Harrison – The Super Stock of Champion Johor Sifu. NTA, EPS & Dividend all Very Good (By Calvin Tan

Hi guys,

Last week I received a call from My Johor Sifu – The Champion of Champions Among the Likes of Dr. Neoh Soon Kean, Fong Shiling, Warren Buffet & other Great Investors of Growth & Value Stocks.

He made a request to post this in i3 investors forum for the benefit of all serious long term Value Growth Investors.

The Super Stock is HARRISON Holdings

These are the salient points he messaged me

1) Current price Rm3.68. EPS is 27 sen. Translating to P/E 13.5

2) NTA Rm4.38 (Prime Prime Assets still at Old Book Value)

3) Proposed dividend  is 25 sen (a jump from 15 sen last time). Translating to a dividend yield of 6.8% 

4) If Harrison price goes up to Rm4.50 dividend yield is 5.5%. Still better than Bank FD of 4% now.

5) Company year in year out making 30 sen and above except for year 2014 where it disputed with custom due to some technical excise duty and settled Rm30 millions with custom department once and for all

6) The business resumed to normal from year 2015 and can easily make Rm30 millions due to nature of products such as Nestle, Dutch Lady, Coco cola products and basic neccessities like Milo & Maggee Mee.

7) Oil palm price remain high. Consumers are not really affected as most of these necessities are to be delivered to various small towns in Sabah and Sarawak.

8) It is recession proof business as it’s turnover merely relate to basic necessities

9) Its history dates back to British colonial times. Name was Harrison crossfieldbhd. That means most of the estates in Sabah/Sarawak rely on its delivery of basic necessities.

10) There is a saying estate workers in Sabah have money but if Harrison does not deliver basic necessities in time, they will die of hunger.

11) Before dividend proposal was announced price hovers around Rm3.40 to Rm3.50. I don’t think the effect of dividend has been priced in.  I bought around Rm2.60 to Rm2.70.  The effect will be priced in once it cross Rm4.10

 

Company Announcements

 

OTHERS HARRISONS HOLDINGS (MALAYSIA) BERHAD (“The Company” or “HHMB”) – PROPOSED FINAL SINGLE-TIER DIVIDEND OF 25 SEN PER ORDINARY SHARE IN RESPECT OF THE FINANCIAL YEAR ENDED 31 DECEMBER 2016

HARRISONS HOLDINGS (MALAYSIA) BERHAD

 

Type Announcement
Subject OTHERS
Description
HARRISONS HOLDINGS (MALAYSIA) BERHAD ("The Company" or "HHMB")
- PROPOSED FINAL SINGLE-TIER DIVIDEND OF 25 SEN PER ORDINARY SHARE IN RESPECT OF THE FINANCIAL YEAR ENDED 31 DECEMBER 2016

The Board of Directors of the Company is pleased to announce that the Company intends to seek the approval from its shareholders for Proposed Final Single-Tier Dividend of 25 sen per ordinary share in respect of the financial year ended 31 December 2016 at the forthcoming Annual General Meeting.

The dividend entitlement and payment dates will be announced in due course.

This announcement is dated 12 April 2017.

 

 

 

 

These were the sms he made to me while I erased other calls or past sms from my phone to make space for him.

Calvin comments:

In simple, straight to the point language My Johor Sifu mesaged me. Then I replied, “I haven’t bought any Harrison yet, how to post?”  He replied, “Then go get some”

“Ha! I bought so many other shares until no more money left now. Waiting for cash from one house I just sold”, I answered.

He said, “You should have sold your house last year and dump into the market now so hot!” “Ha how many lots do you want? At the closing price of Rm3.67. You will save on broker’s commission?”  “Ok, I hutang first, please let me have 3,000 Harrison shares at Rm3.67. I will pay you later.”, I replied.

Note:

Now better keep your promise- Johor Sifu, You just sold me 3,000 Harrson shares at Rm3.67 on credit with zero commission & zero interest, Ok?” Hahaha! So good!  So happy indeed. He’s putting monies into my pocket. I think Harrison is a sure fire winner!

Now let’s Calvin share more about Harrison Holdings Bhd

This was a nostalgic share we both bought in year 2006, I think, around Rm1.40. About the same time My Johor Sifu also mentioned Pintaras Jaya at Rm1.40. Pintaras Jaya powered up to Rm7.00 & split later (Up 500%)

However, I had taken profit on Harrison and had forgotten about it. Until My Johor Sifu messaged me.

Harrison is going to increase its Dividend payout from 15 sen to 25 sen.

Something’s brewing there. Just like last time Tomypak at 40 sen suddenly declared a 4 sen dividend unexpectedly (Tomypak later surged to Rm4.00 and spilt (Up 1,000%)

Another stock was Daibochi which Dr. Neoh bought 1 million shares. We also bought at that time around 60 sen. Why? Daibochi manufactures plastic  food packaging for Nestle.

