PAN MALAYSIA CORPORATION (4081) AN OVERLOOKED & VERY UNDERVALUED STOCK IN KLSE, MALAYSIA

There are 3 investment advice by Warren Buffett for would be investors (Investors, not gamblers or day traders. Remember? The poor and the very poor live from day to day. So are the day traders, who trade shares day in day out.  These are the 80% who eventually loose money.}

Rule No.1 NEVER TO LOOSE MONEY

Rule No. 2 TO REMEMBER RULE No. 1; THAT IS “NEVER TO LOOSE ANY MONEY”

And Rule No. 3?    Never heard of it?

TO BUY A STOCK THAT HAS A BOND NATURE. For SAFETY people keep CASH IN THE BANK. For SAFETY people buy SINGAPORE GOVT. BOND. Stock is too dangerous and violatile. Not if you KNOW WHAT YOU INVEST IN.

Actually, Stock Investment IS VERY SAFE IF YOU KNOW HOW. It takes INTELLINGENCE to MAKE MONEY IN THE STOCK MARKET. What kind of intelligence? BOTH MENTAL AND EMOTIONAL INTELLIGENCE.

Warren Buffett read “THE INTELLIGENT INVESTOR” by  Benjamin Graham and saw the light of day in all his future investment. From his Master Teacher Benjamin Graham he  learnt “margin of safety”.

He learnt how to identify shares of company with DEEP VALUE OR ASSETS to determine ITS INTRINSIC VALUE. TO BUY AND  HOLD UNTIL ITS VALUE EMERGES. SOMETIMES IT TAKES MANY YEARS AND EVEN DECADES FOR THE VALUE TO EMERGE.

For the VERY SUCCESSFUL INTELLIGENT INVESTORS Stock  Market  Investing Is For The Most Part Very Dull.  Like planting a durian tree and waiting for its fruit. It might take years of patience.  In a word “FORTITUDE”‘

Over the years he found such shares like COCA COLA, McDONALD, PROCTOR & GAMBLE, GENERAL ELECTRIC, GILLETE SHAVING BLADE, WALT DISNEY,  BERKSHIRE HATHAWAY & SEE’S CANDY.

SEE’S CANDY? This wonderful  chocolate company that gave him a compounded growth of 0ver 20% year after year, beating Benjamin Graham’s 15% performance!  Candy (chocolate) is addictive and also recession proof. So he bought HERSHEY, then CADBURY, then  VAN HOUTEN chocolate.

Why? Chocolate is an inexpensive luxury! It also give a High Profit Margin (Up to 50%). It  is also an addictive luxury. As someone says “LUXURY ONCE ENJOYED BECOMES A NECCESSITY”.

 

Let Us Introduce You To A CHOCOLATE COMPANY with Margin  of Safety & Powerful Potential.

PAN MALAYSIA CORPORATION (4081) is classified under CONSUMER in the KLSE. Very few people know that IT IS ACTUALLY A MALAYSIAN CHOCOLATE COMPANY. If fact they mistook it for PMI or PM Capital who both went into PN17.   PM CORP is actually a Golden nugget in the midst of valueless sand as you shall see.

In the latest Quarterly Report PM CORP again reported a profit {this makes it total 5  quarters of turnaround in profits).

The majority of the investment public does not know due to  the following negative perception:-

1) The Company has been bleeding losses for many, many years. In 1980 it was traded at a high of RM13.00.  At that time it was called Associated Pan Malaysia Cement Works (PMCW).

In 1999 it assumed the present name of PAN MALAYSIA CORP after having sold off the Cement Plant for over RM700 Million Cash. The bulk of  Cash has been invested in Quoted & Unquoted shares.

SOME OF THE QUOTED SHARES ARE;

  • PM CAPITAL
  • PM HOLDINGS
  • MUI PROPERTIES
  • MUI BERHAD
  • JOHAN (Just sold for over RM5 Million Cash)
  • BANK OF EAST ASIA (HK) which own AFFIN BANK (23%)  (ALREADY SOLD OFF For Over 40% gain)
  • MANY OTHERS.

 

UNQUOTED SHARES

PM CORP own the franchising Rights of LAURA ASHLEY for South America. Investment was RM3 Million. Now the current Value  is RM6 Millions. You won’t know this piece of news unless you attend the Share Holders’ Meeting. The next AGM is on 26th  June 2013. To be held in CORUS HOTEL – Port Dickson.

