0083 notion RM 1.87还可投资吗?

NOTION – A 2020 Gem Stock that fulfils Mr. Fong’s RUG Criteria
Hi, i3 members. I am Another Perspective.
Here, I humbly share my first i3 article with you.
This article is strictly for sharing purpose only.
There is no buy or sell recommendation.
Any constructive feedback is welcomed.
Let’s dive in.

1)  What are Mr. Fong’s stock selection criteria?

According to one of the Malaysia’s top investor, Mr. Fong Siling, investors can look for great investment opportunities in RUG stocks:
  1. R (Recovery Stock) – Companies that have good fundamentals but suffer from temporary setbacks may have extremely depressed stock prices. As long as the company can recover, we can buy the stock at depressed prices and keep them for 1-3 years. The investment returns should be good.
  1. U (Undervalued Stock) – Companies that are undervalued.
  1. G (Growth Stocks) – As long a company is growing, we should hold its stock.

2)  How does Notion fits Mr. Fong’s RUG stock selection criteria?

  1. R (Recovery Stock) - Notion’s stock price has been severely impacted due to a series of incidents, including a fire at its main manufacturing facility in Klang in October 2017. After nearly two years, Notion has fully restored its operations in September 2019.
  1. U (Undervalued Stock) – Notion has an NTA of RM1.24. As a precision part manufacturer, its manufacturing equipment and facilities should fetch a value similar to, if not higher than the NTA. If even a non-operational Notion is worth RM1.24, how could Notion be worth at RM1.05 when there are management team and employees generating earnings in a business with high barrier of entry? If you check Notion’s peers, namely ATAIMS, VS and SKPRES, you will notice they are trading at stock prices much higher than NTAs.
  1. G (Growth Stock) – Notion’s three business segments, namely HDD, EBS and EMS, are all growing. Notion targets to reach a market capitalisation of RM1 billion by 2024 – a 3x increase in market capitalisation within five years. With a healthy Current Ratio of 4.41, Debt-to-Equity ratio of 0.16 and expected insurance claims, Notion should able to expand rapidly, without overstretching itself financially.
  • HDD (Hard Disk Drive) – Their HDD parts precision manufacturing business is growing, due to the extensive application of Shingled Recording (SMR) and helium drives.
  • EBS (Electronic Braking System) - Many people are not aware that Notion is one of the largest auto braking plunger suppliers in the world. Notion produces 30 million pieces of plungers annually for 15 million cars, as each braking system would need two plungers. Given that the global production of cars is about 90 million annually, it essentially means that one in every six cars in the world has plungers is made by Notion. Their clients include world-class automotive brands, including Mercedes-Benz, BMW, Audi, Volkswagen, Mitsubishi. Notion’s parts are being supplied to everywhere in the world. Recently, Notion had secured three new automotive customers, namely Delphi Technologies, Hilite International and BorgWarner, with orders expected to start coming in 1H2020.
  • EMS (Electronic Manufacturing Service) – This is Notion’s main growth driver. Notion is the specialist in metal parts, especially the aluminium parts. In 2H2019, it has secured a European EMS client to which it will supply the metal parts — both machine and fabricated parts — for its products. The client stated they are impressed by Notion’s capability and quick response. It is highly likely that the European EMS client is Dyson. Why? VS, SKPRES AND ATAIMS, which serve Dyson, are based in Johor. Their stock prices have soared ever since they started serving Dyson. If you notice, Notion’s EMS plant is based in Johor too. Secondly, they have comprehensive engineering capabilities. Refer table below, sourced from Notion’s Investor Relation slides (You may view them at Notion’s website).

3)  How much is Notion’s stock worth?
  1. Let’s focus on Notion’s big picture. Underpinned by encouraging R, U, G factors, Notion targets to reach a market capitalisation of RM1 billion by 2024 – a 3x increase in market capitalisation within five years. It would be helpful to derive a stock price based on this input.
  2. With a market capitalisation of RM1 billion by 2024 and a total outstanding 335,821,905 stock units, each stock would be worth RM2.98 by 2024. Applying a sufficiently huge margin of safety of 50%, the stock would still be worth RM1.49 by 2024.
  3. EMS players, namely ATAIMS, SKPRES and VS have PERs of 16-20x. Assuming Notion is valued at just a PER of 15x, a stock price of RM2.98 is equivalent to an EPS of RM0.20 and annual earnings of RM66.7 million.
  4. Is this Notion able to achieve this target? No one can give an exact answer - We have no crystal balls. We shall monitor their performance from time to time, to see whether they underdeliver, deliver or overdeliver.

4)  Is there any prominent investor believing in Notion?

Here’s the interesting part – Yes. The most practical way to exhibit belief in a company is by buying its stocks. Based on Notion’s latest 2018 annual report, Mr. Fong Siling holds 2.03 million units of Notion stocks. Yes, Mr. Fong himself. Notion seems to fulfil his own RUG stock selection criteria. Not sure whether he is still holding now, but that is not a major concern. At a price below NTA, Notion is clearly undervalued.

