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Saturday, 15 April 2017

(Tradeview 2017) Value Pick No. 7 : Kronologi Asia Bhd. (0176)

Dear fellow readers, 

This is my No. 7 Value Pick for 2017. 

Once again, these writings are just my humble highlights (not recommendation), feel free to have some intellectual discourse on this. You can reach me at :

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Value Pick No. 7: Kronologi Asia Berhad (Initial Valuation RM 0.45) 

Following the superb performance of Scope Industries Bhd, which moved from 16 sens to 27 sens in 1 month (68% gain since released of article), there were many request by my readers to focus my writing on more small cap stocks. Let me clarify beforehand, this is not adhering to the request but rather I came across this counter after a friend highlighted the strong growth since their IPO 2 years back. 

Once again, we will give an upfront warning, as this is a small cap stock, this stock has higher risk compared to our other value picks. So for those who have low risk tolerance, you can skip this. 

Kronologi Asia Bhd, is in the business of Data Storage and Recovery Solutions & Technology. In layman terms, Krono provide Data Backup, Consultation, Server Maintenance, Recovery services to companies. Think of them as your office work data archiver / gatekeeper. 

The company consist of a team of IT professionals with substantial experience in their respective fields. From how I look at it, the team running the company is very professional. Just to name a few, the Executive Director / CEO /CTO,  Mr Teo has over 20 years of experience in storage solutions, software programming and network architecture.  Executive Director / Director of Operations, Mr Tan brings with him a wealth of IT experiences having worked for a HK listed IT firm and US based 3Com, both in their Singapore operations. He was also one of the pioneers of a successful regional IT System Integration company, Sandz Solutions. In short, the management of Krono knows what they are doing. 

As Krono is a relatively new company, looking at the 2 years profit trend, Krono has shown steady increase both top and bottomline from RM61 to RM81 million in revenue and RM3 to RM7.4 million in net profit. Profit margin almost doubled from 5% to 9.1%. All indicators point towards continuous growth. However, it is imperative to understand the reason behind the growth. 

Back in August 2016, Krono acquired the  remaining 80% stake in Quantum Storage (India) Pte Ltd for RM26mil. This is one of the key reason for the growth of Krono. With a new subsidiary and board members / management level, Krono has been improving. The key sector for Krono is to tap on the burgeoning data storage and management business in Asia. It is reported that Krono is a long-term partner of US-based Quantum Corp which in turn is a global player in data protection and data management – promoting Quantum products, solutions and branding in South Asia. 

Krono acquisition of Quantum Storage for RM26mil, was satisfied by new shares and RM15.2mil in cash on a staggered payment basis. The acquisition was to capitalise on big data, and India's growth in the sector of data storage. Ex: 4K ultra HD technology, Satellite imagery, CCTV etc. The pivot towards Digital cities, Smart Cities and to boost IT usage in businesses and organisations will help the company grow in the long term. This acquisition comes with a profit after tax guarantee of US$1mil (RM4mil) each year of financial years 2016 and 2017. The RM15.2mil cash portion of the acquisition is being funded from RM6mil of IPO proceeds and a further RM9.2mil from internally generated cash. The company has RM8.7mil in cash as at Dec 31, 2016 with a reducing debt position. Additionally, Krono's balance sheet is relatively strong compared to many other tech stocks out there. It is a net cash company despite having gone through an acquisition. 

We like Krono for many reason. Firstly, it has a change in management / board members which turned the business around. Secondly, it is in a tech sector of growth which is easy to understand and shows actual revenue and profit growth. Thirdly, the company have a good mix of revenue from various geographical location which shows demand in various countries outside of the home country. Hence, we believe the future prospect is intact. We are cautiously optimistic for it to maintain its profitability in the coming QR. If Krono successfully pull it off, there may be a rerating to the stock. 

The 2017 prospects by Krono looks promising as well. Given the management confidence of being able to deliver a positive performance to FY 2017, I think it is worthwhile to consider investing in the company for the long term basis. 

