cheng's comment on WASCO

cheng · 2019-06-24T09:13:21+08:00

While it has started moving up slowly from its grossly oversold position and boosted by the chaos in oil price, still waiting for progress made in securing contracts for its o&g division.

cheng

jobs this year was secured last year. the next 2 quarter's jobs secured will determine next year's revenue. I am not sure what causes the spike. I prefer to think of it as technical rebound for now until there are signs that it's winning contracts.

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naoki ong

ok got what you mean on the 2017 and 2018 I need to refer to cumulative period for 2017 and 2018. I always refer to the current single quarter against the last year quarter because I'm trying to enter low and sell when there is some profit. if referring to accumulating isn't it for long term??

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cheng

Yes, it is long term for me. Just different strategy. if you are comfortable with your own plans of short term and winning, stick to it and repeat it until it breaks.

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naoki ong

ya that's why log in at 0.6 but it just reached 0.61 and left... don't dare chase since no project issue. thanks sifu

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sokhoo...@yahoo.com

Thanks for the input, Wang, Goh....
There’s a lot to learn from you all!

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naoki ong

so this coming 2 quarters is important then.. I'm using the lazy way to read the reports haha. almost have the similar outcome is what important to me. technical rebound due of over selling? if it's about winning contract it's highly possible then. if not just a sudden spike then..

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cheng

I see. retailers like us will never be able to buy at lowest point :p as long as you execute according to your plan, it's good enough. btw, I am not sifu. Just a normal trader like everyone else. sharing and learning.

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cheng

lol, Wang. add oil :)

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naoki ong

ow.. I mean the lowest price for me only, cause my reasoning to low price is off, refer to current date price lowest, lowest 52 week, nice qr not annually, some info on current stock news that's all haha. very risky.

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naoki ong

Ya Wang, Cheng super low key and like to share and teach that's why I like to ask him. hehe. Everyone add oil!

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Jason

Cheng teik, it has been a while following your comment on identifying potential stock. Appreciate for your value investing strategy that help me to allocate my capital on undervalue stock of different segments.

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Time and Space

Cheng is really pro. U all find the right guy to consult.
Congrat Cheng again for Waseong. Let's us see what is the market tomorrow.

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cheng

good to have everyone sharing opinions and prevent bias in decision making. :)

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eng hock ooi

add oil add oil. fly loh waseong.

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eng hock ooi

walao. Not fly but rocket. where are you going waseong?

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cheng

congrats, eng hock. I am not sure where it's going either. it has just rebounded to 50% margin of safety within few days which I think is quiet impressive and scary if you will. Good for shareholders but I hope there will be contracts for o&g division in coming months. if your avg is high, can consider to do zero cost averaging to pull down your average. Just my opinions and could be wrong.

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eng hock ooi

Ok tq. I sold all first since I didn't buy a lot. unexpectedly rocket up. tq, Goh. look forward to next cheap counter.

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cheng

you are welcome, eng hock. have faith in your own plan.

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Time and Space

Wa, rocket shoot so high, man.

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fish small

炒熟就可以吃了, Haha

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Jason

Cheng teik, what is zero cost averaging?

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cheng

hi jason cheong, contrary to buying more to lower your avg price, a true zero cost averaging is selling enough of shares in such that your holding cost becomes zero. people call it free ticket. by doing so, you lower the risk of surprises and ride it, but lower gains as you have lesser qty of shares by then. Just a different strategy. so, it's selling a portion of it when it goes up and lowering your holding cost. depends on the qty you have on hand also.

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cheng

I guessed the bottom line should be - if you are happy with the gains and met your initial plan, follow it then. if it is long term holding, selling a portion of it generates cash flow too. hence, you get to keep your emotions at bay and can stay long in a position. else, emotions will start to kick in and influence your own decision. Hope it helps.

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naoki ong

sound like a tedious work.. but will back fire if it the price keeps go up with low units at hands?

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naoki ong

did that on some stock afraid on losing but once I sold it the next day went up so much.. missed the opportunity to earn more.

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cheng

hi naoki, if you are starting with small positions on hand, not worth it to do zero cost averaging. buy in batches is a norm, and sell in batches is seldom spoken about :) understood on missing opportunity to earn more. it's the emotion that made us feels really bad or gung-ho. thrills of investing :)

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naoki ong

hmmm true.. don't often buy in batches only can do max 3-4 batch as the more I accumulate the more I lose if the price go down but happy if the price go up. quite sad when missed the ups. thrill of investing gave me some heartache sometimes hahah

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cheng

Lol, naoki. as long as it works for you, you should continue with it. personally, as I don't know where the bottom is, I will normally buy in batches according to margin of safety levels instead of every few cents top up.

