InvestIdeas

2014 M'sian market movers

PETALING JAYA: Low-profile businessman Datuk Dr Yu Kuan Chon made a big mark on the market in 2014 as two of the stocks he invested in turned out to be top performers.

Hong Leong Capital Bhd (HLCap) topped the list as the stock that rose the most by price last year, jumping RM3.92 or 40% to RM13.72 in one year.

Recall that Yu had aggressively bought into HLCap in early 2013 and in the process stalled the privatisation of the financial institution by its major owner Tan Sri Quek Leng Chan for RM1.71 apiece. HLCap was also the top performer in 2013, gaining RM8.51 in its share price that year.

Yu held as much as 8.96% in HLCap in 2013 but subsequently, pared down his stake to 4.77%, which is worth some RM162.3mil currently.

The other top performing stock for 2014 that is associated with Yu is Pan Malaysia Holdings Bhd (PM Holdings).

In November, Yu bought 69.2% or 642.7 million shares in PM Holdings from Malayan United Industries Bhd, controlled by Tan Sri Khoo Kay Peng.

Yu paid RM77.1mil or 12 sen per PM Holdings share but is now sitting on a massive paper gain – the stock rose 49 sen at yesterday’s close, valuing Yu’s block at some RM283mil. PM Holdings has risen some 593% year to date.

Source: The Star

Dr Yu's new target BY: TEE LIN SAY

Property developer turned investor said to be eyeing stake in Imaspro

PETALING JAYA: Datuk Dr Yu Kuan Chon, who has carved a name for himself in taking up strategic stakes in little-known companies, is once again on the prowl. His target this time around is Imaspro Corp Bhd, according to sources.

It is learnt that Dr Yu, whose flasgship company is property developer YNH Holdings Bhd, has already started accumulating minority stakes in the company and is looking at acquiring more interest in the company from some shareholders who are exiting.

Among the shareholders who have been reducing their interest in Imaspro include its non-executive chairman Mohd Shafek Isa. Filings with Bursa Malaysia show that Shafek has been steadily disposing of his shares since early March. From a 21.49% stake on March 4, he now has a 10.28% stake or 8.22 million shares in the company via his vehicle Sunbina Dunia Sdn Bhd.

Shafek has been selling the shares in tranches, in prices ranging from RM1.30 to RM1.50.

Dr Yu made his mark in the corporate scene where he emerged as the second largest shareholder in investment bank – Hong Leong Capital Bhd (HLCap) – that was a subject of privatisation by its parent company, Hong Leong Financial Group Bhd (HLFG) at RM1.71 per share. HLFG failed to get the required shares for it to take HLCap private because Dr Yu had accumulated close to 8.96% of the investment bank.

Last year, Dr Yu emerged in PM Holdings Bhd and Rapid Synergy Bhd with stakes of 20.99% and 5.33% respectively. He has proposed to increase his stake in PM Holdings.

This came about in November last year when Dr Yu proposed to acquire a 69.2% or 642.7 million shares in PM Holdings from Malayan United Industries Bhd, a company controlled by Tan Sri Khoo Kay Peng. Dr Yu is proposing to pay RM77.1mil or 12 sen per PM Holdings share. Upon completion of the sale, Yu, together with persons acting in concert with him, will increase his interest in PM Holdings from 5.33% to 74.52%.

Executives close to Dr Yu said he was keen on Imaspro because it had cash backing per share of about 64 sen each and a stable business in supplying fertilisers.

“Dr Yu feels the company is cheap. The company’s business is more or less on auto-pilot, and it also has that a cash pile of RM51.32mil,” said the executive.

A big hint of Dr Yu’s entrance arose when Chan Weng Fui, who is his close associate, was appointed as independent and non-executive director of Imaspro on Dec 4.