With the latest QR, it is now trading at a narrow band. Since middle of 2015, Krono has fallen from 40+ sens to a low of 10 sens before rebounding to recent high of 39.5 sens. If Krono can maintain their growth, there is no reason it cannot challenge it's historical high. Currently at 35 sens, it is trading at a multiple of 13x. It's NTA stands at 19 sens with ROE of 14.5% for the past years. We believe in the long term growth trajectory of Krono and estimate the coming Q with EPS between 0.7 to 1 sen. Should that happens, the full year EPS will be around 3 sen and applying a multiple of 15x (factor in the net cash position and tech sector), there is a possibility that Krono can move towards 45 sens. For now, this will be the initial TP pending observations of coming quarter results. 

*Please note this is a penny stock with erratic earnings. Hence the risk is higher. For those who do not have such appetite, feel free to skip.

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Saturday, 8 April 2017

(Tradeview 2017) - Thank You Boss! Now, What Should I Do With My Bonus?

Dear fellow readers, 

Once again, these writings are just my humble highlights (not recommendation), feel free to have some intellectual discourse on this. You can reach me at :

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Congratulations everyone, it is bonus time! The recent quarterly result season, corporate earnings have rebounded. This led KLCI to be in buoyant mood (aside from Trump effect, rebounding oil price, election etc). Many companies seem to have done better or at least shown improvement compared to the past two results season. Many friends and acquaintances have shared with me that this year, some of them finally got their bonus compared to 2015, where there minimal or none. 

So with much excitement, many of them started planning how to use their bonus. I would like to say it is subjective. Not many intend to use it for the same reason. Majority of them have already been counting down to end of March and waited impatiently to use the bonus to set their plans in motion. Of course, there were some of my friends / acquaintances who knew about Tradeview and approached me for advice. As I thought this was an interesting topic, I would like to share with everyone some of my ideas. 
Do note, one size does not fit all. Everyone is unique. My sharing is merely a simple exchange of insight. Of course, it all comes down a few basic notions such as prudent money management, desire, obligations / responsibilities, needs amongst others. Let me share with all through some simple illustration of how one can use their bonus :

1. Debt Repayment

Surely, using your bonus for this purpose is the least sexy thing to do. Even the title looks boring. However, do not underestimate the importance. Today's society is largely debt fueled due to cheap credit and easy monetary policy across the world. Government relies on debt to grow the economy, building infrastructures, social programmes etc. Ordinary household incur debt through housing / property loan, students through student loan, individuals credit card debt and others. Having extra income from bonus is great, in fact it would be a good avenue to pare down debts as it is never easy to serve the monthly interest outstanding. Should the bonus be used for other purposes, the debt position will never be reduced and forever, one will be financially burden regardless how much they earn. 

2. Savings

Saving for rainy days. This is an age old adage that rings true throughout the course of history. There can never be too much savings. Malaysia is one of the few countries that enjoy relatively high fixed deposit savings rate at around 4%++.  Looking across the causeway, Singapore's savings rate is around1%++ and further on to developed countries like US / UK which also only provides 1%++. The beauty of saving and setting aside extra money is the compound interest that one gets to enjoy every year. There is saying "Compound interest is the 8th Wonder of the World". Example : assuming one saves RM 1000 every year at 4% interest per annum. After 20 years, the savings would amount to a staggering RM 33,160.62. 

3. Investment 

There is a saying that salaryman will never make it rich in life. Of course this is not entirely true. Indeed, Malaysia's cost of living has increased significantly, but as we all know, salary growth has been stagnant / incremental. The limited increased despite the high inflation rate is a sign of our economy not growing fast enough. Of course, depreciation in MYR also affects the purchasing power / value of our money. Therefore, a good way to mitigate is to make investment apart from earning the monthly salary. There are many forms of investment one can consider such as equities market, FOREX, property, unit trust, ETFs, PRS and others. Making the right investment can help overcome the annual inflation rate and eroding MYR value through the positive returns. Of course, investments are risky. Hence, investment should only be done with spare cash / funds. Putting a portion of bonus to investment is wise provided one has the necessary knowledge or property financial adviser to guide.  