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naoki ong

same here just if the share keep falling but have the potential to go up I'll buy but my strategy was wrong...drop few cents and I buy... result of losing more and averaging too high up.

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naoki ong

will follow your method see which better haha

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Time and Space

Cheng method really work, I trying it on layhong, average 0.4, hope 0.5+ then can take back my cost, left the free ticket inside.

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cheng

congrats, Sean. it's your own plan that works :) keep it up.

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cheng

digesting budget 2020. one of the most toughest deficit budget over the years. strengthening domestic demand and encouraging local companies to penetrate overseas market at the back of lower exports next year with special investment incentive package worth 1bil per year for 5 years.

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Time and Space

Hope this can be regain back the faith of oversea investor.
Cheng, how do you feel about Revenue?

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cheng

hi Sean, doubt foreign will return so soon :) as for revenue, can share why you are looking into it? was it because of e-payment/e-wallet related? the closest competitor for revenue is ghlsys. my personal opinion is ghlsys is better compared to revenue.

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cheng

based on the latest annual report and ctd qr, it seems that revenue day sales outstanding trend is going up while ghlsys is going down. rising dso signifies the companies solutions is not as hot as they used to be. additionally, ghlsys has exposure to other markets though both revenue and ghlsys has gotten approvals for money lending activities. one is in main market and the other is in ace. ghlsys will have more exposure to funds participation.

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cheng

current price has yet to reach attractive levels for both. can start to pay attention if it is selling below 1.0 and when more data available from future qr. there is still high euphoria of future prospects of e-wallet and hence, supporting the price. Just my opinion and.could be wrong. Hope it helps with your research.

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Time and Space

Thz Cheng, actually i doubt Revenue and Ghl both will go below rm1. But now both price is alr very high, i will try initiate a position if Revenue below rm1.2
Cheng, WaSeong got any service that at Klang area as you know of?

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cheng

I am not sure about that, Sean. you wanted to visit the office? :)

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Time and Space

Yea, is good to check on the company personally. Depend on how the price go this week, thinking to initiate a position then can try to attend coming agm.

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cheng

Ooh ok. noted. maybe you can start off with reading it's recent annual report to understand the company structure, principle operations, subsidiaries, and it's financials. once done, you can visit it's company websites to learn more from there.

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Time and Space

Thz Cheng. Let's all of us be psych about tomorrow...

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cheng

alright. there will be pockets of opportunity from the budget and will not be a full swing impact imo. it's a deficit budget overall. :)

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cheng

the impact from phase one deal btw U.S. China will be greater as that will increase the risk appetite. no further tariffs for now and the next one will be in Dec. waiting for details of the deal from phase one.

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Time and Space

Yup, can't wait the next opportunity, hope can find a great share to place a position. Thz Cheng.

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cheng

you are welcome, Sean. depending on your plans - dividend stock, growth stock or trading stock. my preference is the first two when it is selling at discount, one that has clean balance sheets. you can still consider 7204 which you have locked in the profits :) though it has rebounded from 50% margin of safety at 0.50 to 40% at 0.62, you can consider it if it pulls back to between this range. I am still holding it until today. you can research about the company to prevent bias from my inputs.

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cheng

if it is dividend stock, you can pay attention to 5248 whereby the price is near it's intrinsic value of $2.10. entry between 2.10 to 1.80 is a good entry personally for me. as household income remains a challenge, it will add pressure to it's sales. hence, market expectation will drive the price towards lower end. Just need to have some patience. do research about the company too. Hope it helps.

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cheng

next to watch will be the impact of lowering the ceiling price for foreigner's property purchase price from 1M to 600k for overhang stocks on 8664. will take at least a quarter or two to see the impact. currently selling at 40% margin of safety. both Wang and I coincidentally picked the same stock :)

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cheng

wow. entering gap down area. surprisingly strong :) congrats to all shareholders.

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cheng

amazing. going up non stop. scary and unbelievable :)

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cheng

thank you, Wang :) holding power it is on counters that got beaten by market expectations. most undervalued counters has started moving strongly and waiting for 8664, 6399 and 5147. 6399 started moving today which is good. I am waiting to add 8664 (btw 1.25 to 1.30) and 5147 (btw 0.46 to 0.55). let's monitor how it goes over the next few weeks :)

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cheng

ooh, I didn't know that all say good for 5147. I am still monitoring. I picked it because it's showing signs of sustainable growth which is revenue growth > profit growth; similar to dno. working capital - inventories & receivables were off last two years and started getting back in order this year. and it was selling at a discount. I started position at 40% margin of safety and to add at 50% margin of safety. hence, I will wait for the next qr to confirm that it's working capital is in order.

