Target Invest KLSE

Microsoft, OpenAI plan $100 billion data-center project, media report says | Reuters

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If you had been following my updates on Mclean, you would know that Mclean major customer in surface treatment and cleaning services is mainly provided to SEAGATE in Thailand and Singapore.

Mclean performance will be highly related to SEAGATE performance.

And now with the MAGNIFICIENT 7 company pumping in multi billion into data center to cater for the coming demand from GENERATIVE AI. While high end graphic processor from NVIDIA is the main actor in GENERATIVE AI, the whole equation cannot be completed without ample of storage capacity, where SEAGATE HDD will come into play.

Let's take a look at how much big corporate are spending into the next generation data center.

Microsoft + Open AI = USD 100 billion

Oracle (ORCL) Sales Beat Estimates as Cloud Growth Stabilizes - Bloomberg

Oracle unveils $10B data center expansion plan | Construction Dive

Oracle, USD 10 billion

Google to invest $1 billion in UK data centre | Reuters

Google expanding on UK data center - usd 1 billion

Amazon Bets $150 Billion on Data Centers Required for AI Boom - Bloomberg

Amazon - usd 150billion

Meta projects $35 Billion expenditure in 2024, mostly on AI data centres - The Tech Capital

Meta, Facebook - USD 35 billion

With so much interest being center into AI and Generative AI, analyst are looking at spending capex of more than USD 1 trillion by 2027

Data center capex could top $1 trillion by 2027 thanks to AI (silverliningsinfo.com)

Seagate as the leading HDD supplier in market command 43% of market share. With the latest launch of HAMR HDD, SEAGATE will be looking to capture more market share back into it's fort.

With a projection of more than USD 1 trillion looking to be spent into data center in the next 4 years, what is going to be of Mclean, being a critical supplier for surface cleaning and treatment for Seagate?

IMPORTANT NOTICE

Please be informed that I am not a professional or certified analyst. I am not a licensed consultant, just a normal retail investor. I am just sharing my ideas and opinion on the market outlook. Any company mentioned should not be interpreted as a buy/sell/trade call. Please do your own research and buy/sell/trade at your own risk.

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Sunday, March 31, 2024

MCLEAN TURNAROUND FORTUNE WITH AI

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Mclean had been laying on the low for quite a while after a sensational run from cryptocurrency chia coin craze. The company shareholder then proposed for a new business injection, however the proposed business did not materialize, which might be a blessing in disguise as Mclean is able to focus back on what they do best - providing surface cleaning services to their main customers - SEAGATE Thailand and SEAGATE Singapore.

WHY SEAGATE DEVELOPMENT IS IMPORTANT TO MCLEAN ?

Mclean provide it's expert services in tray cleaning, surface treatment and cleaning to it's main customer SEAGATE. SEAGATE business going up or down is very important to Mclean.

As we can see from chart, SEAGATE share price has some co-relation with Mclean

By comparison, you can see that SEAGATE share price is up during 2021/2022 era, which is almost similar to Mclean 2021 surge which is due to Chia Coin cryptocurrency launching which farm coin using storage space. However, the craze fizzle out as more and more coins come out to the market.

The new surge in HDD storage space demand will be due to GENERATIVE AI entering into production stage. Generative AI will be the next big thing as big corporate like Apple, Google, Meta, Microsoft, Oracle are pumping in more than USD 1 trillion to build data center.

The latest invention from SEAGATE - 30 to 32TB HAMR HDD (Heat assisted magnetic recording) can be scaled up until 50tb in the future. The HDD is on the green light for mass production now and all big corporation is spending big and giving big orders to storage space provider like SEAGATE, WESTERN DIGITAL AND TOSHIBA.

As you know MCLEAN is highly relatable to SEAGATE, the coming GENERATIVE AI push will definitely see SEAGATE going busy for the next 10 years.

For the case of MCLEAN, do you see this as an opportunity or miss?

I will discuss more on Mclean further again.