So when we entered GIANT SUPERMARKET we SAW Daibochi everywhere.

A Sea of Green in Milo

A Sea of Yellow in Maggie Mee

A Sea of Red in Kit Kat

Everywhere is Daibochi. Daibochi made us tonnes of monies as its price followed Nestle’s growth.

Ha! Now It is Harrison’s Turn

Being the major Controlling Distributor of Milo, Maggee & other foodstuff for Nestle in Sabah & Sarawak – Harrison has captured this recession proof market by being Its Distributor throughout the towns, villages & kampungs of East Malaysia.

And Coco cola which Warren Buffet owns substantial portion, is also being distributed by Harrison. And wide range of health care & personal hygiene products also pass through Harrison many distribution channels & warehouses!

In USA Berkshire owns lots of Johnson & Johnson and Proctor & Gamble shares which are daily necessities. So is Harrison – it distributes recession proof necessities.

After many decades history Harrison’s business is fully entrenched & penetrate & saturate all areas of Sabah & Sarawak.

It is like the arteries that bring blood to the very heart of East Malaysia. Without which it cannot survive just like blood circulates and bring nutrients & oxygen to every part of our human bodies.

So this is the type of  business that Warren Buffet said, “Even a fool can run it”

And it runs so well that even if the stock market closed tomorrow and don’t open for the next 10 years, we think Harrison will still do fine. Just like Wrigley Chewing gum has a 100 year history & survived – so will Harrison in East Malaysia. After all Harrison Crossfield has a 100 year history already.

Just like PIE,  Harrison from now will be a Prime Dividend Stock.

With Earnings of Rm29 millions and Cash Payout of 25 sen it is about Rm17 millions payout. There is still a good yearly surplus of Rm12 millions left over after dividend payout.

Question is?

Will Harrison follows Dutch Lady’s foot print by Increasing Dividends as Retained Earnings Increased. (Remember that Dutch Baby changed name to Dutch Lady. Earnings increased followed by Progessive Dividend Increment. Thus propelling Dutch Lady share price from Rm4.00 to Rm40.00 and more – up 1,000%)

Will Harrison follow Dutch Lady Into BLUE CHIP TERRITORY?

Only Time Will Tell

MY Johor Sifu thinks Harrison’s Fair Price is Rm4.50.

He also said that the recent hype on logistic stocks have overlooked Harrison being a Huge Logistic SetUp with Warehouses & Distribution Centers Throughout East Malaysia!

So from Rm3.68 to Rm4.50  there is about 20% discount. From Rm3.68 to Rm4.50 there is 82 sen upside. He always has a very reasonable expectation.

Calvin thinks Rm4.50 is a sensible price, but it should cross Rm5.00 just like Scientex & Pintaras Jaya with so Solid Growth Story!!

But who knows? Last time we bought Ajinomoto at Rm2.50. To my surprise Ajinomoto rose to a high of Rm18.38 (Up 635% ). At this price Johor Sifu has switched to Harrison with undervaluation and far more potential for upside.

 

For Now All VALUE INVESTORS WILL ACCUMULATE THIS COMING SUPER STOCK CALLED HARRISON.

(Value Investors hold stocks for 10 or more years like Warren Buffet. So while DR. Neoh Soon Kean is the Benjamin Graham of Malaysia my Johor Sifu could be called the Warren Buffet of Malaysia. He buys and holds for very long time.). So 3 to 7 Baggars are very common. And 10 Baggars or more also occurred from time to time.

 

Regards,

Calvin Tan Research

Singapore

 

Note: My Johor Sifu is the Top 30 Shareholders of Harrison.  He was also Top Holder in Ajiya with Dr. Neoh Soon Kean. He already sold out his Ajiya shares for a nice Rm1.5 million profit.

Do you want to know his name?

One day his name will appear beside Fong Shiling(ColdEye)  & Dr. Neoh Soon Kean

For now I don’t have his permission to disclose.

 

Further note:

 

According to Johor Sifu a defensive Stock like Harrison with only 13.5 P/E should trade at at least 15 to 20 P/E in the likes of Nestle & Dutch Lady.

So expect a rerating due to its increasing Dividend Yield Now.

RHB Investment Bank has included Harrison as one of its Jewels for Year 2017. Its modest target price for Harrison at Rm3.92 will soon be breached – only a matter of time!

GSB – The laggard property stock is coming alive – See latest photos of G Residence’ (Calvin Tan)

Dear friends,

Today I passed by G Residence in Plentong, Johor. To my surprise the building of G Residence is in progress. Not only that, I saw the take up rate of the apartments & shoplots have increased to 70%!