Additional Good News (Latest Update 27th June 2013)                                                                                 No.1) Profit of 3 Million from Laura Ashley is in US Dollars, not ringgit  ; redeemable by 2015 (50%) No.2) MUI bought PNB 4% Shares through private deal at 12 – 13 cents per share.                                        No.3) There is a proposal in Share Capital Reduction in order that the Company can then exercise treasury shares distribution to shareholders or payment in cash. This is bad news for speculators BUT DEFINITELY GOOD NEWS FOR LONG TERM INVESTORS OF PM CORP!

PENDING:                                                                                                                                                                                 1) Change of Name from  Pan Malaysia Corporation to NETWORK FOOD INDUSTRIES.                                      2) Tangling View Penthouse (Current offer is S$3.5 Million. Company still waiting for higher price.)

Corus Hotel PD is a very beautiful place. And the Directors & Supporting Staff have done an excellent job in turning PM Corp profitable for the last 5 quarters. Keep up the good work!

The Total Investments are around RM90 Millions.

 

THE ABOVE IS THE FIRST  MARGIN OF SAFETY. PMC has Diversified Investments in many other Companies.

 

VERY VALUABLE PROPERTIES IN HOT, BOOMING REGION BOUGHT AT ROCK BOTTOM PRICES During The Asian

Financial Crisis in 1999.  Prices that have NOT YET BEEN REVALUED. This is the 2nd Margin of Safety.

PM CORP’S PROPERTIES ARE:

  • One Apartment Factory in Hong Kong
  • One and a half Acre  Factory in W.oodland, SINGAPORE (Sold to Sing Long for RM38.18 Million, originally bought for RM14 Million:  A huge profit  of RM24.18  Million}
  • One Penthouse Condo in Orchard Road (S’pore) called “TANGLIN VIEW bought in 1999.  Book value RM2.7 Million.
  • (Current Market Value RM7.5 Million}
  • One Semi Detached Factory in Iskandar Johor
  • 3 Factories In Shah Alam. One of them has a 6 acres Main Road Fronting Prime Land.
  • Another Investment Building In Shah Alam
  • One Factory in PENANG.

As you can observe 2 things. The properties were bought at ROCK BOTTOM PRICES  just after the Asian Financial Crisis in 1997 -1998.  Never been Revalued.

The Company NTA is 44 cents.  Since they are LOCATED in the WORLD’s HOTTEST PROPERTY BOOM AREAS: HONG KONG, SINGAPORE, ISKANDAR, SHAH ALAM & PENANG PRICES HAVE DOUBLED, TRIPLED QUARTRUPLED – EVEN SOME HAVE SHOT  UP AS HIGH AS 1,000%!!!   How then can the NTA (Net Tangible Asset) be 44 cents! It should be at least doubled to 88 cents at the very least.

THIRD LINE OF DEFENSE AGAINST LOSSES (OR MARGIN OF SAFETY}

In the Latest Report PMC CASH POSITION is RM89,077,423. Bank Borrowing has been further pared down to  RM6,582,000. After deducting Debt From Cash,  PMC  has a CASH HOARD of RM82,495,000.

With the RM38.18 Million Cash From Woodland Factory Sale to Sing Long, there is a CASH POSITION OF RM120,675,000. Add another RM5.8 Million For JOHAN Shares Sold: FINAL CASH HOLDING IS RM126,475,000!

Dividing by 700 million  PMC  Share Free Float there is a Cash of 18.06  cents per share. Since PMC (4081) closed at a last quoted price of 15 cent.  The  Share Price does not reflect its Value. 15  cents is even  below its net Cash Value of 18.06 cents.

So when you buy PMC at 15 cents you are only paying less than  its Cash Value. You have 3.06 cents Free Cash.  All the Assets Are Free. All The Investment In Quoted & Unquoted Shares ARE ALSO FREE. Do you SEE NOW? Investing is so CLEAR & EASY!

Let’s Do Our Sums Again. NTA 44 cents? No! Should be 88 cents. Cash 18.06  cents.  So the INTRINSIC VALUE SHOULD BE RM1.06  (88 centts  + 18 cents)

So Let’s SUMMARISE: PMC has INVESTMENTS IN OTHER COMPANIES. IT HAS HIGH VALUE TANGIBLE  ASSETS. IT HAS A NET CASH SURPLUS POSITION of 18.06  Cents.