IMPORTANT NOTICE

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Thursday, January 4, 2024

WHY I AM INVESTED INTO CENSOF

Target Invest KLSE: CENSOF GROWTH OPPORTUNITY WITH COMPULSORY E-INVOICE IMPLEMENTATION (targetinvest88.blogspot.com)

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As you can see, I am definitely invested in the e-invoice ecosystem. While there are many players in this industry, some are public listed and some are unlisted entity.

While I am in invested in almost all of the public listed company in KLSE which offer e-invoicing / ERP system / POS system, I found a stronger liking to Censof due to several reason

1. Strong relationship with the Malaysia government. Censof is providing software solution service to critical government services in Malaysia.

2. Established player in the POS / ERP ecosystem, with various software catering for different industry from F&B, Manufacturing and construction.

3. Have established pool of customer connected into PEPPOL framework in Singapore, Hong Kong

4. Strong cash flow and giving dividend for past 2 years

5. Net cash company

The ERP research and development is developing very fast, especially with the emergence of Artificial Intelligence.

Soon, ERP system will be equipped with AI to provide insight, projection and probably solution to business owner, which will further put deeper valuation to software provider company.

With such solution running on SaaS (Software as a Service) on cloud internet, and the requirement of the Malaysia government to mandate e-invoice as a compulsory implementation to all businesses by 2025, subscription and renewal fee will be a solid cash flow.

Censof already break out from long term down trend. New trend is back up with e-invoice factor to support stronger fundamental.

While it will take some time to see revenue coming in, however, I think the current share price is very good for long term investor looking for both capital gain and dividend yield in the future.

My previous posting on Censof

Target Invest KLSE: Malaysia to incentivize digitalization with RM 100 million grant, to benefit CENSOF and others ERP provider (targetinvest88.blogspot.com)

IMPORTANT NOTICE

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Friday, December 29, 2023

Malaysia to incentivize digitalization with RM 100 million grant, to benefit CENSOF and others ERP provider

Accounting Software for Small Businesses | ABSS MY (abssasia.com)

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Malaysia effort to make e-invoice a compulsory for all business by the 2026 will spearhead the growth of POS and ERP system. ERP/POS system provider with revenue model based on SaaS will be able to enjoy a high subscription rate, hence better profit in the coming days.

One of the more established player in the ERP landscape in the SME will be Censof, ABSS.

ABSS had been providing e-invoicing services in Singapore and Hong Kong with PEPPOL partnership.

E-invoicing | ABSS MY (abssasia.com)

Understanding traditional invoicing vs e-invoicing through PEPPOL Framework.

E invoicing

The e-invoicing take up rate will be boosted with government initiative to provide RM 100 million digitalization grant to MSME.

Deputy finance minister: IRB to run continuous engagement sessions to firm up e-invoicing requirements | Malay Mail

I am invested in Censof because I can see the growth in the industry for the long term. Censof is also an established player with good fundamental and links to the government services which will further give Censof additional advantages.

IMPORTANT NOTICE

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Sunday, December 17, 2023

CENSOF GROWTH OPPORTUNITY WITH COMPULSORY E-INVOICE IMPLEMENTATION

LHDN to launch ‘e-invoicing’ system next year (themalaysianreserve.com)

Malaysia is going to implement e-invoice in stages, with a compulsory implementation by year 2027 in all businesses.

The first stage will be targeted for businesses with turnover exceeding RM 100 million. Subsequently, in 2025 will be business with turnover exceeding RM 50 million. 2026 is for businesses with turnover exceeding RM 25 million, while 2027 will be for all business.

How is this going to benefit Censof in the long run?

Home - Censof Holdings

Censof core business is to provide software solution for financial management system to both government and commercial SME businesses. To make it easy - their business is "Software as a Service".

According to the latest figure, there are approximately 1.22 million of SME in Malaysia, contributing to 38% of the GDP in Malaysia.

Emergence of a new big market pie with compulsory implementation of e-invoice feature in all businesses.

The type e-invoice that is going to be implemented in Malaysia is going to be real time, to ensure that the e-invoice meet the necessary standards and criteria.

With the real time requirement, the software provider will need to link to LHDN system. Hence the software will need a renewal fee every year for support and maintenance.

