My respond to Mr. Phillip Fisher

Dear Mr. Phillip Fisher,
I am surprise, honor and at the same time humble by your interest on me and you had looked into my comment and found out that INSAS is my biggest and favorite stock. Like you I attend INSAS AGM year 2017 and 2018, getting to know the board and even have a personal meeting with the newly appointed CEO Dato’ Wong. So please allow me to clarify some of your misperception about INSAS

The facts on INSAS are as follow:
INSAS is a founding shareholder of Inari 11 years ago and its original 51% equity interest in Inari has been diluted over the years primarily due to its IPO in 2011, the subsequent capital raising exercises carried out by Inari to raise funds to expand and grow its businesses and part disposal of the Inari shares by INSAS. INSAS as an investment holding company had on a prudent basis disposed of some of the Inari shares to realise capital profit. Notwithstanding the disposal of some of the Inari shares, the value of the Group’s remaining shareholding in Inari is still significant.
 

At 30^th June 2018 INSAS NTA RM 2.49 and refer page 107: ASSOCIATE COMPANIES (Inari, Ho Hup, Melium, Winfields and other) book value RM 357,628,000 and market value of Associate companies quoted in Malaysia alone is RM 1,376,569,000. Inari closing at 30^th June 2018 is RM 2.28. Even with today Inari closing price of RM 1.27 the market value is still way above the book value.

1. Values:

1. INSAS hold 19.1% or about 600 million of Inari share hence Inari alone contribute value of about 0.91 X (Inari share price) per INSAS share.
2. CASH AND CASH EQUIVALENTS COMPRISE OF:
   Cash and bank balances RM 103,763,000
   Deposits with licensed banks and financial
   Institutions RM 572,703,000
   Total RM 676,466,000. Contribute value of about RM 1.02 per INSAS share.
3. Receivable RM 376,481,999 mostly under secured loan given to client by INSAS credit & Leasing (“ICL”) ICL, an interest earning receivable. Contribute value of about RM 0.57 per INSAS share.
4. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (RM)
   Quoted securities, at market value
   - in Malaysia 57,744,000
   - outside Malaysia 178,818,000
   Total 236,562,000. Contribute value of about RM 0.36 per INSAS share.
5. Non-current assets (Excluded associate book value of RM 357,628,000) are RM 437,426,000. Contribute value of about RM 0.66 per INSAS share.
6. Other current assets (Exclude: B, C and D) RM 136,637,000. Contribute value of about RM 0.21per INSAS share.
7. Total liabilities (Include Preference shares) RM 565,234,000. Contribute value of about negative RM 0.85 per INSAS share.
8. INSAS other subsidiaries exclude Inari RM Z million. Contribution value of about RM Z/663 per INSAS share.

Grand total value of INSAS share is A+B+C+D+E+F+G+H = (0.91Inari+1.02 +0.57+0.36+0.66+0.21-0.85+ Z/663 )=(0.91Inari+1.97+Z/663). Of which A, B. C and D are all liquid assets. So just A alone of 0.91 Inari is good enough reason for me to buy INSAS instead of Inari at the current price.

 

2. Profit visibility (Year 2018 annual report)

1. Inari is associate company of INSAS hence there is no Q to Q fair value loss/gain only equity accounting of Profit/Loss of Inari (19.1%). Inari report FY 2018 profit of 233.6 million and INSAS equity account profit of 44.48million and received dividend cash inflow of 40.15 million. Note: Every one cents dividend received from Inari is about 6 million cash inflow to INSAS.
2. Similarly Ho Hup is 12.2% associate company of INSAS. FY 2018 Ho Hup Profit 31.8 million and INSAS equity account profit of RM 3.87 million.
3. The total interest income earned by ICL from the money lending business for FY2018 is RM 23.0 million.
4. M & A securities still profitable in broking services and advisor services for new IPO.
5. Property investment mainly vacant land hold for development and properties hold for own used or for rental income still profitable.
6. Car rental (Mostly corporate long lease) make small profit of RM 242,000 but retail business share of Melium Groups losses of RM 3.1 million.
7. Investment holding and trading: As of 30 June 2018, the Group’s investments in listed equities are primarily in the properties, technology, consumer products and financial services sectors in both local and overseas stock exchanges, and the key equity investments include, amongst others, IGB REITS, Ho Hup Construction Company Berhad, Omesti Berhad, SYF Resources Berhad and Oversea-Chinese Banking Corporation Limited. Dividend received RM 9,383,000.These Investment Holdings will need to make Q to Q fair value gain or loss.

Beware I was warned that people said no body point the gun to your head to buy a share and you need to judge by yourself. However, some very experience blogger can use a lot of convincing/manipulated points/story to lure you to buy into their shares or vice versa. In i3 the most famous manipulator is PLP king “You-Know-Who” the fake accountant hoodwinked many people with JAKS vision 2020 Vietnam IPP game changer and promoted JAKS day and night and encourage people sailing/all in with margin finance and PLP Mr. Koon to push the JAKS price up many rounds to as high as RM 1.80 and he profited from it again and again. The rest is history.

With respect and no offend, but suddenly when someone comes from nowhere and starts talking about his perfect record of 4 out of 4 and his perfect business sense and timing on QL like professor. I am of skeptical view that something so seeming too good to be true must have something wrong into it hence my advice do not chase high as I have the same view with Ricky Yeo that QL is overvalue. Let me read through the financial report of QL this week end and I will make my case why QL is over value. Till then

Thank you
P/S:
Link to INSAS 56^th AGM minutes:
https://klse.i3investor.com/blogs/Sslee_blog/184263.jsp
http://www.insas.net/pdf/img-20181226.pdf
http://www.insas.net/pdf/img-20181226-2.pdf

https://klse.i3investor.com/blogs/Sslee_blog/188711.jsp