RCECAP

Just look into RCECAP, no doubt that their main business is providing loan to ppl who need it and they are smart because they are providing personal loans to government servants through strategic affiliation with credit cooperatives, where repayments are done via the Salary Deduction Scheme. Haha, at least the risk for the loan owner to "jiok chou" is low because they work in goverment sector ma.. hahaha *V*!!

From latest Q report, around 84% of the profit is comming from financial loan & 12% coming from investment and holding management. Since they are doing financial loan, so the fix asset is low, because they no need machine, unless they have to print ringgit la.. haha.. On the other hand, figure in financial activities is high as u can see at the long term investment amount and long term borrowing amount.

Latest figure on balence sheet shows that the cash/deposit is 214M and the current Liabilities is 346M for RCECAP. Have to make sure that they receive the payment from the loan consistenly so that at the end of the year they can cover the total of the current liabiities. the delta for cash and liabilities is 132M and the loan & trade receivables at date is 146M, quite tight huh?! luckly they loan payment terms is by salary deduct scheme. 1 question to ask, did RCECAP also giving personal loan to non-government servants that do not have the repayments through the Salary Deduction Scheme?? this is important rite?!

Financial wise should not be a problem if they maintain to receive the consistant payment from the scheme. The only remaining concern is the 1 question that i ask my self lol.

In terms of the performance wise, the RoE for this company are as below:
26.16 (06), 49.77(07), 27.4(08), and the latest 22.3(09)

My understanding from this figure is when the market is good (07-08), the consumer force will be strong and more ppl is applying loan to spend. other point is the RoE performance will be more or less maintain at it is ( in this case i would say is >20) because the payment from the loan any how have to be done (more over through salary deduction scheme!!) regardless of market situation -> crash or not crash (i believe the loan that provided by RCECAP is calculated in the term of year, need to confirm!!). So i would expect that we may only see the effect of the resent market tsunami on the RoE after next few quarter, agree? but 1 think strange is th e revenue is increasing for RCECAP! mean more ppl is applying loan in this kind of market. strange!!!

For others important ratio such as current ratio, the latest figure is 1.08, only slightly above 1, not so good lo. Debt to Cap. ratio is 0.68, as comparable to pas few years performance which is around 0.7+.

So for current RCECAP price at 0.585, converted to Pe with latest EPS 2.60 sen, assume the same earning in coming 4 quarter, the forward EPS estimated to be at 10.4 sen, the PE will be at 5.63. quite low lol..

To enter RCECAP, the risk will be focus on how strong the company is able to retrave the schaduled payment from the loan stably and how to further improve the current ratio as i can see the current debt is ngam ngam can be cover by all her current asset (with the cash on-hand, RCECAP are not able to cover it curent liabilities lol). Anyhow, since the loan payment will be made through salary deduction scheme and the target of the customer is from goverment sector, i think this had minimized the risk for this bat to lower stage.

My plan is:
- Will allocate not more then 30% from my capital on RCECAP.
- Price to enter, i will follow SAM's call and start to collect stage by stage with anything below 0.55.

I'm thinking whether should i wait for Monday *V*!!! hahaha... Time to sleep..