Dr Yu is known to work closely with Chan in past transactions. Chan has also invested in Rapid Synergy Bhd and Pan Malaysia Holdings Bhd, companies where Yu has taken major stakes Meanwhile, the single largest shareholder of Imaspro is Swiss Revenue Sdn Bhd, which is the investment vehicle of Imaspro’s managing director Tong Chin Hen.

Imaspro’s shares have risen from RM1.20 in early March to close at RM1.59 as of yesterday.

Despite the 23.2% year-to-date increase in its share price, the stock still only has a market capitalisation of RM123.2mil. At RM1.54, the stock is trading at a price earnings ratio of 14.22 times. The company regularly pays dividends and its yield is currently 2.27%.

For the second quarter to Dec 31, 2014, Imaspro’s net profit was down 7.72% to RM2.44mil on the back of a 9.35% decrease in revenue to RM25.36mil.

For the six-month period, net profit was down 10.1% to RM4.28mil on the back of an 11.04% decrease in revenue to RM44.14mil.

Dr Yu is the chairman of YNH and is its second largest shareholder with close to 15.8%. The Perak-based property developer’s prime parcel of land that has yet to developed is located along Jalan Sultan Ismail.

Source: The Star

Poser over Dr Yu’s interest in Imaspro

BY: TEE LIN SAY


Pesticide, fertiliser maker has strong cash pile of RM51mil

SO what is Datuk Dr Yu Kuan Chon’s interest in little known pesticide and fertiliser manufacturer and distributor Imaspro Corp Bhd this time?

Dr Yu’s entry into a stock is not to be taken lightly, mainly for two reasons. First and most obviously, he is seen as a savvy investor, and his entrance into a stock typically causes the share price to rally. (Imaspro’s share price rose 12% to RM1.78 on news of Dr Yu’s entrance).

Secondly, Dr Yu is seen to be a long-term investor who has done his homework, and sees value or potential that others have yet to see.

Over the last two years, Dr Yu has carved himself a solid name as an astute investor.

While Dr Yu was already a respectable figure as chairman and major shareholder of Perak-based property developer YNH Property Bhd, he consolidated his position as an investment figure when he became the second largest shareholder of Hong Leong Capital Bhd (HLCap).

He blocked the privatisation of HLCap by its major shareholder Hong Leong Financial Group Bhd, the ultimate shareholder of which is Tan Sri Quek Leng Chan.

Last year, Dr Yu emerged in PM Holdings Bhd and Rapid Synergy Bhd with stakes of 20.99% and 5.33% respectively. He has proposed to increase his stake in PM Holdings.

Upon completion of the sale, Dr Yu, together with persons acting in concert with him, will increase his interest in PM Holdings from 5.33% to 74.52%.

Over the week, it was learnt that Yu had started accumulating minority stakes in Imaspro and is looking at acquiring more interest in the company from some shareholders who are exiting.

Among the shareholders who have been reducing their interest in Imaspro include its non-executive chairman Mohd Shafek Isa. Filings with Bursa Malaysia show that Shafek has been steadily disposing of his shares since early March. From a 21.49% stake on March 4, he had a 10.28% stake or 8.22 million shares in the company via his vehicle Sunbina Dunia Sdn Bhd as of March 23.

Then on March 24, he ceased to be substantial shareholder of the company after selling a further 3.53 million shares of his company at a price of RM1.70.

Shafek has been selling the shares in tranches, in prices ranging from RM1.30 to RM1.70.

Executives close to Dr Yu said he was keen on Imaspro because it had cash backing per share of about 64 sen each and a stable business in supplying fertilisers and pesticides.

“Imaspro is the only Malaysia company whose Glyphosate product is of proven equivalent in the EU countries. This enables Imaspro to export to Europe. As a medical doctor, Dr Yu would appreciate the proven equivalent factor,” said the fund manager.

A big hint of Dr Yu’s entrance arose when Chan Weng Fui, who is his close associate, was appointed as independent and non-executive director of Imaspro on Dec 4.

