Dear Friends of i3 Forum,
Sasbadi came to our attention due to some strong fundamentals
1) Sasbadi Fortune is Turning Around
See this latest QR table of Sasbadi
SUMMARY OF KEY FINANCIAL INFORMATION
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INDIVIDUAL PERIOD
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CUMULATIVE PERIOD
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CURRENT YEAR QUARTER
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PRECEDING YEAR
CORRESPONDING QUARTER |
CURRENT YEAR TO DATE
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PRECEDING YEAR
CORRESPONDING PERIOD |
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30 Nov 2018
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30 Nov 2017
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30 Nov 2018
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30 Nov 2017
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$$'000
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$$'000
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$$'000
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$$'000
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| 1 | Revenue |
30,508
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27,514
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30,508
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27,514
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| 2 | Profit/(loss) before tax |
6,633
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3,586
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6,633
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3,586
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| 3 | Profit/(loss) for the period |
4,382
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2,381
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4,382
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2,381
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| 4 | Profit/(loss) attributable to ordinary equity holders of the parent |
4,382 (14.3% profit)
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2,381
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4,382
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2,381
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| 5 | Basic earnings/(loss) per share (Subunit) |
1.05
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0.57
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1.05
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0.57
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| 6 | Proposed/Declared dividend per share (Subunit) |
0.00
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0.00
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0.00
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0.00
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AS AT END OF CURRENT QUARTER
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AS AT PRECEDING FINANCIAL YEAR END
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| 7 | Net assets per share attributable to ordinary equity holders of the parent ($$) |
0.3700
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0.3600
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Revenue increased by 10%
Profit jumps by 94% from 0.57 sen to 1.05 sen
NAV also increased slightly
Will this strong growth of EPS be sustainable?
Yes.
2) VERY STRONG GROWTH IS POSSIBLE DUE TO 3 REASONS
i) Tun Dr. M propensity towards education. If fact after the election Tun Dr M wanted to be the Education Minister. But as it turned out someone else took that position. But that did not deter him. Why
ii) Because Education got the Lion Share of the PH Budget
Budget 2019: RM60.2 billion allocated for schools and education
KUALA LUMPUR: The Education Ministry will receive RM60.2 billion under
Budget 2019 – the biggest allocation ever in the federal government’s
spending plan.
Finance Minister Lim Guan Eng yesterday announced that RM652 million is allocated for all school types in the country.
Prime Minister Tun Dr Mahathir, who wanted to become the Minister of
Education before but was not allowed, said that the huge RM60.24 billion
allocations for schools and education by PH are due to the fact that
the future generation needs to have more knowledge.
He said the government has prioritised education to prepare students to face the future.
“Education is extremely important.
“I wanted to be Education Minister, but they didn’t allow me to,” he joked.
Dr Mahathir stressed that the knowledge field has changed considerably and that nowadays students need to learn more things.
3) Education is important because Malaysia must upgrade itself
from a low cost labour intensive economy to one that is high knowledge
& high skill.
Japan, China, Korea, Singapore's GDP have gone up 3X to 5X more than
Malaysia. Only by Knowledge (know how) can Malaysia catch up. So
education is not an option but a neccessity.
And if just 10% of the Rm62 Billions go into more Printed or Digital
Books that means Rm620 Millions new orders. If 20% that would be a
Whopping Rm1.24 Billions Revenue for all Publishers. The cake is big
enough for all
3) EDUCATION is Non Cyclical & Recession Proof
No matter how bad times are our children still go to Schools.
In Subang people convert homes into multiple rooms for students.
In Germany the Singapore Govt invested in Student Accommodations
Why? Because this business is Recession Proof
So Sasbadi is in a recession proof business.
4) At 21.5 sen with NTA of 37 sen Sasbadi is selling at 42% discount to NTA
There is now a huge margin of safety as price has fallen to very attractive level
5) SASBADI IS NOW A BUY LOW CLASSIC OPPORTUNITY
EPF first reported its entry purchase at Rm2.60 to Rm2.70 for Sasbadi
After Capital Exercise Two for One Split & One for Two Bonus
EPF holding cost is 90 Sen
Now EPF is disposing Sasbadi at 21.5 sen for more than 75% discount.
EPF loss will be the gains of those brave enough to buy at near Rock
Bottom
Last time EPF suddenly sold down Ajiya to Rm1.25. Both my Johor Sifu
& Johor buddies bought. Ajiya later powered to over Rm4.30 &
split - making my Johor Sifu Rm1.5 Millions
Another thing to note is Director's purchase price
See
| MR LAW KING HUI | 09-Feb-2018 | Acquired | 500,000 | 0.470 |
 |
| MR LAW KING HUI | 07-Feb-2018 | Acquired | 400,000 | 0.493 |
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| MR LAW KING HUI | 06-Feb-2018 | Acquired | 300,000 | 0.553 |
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| MR LAW KING HUI | 26-Jan-2018 | Acquired | 300,000 | 0.583 |
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| MR LAW KING HUI | 25-Jan-2018 | Acquired | 404,700 | 0.591 |
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| MR LAW KING HUI | 24-Jan-2018 | Acquired | 142,200 | 0.600 |
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| MR LAW KING HUI | 22-Jan-2018 | Acquired | 50,000 | 0.600 |
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| MR LAW KING HUI | 19-Jan-2018 | Acquired | 303,100 | 0.600 |
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| MR LAW KING HUI | 30-Aug-2017 | Acquired | 105,000 |
0.804 |
Insider buying price after ex-bonus ranges from 47 sen to 80 sen
So at 21.5 sen we are buying at a Huge 50% to 74% Discount!
So far so bullish
Now what are the downsides?
1) The profit of Sasbadi depends on Govt Tenders which are fixed in prices. But cost of production is not. If newsprint & ink price go up then Sasbadi will make less profit. If paper prices spike up too high then Sasbadi night even incur a loss.
However, Sasbadi can ask for a higher price since tender process is year by year or semester by semester.
2) With the sanguine management (Directors are fully aware of the Rm60.2 Billions : please note IT IS RM60.2 BILLIONS and not Rm60.2 Millions) And Rm60.2 Billions is about the cost of High Speed Rail which was postponed.
So Directors have gone into added production & pile up even more inventories due to glowing prospects
Now if there is cash flow constrain Company might go into borrowings or even issue RI to raise capital
3) EPF entrust the selling or buying of shares to outsourced entities. So there in no certainty whether EPF will continue to sell down Sasbadi shares or start buying back again.
So there are positives and there are negatives about Sasbadi.
I cannot say buy or sell for you
You have to decide with this information
Good luck
Best Wishes for All in Year 2019
Calvin Tan
Jurong West, Singapore
https://klse.i3investor.com/blogs/www.eaglevisioninvest.com/191565.jsp