Very Good News. Then What’s The Problem? Why So Cheap? Something Wrong Somewhere? If So Good as You Say, then Why PM Corp Share Price CRASHED FROM RM13.00 in Year 1980 to a Low of only 7.5 cents at Its LOWEST in Year 2012?  A CRASH OF 999.99%.  $13.00 Ringgit?

To only less than 8 miseable Cents? Many must have suffered heart attacks & bankruptcy All The Way Down. This is Worse Than the Asian Financial Crisis of 97-98 When KLSE  Index  Crashed From a high of 1332  to  262  points.

A Crash of 81%!! This is Even WORSE THAN THE CRASH OF DOW JONES DURING THE 1929- 1939 GREAT DEPRESSION When DOW JONES CRASHED 89%!!!

There are A Few Reasons:-

i) BECAUSE OF PMI & PM CAPITAL. Both were candidates of PN17, which is a step to Delisting. Fear of Total Loss.

THE PUBLIC SHUN PM CORP because of  WRONG PERCEPTION. PM CORP is a Totally Different Entity.

ii) PNB SELL DOWN. PNB  has been selling down PMC shares from 30 cents to 10 cent. Since Year 2004 when  PMC has stopped giving out Dividends ASB/PNB has to switch to other  Dividend Paying Companies.

This  year MUI BERHAD  has bought over the remaining  shares through private deal. Price? Ask during the Shareholders Meeting. Since the selling by PNB  ceased, prices have doubled from 7.5  cents to 15  cents.

BUT THE BEST DAYS OF PM CORP IS YET TO COME. PRICES COULD REBOUND TO ABOVE RM1 Ringgit.  And In Future It Could Rise As High As RM10 LIKE  Nestle (RM63) And DUTCH LADY MILK (RM43)

RM1.00 when price is 15   cents today. Sound far fetched?  And RM10.00  in future. Are you mad or crazy to suggest this? Then PM Corp must the the BEST BUY IN KLSE, MALAYSIA!  YEA, IT IS ALSO THE BEST BUY IN THE  WHOLE   WORLD! A 15  cents Share Going All The Way To RM10.000.

WHAT THEN, ARE THE FUTURE PROSPECTS THAT WILL PROPEL ITS SHARE PRICE UPWARD?

THERE ARE 7 REASONS

No.1) FAST MOVING CONSUMER GOODS

PM CORP’s TOP SELLING  BRANDS ARE   TUDOR GOLD,   TANGO   &   CRISPY   CHOCOLATES.

These Are Found in MALAYSIAN HYPERMARKETS & SUPERMARKETS Like GIANT, JAYA JUSCO, TESCO, MYDIN,  & MULTIPLIED THOUSANDS OF PROVISION  SHOPS, 7 ELEVEN & PETROL STATIONS.  They are Also Exported to Over 40 COUNTRIES IN THE WORLD.

No. 2) OEM (ORIGINAL EQUIPMENT MANUFACTURER) FOR:

TESCO (About 30 TYPES OF TESCO  HOUSE BRAND CHOCOLATES) There are Currently 47 TESCO HYPERMARKETS IN MALAYSIA & STILL EXPANDING EVERY YEAR.

COSWAY (There Are 12 TYPES OF SPECIALTY TUDOR GOLD CHOCOLATES).    COSWAY HAS 1,500 STORES IN MALAYSIA, SINGAPORE & HONG KONG. By the way, the word “TUDOR GOLD” was coined by Vincent Tan of  BERJAYA GROUP. PM CORP was the OEM for VAN HOUTEN CHOCOLATE until  they decided to move manufacturing to INDONESIA.

Then to CUT FURTHER COST VAN HOUTEN MOVE THEIR MANUFACTURING TO THE RP OF CHINA. As you know the CHINESE  in MAINLAND C HINA will avoid China Made   Infant Milk Powder or CHOCOLATE Products due to Melamine Scare?

With the Loss of VAN HOUTEN to CHINA,  PM CORP DECIDED TO MANUFACTURE  ITS  OWN BRAND CALLED “TUDOR GOLD”.

BARNSBERRY CHOCOLATE

THERE IS A HUGE VARIETY OF BARNSBERRY CHOCOLATES AVAILABLE FOR SALE AT MYDIN HYPERMARKET. THEY ARE OF  HIGH QUALITY  & VALUE FOR MONEY.

3) CHINA MELAMINE SCARE.

Since CHOCOLATE is A Compound of  MANY TYPES OF EDIBLE  (And inedible – like melamine) INGREDIENTS. It all depends  on the Integrity or Honesty of the Manufacturer. The people of Communist China , having been brought up under Atheistic Idealogy for 2 generations.

