China Stocks Cheapest 'I've Ever Seen': Index Pioneer

Chinese stocks are extremely undervalued and U.S. investors should heavily increase their exposure to benefit from the emerging market's long-term growth, says Burton Malkiel, author of the financial classic "A Random Walk Down Wall Street."

.......The economist was referring to a slide showing several valuation metrics—from the price-to-earnings and price-to-book ratio—for the AlphaShares family of China indexes he created.
For details, please visit.http://www.cnbc.com/id/45065376

Plantation / CPO: Golden Agri Res (E5H.SI)

CPO price move back to RM3000 level. Therefore, we can see plantation counters to move up in tandem with the CPO price movement.

If the CPO prices can maintain at average RM2950 - RM3,050 level, i believe some of the plantation counters still can make huge profit.

Estimate Golden Agri 2011 EPS= SGD 0.08. Therefore, during negative sentiment, GAR  tend to trade at 7X PER and during good sentiment, its share price may trade up to 10X PER. ( Price range from SGD0.56-SGD0.80). Near term target price @ SGD0.72 based on 9X PER.

Good Luck!

Invest Indonesia Bank : CIMB Niaga (Price : Rp1280)

Updates from Analyst Meeting Presentation 3Q2011 :-
** Declared Rp200 bio interim dividend

IF, 4Q2011 able to deliver another EPS of Rp33, the annulised EPS will be Rp128.
With the annual earning growth rate of at least 25%, we may see 2012 to register EPS of Rp160. Therefore, the target of of Rp1920-Rp2400 is achievable based on 12X-15X PER when sentiment turn good. ( potential upside 50% - 87% )  

Year-end target price based on 12X PER = Rp1530 and 15X PER = Rp 1920 ( potential upside 20% to 50%).


Good Luck !

Plantation / CPO: Golden Agri Resources (E5H.SI)

1. Third quarter result will be released around 2nd week of November. GAR making SGD 0.04 for 1H2011.
2. CPO price has weaken from USD $1050 level to USD $950 level. Hope with the increase in production, GAR able to maintain its quarterly profit level between USD $180 million-USD $200 million (EPS of $0.02)
3. The recent sell down provide very good opportunity for investors / traders to accumulate GAR from SGD 0.63 and below.

China Banking Sector (Part 2): Very Attractive? Cheap Valuation?

( Please refer to Table 1 )
The prices of banking counters from China has been dropping since the peak of Oct 2010 and almost touching March 2009 level. Based on 6-10-2011 prices, most of the banking counters are trading at 5x-7x PER.( cheap valuation when compared to Malaysia banking counters and some other Asia banking counters).

Maybe is time for us to positioning our investment portfolio  in China Banking sector for time horizon of 2 years. Start to accumulate China banks from this level and expecting a investment return of more than 20% p.a
if you hold for time horizon of 2 years.

Assumption is made based on prices rebounded back to 10x PER (reasonable level). During good time,China banking counters tend to trading at the range of 13x-16x PER.

China Banking Sector (Part 1) : Very Attractive? Cheap Valuation ? (Table 1)

Current Price (06-10-2011)	ICBC 3.77	BOC 2.32	CCB 4.70	PFH 2.96	ABC 2.45	BCOMM 4.46
EPS 2007	0.26	0.24	0.32	0.61	-	0.45
EPS 2008	0.37	0.28	0.45	0.33	-	0.65
EPS 2008 (Growth %)*	44%	19%	40%	-46%		45%
EPS 2009	0.43	0.35	0.52	0.25	0.28	0.67
EPS 2009 (Growth %)*	16%	25%	16%	-23%		3%
EPS 2010	0.5672	0.46	0.6617	0.41	0.3899	0.8626
EPS 2010 (Growth %)*	31%	31%	26%	63%	37%	28%
Average EPS Growth Rate	31%	25%	28%	-2%	37%	25%
Dividend Payment (2010)	0.20	0.17	0.24	0.21	0.14	0.24
Dividend Yield	5.4%	7.3%	5.2%	7.1%	5.8%	5.4%
Dividend Payment (2011)	0.22	0.18	0.26	0.05	0.07	0.02
Dividend Yield	5.9%	7.6%	5.4%	1.7%	2.7%	0.5%
52 weeks High	6.90	5.02	8.47	6.25	4.85	9.51
53 weeks Low	4.67	2.88	5.02	3.52	3.22	5.15
Current Price (06-10-2011)	3.77	2.32	4.70	2.96	2.45	4.46
Current PE Ratio	6.65	5.03	7.10	7.22	6.28	5.17
EPS Half of 2011	0.38	0.24	0.37	0.19	0.21	0.43
Expected EPS (2011)	0.76	0.48	0.74	0.38	0.42	0.86
PE ratio (end of 2011)	4.98	4.83	6.35	7.83	5.83	5.19
Expected PE ratio (2011)	10	10	10	10	10	10
Fair Value	7.57	4.80	7.40	3.78	4.20	8.60
Potential Upside	101%	107%	57%	28%	71%	93%
*All figures were converted to HKD from CNY

RHBCAP & OSK MERGER : TARGET PRICE > RM2.00 ?

Compared to previous stockbroking merger cases, the take over price ranging from 0.69x-2.32x (average of 1.2x) of their price to book value.  OSK definitely can command higher price to book value based on following :-

1. With regional present in Hong Kong, Singapore, Indonesia, Thailand and Cambodia.
2. Holding commercial banking license in Cambodia- OSK Indochina Bank Limited.
3. Strong Investment Banking background and retail clientele.

Latest book value per share = RM1.57,
Potential upside relatively to the potential merger price that may taken place:-

		Upside
Price to	Valuation	Based on Current Price
Book Value		RM1.60
1.00	1.57	-
1.10	1.73	7.9%
1.20	1.88	17.8%
1.30	2.04	27.6%
1.40	2.20	37.4%
1.50	2.36	47.2%
1.60	2.51	57.0%
1.70	2.67	66.8%
1.80	2.83	76.6%
1.90	2.98	86.4%
2.00	3.14	96.3%
2.10	3.30	106.1%
2.20	3.45	115.9%
2.30	3.61	125.7%

IF merger take place at above 1.5x of the book value, OSK will be valued @ at least RM2.36 and above. Provide minimum  47 % upside during this uncertainty market condition.

IF you are looking for stock that provide minimum downside during this uncertain market, OSK maybe a good choice for you.

GOOD LUCK!