Dr Yu is known to work closely with Chan in past transactions. Chan has also invested in Rapid Synergy and PM Holdings.

Why Imaspro?

The face and spirit of Imaspro has consistently been that of its managing director and founder, Tong Chin Hen.

Some people view Imaspro as a one-man show as Tong has more or less been solely responsible for the growth of Imaspro to becoming a leading exporting pesticide player in Malaysia.

Tong is known to fly across the globe every other week selling fertilisers and closing deals. Imaspro exports to 30 countries.

He has single-handedly led Imaspro to break new markets and increase its overseas presence despite growing protectionism in this segment. “He is very savvy and can talk to anybody. His networking in the international agrochemical business is very strong,” said the fund manager.

Tong is also the biggest shareholder of the company, and holds 40% in the company via his vehicle Swiss Revenue Sdn Bhd.

Business-wise, Imaspro is principally involved in the manufacture of pesticides and plant micronutrients, and the distribution, agency and trading of pesticides and other agrochemicals.

It has a further edge in the form of 277 product registrations in the domestic and overseas markets.

It is this 277 product registrations that has enabled Imaspro to secure new markets, particularly in the eastern European countries.

It also has a 43-acre research centre in Jasin, Malacca.

Imaspro was listed on Jan 20, 2008 at a price of 75 sen at a price earnings ratio of 7 times.

Thus, at Imaspro’s current share price of RM1.84, the stock’s share price has only appreciated 145% – and that’s after 7 years. Not exactly stellar.

The company’s earnings are stable. A check over the last five years show that the company consistently makes between RM6mil and RM9mil in net profits. The company has also been consistently paying 3.5 sen dividend every year over the last five years. The company has no gearing.

Cash pile

What has no doubt grown over the years is its cash pile. When it was first listed, it had some RM9.59mil in cash. Today, as of the second quarter to Dec 31, 2014, it has cash of RM51.32mil or a cash backing of 64 sen per share.

Some people feel that Dr Yu may have ideas on how to utilise that cash to fully unlock Imaspro’s value.

Since rumours of Dr Yu started circulating, the shares of Imaspro have indeed rallied.

Imaspro’s shares have risen from RM1.20 in early March to close at RM1.83 as of Thursday.

Despite the 44% year-to-date increase in its share price, the stock still only has a market capitalisation of RM147.2mil. At RM1.83, the stock is trading at a price earnings ratio of 16.99 times.

For the second quarter to Dec 31, 2014, Imaspro’s net profit was down 7.72% to RM2.44mil on the back of a 9.35% decrease in revenue to RM25.36mil.

For the six-month period, net profit was down 10.1% to RM4.28mil on the back of an 11.04% decrease in revenue to RM44.14mil.


Source: The Star

YU KUAN CHON is a 53-year-old medical doctor who gave up his practice to join the family business of precision tools, semiconductors and real estate.

He launched YNH Property in 2001 to build residential developments in Perak.

He’s fast expanding into high-end properties in Kuala Lumpur’s new residential clusters.

He owes much of his fortune, however, to some well-timed investments in profitable, well-run companies such as Quek Leng Chan’s (No. 3) Hong Leong Capital.

He’s increasing his stakes in other listed companies, such as agrochemicals outfit Imaspro and hotel, travel and financial company Pan Malaysia Holdings.

Source: Forbes

Yu gets extension to buy Pan Malaysia stake

PETALING JAYA: Datuk Yu Kuan Chon’s move to purchase Malayan United Industries Bhd’s (MUI) 69.192% stake in Pan Malaysia Holdings Bhd (PMH) has been extended again from March 12, 2016 to April 11, 2016 to fulfill the condition precedent to the deal.

According to an announcement to Bursa Malaysia yesterday, MUI was still awaiting the outcome of the application to the Securities Commission (SC) for a change in the controlling shareholder of PMH.