4. Education

There is no end to learning. Everyday I am learning something new from different individuals and life experiences. The day one should stop learning is the day our utility runs out. Using bonus / extra income to take up a course to better oneself is the best. They always say, the best investment is education. As long as it is proper education, and you learn something good, then it is a worthwhile investment. Some use their bonus for financial courses, MBA, soft skills training and others. Personal development is very important. So long as you keep improving yourself, you will never be irrelevant. Think of it as a software update like your Iphone / Android. 

5. Necessities of Life

Many people in today's society work to make ends meet. Although B40 category has continued to shrink as the society progress, there are still people out there who live day by day. Many shoulder responsibilities as the sole breadwinner of the family, as a father, mother, son, daughter and so on. Bonus would come in handy in easing the burden of life be it through the mean of buying diapers for a new born baby, medical bills for the elderly, school fees for the children and so forth. Taking into account of all walks of life, it is important to use these funds to sustain the family well being. 

6. Enjoyment of Life

After working hard 365 days, I think it is fair to enjoy what life has to offer. We will never know what happens tomorrow. Hence, it is not wrong to reap the fruits of your labour. Use a portion of your hard earned money to travel to that part of the world you have always dreamt of, or seek the adventure trip you have long for, buy that handbag you have always desired, get a brand new Apple product, upgrade that worn out furniture, buy that brand new facelift car, indulge in the concert that is coming to town, visit the restaurant you have been saving for the special day and many more. You worked hard to earn it, so use your bonus guilt free. 

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As per most people's employment contract, Bonus is actually discretionary. It is not guaranteed and employers has no legal obligation to give bonus every year. Therefore, bonus would constitute extra income. Given the opportunity, one should appreciate it and not take it for granted as a must. In fact, if your company is still giving out bonus year in year out for the past 3 years (despite the slowing economy), your company is beyond generous. Make the most of it, stretch your dollar / Ringgit by realising opportunities that  would make one's life better. 


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Saturday, 1 April 2017

(Tradeview 2017) - Monthly Report Card (As at 31st March)

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Dear fellow traders / investors,

As in the past years, I will be continuing the practice of recording my calls for the public. The report will show the monthly record for year 2017. The purpose is for transparency and accountability. This is the updated results as of end March. 

For those keen to be a subscriber, there are several links below

This is just a simple periodical report to keep track of the progress of my picks for readers. Feel free to cross check my public comments / article posting date as reference for the calls. Some are calls, some are articles on value picks but all are documented.

*The picks from when it was call until 31 March 2017 : (Gains exclude div) 

1. Poh Huat - Called on 23 December @ RM 1.73 vs Present RM 1.88 (8.7% Gain) 

2. Allianz - Called on 7th Jan @ RM 10.18 vs Present RM 11.56 (13.6% Gain) 

3. EG Industries - Called on @ 9th Jan RM 0.865 vs Present RM 0.905 (4.6% Gain) 

4. CCK Consolidated - Called on @ 23rd January RM 0.645 vs Present RM 0.64 (-0.01% Loss) 

5. Magnum - Called on @ 23rd January RM 2.10 vs Present RM 2.13 (1.4% Gain) 

6. Paramount Corporation Bhd - Called on @ 1st March RM 1.65 vs Present RM 1.74 (5.4% Gain) 

7. Scope Industries Bhd - Called on @ 3rd March RM 0.155 vs Present RM 0.245 (58% Gain) 

*** In fairness, I excluded Magni and Yee Lee as both were 2016 Value Picks & MFCB and Jaks as called Nov / Dec 2016

As of now, it is 6/7 winners against losers. Should you are keen to follow my trades, there are 4 ways to follow Tradeview Group. I usually share my calls with :

1. Private Exclusive Subscribers first
2. Website / Blog / Facebook second
3. Telegram Public Channel third
4. Forum last 

If you are keen to have the earliest possible call picks or FA/TA coaching or value investing guidance or to be private exclusive subscriber, feel free to contact me at to sign up. Thanks. 



