlist.

2) We chose the themes that we feel are most relevant, or contain a direct impact, to the companies.

3) We chose the stocks that are most relevant and filtered out the more speculative names. We also left out certain lousy stocks that we would not buy in a million years.

4) These are short summaries only. You have to do your own homework and dig deeper.


PORTS



SIMEPLT - Largest landowner on Carey Island. The speech excerpt implies that the Carey Island port project is still seriously being considered, despite adequate capacity at Westports. This thematic is in the 5 to 10 years range, so don't get too excited just yet.

WESTPORTS - Klang Logistics Corridor to improve transport/efficiency.




IJM - Kuantan Port development funds.


BUILDING DIGITAL INFRASTRUCTURE



OPCOM - Fiber optic cables manufacturing, installation activities.
OCK - Provider of telecommunications network services.


BINACOM - VSAT capabilities and specialisation in satellite broadband tech.


SEDANIA - Hey, they just got into e-sports OK...


BUILDING DIGITAL COMPANIES



GHLSYS, REVENUE - Provider of electronic Point of Sale systems and payment services.



RENEWABLE ENERGY


SOLARVEST (to be listed on 26 November 2019) - Direct beneficiary of GITA and GITE. The company's unit also runs a solar leasing programme.

VISIT MALAYSIA 2020


GENM, OWG - What counts as 'new investments'?? We have no clue so far - the wording leaves things open to interpretation. We're just saying that theme park operators should really consider throwing some money into new theme parks to enjoy these benefits...


INCREASING THE MINIMUM WAGE


A lot of labour-intensive manufacturers are impacted by this, but we will pick TOPGLOV simply as a representative example. That RM100 increase sounds small, but it makes a lot of difference to both employee and employer.

What does 'major cities' mean? Where does the boundary lie between those who are entitled to get a minimum wage of RM1,100 or RM1,200? 

TOPGLOV's main factories are in Klang - is it a major city or not? Would its competitors - some of whom have factories that are definitively not in 'major cities' - have an upper hand? Interesting hypotheticals to consider.


WATER, WATER EVERYWHERE


 HSSEB - Already tendering for East Malaysia water projects. The contracts are there to be won.


MY WAY OR THE....



GAMUDA, LITRAK - Let's cash out, baby.



GET RID OF THAT OVERHANG


This cuts across a large swath of property developers in Malaysia, so let us be more specific. For this incentive, the clear(est) beneficiaries are property developers with substantial exposure in affordable homes priced at RM300,000 or so.

To narrow this further, it would likely be for homes located outside of the Klang Valley, given the price point. We discount any listed developers with exposure to PR1MA - the agency was not even mentioned in the speech...

For us, the compass points squarely at several smaller property developers with projects in states like Johor. So our representative pick is LBSBINA.

MAHSING, UEMS - inventory clearance soon hopefully. These are our two representative picks. Purely from our personal bias, we like the stocks.



NOMBOR EKOR, BRO

BJTOTO, MAGNUM - We think these companies should thank their lucky stars (ahem) as the Government inexplicably chose not to hike gaming taxes for NFOs.


BANDAR MALAYSIA

EKOVEST, IWCITY - Another round of this again then??



To conclude, we'll leave you with this quote:


"Where the hell are all the construction counters?"








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