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Shares : Chart Pattern Part 1

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Based on request, not all of us would know how to read financial statement or annual report from the Corporate, after all, it is full of figures and amount everywhere. For those who know how, it is a plus for them.  With the financial statement, though it would not translate the meaning of the shares prices up and down, it is certainly safer for investors to invest a profitable corporate much more worth then invest a net-loss making corporation.

For shares chart, there are general rules or guidelines to be determined to avoid mistake on "buying" the shares, and "trading" the shares. 'Buying' shares mostly mean, we keep for quite a long time especially shares with dividend. While 'trading' shares definitely buy and sell within months that usually would not be kept and not to be hold for years.

Let's have a look :

1. The Industries Behavior. Selection shares based on Industry Performance.
Knowing the industry sector in chart would give us a genera…

Digistar Corporation Bhd

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Digistar Corporation Bhd, has tried their best to stay positive on the net profit before tax. The financial statement could be fluctuated up and down with uncertainty.

It does not look too well on the Trade Receivables made up a huge amount for the Non-Current Assets, while the Inventories made up of huge unsold completed properties. The corporate might have a lot of different type of nature of business, however, the net profit before tax does not seem to make such impact as finance cost is making the move.

Overall Performance : The corporate would give us the big shock either huge net profit or huge net loss in coming years. This corporate definitely require strict monitoring for a stressful environment.



 Latest Annual Audited Accounts最新年度财务报表30.09.2016 01. Gross Profit Margin more than 15%
     毛利率超过15% Yes  02. Net Profit before Tax more than 5%
     除税前溢利率净额超过5%  Yes  03x. Dividends on Ordinary Shares over Comprehensive Income
    普通股股息占综合收益表
None 04x. Retained Earnings 保留溢利  Yes  0…

Ajinomoto Malaysia Bhd

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Ajinomoto Malaysia Bhd, has made an impressive current ratio of over 4.0 for years, while Revenue is no doubt increasing yearly most of the time.

GP Margin has stay above 35% for years, while fast cash flow provide a better view which stay positive and great for years.

Overall Performance : By looking at the financial statement, monitoring and managing has put such a great impact on this corporation. Steady Revenue, steady profits, steady cash flow and good current ratio.

 Description 叙述 Latest 最新财务报表 Current Assets more than Fixed Assets
流动资产 超越 固定资产 Yes 是 Current Ratio more than 1.50 流动比率超过1.50
 偿付短期债务能力的一个指标 Yes 是 Net Profit before Tax 除税前溢利 Yes 是 Fast Cash Flow Positive 正面快速现金流转 Yes 是 Cash and cash equivalents over Current Assets 现金及现金等值项目占总流动资产 62% Trade and other Payable over Current Liabilities  贸易及其他应付款项占总流动负债 92% Retained Earnings 保留溢利 Yes 是 Biggest Turnover (Stock)  最长周转率时期(库存) 2.87 months 个月


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VisDynamics Holdings Bhd

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VisDynamics Holdings Bhd, has maintain GP Margin above 40% while the net profit mostly eaten up by Admin expenses that ends up as net losses at the end. Although fast cash flow and current ratio is good to look at, however, this corporation has a lot of inventories value accumulated at Raw Materials and Work in progress level.

Performance : There would be some few issues, that related in each other from the production, inventories, and lastly the revenue sales almost depends on the production rather than fixed sales target. Not forgetting the net profit does not come easily.


 Description  Latest  Current Assets more than Fixed Assets  Yes  Current Ratio more than 1.50 No Net Profit before Tax  No Fast Cash Flow Positive  Yes  Trade Receivables over Current Assets4.63% Trade Payables over Current Liabilities    18.54% Biggest Turnover (Stock)   18.47 months


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Prestar Resources Bhd

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Prestar Resources Bhd, has maintain GP Margin between 9% - 12% so with Net Profit before taxation that's below 4%.

Performance :  Although there are improvement on fast cash flow and current ratio, the expectation of this corporation would be definitely slow and patient due to it's GP Margin and Net Profit Margin.


 Description  Latest  Current Assets more than Fixed Assets  Yes  Current Ratio more than 1.50 No Net Profit before Tax  Yes Fast Cash Flow Positive  Yes  Trade Receivables over Current Assets43.29% Trade Payables over Current Liabilities    15.79% Biggest Turnover (Stock)   3.40 months


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Bursa Malaysia Bhd

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Bursa Malaysia Bhd, has stayed in the positive ground, with net profit before tax.
Current Ratio is below 1.50 and fast cash flow is positive.

Performance : Cash and bank Balance is dropping, so with the current ratio.  
Still it is not that attractive when comes to the current ratio heading downwards towards 1.0



 Latest Annual Audited Accounts最新年度财务报表31.12.2015 01. Gross Profit Margin more than 15%
     毛利率超过15% Yes 是 02. Net Profit before Tax more than 5%
     除税前溢利率净额超过5%  Yes 是 03. Retained Earnings 保留溢利  Yes 是 04. Current Assets more than Fixed Assets
流动资产 超越 固定资产
Yes 是 05. Current Ratio more than 1.50 流动比率超过1.50 
          偿付短期债务能力的一个指标
No 否 06. Fast Cash Flow Positive 正面快速现金流转Yes 是 07. Inventory (Stock) Turnover 存货周转时期 N/A 08. Debtor (Customer) Turnover 客户周转时期 N/A 09. Creditor (Supplier) Turnover 供应商周转时期 N/A


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7 Simple Steps for Shares Selections

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There would be a lot of articles out there to give you guidelines on how to select shares. Perhaps you are not even care about it until you starts to ask people around. In my recommendation, here are the seven (7) simple steps for shares selections.

1. Company should makes a reasonable Profit Margin. 
This is a very simple fact for everyone to understand. In order to get the fast fact, gross profit margin and net profit margin is used to determine the strength of the profit in that company. For example Gross Profit Margin should at least 20%, Net Profit Margin be should at least 10% for comfortable believe that it's really making a profit higher than EPF average 6% yearly dividend.


2. Company that pays a reasonable dividend rate over annual Profit.
Even though these companies with dividend surely could afford to pay the dividend, do they really make a reasonable Profit Margin as stated above?


3. Company that Big Corporate has interested in. 
This is a very simple step to follow as …