Ha! According to what I heard  if a condo developer has sold just 40% of his stocks he would have already recovered the cost of his capital & the rest will be his “profits”. How true I am not sure. But one Banker told me this, when one developer submitted proposal for building loan. The builder stated the sale of a condo worth Rm400,000 could cost as little as Rm100,000 or about one quarter of the Retail List Price. Again, I am not so sure as I have not build any condo for sale personally.

But at 70% take up rate I think G Residence stands a good fighting chance to complete the project with progessive billings & loan payment release from Banks.

So GSB has now moved to firmer ground.  I think its unique concept & location play a part in its sales

These are the salient factors

1) Location Factor

Through Permas & EDL G Residence is only 15 minutes away to downtown CIQ Kastam of Johor.

 

2) Connectivity

The Pasir Gudang Highway has been upgraded from 4 lanes to 6 lanes. This connectivity creates ease of access

 

3) Amenities

Giant Plentiong has just gone into a multi million make over. It is only 5 minutes walk away. Plus AEON Tebrau City is only 5 minutes drive away. Above all IKEA will also be ready by end 2017. It was IKEA Damansara & One Utama Shopping Complex  that lifted up the Value and prices of  Bandar Utama & Taman Tun Dr Ismail in KL. So with these important ameninties G Residence has drawn more interest now.

 

4) Gentrification

The run down surrounding is now being gentrified & roads widened. The whole ambience is being transformed. A good surprise indeed.

 

5) The Unique Design of G Residence. 

The Twin Towers are connected by a sky bridge. And ground level consists of self contained shops. So the all in one concept is all sufficient in itself.

 

6) Above all G Residence is priced at very competitive pricing. This attracts those that who look for Value

 

7) And to crown it all the entire project is in a joint venture with Land owner. So there is little fear of debt piling up through delay.

 

How I got to know G Residence?

 

I first heard about G Reidence through Mr. Law the OSK Iskandar Top Boss

He mentioned G Residence of GSB at 9 sen. He calculated that if all the projects of G Residence is sold “the one off profit” would equal to 9 sen – which is the price of GSB then. That means 100% profit on paid up capital?

However, G Residence together with other high end condos in Iskandar face imminent glut & also Banks have tightened loan margin. I cautioned fellow investors that G Residence might be in trouble.

All these doubts vanished as I saw its progress now.

With 70% of the development sold & building in fast progress everything is in good order.  And so I have turned bullish on GSB again.

 

Now looking deeper into GST assets I noticed they have lots of lands in Shah Alam, Klang & especially Bentong.

Bentong?

Yes, Bentong will be one of the Major Transit Interchange when East Coastal Railway is built to link KL with the Eastern Coastal states of Kuantan & Kelantan. This will increase the Value of GSB’s lands there.

 

See location map in Johor

 

  • plan2

 

 

Photo no 1

 

5 Minutes walk away is the Newly Refurbished GIANT SHOPPING MALL (PLENTONG)

 

 

 

 

 

 

 

 

 

 

 

 

 

Photo no. 2. Showing Sales Progress of Block A (70% sold) Sorry picture not complete

 

 

 

 

 

 

Photo no. 3. Sales progress of Block B (again picture not complete)

 

 

 

 

 

 

 

Photo no. 4. Shopfront View from the Road.

 

 

 

 

 

 

 

Photo. no 5 (More complete view of Condo Model  Notice the skybride at the very top?

 

 

 

 

 

 

 

Photo. no. 6  The actual progress of G Residence (Now reaching level 4)

 

 

 

 

 

 

 

 

 

Photo. no. 7  Another View of G Residence from the Main Road.

 

 

 

 

 

 

 

 

 

Photo. no. 8 (Notice the GIANT SHOPPING MALL in the Distance? Also Tan Chong Building on the Right?

And nearer right is Kia Motor showroom

 

 

 

 

 

 

 

Photo . no 9   Notice the gentrification of the place. The Main Road now being upgraded & widen

 

 

 

 

 

 

 

 

 

Photo. no. 10   View of G Residence from across the road.

 

Note:

 

There were 2 property stocks in Iskandar that performed spectacularly

 

1) Focal Aims was 11 sen in year 2009. After taken over & renamed to Ecoworld price shot past Rm4.00 (Up 4,000%)

2) Tebrau Teguh was 10 sen before year 2005. After name changed to IwCity price shot past Rm3.00 (Up 3,000%)

 

G Residence of GSB is only 5 minutes away from IwCity of Permas Jaya (Refer to map – see how near is Giant to Permas Shopping Center & JUSCO?

 

And now in this mini bull run GSB is still a laggard at only 11 sen?

So the Market has overlooked & neglected this hidden gem?

 

Calvin has now turned bullish on GSB and call for a buy at current price.

So get some early before its price run away.

 

Your friend

Calvin Tan

Singapore