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"No names are mentioned in the article of The Star, but a friendly tip pointed at the possibility that this relates to the research report by CIMB on Instacom Group." You can read the rest of the article here.  A rather bullish projection? Revenue projected to grow from RM66 million in 2014 to RM195 million in 2015 and a whopping RM572 million in 2016. In 2017, it is projected to achieve RM3.23 billion. The detailed research paper dated 18 November 2015 is here.
Unleashing the giant? Time will tell.
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"Don’t be fooled by AirAsia’s fancy marketing; we think it’s close to default. We estimate that it has managed to inflate profits by 39% over the past five years through related party transactions with associates. Today, these associates have not only stopped paying their bills but require AirAsia’s financial support. The company is basically creating profits and flattering its operating cash flow by abusing its associates. Real profits have collapsed and AirAsia now needs a recapitalisation that will dilute existing shareholders by more than 100%. We see at least 42% downside with fair value less than MYR1.23/share. Sell or Short. AirAsia may be a new dog, so to speak, but it’s playing a very old trick". GMT Research What do you think of this company financial performance?
Finally, the truth is revealed in its recently released result for the fourth quarter May 2013. It reported a huge loss of RM208 million. Effectively wiping out all the previous years profit. It has an accumulated loss of RM69 million. See the fourth quarter May 2013 announcement here.
What happened? Possible accounting fraud? The auditor is Ernst & Young (one of the big four audit firms). This company, Malaysian AE Models Holdings Bhd, was classified as a PN17 company in June 2013. It has been suspended and may be delisted on 2 July 2014. You can read more about this company in Corporate Governance in Malaysia blog. Give a man a gun and he can rob a bank. Give a man a bank and he can rob the world. William Black is an associate professor of economics and law at UMKC. He has held many prestigious positions, including executive director for Fraud Prevention. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management. He is a criminologist and former financial regulator. He has seen firsthand how banking systems can be used to commit fraud - and how "liar's loans" and other tricky tactics led to the 2008 US banking crisis that threatened the international economy. Black reveals the best way to rob a bank - from the inside. This "bank robbery" has resulted in USD11 trillion in lost wealth and 10 million in lost jobs. Analysts in investment banks and stockbroking companies have some of the toughest jobs. They have to say something about the stocks, market and economy almost on daily basis - even though there is nothing to say. When market is up, they need a reason to justify it and when market is down, they need to say why. The market consists of many buyers and sellers. It is perfectly normal for it to go up and down, without any particular reasons. Analysts have perfected the art of talking nonsense or talking without really talking. Here are some examples: Nonsense #1: Trading in a range Meaning: The stock market has not moved at all and they need something that sounds interesting to say Nonsense#2: The market is likely to go either way Meaning: The analysts have absolutely no idea where is market is moving, so bet on both sides Nonsense#3: The market is in the process of bottoming out Meaning: The market is going down but the analysts have no idea how low is low or how long it takes Nonsense#4: We are cautiously optimistic Meaning: Again, the analysts is betting on both sides - cautious and optimistic. Either way, they are right Nonsense#5: Macro volatility Meaning: The market is uncertain but this phrase sounds smarter 
US Judge David Hittner in Houston imposed the sentence on 14 Jun 2012, after saying Stanford had been found guilty of “one of the most egregious criminal frauds ever presented to a jury in federal court". Stanford wasted investor money on failing businesses, yachts and cricket tournaments and secretly borrowed as much as $2 billion from his bank. Victims described Stanford as treating them like "road kill". Stanford was ranked 205 on Forbes magazine’s 2008 list of the richest Americans, with a net worth of USD2.2 billion. Doubt that this will prevent another fraud case from happening. Investors need to be better educated and not be tempted with high return, often sweet-talked into it by brokers / consultants / agents who are paid super high commission. As Accountant and CFP, I always remind clients to stay away from such financial investments (including "schemes" approved by the government). Buyer beware. |