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cheng

Ok, Wang. Good night

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Time and Space

Congrat to you both. I started vampire shift lately, day time will snore in blanket, can't follow up, i think miss out alot of train alr.
Cheng, can help me look the prospect of Ekovest? I read yst, seems like quite promising, but the only thing is I duno how to judge the reasonable to go in

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cheng

morning Sean. I could not do an estimation of a safe entry for ekovest as it has been reporting -ve fcf for the last few years. from the prospects perspective, the major shareholder of IWH which is part of the JV for bandar malaysia is also a major shareholder for ekovest. there could be some spill over possibility for ekovest. business outlook wise can be positive. briefly compared with a few construction companies and ekovest net margin was not too bad. second behind gamuda followed by gbgaqrs

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Time and Space

Thz bro. Lately eyeing on a construction, thinking to keep for midterm. Seems like now O&G and technology is alr surg high.

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cheng

there's two dispute on going which involves ekovest - (1) with shapadu construction related to new north klang straits bypass highway project. refer to notes in latest qr report (2) with samling resources related to jv termination for the pan borneo highway related work packages. refer to announcement in July. anyway, based on budget 2020, there will be new tender for pan borneo highway packages; packages that has yet to be tendered out

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cheng

imo - you can use technical to assist your monitoring. there's huge gap up back in Apr. hence, as long as the gap is not closed, price stays above key smas (daily and weekly), you can still adjust your entries at different level as you continue to monitor ekovest business development specifically in construction contracts. for now, I would say 0.67/0.70 range is a strong support. Just my opinions, could be wrong. Hope it helps.

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cheng

you are welcome, Sean. if you are aiming for constructions, maybe you can list down say 5 to 10 construction companies. then, go through it's financial report. find a few that has clean balance sheets. If those few coincidentally are in the running for mega projects, you can then keep an eye. mega projects requires funding and clean balance sheets is key for applications and sustaining of the company. Hope it helps.

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cheng

congrats all waseong shareholders. looks like it will attempt to rebound to 40% margin of safety at 0.96 cents and possible a pull back by then. Just my opinion and could be wrong.

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Time and Space

Thz Cheng. Your advise always help, Congrat on Waseong and D&O.

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cheng

you are welcome, Sean. all shareholders gained actually. :)

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cheng

still waiting for substantial quantifiable contracts value for the piping coating projects announced yesterday. it's moving towards JV for now after the initial MoU that was signed with Medgulf Construction Company during Tawteen Conference held by Qatar Petroleum back in Feb 2019.

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Shi Hao

cheng, so u suggest this can hold?

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cheng

hi CBK, depends on your objectives and average price. if you plan to hold longer term, imo - you can consider to exercise cost averaging by selling some to lower your average cost to ride it's recovery. until there is substantial contracts in it's book order, it's good to be on the defensive side. Just my opinions, could be wrong. Hope it helps with your research.

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Shi Hao

thanks Cheng. just saw the research by HLInvest about wah seong and medgulf corporation JV

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cheng

you are welcome, CBK. thanks for the sharing on the research by hlinvest. Will have a look at it.

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Shi Hao

it's on i3 website. let us know what u think after reading it

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cheng

hi CBK, got it. I can share my opinions based on my own plan and could be wrong. best is to follow your own plan as everyone has diff objectives. these is how I see it: (1) detailed analysis and projections of order book of $1.0 bil for fy20-21 (2) revise TP from $0.70 to $1.13 based on 12x PER valuations and riding on o&g upcycle. It's a good analysis.

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cheng

going back to my own plan and how does that fit into the plan. my personal opinions which was shared previously is as such (1) it was selling at 60% margin of safety at 64 cents, 50% margin of safety at 80 cents and rebounded to 96 cents at 40% margin. at 30% margin of safety it is at $1.12 cents. (2) back then, the book order peaked at 2016 going into 2017 at $3.51 bil and $2.80 bil at 2017 going into 2018 and at $1.10 bil at 2018 going into 2019.

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cheng

the share price peaked at $1.70 in early 2018 and came down all the way until recently to the low of 60 cents. the projections for fy20-21 was at $1.0 bil and TP at $1.13 TP by hlg, hence it's a good analysis.

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cheng

at current price, will I add based on my initial plan? I will not do so bcos (1) the risk reward ratio is 1:1. from $0.96 to $1.12 versus from $0.96 to $0.80. there isn't much safety of margin. (2) current price is starting to priced in the latest announcement. I prefer to wait until further quantifiable order book to decide on whether to add. these are just opinions based on my own plan and could be wrong. hope it helps with your research.