**Some counters I may have spotted at lower entry price but I displayed the call price based on my first mention in public forums. Also, of all the counters above, some counters I have taken profit, some are still holding, some I have cut loss. My private subscribers would know. 

Sunday, 26 March 2017

(Tradeview 2017) - Your Risk Appetite Vs My Risk Appetite (on Notion VTec, Dnex and D&O)

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Dear fellow readers, 

Once again, these writings are just my humble highlights (not recommendation), feel free to have some intellectual discourse on this. You can reach me at :

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Readers who have read my articles know that I am quite conservative and careful in my selection of stocks. I will not recklessly call a buy on any shares without due deliberation and in-depth analysis or research. Additionally, I will avoid listening to share tips without substantial basis to justify just for the sake of investing or satisfying my readers.

My father have always reminded me when I first started investing, "The market is always there. If you missed the opportunity today, there is many other opportunities in the market. Do not rush into it just because everyone around you is doing so." This simple but poignant advise has always stuck with me all these years. I will admit, it is not easy sticking to this investment philosophy especially if people around you, colleagues, kopitiam customers, uber / grab drivers, pasar aunties and uncles are all sharing with you how much money they made from DataPrep, Dnex, Efficient, IWCity and many others. 

In fact, "sitting still doing nothing" is one of the hardest thing to do in investment. Even up till this day, I still have problem achieving this. A good example would be Visdynamics and MPI. I remembered we  first called Visdynamics at 22 sens end 2016 and cashed out fully at around 45 sens when I felt the share price is beyond its true fair value. For MPI, we called at RM8.03 in early 2017 and cashed out fully at around 10.30+. Look at the price today for both counters. Spectacular. Sitting still requires huge amount of discipline. But it has a lot do with RISK APPETITE which brings me to the crux of my article. 

Everyone has their own risk appetite. It may be low, medium, high and so on. However it differs from one individual is different from another. In short, it is subjective. Let me share with you through the illustration of a few stocks :

1. Notion VTec

Few months back when it was still around 45 sens, I received information from several parties that Notion will be in the play and TP was RM1. Quickly, we researched and decided against the investment. We felt Notion was too expensive and even if indeed the rebound play thesis came true, I rather put my money with Dufu, LCTH or Visdynamics for that matter instead of Notion. Why? My risk appetite did not allow myself to invest in Notion. Logic and sense prevented me from doing so. Clearly, my risk appetite prevented me from making a windfall. Today, Notion is RM1.26 and overvalued. Did I regret missing out? A bit. However, my funds was securely diverted to other companies which made me good return as well. 

2. Dnex

Dnex was one of the favourite penny stock for the past few months. Some banks also initiated coverage on it. The share price moved from 20+ sens to 40 sens today. We first noticed Dnex when it was 26 sens. Oil and gas was rebounding, Vehicle Entry Permit contract, new contract by government etc, the investment thesis looks sound. All seems to be on track. Again, after due research and consideration, we decided to pass on Dnex. We believe Dnex is a case of over optimism as earnings just started to show only plus largely derive from associate contribution which has a fixed timeframe. Mostly, stocks like this always starts out strong then dwindle as time passes on. Hence, to us, the investment thesis while attractive and tempting, my risk appetite did not allow us to proceed with it. 

3. D&O

This was another stock that jump ridiculously due to market rumours on the takeover offer. Like most people, we do not have any inside information. Everything is based on hearsay. The thing with investment is requiring a person to take calculated risk. If an investment relies solely on hearsay or rumour, it is very dangerous. However, different people has different risk appetite. Some people like to buy on rumours sell on fact. However, we do not like to rely on hearsay or rumour. We act on the basis on fundamental valuation of the stock coupled with future prospect. This is largely because my risk appetite will not allow us to consider this counter as well. 

