How our stock calls have fared

Over the months from Oct to Dec 2013, we analysed a number of companies listed on Bursa Malaysia.  Among them were a big capitalization company in Tenaga Nasional Bhd, two hugely undervalued, conservative, net cash and prudently-managed property development companies, namely Daiman Development Bhd and Matrix Concept Holdings, and China Stationery Ltd, a mainland Chinese company whose operations have been the subject of much suspicion.

Now that six months have passed, let us review how these companies have performed.

Company Name	Analysis and Date	Share Price (RM) then	Share Price (RM) as at 15 May 2014	% Change
Tenaga Nasional Berhad	BUY (9 Dec 2013)	10.78	11.98	11.13
China Stationery Ltd	SELL (4 Oct 2013)	0.23	0.12	(46.67)
Daiman Development Berhad	BUY (22 Nov 2013)	2.99	3.55	18.85
Matrix Concept Holdings Berhad	BUY (10 Oct 2013)	2.75	4.10	49.15

The stocks we were positive on have performed well. Even a large company like Tenaga has gone up by 11% in 5 months.

Within only six months, Daiman Development Bhd is up 19% and Matrix Concept by a whopping 49%.

In contrast, China Stationery Ltd’s stock price has all but collapsed. It now trades at 12 sen from 23 sen just seven months ago. 

We hate to say “we told you so”, but really, the signs were staring at our faces. To those of you who are still hanging on, hoping against hope, sometimes you must learn to let go. Cut your losses and move on, as there are always opportunities elsewhere.

This update is also to indicate a change in our view on Tenaga. The good news have all been factored into the stock price. Almost certainly, bad news will now dominate this company. Its fuel costs are higher as its coal-fired plants were hit by outages. 

Early retirement of older plants and bringing forward new plants, with greater reliance on more expensive gas fuel, will raise its production costs. Tenaga is likely to see its earnings peaking in 2014. It is time to say goodbye to this stock.