Thursday, January 14, 2010

Notion Vtec (RM3.32): Still cheap, worth accumulating now

Much has been written about Notion Vtec by Salvatore Dali in his posts, so I won't repeat here again.

  • Resilient and high net margins in the range of 22%-25% since IPO in 2005
  • Net profit to rise to about RM60mil in 2010 from RM36mil in 2009
  • PER'09 and '10 at 12.9x and 7.8x respectively
  • Nikon to hold 10% of Notion Vtec, further establishing Notion's business with Nikon and elevate Notion's branding among clients.
  • Earnings growth expected to be strong from anticipated gains in market share.
  • Backed by its earnings growth, high net margins, high ROE, higher reputation and Nikon as a shareholder, it has no business trading at PER'10 of 7.8x. Share price could potentially reach PER of 12-14x, breaching RM5.00 mark.
  • Share base of 140.7 mil only, rather easy to nudge up the share price.
  • Market Cap: RM467.2 mil
  • Expected Div Yield: 3-4%, decent.
Disclaimer: The above article does not represent an investment advisory service as no subscription or management fees are charged. The contents of the article are provided as general information only and should not be taken as investment advice or as a recommendation to buy or sell any security or financial instrument. Any investment decisions carried out based on information, analysis, or commentary provided above is solely your responsibility. You should consult your investment adviser before making any investment decisions.

Thursday, January 7, 2010

Pre-Chinese New Year Rally

Just for fun, I computed 15 years of KLCI movement around CNY period (40 days before and after CNY) since so many people have been talking about pre-CNY rally. How true is it? Enjoy the graph below!

Surprisingly, my findings showed that on average KLCI performance rose 5% during the 40 days before CNY and spiked up to 8% after CNY (Base count from 40 days before CNY). Though this rally is not fundamentally driven, perspective of the investors anticipating a pre-CNY rally does make an impact on the market movement. Though there were some years where KLCI performed badly during CNY, this year is different, backed by improving market sentiment, economic recovery etc etc. In the meantime, let's just ride on the rising tide yah!!

Happy trading!!

PS: Mudajaya and Supermax flight was just exhilarating. Both breached more than RM5.00 (Though Mudajaya fell back to RM4.90 level currently). Anyway, will wait for RM6.00 to sell.