4. Jack Ma, Alibaba Effect + Loss Making Penny Stocks

Due to our conservative position, we issued a gentle cautionary reminder to all readers on telegram and facebook when many were thinking to jump on the bandwagon of rallying penny stocks with the "Jack Ma, Alibaba Theme" promoted by operators from last week. Many of these counters were loss making. True enough, the next day after our warning (Friday), many of these shares plunge and many retailers were trapped already. The reason we issued a cautionary reminder was because we have seen it over and over again how operators tried to manipulate share price to trick unsuspecting retailers. Additionally, we understood the risk involved. While we can provide the gentle reminder, due to different risk appetite, not everyone will listen. Some have higher risk tolerance and willing to ride along. The excerpt of the gentle reminder on 23rd March (Thursday) when these stocks were being pushed as below. 


Everyone has their own risk appetite. Some higher than others. Some lower than others. So the question we should all ask ourselves before every investment decision is "whether am I willing to take this risk to put my hard earn money in this counter". If the answer is yes, go ahead and invest. If the answer is no, avoid. If the answer is neither, take a step back to reconsider your position otherwise, just sit still. That way, at least your investments will give you the peace of mind when you go to bed every night.


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Saturday, 18 March 2017

(Tradeview 2017) - The Love-Hate Relationship of Stocks & Dividend (On Visdynamics, EG, YeeLee, Digi & Poh Huat)

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Dear fellow investors / readers

Today, I would like to share with all on the above topic :  "Love-Hate Relationship of Stocks & Dividend". 

Once again, these writings are just my humble sharing (not recommendation), feel free to have some intellectual discourse on this. You can reach me at :

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Dividends. Who wouldn't like to invest in a company that gives good Dividend + good earnings growth (Capital Gain)? Ideally, all listed companies should be that way, then all investors in the stock market will make good returns. Sadly, majority of the listed companies in KLCI do not deliver good earnings growth + good dividend annually. 

Therefore, when we invest, it is imperative for us to look for such counters in the whole share market. However, there is strong inverse relationship between growth companies vs dividend yielding companies. 

I call this the "Love-Hate Relationship of Stocks & Dividend". Why is that so? Let me explain : 

1. Growth stock 

When a company is growing, it has limited funds to spare. Cash is precious and utilised specifically to expand and grow the business. Rewarding shareholder is the last thing on the mind of a growing company. 


2. Blue Chip 

When a company is established and stable with strong recurring income and healthy balance sheet, the company has the ability to use their cash hoard to declare dividends to reward shareholders. Even after rewarding shareholders with dividend, they still have plenty of cash to further grow the business. 

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In layman terms, it is like deciding whether to buy a Landed Property vs High Rise PropertyIgnore the supply and demand, assuming it is a constant, Landed Property provides good capital gain but low rental yield Vs High Rise Property provides slower capital gain but high rental yield. 

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It all comes down to an individual's investment decision. It a matter of choice, preference and strategy. A balance portfolio would include all types of stocks, a conservative portfolio is skewed towards dividend stocks etc. This is a topic for another day. 

To help all see it in better light, let me explain with 5 stocks namely Visdynamics, EG Industries, YeeLee, DIGI & Poh Huat  

1. Visdynamics (Turnaround Play) :

We were among the first to discover this hidden gem when it was only 22 sens. Today it is 66 sens. You can refer to both our articles on Vis here

Many would have enjoyed a windfall if they invested when we called it back in Nov 2016. What caught my attention with Vis was a continued trend of gradual improvement. There were setbacks initially but the management manage to deliver the promise to shareholders. However, this company was loss making in the earlier years before turning around. Hence, Vis did not declare dividend at all for the past 5 financial years. How can a company with erratic earnings and losses declare dividend? Those investors who only invest in dividend yielding counters would miss a counter like Vis. If one is able to look beyond Dividend Yield, they may notice the improvement and turnaround in place for Visdynamics. The company required the cash to improve the business. Sometimes, Dividend Yield cannot be the one and only benchmark in assessing the company's investment worthiness. 

