UCHITEC share price soar

Technical Outlook
Uchitec share price jump RM0.07 to RM1.43 during as of posting. Two weeks ago(28/2/11) i start to keep a close eye on this stock as it break above symmetrical triangle at RM1.32. Straight away, I revise the target price to RM1.38 then RM1.44.

However, share price stay put since then i suspect because of the uncertainty in Japan Earthquake and Libya.

If share price successfully break above resistance RM1.44, uptrend should pretty firm. Next target will be RM1.54.

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KPJ revenue recorded another year high

FY31/12/10
Financial Result
Quarter-to quarter comparison, company revenue up 12.5% to RM433.43m from RM385.34m 4Q09. However, net profit had drop RM6.5m to RM30.81m. 4Q09 net profit was RM37.36m. I cannot find any explanation from the report, i guess is something to do with some sort of adjustment on minority interest.

Year-to-year comparison sees revenue recorded another high of RM1656.2m. Revenue on last preceding year was RM1456.35m. PBT also increase 16% to RM168.13m vs RM144.92m for FY09. As say in the report, the increase in PBT is in line with the revenue and contribution from the hospitals.

Technical Outlook
KPJ share price was on uptrend from July 09, until Dec 10. A period of 14 months. Since then, it hovering around RM3.80, ups and down between MA(50d), but well above MA(100d).

From my point of view, warrant issue during Jan 10 much or less effect the share price, as profit will be diluted when they are exercise.

Stock Valuation
Base on annual EPS RM0.212, KPJ is trading at PE18x. I think it about right for the price we pay for this share(RM3.82 as at 15/3/11).

Future Prospect
From financial report, board of directors are optimistic about KPJ's performance in FY11, in tandem with increasing hospital capacity and activities.

Acquire 100% in Sibu Medical Centre Corporation for RM26.9m, and 100% in Sibu Geriatric Health & Nursing Centre Corporation for RM1.24m. The acquisition is expected to be complete by 1H11.

Into condition Subscription Deed for acquisition of up to 51% equity interest in Jeta Garden Waterfront Trust(JGWT) and up to 3,308,415 10-year convertible notes for total cash consideration up to  RM19m. JGWT is primarily involved in operating a retirement village in Queensland, Australia. Go here or here

Overall
KPJ is a fundamentally strong company. Company's revenue has been growing for the past 6 years(i only have data for this long). Inline with revenue growth, Shareholder's Equity has nearly double (0.86 times) since FY05. ROE averaging 13%(6 yrs) also prove that company always manage to generate profit for the shareholders.
In short term, share price may be drifting side way as more warrants to be exercise, diluted EPS. Both acquisition to be completed during FY11 shall generate more income to the company, push up the bottom line.
Long term prospect remain good.

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Warren Buffet Watch

Warren Buffet appeared live in CNBC on March 2,2011. I manage to download a copy transcript of his interview. Its a 60 pages long pdf file, attached below with my highlight.

CNBC Warren Buffet Interview
To make it easy to review, i list down the majors :

Some of Warren Buffet's associate company : Coca-Cola,Wells Fargo, Wrigley,See's Candy,Iscar,Wal-Mart,BNSF Railway,GEICO,Johns Manville,Dairy Queen,Flight Safety,American Express,Fruit of the Loom,Marmon,Netjets,MarquisJet,

• He is not worry about the oil prices issue regarding what's happening in Libya. It isn't a real supply situation yet, but market anticipate.
• TTI, a world class leader in quality consumer, professional and industrial products is booming in Asia. I think its a Hong Kong company. Its main product including power tools and accessories, outdoor products, and floor care.
• The demand for housing comes from household formation. For example, if we build 2 million houses and they were no 2 million families created, it will be a excess supply. The only way to solve that is to underproduce compared to household formations.
• Warren do not like bonds. He think its a terrible mistake to buy into fixed dollar investments at this kind of rates.
• While commodities price are going up and up everyday, Warren just don't like them. He like income producing assets.
• Investment is about you buy the asset now and the asset itself deliver more money over time. For example, Coca-Cola, Wells Fargo and McDonalds.
• The problem with commodities is you are buying something and hope somebody else will pay you more for the item. The item itself is not doing you anything. Its speculation.
• An example about gold. If you took all the gold in the world, it makes a cube 67 feet and worth about $7 trillion. Its roughly 1/3 of the value of all stocks in US. Do you prefer to have 1/3 of all the stocks in US or owning that block of gold, which can't do anything.

Warren Buffet :" I like business or i like my earning power as the best assets in a time of inflation. They really can't be taken away"

• A fair price to buy a company is one that we think we're going to get our money worth in terms of future earnings.
• US Dollar will become less important over time because America's dominance of world economic system will diminish.
• Importance of liquidity and not getting overleveraged.
• People want to be entertained and want to be informed. The demand for media is huge, is worldwide, its going to go on forever. 

I don't have to be right about everything or even understand about everything. I just have to right on the decisions i make. So i stay with the simple things. If i don't see any easy decision, i don't play

•  A century or so ago, nobody ever heard of monetary policy or fiscal policy. We had recession, it will cured themselves. Millions of American were trying to figure out how to do things better next day. Warren don't like fiscal policy to stimulate the economy.

Inflation is the ultimate Tax. It taxes people who don't know they're being taxed. It taxes people who believe in paper money. Paper money generally has a lousy future.

• Productivity has improved very significantly. If productivity hadn't improved, we'd have less unemployment right now. But, productivity is great over time. More output is what really solves problems over time. When we have more output per capita, then we'll fight for it.

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