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Shi Hao

cheng thank you for sharing. it helps me to understand how to analyse better. thank you so much leh :)

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naoki ong

wow cheng. you do dig very deep inside. thanks for the info. ya. quite high to add in now.

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cheng

you are welcome, cbk, wang, naoki. I am learning too :) too lengthy probably.

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naoki ong

learn till you old Chinese proverb. lengthy is what make me easily understand the content

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Shi Hao

cheng, it's not lengthy. it's very detailed and i learn that way :)
btw i sold today and went in armada. immediately breakout de. paper profit now. u shud all check it out

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cheng

congrats, cbk. Follow your own plan and repeat your winning method until it breaks :) Sean has positions on armada and riding it. Can exchange opinions with him.

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Shi Hao

^_^ cheng, what other counters are u monitoring?

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cheng

monitoring and waiting for dividend stocks selling at discount. waiting to add - bauto, spsetia, astro. waiting for financial report to decide next step - Liihen, Homeriz. monitoring samchem to determine whether it fits the criteria of growth stock. initiated position but hoping for it to come down a bit more to add and looking forward to it's next qr.

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cheng

Few others are hold for long term. not looking at it now - d&o, waseong, mi, lctitan. those mentioned above will be rebalanced whenever it achieve its valuations. Lol, I have pbbank too. also for long term. baskets of stocks :)

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Shi Hao

i can see that you are more of a investor style of trading, am I right? :)

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cheng

yeah. Just different strategy. hence, mentioned previously that everyone has different investment objectives :) required rate of returns is also diff. I prefer to buy when it is selling at discounts but have to hold for months.

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Shi Hao

^_^ good to know. it's always good to learn from different perspectives heeheee

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cheng

have faith in your own plan, cbk. you are earning from waseong and armada, your method that led you to initiating position has to be right. and I can see commonalities in your winning trades - o&g themes and positive market sentiments. keep it up and repeat it until the method stop working :)

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Shi Hao

thank you Cheng :) would you be ok to share your personal opinion about Green Packet and Green Packet warrants? im actually holding these with paper profit but not sure how to decide to continue hold or sell when market is greedy. i believe you have more investing experience than i do, i would appreciate your view about the business. ^_^

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cheng

congrats again, cbk. riding on the right theme. the return of cc puan has definitely boosted gpacket. there have been two off market deals in recent months. something is brewing there. technically, it's forming a decade long rounding bottom and may test 2009 high of 1.0. depends on your avg price, if you are holding more than 30% gains, imo - you can continue to ride it. business wise, it is aligned to future trends. financially, it's reporting -ve fcf but there are signs that it's improving.

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Shi Hao

Cheng - were you already investing already in stocks when Green Packet was RM2-3 in the past? how long have u been doing this ah? ^_^

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cheng

Lol, cbk. I have seen this company long time ago, the rise before recessions.

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cheng

back to gpacket, though it's parked under telecoms and media sector, the nature of it's business is also software related. seems like it's getting into fintech. fintech is future trends. for software companies, you can monitor it's day sales outstanding to determine it's software popularity. software companies tends to get initial payment for consulting and design solutions. if that's the case, you can actually monitor it's day sales outstanding (dso). you can research about it.

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Shi Hao

wow. that's easily 10 years.. i was so young i only remember the "mesti potong" by P1 wimax Green Packet only..

So is CC Puan a very influential figure that got Green Packet to its glory days??

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cheng

I briefly looked at it's dso trend. Just for the last two years and seems like it's coming down. that means, it's gaining popularity. if it can further improves it's financials, it's on a good track for recovery. Just my opinions and could be wrong. Hope it helps with your research.

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Shi Hao

green packet IPO price was 0.7 and went up to 6.5+ in 1 year!! omg someone must have earned so much hahaa

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Shi Hao

dso as in day sales outstanding?

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cheng

Lol, there's also a lot that got stuck. :)

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cheng

Yes, that's right. research about it and you can track it for yourself for gpacket if you intend to hold it for long term.

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Shi Hao

cheng - the green packet warrant exercise value is 0.40, which means now the warrant is super undervalue. however im curious what will happen to it, bcoz i keep seeing Green Packet exercising existing warrant. if there's less and less warrant available, less supply higher demand? ^_^

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cheng

I am not familiar with warrant, cbk. there is a formula for the conversion. some will convert and most will just trade it especially the pros.

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Shi Hao

^_^ will do more research. will share if i learn more

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cheng

ok, thanks :)

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