2. EG Industries (Growth Stock) :

This company was a favourite back in 2015 when many prominent investors entered the counter and promoted it heavily. The share price moved from 80 sens to RM1.20 in less than few months. Since then it has been consolidating for the past 1 year. When we picked EG as our 2nd Value Pick in 2017, some of my readers were quite surprised as they saw some funds selling EG. Also, it wasn't declaring dividend despite delivering good results. Many were critical as this company went through several rounds of fund raising though rights issue, private placement and then now pending another rights + bonus issue. When I called EG, it was 86 sens, today it is around 90 sens. The company released their recent results which was really good. The actual FV based on the past 2 quarter results would easily be RM1.15. However, their fund raising again cause the market to sell off the counter from a high of 98 sens back to 90 sens last month. Our view on EG is simple, if you choose to invest in this company, it is definitely not because of the Dividend Yield. The company has been raising cash several rounds with investors to expand the business. The results they delivered was good which shows the expansion is working. If you choose to invest in EG, you are making a decision to grow with the business. The business needs to grow before it can reward shareholders. Hence, dividend is last thing on their mind. 

3. YeeLee (Maturing Growth Stock) :

A slow and steady consumer counter which has quietly delivered consistent growth and profit for the past 5 years. It is not glamorous, nothing to shout about, but it delivers. We like companies like that. Your silent unsung hero. Fundamentally, YeeLee is strong. Balance sheet is strong. Business solid. Additionally, it is growing every year topline and bottomline. This year it even broke the RM1 billion revenue mark. We called YeeLee as our 2nd last Value Pick in 2016 at RM2.30, it hit our TP of RM2.68 nearing the release of the quarter results. However, Dividend Yield investors may not like YeeLee as the DY is very low. In another words, the management is not rewarding shareholders enough. To us, we are happy to invest in YeeLee even though the DY is low. This is because YeeLee is a maturing growth stock and the management is using the companies funds to grow the business continuously but at the same time, declared a minimal dividend as a token sum for investors who stayed on with them. This to us, is acceptable corporate decision.

4. DIGI (Blue Chip) :

One of the most well run company in KLCI, it has been consistently paying good dividend to shareholders for the past 10 years. Even last year, when most Telcos were suffering, DIGI manage to maintain 4% Dividend Yield for investors on top of capital gain for those who entered around RM4.40 with us in mid of 2016. Today it is RM5.10. The company has a 100% dividend payout policy from their profits and shareholders who like dividend yielding counters absolutely love DIGI. This is also among the many reasons why DIGI is considered a Blue Chip company. DIGI is considered a mature, stable business with strong recurring income. Whatever growth there is to the company, it would be minimal. In order to attract investors to invest in the company, it gives good dividend yield. Additionally, it is because DIGI can do it due to their steady and strong balance sheet.   

5. Poh Huat (Growth + Good Dividend Stock) :

The furniture sector has been very hot for the past few years. This is largely due to their export nature in the business as well as the beneficiary from weak MYR. The annual growth of local Malaysia furniture companies has also been extraordinary due to increasing labour cost in China, resulting in shift to Malaysia. The reputation of good quality furniture from Malaysia internationally also helped the sector. As a result, a company like Poh Huat have been defying slow economy to grow YoY and QoQ while giving good Dividend Yield to investors to the counter. Many other notable investors have done a write up on Poh Huat. We were quite late to the game as we only invested when it was at RM1.73. Today it is RM1.96. We believe the company will continue growing with the primary market being US whose housing market has been resilient and income derive in USD. Poh Huat is one of the few companies in KLCI like LiiHen which is showing good growth and still giving good DY.  

Conclusion :-

Dividend is an integral part of investing in the market. While not everyone like dividend stocks as part of their portfolio, one cannot deny the beauty of having to collect dividend annually.

We hear many stories of those who bought Public Bank 20-30 years ago living off purely on the dividend distributed by Public Bank every year. This is a success story of dividend investing. We also hear many who made more money through capital gain of the shares instead of dividend yield, like for the past few years, those who invested in export driven stock at the bottom then selling at the peak.

Regardless what kind of investment choice, choose the investment strategy that one is most comfortable with, For us, we are very happy to invest in strong fundamental stocks with good dividend yield / growth prospect.

Please note that I respect all investment styles and in no way saying one method of investing is better than another. I know that everyone has their own preferred method and that is what makes the market interesting. Diversity. 

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