With the adoption of e-invoice, it will be estimated that each SME will be needing to pay around RM 3000 to RM 4000 (depends on software complexity and number of users).

In summary, the compulsory implementation of e-invoice will bring about a new big market of RM 3.66 billion worth of business in ecosystem of ERP/POS system. (1.22 million SME x RM 3000)

If Censof is about the capture 15% of the market, that will be worth RM 550 million a year in revenue.

I am invested into Censof for a long term as I can see the potential of the company revenue and profit and dividend growth in the next 3 to 4 years.

Will be looking and sharing Censof software application and potential in the following update.

IMPORTANT NOTICE

Thursday, November 16, 2023

Can MYCRON surge a signal for privatization from Melewar ?

Italian govt nixes KNM unit’s RM112mil disposal of FBM Hudson | Free Malaysia Today (FMT)

The recent boardroom tussle in KNM had the spot light shining towards Tunku Dato Yaakob Khyra. Despite able to fence off the German billionaire led boardroom revamp, there are still much to be done in order to bring KNM out of the dark.

To recap on, Tunku Dato Yaakob Khyra is the single largest shareholder in KNM through indirect shareholding from Melewar Industrial Group Bhd, which is held by MAA Group Bhd.

Melewar > 29.89% MAA > 9.44% KNM

It is also known that Tunku Dato Yaakob Khyra control Mycron through Melewar.

Melewar > 74.13% Mycron

The restructuring of KNM involve a series of asset disposal as well as listing of core asset - Borsig GMBH. However, KNM restructuring effort could had hit a speed bump when Italian Government block the sale of FBM Hudson.

KNM had applied for PN17 extension for 1 year.

KNM seeks one-year extension to submit PN17 regularisation plan | Free Malaysia Today (FMT)

While the result of the extension is still unknown, there are some solid movement from Tunku Dato Yaakob Khyra in fund raising activities. The latest involving an asset sale from MAA Philipine business for RM 235 million.

Tunku Yaacob’s MAA surges 37% after selling Philippine biz | Free Malaysia Today (FMT)

While there are much more to be done, the sudden surge in Mycron could raise some eyebrown.

Given Melewar already own 74.13% of Mycron, the surge could ring a bell on potential privatization as to enhance the balance sheet of Melewar.

It is worth to note that the NTA of MYCRON is RM 1.51 based on last financial quarter.

At a steep 50% discount for take over offer will still put it at RM 0.75.

For now, it is anyone guesses on what will be the outcome of Mycron. I wished to inform that I am invested in Mycron as to see along with potential corporate movement.

IMPORTANT NOTICE

Thursday, July 13, 2023

Theta gearing up for Jendela Phase 2.0 ?

MCMC COO: Jendela will roll out its Phase 2 later this year | Malay Mail

The recent market is volatile and trading in thin volume. With the state election coming up in August, many investors will perceive this moment as risky and will not get into big positions to invest. However, some investors will see this as a window of opportunity to get good deals.

One of the major government project that will be announcing soon will be the Jendela phase 2.0, which will be slated on 3q 2023

Jendela Phase 1.0 had a budget of RM 28 billion. For Jendela Phase 2.0 will be more on 5G, and the budget will be finalized later on.

Theta Edge is one of the appointed contractor for the Jendela Phase 1.0 project. The total project site won by Theta is 221 location, worth RM 154 million.

Theta Edge appointed to implement Jendela Phase 1 project (themalaysianreserve.com)

With the timely and good delivery for Jendela Phase 1.0, the existing contractor involved in the phase 1.0 will have a bigger chance to be appointed for phase 2.0.

Furthermore, one of the uprising player - Opcom, had terminated it's agreement with Global Forway. This will indirectly give the existing player to get a bigger pie for the phase 2.0.

Opcom Terminates Agreement After Failing To Secure 5G Contracts | BusinessToday

The other running listed contenders for the Jendela phase 2.0 could see OCK, Mestron, Handal.

Based on the previous sizable contract won by Theta, it is a good reference to bet on another sizable contract from Jendela phase 2.0 by Theta.