Since there is NO GOD (A – means No  “Theist”  means God ) there in No Accountability – No Fear of God. Therefore anything goes, as long as Money can be made.

So put Melamine as Milk, sell rat meat as beef, chopped up card board as minced meat in meat buns & paint dye as coloring for food.  Even in Europe they substitute horse meat for beef in meat balls (found in  Ikea).

The recent Melamine Scare  put fear and panic in China. Millions  of Chinese Cross Over to Hong Kong to buy  foreign made Milk products & chocolates, including Malaysian CHOCOLATE like  TUDOR GOLD,  TANGO  & CRISPY.

4)  HOME SOURCE ADVANTAGE

Malaysia has the added advantage over Chocolate Manufacturing Countries because All The Ingredients used for CHOCOLATE Manufactturing are home grown. Example: COCOA GROWN IN SABAH, RICE IN KEDAH, SUGAR IN PERLIS, PALM OIL (M’sia among top exporters  of Palm Oil in the world) And Milk? Yes, Dutch Lady sourced its milk in M’sia. (In 2000 Dutch Baby changed its name to DUTCH LADY for better positioning to capture market share. Share price shot up from RM4 to over Rm40 today!)

With these home sourced Advantage, M’sia can be a World Champion Exporter of High Quality Chocolate products.

Just like TOP GLOVE is the CHAMPION IN THE WORLD FOR RUBBER GLOVES MANUFACTURING. Why not Japan & USA since they have better technology?. Well, rubber trees cannot grow in their countries.

5)  READY FOR EXPANSION TO CAPTURE WORLD MARKETS

PM CORP has purchased a 6 acres Main Road Frontage Land in Shah Alam (2009). RM31 Millions are set aside for the Construction of a new factory. When Guan Chong expanded its cocoa grinding business to Indonesia, profits doubled and share price followed.

Same goes for Ducth Lady Milk & Nestle. When there is product expansion, sales increased, followed by bigger profits and thus higher and higher share prices.

6) BIBLICAL MANDATE:   ” BE FRUITFUL & MULTIPLY & FILL  THE EARTH (Genesis 1:28)”

According to Bible End Time Predictions, there will be a Population Explosion as it was in the days of Noah before the Great Flood. And one sign mentioned in particular  is “they were eating   and drinking

“For as in the days that were before the flood they were eating and drinking, marrying and giving in marriage, until the day that Noah entered into the ark. And knew not until the flood came, and took them all away; so shall also the coming of the Son of man be (Matthew 24:38 – 39).

Food and Chocolate will be in demand till the end of time. A Recession Proof Industry! In fact demand will only increase & accelerate all the time.

7) NETWORK FOOD INDUSTRIES

NETWORK FOOD INDUSTRIES is the Manufacturing Arm of PM CORP. Listed under Code 4081 Under CONSUMER SECTION in the KLSE. How befitting then for the Company to change its Name From PM CORP  to NETWORK FOOD INDUSTRIES.  And the Advantages are Many:-

i) IT WILL DISTANCE ITSELF FROM   –   PMI   &   PM CAPITAL    (Both PN17  Candidates).  

90% Of The Investing Public CANNOT   DIFFERENTIATE   BETWEEN   PM CORP  &  PMI/ PM CAPITAL.  When they sell down PMI & PM CAP Shares,  They Also Sell Down PM Corp.  They Throw Out THE BABY WITH THE BATH WATER, So To Say. THEY THROW OUT THE GOLDEN NUGGETS WITH THE TRASH! Like A Bird With Its Wings Clipped, PM CORP Share Price Cannot Take Off!

ii) IT WILL CREATE AWARENESS.

Most people do not know that PM Corp is involved in FOOD MANUFACTURING.

To place the name “NETWORK FOOD INDUSTRIES” (NFI) inside BURSA WEBSITE will definitely   cause the Investing Crowd to Take Notice – on KLSE  STOCK TRADING Every  Day.

iii) FREE ADVERTISEMENT

When millions of Malaysian open the newspapers to track their Share Perfomance, they will notice the name “NETWORK FOOD INDUSTRIES” This is free publicity indeed!

iv) Example of PARKSON

When the Lion Group of Companies   changed the  Name AMALGATED  CONTAINERS     to  PARKSON, the Share Price of PARKSON shot up from RM1.20 to a high of RM9.90.

v) TO CREATE FOCUS  – —   FOCUS ON FOOD MANUFACTURING.

