Thursday, April 25, 2024

MALAYSIA HIGH SPEED RAIL PUTRAJAYA STATION POTENTIAL SITE TO SEE LAND ACQUISITION INVOLVING PAOS FACTORY IN BANTING

Blog https://targetinvest88.blogspot.com



Malaysia is picking up steam on the progress of HSR. While the main place of the station is well known, such as Bandar Malaysia, other places such as Putrajaya, Seremban, Melaka is a guess for most.


Earlier, Target Invest spot a potential location of HSR Batu Pahat landing. You can find it here


Today, Target Invest would like to make a very good guess on the possibility of the potential location of HSR Putrajaya station and railway line alignment.

After a series of studies, the potential site for the MALAYSIA HIGH SPEED RAIL HSR Putrajaya Station might be landing at Banting.


It will be the best alignment as it will not cut through the KLIA from Seremban. And the location will still have a good proximity to KLIA.

Zooming into it, I will place my bets on the site being here at Banting Industrial area.



The area will eat up a huge place for railway path, parking and other infrastructure.

The site will potentially take up a few factory as to make way for station and railway.




PAOS HOLDING BHD will be in the vicinity of the land for the Putrajaya HSR station and railway which is highly potential to see land acquisition.


There is also a very high co-relationship in Batu Pahat land acquisition and Putrajaya in terms of share prices of potential company involving in land sale.

As of my previous blog, Batu Pahat potential candidate is HWATAI.

Today reveal of Putrajaya candidate will be PAOS.


As you can see, HWATAI and PAOS share price movement are identical on the time frame.

They also have identical shareholder which can further give the case a better boost on the linkage that this 2 companies are going to see their land asset being buy back for HSR station or railway.

So what do you think of this piece of information?

PAOS -> HSR PUTRAJAYA
HWATAI -> HSR BATU PAHAT

HOW MUCH IS MY PREDICTION ON SHARE PRICE MOVEMENT?

BASED ON 100% RETURN THEORY (MY OWN THEORY),
HWATAI COULD BE RM 1.20
and
PAOS COULD BE RM 1.00


If you cannot buy land to capture the opportunity, probably buying shares can get some fractional exposure towards the excitement in the development of the HSR news.


PLEASE BE INFORMED THAT I AM IN NO POSITION LINK WITH ANYONE WITH HSR INFORMATION, GOVERNMENT PERSONNEL, OR INSIDERS. ALL INFORMATION IS PURELY BASED ON EXISTING AVAILABLE INFORMATION ON THE INTERNET, ANNUAL REPORT AND SHARE PRICE MOVEMENT. ALL THE ABOVE INFORMATION IS JUST MY VIEW ON POTENTIAL HSR DEVELOPMENT SITE BASED ON ANNUAL REPORT LAND ASSET, SHARE PRICE MOVEMENT AND COMMON SHAREHOLDERS.


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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Tuesday, April 9, 2024

E-invoice candidate, who is the best deal now?

Blog https://targetinvest88.blogspot.com


Malaysia is launching on e-invoice test run on the month of May 2024, while the 1st batch of compulsory participating company with annual revenue above rm 100 million will go live on August 2024.

So while the trend is going to be picked up soon, let me show you some of the listed company that are involved in e-invoice/ pos system / erp system.


Here is 4 commonly known listed player in KLSE
1. ADB - 0276
2. CENSOF - 5195
3. IFCAMSC - 0023
4. PANDA - 0290

ADB and PANDA is the 2 companies that went IPO within the past 12 months period.


1. ADB

ADB annual revenue is around RM 40 million, with net profit at rm 12 to RM 13 million region
Market capitalization for ADB is RM 522 million with share price at 95 cents region





2. CENSOF





Censof got 2 types of customers. Government and commercial. On the commercial side of business, Censof software sales is around RM 25 million (Since e-invoice is only for commercial business)

The profit for the commercial customer is around RM 7 million annually on average.


3. IFCAMSC





IFCAMSC got the higher revenue compared to all the other, averaging RM 75 million for it's software services. However, it lacks on net profit margin, with the latest 4 quarter net profit at just RM 2.6 million. IFCAMSC can go further if they embark on internal operating cost restructuring.