Theta is a subsidiary of Lembaga Tabung Haji, and in turn, Lembaga Tabung Haji is under the purview of PMO department. It will be crucial for the current unity government to ensure that Lembaga Tabung Haji will be able to secure the interest of muslim hajj contributors in the long run.

Technical chart of Theta is looking for a break out after a 1 year consolidation.

IMPORTANT NOTICE

Friday, April 14, 2023

Puncak Niaga is grossly undervalued from its NTA, MRT3 finalization in 2H 2023 will be a boost

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About 10 years ago, Puncak is one of the favorite topics among the investor and trader due to the Selangor government water restructuring exercise where multiple water concession will be taken over by the state government, which includes Puncak water asset.

Fast forward the deal is signed at RM 1.56b.

While the deal is far lesser than many had thought, it still went through.

Puncak then buy out entire Triplc property and construction firm which will automatically inherit UITM building and campus expansion plan. It also expanded into 43k hectare of oil palm plantation in Sarawak.

While the company NTA is RM 2.89, the current share price of RM 0.25 is a far cry from the value of the NTA, which is not even 10% of the NTA.

Technical outlook on the short term indicate an uptrend, highlighted in green zone.

On the longer term outlook, the current price might had break away from a long term downtrend line.

Hence, there will be a good chance for Puncak share price to appreciate further in the short term outlook towards 30 cents.

With the current government retendering most of the infrastructure project from previous administration, there will be a good chance for Puncak to enhance their book order in Peninsula Malaysia as well as Sabah Sarawak.

The case of Puncak vs TS Khalid estate and Selangor state government

Based on experienced and learned people in the industry, while declining to comment into much detail, it is said that Puncak might have some chance to salvage something in compensation to the earlier disposal which might be deemed undervalued.

The current price of Puncak compared to it's NTA is very undervalued. Puncak upside tendency is good with supportive technical outlook and improving fundamental on business prospect. With government finalizing MRT3 costing in 2H 2023, construction sector will be in the look out by investor and trader for a bargain hunt.

IMPORTANT NOTICE

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Wednesday, April 5, 2023

Malton might see a special dividend prior to disposal of Pavilion Bukit Jalil for RM 2.2 billion

Pavilion Damansara Heights Mall Phase 1 to open in May 2023, secures tenants for over 70% retail space | The Edge Markets

One of the largest real estate transactions for the year 2023 will be the disposal of Pavilion Bukit Jalil for RM 2.2 billion to Pavreit. The transaction will finally see Malton Bhd cashing in the gain from the 51% joint venture of Regal Path Sdn Bhd, a subsidiary which holds the 50 acres prized shopping mall.

While the disposal of the shopping mall at book value RM 2.2 billion will result in the company losing money due to the cost of disposal and other related cost, it must noted that the price tag of RM 2.2 billion actually carries a profit of RM 200 million recognized earlier due to revaluation of the property.

In simple terms, Malton 51% ownership will see approximately RM 100 million of profit from the disposal process coming back to the company in the form of cash.

The payment term will be set out in the following manner

The full cash scenario will see RM 2.2 billion paid by cash, while the minimum cash scenario will be RM 1.6 billion in cash and RM 600 million worth in issuance of shares.

Pavilion Bukit Jalil started work in 2015. Loyal shareholder had held out from 8 years to see the fruit of the labour.

With the current share price lingering around RM 0.42 against the NTA of RM 1.87, there is certainly a big gap in the market price with the underlying value of the company. As the disposal of Pavilion Bukit Jalil is certainly to beef up the company cash level, there will be a very high chance to reward loyal shareholder with a special dividend as the last dividend Malton paid out is 2019.

Another catalyst for Malton will be the opening of Pavilion Damansara Height in May 2023.

I am obliged to inform you that I had invested in Malton due to

1. Current share price is at steep discount to NTA, and cheaper than the price 10 years ago

2. Potential special dividend to reward shareholder from Pavilion Bukit Jalil

Sunday, February 5, 2023

CUSCAPI TO BENEFIT ON GST IMPLEMENTATION - GST CAN BE DELAYED, BUT CANNOT BE DENIED