07-03-2020, 10:38 AM
(05-03-2020, 10:46 PM)gzbkel Wrote: [ -> ]Hi karlmarx, thank you for sharing your thoughts on this. As usual, it is informative and thought provocating at the same time. There were more big contributors in VB in the past, but sadly many have gone dormant. You are one of the few left. Someone should compile all your long posts and publish as Karlmarx's Art of Investing or something, haha
Indeed Jardine C&C is a really complicated conglomerate and it is going to be hard to analyze.
I thought of adjusting its free cash flow by simply multiplying it by the profit attributable to shareholders divided by total profit, but maybe this is too rough to be useful. As you say, we don't know the free cash flow attributable to each segment (and thus the amount that belongs to minority interest)
I noticed Jardine C&C because it is trading at a historically low PB right now. The price dropped by about 25% from the recent peak of about 36 last July to 26+ now.
Q3 result in Nov shows -9% underlying profit while the latest full year result 2 days back shows a stable result. I am guessing the price correction is due the virus situation. Still the big correction appears overdone, considering Jardine C&C is not in the hospitality business. Could it be fears about secondary impact on commodity prices, or perhaps the Rupiah? I remember Jardine C&C was also badly affected in 2015 due to Rupiah devaluation.
That's more flattery than I can accept.
Actually, you can tell there are a lot of smart people here, and they can contribute better stuff than I do. But since there is nothing to be gained from making the market more efficient -- by helping the market better understand the asset quality of whichever stock -- and much to be lost -- in terms of the contributor's competitive advantage and time, it is easy to understand why we don't see more/better contribution.
If you look back at my earlier posts, you will see how inane and shallow they are. If anything, it should be evidence that anyone who wants to at least better understand businesses/valuation/investing can do so. And without paying exorbitant prices for crash courses where the quality of the teachers and their teachings are suspect, to begin with. If you're so easily sold by the course sellers, how do you expect to keep yourself safe from the owners/analysts who are trying to sell you their stocks, which are usually of suspect quality?
If anyone wants to do better as an investor, I highly encourage writing and posting your investment thoughts/thesis on VB. Depending on your luck, you may receive useful feedback, and be exposed to possible blind spots.
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Since JC&C is mostly exposed to the SEA consumer market, their fortunes will rise and fall with it. Since most of JC&C's business is in Indonesia, the devaluation of IDR will affect the results as it is reported in SGD or USD. So an investor in JC&C is really long Indonesia and IDR.
For what it's worth, I don't believe Indonesia will transform into a manufacturing export power house like China -- even though that is what Jokowi is currently trying to do -- and so will not experience aggressive growth rates of 8-9%. This means that the government will likely continue to struggle with maintaining a budget surplus, and building its foreign reserves, which has traditionally made foreign investors wary (though there are a lot of other reasons as well).
But if the government is able to improve on its ability to collect tax (which is among the lowest in the world, not because of low tax rates, but because of tax evasion), improve on its manufacturing export numbers, receive adequate prices for their natural resource exports (which makes up the bulk of their economy and foreign earnings), and gradually wean the populace of fuel subsidies, the IDR should remain stable -- or at least avoid sharp devaluations -- over the long-term.