Without the SC approval, the condition will not be fulfilled, thus rendering the deal not being able to move to the next stage.

The intent to purchase the stake for RM77.12mil was first announced more than a year ago in December 2014.

The deal will see 642.7 million shares representing 69.192% of the issued and paid-up share capital of PMH change hands from MUI to Yu.

The proposed disposal was in line with MUI’s business strategy of divesting non-core assets and it was also in line with the company’s continuing efforts to reduce its borrowings, an announcement said earlier.

Yu is the major shareholder of YNH Property Bhd, a Perak-based property developer.

After being a substantial shareholder of Hong Leong Capital Bhd (HLCap) then, Yu shot into the limelight in 2013 for blocking the privatisation of HLCap by its major shareholder Hong Leong Financial Group Bhd, whose ultimate shareholder is Tan Sri Quek Leng Chan.

Source: The Star

Dr Yu’s elusive stockbroking deal

BY GURMEET KAUR

Source: The Star

http://www.thestar.com.my/business/busi ... king-deal/

Setback to Yu’s stockbroking dream

BY GURMEET KAUR

DATUK Dr Yu Kuan Chon’s failure to secure a controlling stake in Pan Malaysia Holdings Bhd (PM Holdings) has put an end, at least for now, to the businessman’s attempt at getting ownership of a stockbroking business.

Yu had back in late 2014 sought to buy the 69.192% stake in loss-making PM Holdings from Malayan United Industries Bhd, which, in turn, is owned by the once high-flying tycoon Tan Sri Khoo Kay Peng.

But last Wednesday, PM Holdings said the deal had been terminated without giving any explanation.

In March, StarBizWeek had speculated that the regulators may have had an issue with an individual like Yu coming into control of a stockbroking company, preferring an institutional outfit instead. It was then also reported that Yu was seeking to secure an institutional partner to strengthen his chances of securing the approval of the regulators.

Going by recent failed deals in the local stockbroking industry, it is possible that even that did not materialse, as the return on equity from the broking business has been trending downwards because of competition and a shrinking market.

But this doesn’t mean that Yu is likely to fade away from the limelight.

Recall that Yu, whose flagship is Perak-based YNH Property Bhd, is a savvy stock investor in his own right by taking up strategic stakes in little-known companies.

In early 2013, Yu aggressively bought into Hong Leong Capital Bhd (HLCap) and accumulated more than 8% of the stock, putting him in a strong bargaining position in relation to the planned buyout of the stock that is ultimately controlled by tycoon Tan Sri Quek Leng Chan of the Hong Leong group.

HLCap has been suspended from trading on Bursa Malaysia since March last year for failing to resolve its public shareholding spread after its privatisation attempt was stalled by Yu.

Bloomberg data shows that Yu still holds 3.61% in HLCap after paring down his stake periodically.

He reportedly made a tidy sum of RM70mil as HLCap’s stock price soared from RM1.42 prior to Quek’s takeover attempt in early 2013 to a record high of RM14.60 on June 17, 2014.

The stock was last traded at RM10.20 prior to its suspension.

HLCap is an investment holding company with subsidiaries involved in investment banking, stockbroking, fund management and unit trust management services. It is 81.33% owned by Hong Leong Financial Group Bhd (HLFG), which, in turn, is 65% controlled by Quek.

Sources say that a solution is being worked out at HLCap that would be a “win-win” for both parties, namely, Yu and Quek.

“The word in the market is that both sides have met to work out a solution for HLCap,” says an industry source.

While stockbroking is not seen as an attractive business these days, analysts note that HLCap has been gradually expanding market share in equity and debt issues, as well as in stockbroking.

AllianceDBS Research Sdn Bhd in a recent report noted that HLCap has seen its pretax profits increase almost four-fold since 2010 after establishing a full-fledged investment banking team in that year and completing the merger of Hong Leong Investment Bank and MIMB Investment Bank two years later.