5)  What does Notion’s chart suggest?
  1. At RM1.05, Notion is standing as its 1-year high. However, it is still 16% lower than its NTA of RM1.24. Notion’s peers, namely ATAIMS, VS and SKPRES, you will notice they are trading at stock prices much higher than NTAs.
  2. Notion has been uptrend stock since the October 2019, right after it has fully recovered from the fire incident in 2017- Positive signs for value + trend investors.

6)  Are there risks buying Notion?
Yes. No matter how good a company is, it is not risk-proof.
  1. Business Risk - Notion may not hit its target - a 3x increase in market capitalisation within five years due to different reasons, such as termination of client projects, or incidents like floods and fire.
  1. Market Risk – In the short term, anything can happen to the stock market. Notion’s stock price could fluctuate with respect to changing market sentiments.

7)  Conclusion?
       a. Notion fulfils the RUG stock selection criteria.
  • R (Recovery) – Notion has fully recovered its operation in September 2019.
  • U (Undervalued) – Notion’s current stock price is 14% below NTA, while its peers are traded at prices much higher than their NTAs.
  • G (Growth) – All growth drivers combined (HDD, EBS, EMS); Notion targets a 3x increase in market capitalisation by 2024. If achieved, with a total outstanding 335,821,905 stock units and a PER of 15x, each Notion stock would be worth RM2.98 by 2024. Applying a sufficiently huge margin of safety of 50%, the stock would still be worth RM1.49 by 2024.
      b. Notion has been an undervalued, uptrend stock - Positive signs for value + trend investors.
      c. By investing in Notion, investors should expect business and market risks.

Is Notion a worthwhile investment? You decide.
This article is strictly for sharing purpose only.
There is no buy or sell recommendation.
Any constructive feedback is welcomed.


Another Perspective



0179 Biohldg 科鼎 30仙投资。

China Focus: 
Cleansing lungs, dispelling toxins: TCM fights COVID-19
BIOALPHA Experiences in Delivering Health Food and Nutritional Meals.

As the COVID-19 epidemic wrecked havoc across China since the beginning of this year, a traditional Chinese medicine (TCM) decoction named Qing Fei Pai Du (QFPD), meaning cleansing lungs and dispelling toxins in Chinese, drew wide attention for its efficacy.

The study found that QFPD had an effect on the virus in all its stages from transmission to its replication and even after it had caused multiple organ damages. In Hebei Province, a severely-ill patient emerged from a fever and saw his white blood cell count return to normal after taking QFPD once. In Shanxi Province, nucleic acid testing became negative after patients had QFPD for three days.
QFPD is also relatively cheap, saving costs for local governments that foot the bill for COVID-19 treatment. A three-day course costs no more than 100 yuan or less than 15 U.S. dollars.

A study by Dalian Institute of Chemical Physics under the Chinese Academy of Sciences and other research institutions found 16 of the 21 herbs in QFPD worked on lungs and the rest worked together to protect the heart, liver, spleen and kidneys





























Dpharma 7148 联合药业RM 3.06投资。


大马市值最高药业公司‧联合药业管理强 盈利稳


【 DPHARMA 简介】 

        DPHARMA 是一家制药公司,以生产仿制药(Generic medicine)为主。DPHARMA 的全名是 Duopharma Biotech Berhad (在今年才刚刚换名字) ,原名是 CCM Duopharma Biotech Berhad(本来的股票代号为 CCM)。以销售量(volume)来计算,DPHARMA 目前是大马领先的业者,目前占据整个仿制药市场的 6.5%,不过销售值却排名第 2,市值也为大马药剂第 2 大。 
          DPHARMA 也与一些生物科技(biotech)公司联营来升级公司本身的生产厂。DPHARMA 目前是印度药剂公司 Biocon 的主要合作对象之一(这家公司是印度上市的药剂公司,市值排名第 8),共同生产一系列的胰岛素(insulin)到马来西亚,新加玻,和文莱。

       除此之外,DPHARMA 也与韩国的一家药剂公司 PanGen Biotech 成功开发了一种叫做Erythroprotein “EPO” 的生物仿制药(Biosimilar),这是一种红血球生成素。公司是在去年的 4 月购买这家 PanGen Biotech 8.39% 的股权,这个购权的用意是为了受惠于 PanGen 的生物科技技术,加强公司本身的开发产品能力。DPHARMA 在最新季报也表明了公司已经获得全国药品监管机构的注册批准,被允许销售这个“EPO” 产品,将以 Eryssa 品牌命名。EPO 是一种

            据 2018 年报得知,DPHARMA 目前一共有 3000 位员工,他们都分布在首都吉隆玻的办公楼,Bangi ,Klang,Glenmarie 的生产厂,和菲力宾,新加玻,印尼的地区办事处。这三家生产厂房都受卫生部 (MoH) 的认证, 有达到 GMP 生产标准. 公司这几年都在积极升级位于 Taman Jaya Klang 和 Glenmarie 的厂房. 巴生新的厂房(K3) 将会取代旧的 K1, 目的是为了提高口服药物和特别产品的产量. 至于 Glenmarie 的厂房将会改造为新的 “HAPI” 厂房, 目的为了迎合与Natco 的合作. 由于 Glenmarie 的这个 Hapi 厂房主打的是一些仿制肿瘤学和其他 High Active Potency 的药物产品,公司预计会获得由政府颁发的 100% 收入税豁免. 