Market cap is RM 200 million at the current share price.


4. PANDA





Panda annual revenue is around RM 23 million, with net profit at RM 4.3 million range. The market cap for PANDA is now at RM 208 million. The share price has seen a good run forward in the midst of implementation of e-invoice.


TARGET INVEST OPINION

In my opinion, CENSOF and PANDA commercial customer revenue base is very comparable, which is sitting at the range of RM 25 million. However, looking at the valuation, PANDA is currently valued at RM 200 million while CENSOF is just RM 140 million. That is not including the government side of business profit that CENSOF is bringing in to the shareholder.

Should CENSOF trade towards RM 200 million market cap valuation, CENSOF share price will be trading at RM 0.36 per share.

Current share price (RM 0.25) of CENSOF is 30% below valuation for peer to peer comparison on commercial SME customer base. Adding in government revenue and profit will bring CENSOF value more than RM 300 million.


What do you think of the 4 selections? Which one is undervalue?



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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Friday, April 5, 2024

HWATAI - FROM SELLING BISCUIT TO SELLING LAND FOR HSR BATU PAHAT ?

Blog https://targetinvest88.blogspot.com



Malaysia government had restarted the HSR (KL-SG) project under Prime Minister Anwar Ibrahim. Ever since then, listed company especially property developer with prime land located near to those subject area had been going up strongly.

This big project will be carrying a mega price tag worth more than RM 100 billion, which include land acquisition and infrastructure construction cost.

As of the latest, three consortia is believed to be on the short listed candidates.

The three consortia are YTL Construction Sdn Bhd-SIPP Rail Sdn Bhd, Malaysian Resources Corp Bhd-IJM Construction Sdn Bhd-Berjaya Rail Sdn Bhd-Keretapi Tanah Melayu Bhd (MRCB-IJM-BRail-KTMB) and a Chinese consortium said to be led by state-owned China Railway Construction.

Most of the developer sitting in big plot of prime land in Johor had saw share price riding up high. While Bandar Malaysia co-owner IWCITY saw share price double up from 40 cents to 80 cents region. UEMS from 25 cents to RM 1.20. SPSETIA from 50 cents to RM 1.40. While those are the big names that had liven up, there are smaller player which will be benefiting from the land acquisition.



I will zoom into the HSR BATU PAHAT station.


As you can see, the HSR station will be from Jurong West -> Iskandar Puteri -> Batu Pahat -> Muar -> Ayer Keroh -> Seremban -> Putrajaya -> Bandar Malaysia

For the case of Batu Pahat, the only best possible slot to go through the town city will be the small neckline of land which comprises of a few old factories.



According to research and studies, the potential proposed station will be most probably on the east side, and follow by an elevated railway that will cut through the northern side of Batu Pahat.

The best possible location is owned by Hwatai biscuit factory.




The current land occupied by Hwatai are all leasehold. Most of the land are not revalued. While remainder lease is low, there are many hidden value inside the land that could possibly bring Hwatai worth more than RM 150 million from compensation.

Based on oustanding shares of 74.833 million shares, that compensation will give Hwatai a war chest of RM 2 per share.

Currently, HWATAI shares is trading at 55 cents. What is to be seen in the future when the HSR railway is confirmed will be the revealed soon.


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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Monday, April 1, 2024

MAGNIFICIENT 7 SPENDING ON DATA CENTER EXPANSION GIVING SEAGATE A BIG LIFT UPWARDS, WHAT ABOUT MCLEAN?

Blog https://targetinvest88.blogspot.com



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, USD 10 billion


Google expanding on UK data center - usd 1 billion



Amazon - usd 150billion 


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
 


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

 Blog https://targetinvest88.blogspot.com



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
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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Thursday, January 4, 2024

WHY I AM INVESTED INTO CENSOF

Blog https://targetinvest88.blogspot.com



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



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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Friday, December 29, 2023

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

Blog https://targetinvest88.blogspot.com


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.





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.




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
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, December 17, 2023

CENSOF GROWTH OPPORTUNITY WITH COMPULSORY E-INVOICE IMPLEMENTATION

 Blog https://targetinvest88.blogspot.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?



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
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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