Wednesday, August 20, 2014

Not Muhibah

Muhibbah came out and clarify that they are not related to the company, Syarikat Muhibah Perniagaan dan Pembinaan Sdn Bhd which was involved in the MRT project which had caused several fatalities.

Have not really heard of the Muhibah contractor but the recent number of accidents seems to point to something is wrong in our selection of contractors.

Jobstreet's revised sale price to RM1.89b

Just yesterday, Jobstreet announced a revision in its sale price to Seek which below is self explanatory.


The special dividend hence is being revised to RM2.62.

One should note the following:

- post dividend distribution, the Net Asset value of Jobstreet will still be around RM0.40 per share;
- the sale has yet to be approved by Singapore's anti-competition body. Expected decision to be before 31 October 2014.
Whether I am confident of the approval? I would say yes, although this is taking longer than expected. Nevertheless the longer approval is a blessing in disguise as this allows change in purchase price by Seek.com.

Remember my article on undervaluation of Jobstreet by Seek.com. This seems to be a reprieve.

Tuesday, August 19, 2014

Parkson's sale of KL Festival Mall

The sale of KL Festival Mall does seem weird as it is to my understanding that one of strategy of Parkson sealing its future moves of reducing the risk of increasing costs of rental rates is to own those malls directly. However, it seems that its sale of the Mall is like taking the other direction. However, based on the rationale for the sale, it seems that it does make sense.


With a smaller mall, it is probably harder to be part of the town planning. If one look at how Aeon Malaysia does it, they do it very well. Usually, the township planning comes with a medium to larger sized mall and brands like Parkson, Aeon or even Giant or Tesco will provide added value to the township. The KL Festival Mall is on already a matured township and it is harder for Parkson to grow from there. Developers would want to work with shopping mall operators to build the township and I think Parkson's move may still be a step towards the right direction.

In searching for Parkson's strategy moving forward, I have added the article here.

Saturday, August 9, 2014

Making sense of capital expenditure

I am sorry that I love to look at how sometimes accounts can or MAY be manipulated. Just looked at some of the companies again (hmmm...) Bright's rights issue. Sometime around last year, it announces something like this. I had some of my opinion here although it may not be relevant to what I am trying to highlight in this article.

The company announced the rights issue and mentioned how some parts of its cash from rights are going to be used (as below). It does say that RM11 million of it is going to be used for ERP system.


Usually a RM11 million ERP system will take months if not years to complete. And payments are not made in one lump sum but in staggered basis over the period of completion. However see below. The rights was completed in 23 January 2014 and RM36.9 million was out by 28 February 2014 - in about 1 month. And as I said, ERP system (RM11 million system that is) hardly can be completed within a month. Could it be that payment for ERP is already fully completed? How efficient is the payables department...


Does this warrant further checks? Note that the current auditor - Bakers Tilly - is withdrawing and to be replaced with UHY.

Note: I am not saying that the company is doing anything wrong, but some of the figures and how things are done is really tickling my mind!