【 DPHARMA 筹码面】 

           DPHARMA 大股东内可以见到很多官联投资机构的踪影,其中最大股东就是国名投资公司(PNB),还有 Amanah Saham,EPF,是个名副其实的 “官联股” 。大家注意,本来DPHARMA 的原名是叫 CCM Duopharma Biotech Berhad(CCMB),但在前两年因为 CCM 企业重组,导致两个公司脱节不再有关系,这也是 DPHARMA 改名的原因之一。在此之前,PNB 本来是 CCMB 的最大股东,但就因为 CCMB 把 CCMB 分解出来,所以才导致 CCMB(也就是现在已经易名为 DPHARMA )PNB 持股比例被稀释为仅有的 45.186%。 

【 DPHARMA 产品组合】

             为了迎合大马马来人居多的人口比例,DPHARMA 专门主打清真的药剂产品,更是大马第一家获得由马来西亚伊斯兰教发展署(JAKIM) 颁发的 Halal 证书的公司,也在 2017 和 2018 年荣获“年度清真制药公司” 的奖项。除了专注在仿制药这个竞争激烈的红海市场,DPHARMA 也在这几年专注于生物仿制药市场(Biosimilars)这个缝隙市场。生物仿制药与普通药物不同之处在于它们是取之于动物和植物,而非化学生产,但其价格也会稍微比普通仿制药高一些。这是因为生物仿制药所治的症状都是稍微严重的,比如癌症,老年痴呆,和艾滋病等等。 
            目前 DPHARMA 的药物和补助品组合达到 437 种,当中包括 70 种消费性保健产品,止痛药,和 367 种仿制药。其中一些产品已经是大马人民熟悉的药物品牌,比如 Champs, Flavettes 和 Naturalle,这些都是一些大型活动比赛的时候举办当局送的环保袋会有的一些品牌,或是小学的时候拿回家学校送的礼物. 除此自外,公司也有一家专门做开发和研究 “R&D” 的研究所,由旗下子公司 Innovax Sdn Bhd 负责营运. 

           虽然公司最近一直在扩张业务以减少对本地政府合约的依赖, 但从筹码面和销售额来观察, 公司对政府合约还是十分依赖的, 据 TA securities 研究报告得知, 公司超过 50% 的销售额还是来自于政府,而且那么多官联投资机构都是公司的大股东,相信政府还是会持续办法合约给他们. 但大家要注意的是,政府颁发合约都是给 Pharmaniaga 先,然后再通过下一个竞标程序来派发合约给其他药剂公司.  

【 DPHARMA 基本面】

↑↑↑基本面数据取于Wealthpark 基本面分析软件 ↑↑↑
         DPHARMA 营业额虽然在近几年都保持高速成长, 但净利润却因为赚幅(profit margin) 的减少而导致净利润放缓 . 由于这几年积极的开发和扩张业务 , current ratio (应对短期债务的资产) 和 cash ratio 也减少了许多. 至于自由现金流(free cash flow) 也因为资本开支的提高开始减少。
         DPHARMA 在这几年的资产大幅增长, 原因是公司在 2015 和 2018 年进行了好几次的融资, 这几次的融资也导致公司的负债水平大幅提高. 至于股息方面则因为盈余的减少导致这几年股息的派发减少,不过从公司扩张业务的积极表现, 把这些盈余用于扩张业务是更明智的选择.  

【 DPHARMA 优势 】 

1. 政府在 2019 财政预算案提高了对医疗保健行业的支出, 其中 108 亿将会 用与诊所和医院, 将会间接提高对药物的需求, DPHARMA 身为大马药剂 业龙头之一将会受惠. 
2. 公司积极在红海市场中寻找被遗漏的生物仿制药市场,并把握商机,与国 内外大型药剂公司一起开发各种药物产品. 

【 DPHARMA 劣势 】 

1. 高度依赖单一顾客 (政府). 
 2. 外汇兑换风险, 公司一部分的成本都是以美元和欧元计算, 假如马币兑换 美元的汇率提高将会间接导致公司的成本变高, 盈利减少. 而且公司没有 任何货币对冲的政策来预防马币贬值的风险. 
3. 公司的主要销售产品都是仿制药,这个红海市场的竞争激烈,公司需要不 断地创新和积极寻找新的合约以提高市场占有率. 

【 个人观点 】 

           DPHARMA 目前正在积极开发新的市场和业务,导致公司的成本增加了不少,虽然营业额有明显的增幅,但利润却因为资本开支的提高反而减少了,加入公司能够有效控制成本并在未来
减少资本开支而任继续保持营业额的增长, 那盈利就会有望复苏.