Proverbs 12:11 says “HE  THAT  TILLETH HIS LAND SHALL BE SATISFIED WITH BREAD; BUT  HE THAT FOLLOWETH VAIN PERSONS IS VOID OF UNDERSTANDING” . At last PM CORP has SOLD OFF JOHAN, BANK OF EAST ASIA SHARES, GEORGE KENT (through MUI Properties). PM CORP should Change Its Name to NETWORK FOOD INDUSTRIES. Produce More Fast Moving Consumer Goods. PROMOTE IT WIDELY IN MALAYSIA. AND GO YE INTO ALL THE WORLD AND SPREAD THE SWEETNESS TO EVERY ONE.

vi)  INTERNATIONAL NETWORK FOOD INDUSTRIES (INFI)

Currently EXPORTS  Only Cover 40 Countries. There is a Vast Market Out There In The Whole  World.   As John Wesley says,” THE WORLD IS MY PARISH” and he spread Methodism to All Countries.  Let Management & Shareholders catch the Vision. One Day Network Food Industries Might also be called INTERNATIONAL NETWORK FOOD INDUSTRIES – INFI {Short Form For INFINITY) INFINITE POSSILITIES!  All things Are Possible.  Only Believe!

vii) TO GOD BE THE GLORY – Concluding  remark by Tan Sri Dr. Khoo Khay Peng

In the 2012  Annual Report of MUI BERHAD Tan Sri  Dr. Khoo mentioned “TO GOD BE THE GLORY” instead of the usual phrase “IN GOD WE TRUST.” What is Glory?  Various definitions are given:  Great honor and praise.  ” A highly praiseworthy asset.  Adoration offered in Worship.  Splendour of Heaven.   A height of Achievement.   To rejoice triumphantly.  And more.”

Jesus says, ” In this is my Father glorified, that you bear much fruit (John 15:8)

In Business, FRUIT MEANS SUCCESS & GROWTH.  A Successful Business Brings Glory to God. A VERY SUCCESSFUL BUSINESS BRINGS MOST  GLORY TO GOD

In one past Annual General Meeting of  PUBLIC BANK  held  at Shangrila Hotel, when Tan Sri Dr. Teh Hoong Piow walked in, The Shareholders Stood Up in  STANDING OVATION with Many Rounds of APPLAUSE &  APPRECIATION. It was computed that the Share Price of PUBLIC  BANK in  its Original Venture Capital  of Rm1 ringgit, has increased to Rm1,000,000.

 

INTERESTING NOTE:
THE BRITISH HIGH COMMISSION LAND at 185, JALAN AMPANG Was Sold By Public Tender to SP SETIA FOR A PRICE OF RM2,200 per sq ft. SP SETIA is One Of The Top Developers In Malaysia. the Land is Located In EMBASSY ROW – Very Prime Land near Petronas Twin Towers.

2 Doors Away Are 2 pieces of Real Estates Owned by MUI Berhad, namely nos. 189 & 191 JALAN AMPANG.  Let’s take a Closer Look (From MUI BERHAD Annual Report}

189 , JALAN AMPANG  –   Land size 38,104 sq ft (freehold)  Purchased in August 1991 for RM8,399,000.  Price psf  8,399,000 divide by 38104 = RM220.42 psf.

SP SETIA bought in 2013  for RM2,200 psf   —  185 JALAN AMPANG (22 years later)  Prices have gone up 1,000% in 22 years!!  A 50%   increase every year!

 

Now look at another piece:-

191 JALAN AMPANG – 32,830 sq ft  bought in July 2007. Purchase Price RM25,060,000. Smaller land size and at a higher price (due to inflation)

Cost per sq ft?   Rm25,060,000 divided by 32830 = RM763.32. After 16 years price up 3 fold. But from 2007 to 2013; in 6 short years prices  have gone up to RM2,200 (SP Setia sets a new bench mark)

So from here we learn that it is still not too late to buy land and property even after prices have moved upward.  But why wait? Better to buy early when prices are still cheap.

OR BETTER STILL  (If you have a Long Term View) BUY PAN MALAYSIA CORP (4081) Shares while prices are STILL  SO  CHEAP.   PM CORP  own  MUI  BERHAD Which Own these  TWO  JALAN AMPANG PROPERTIES. When The General Public gets to know The Value of PM CORP & MUI BERHAD through Asset Revaluation, Prices Will Come Alive!