However, its contribution to HLFG remains small at around 3%. The firm values HLCap at one times book value.

Compared with PM Holdings’ broking arm PM Securities, HLCap is much bigger and is also bank-backed.

For the fourth quarter ended June 30, HLCap made a net profit of RM6.82mil. This is down from the RM25.38mil net profit recorded in the same period before in tandem with the weak capital market.

With Quek’s ultimate plan to consolidate his banking and financial business under HLFG, minorities like Yu who had stayed invested in the stock could stand to benefit.

HLFG also owns 64.4% of Hong Leong Bank Bhd, which is listed.

The former recently obtained Bank Negara’s approval to start negotiations with certain parties for the disposal of its life insurance business, fuelling talk that this could be a precursor to more corporate exercises to come.

Industry observers speculate that HLFG could be privatised, with the banking arm, which is its main earnings contributor, taking over its listing status.

It’s uncertain for now whether a deal between Yu and Quek at HLCap will coincide with any group-wide corporate streamlining.

If it’s the case, then Yu could end up owning some shares in the merged entity, a seemingly lucrative opportunity, say industry observers.

As at April 20, 2015, Yu still had a 4.01% stake in PM Holdings, which he is likely to hold on too, say industry sources.

Source: The Star

http://www.thestar.com.my/business/busi ... ing-dream/

Dr Yu nibbles on banking stocks

BY GURMEET KAUR

According to sources, Yu has been accumulating shares of Hong Leong Financial Group Bhd (HLFG) and other stocks in the sector in recent weeks.

Yu, sources say, started accumulating shares in HLFG from around September and is looking to buy a block. The shares were then trading at around the RM15 level.

Besides this, the medical doctor-turned-entrepreneur is also believed to have accumulated shares of CIMB Group Holdings Bhd, Malayan Banking Bhd (Maybank) and Public Bank Bhd.

Bloomberg data shows that Yu still holds 3.61% in HL Cap after paring down his stake periodically.

He reportedly made a tidy sum of RM70mil as HL Cap’s stock price soared from RM1.42 prior to Quek’s takeover.

As for HLFG, it is seen as a stock that is poised for a privatisation under Quek’s ultimate plan to consolidate his banking and financial business under the banking group.

HLFG controls 64.4% of Hong Leong Bank Bhd (HLBB), which is also listed, besides 81.33% of HL Cap. It also owns 70% of Hong Leong Assurance (HLA) and 30% of MSIG Insurance. HLFG, in turn, is 65% controlled by Quek through Hong Kong-listed Guoco Group.

In recent years, Yu has made a name for himself by taking up strategic stakes in little-known companies. In March last year, he emerged in little-known-but-cash-rich Imaspro Corp Bhd with slightly more than 5%. He subsequently raised his stake in the pesticide and fertiliser maker, now owning 17.48% based on Bloomberg data.

He is also a substantial shareholder of semiconductor firm Rapid Synergy Bhd with 28.05% direct and indirect stakes.

Source: The Star

http://www.thestar.com.my/business/busi ... ng-stocks/

not vested

Three Dr Yu-linked counters top Bursa's losers list

By Chester Tay & Justin Lim

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/696825

Alternative Views: Rapid fall of Dr Yu’s shares shatters his invincible image

By M Shanmugam

Based on HL Cap’s latest annual report, Dr Yu still holds more than seven million shares in the company.

Another stock in which Dr Yu is a substantial shareholder, Imaspro Corp Bhd, was also sold down. But sentiment on the pesticide and fertiliser company has recovered for two reasons. The first is that unlike at YNH and Rapid, Dr Yu is not involved in its management. He is only a substantial shareholder with about 15% while Tong Chin Hen is the controlling shareholder with almost 50%. Second, Tong’s block of shares is unencumbered, meaning that it is not pledged to financial institutions and cannot be force sold.

Source: The Edge Malaysia

https://theedgemalaysia.com/node/698137