Wednesday, March 5, 2014

Five Reason why invest in Brahim

In my last email, one of the stock I wrote was Brahim (9474.kl). Since I received few query about this company, I think it's good for me to tell some story.

Five years ago, there was a company name Tamadam, it's was not famous and only few people want to invest it stock, as the earning/ profit of the company was suck! However, this change after 2008, when the company changed direction and rename it as Brahim.

  Since then, the company bought "LSG Sky Chefs Holdings" and turn itself became the monopoly business - the world's largest halal fight kitchen. Currently, it able to produce about 60,000 fight halal meal daily, with MAS as their main customer. Beside MAS, it also provide the similar service to other 35 Airlines. At the LCCT, it also operate two restaurant under name of Taste of Asia and Cafe Expresso. Assume 1 billion Muslim worldwide travel within these Airlines, for Brahim to grow 20% a year is not a problem.

  Brahim will start the sugar operation in 2015, it all start when the company acquired holding of Admuda Sdn Bhd. The licence for this operation come with period of 38 years. So, what's so special about this business? The management already sign agreement with TRR from Thailand to supply raw sugar at very low cost of 16.5 cents per pound. Since the cost is cheaper than market price for other place in Malaysia, of course the profit will better than others. This will contribute about 35% of Brahim's revenue on 2015.

  With 2014 as visit Malaysia year, visitor or tourists come to this region is expected to increase. I don't think it's hard for Brahim to double it's profit. Further with completion of new KLIA2, 10% increase of passenger and more new Airlines added, for Brahim's earning to compound by 20% per year is also not a problem.

  Brahim also have a strong political connection, with Datuk Ibrahim Ahmad Badawi as major share holder and Executive Chairman, the company will become "Boleh" and no problem in Malaysia Business world. Don't need to worry, unless you see something happen in news paper, Ops! Suddenly Datuk sell the company's share!

  Brahim got the blessing from the Government, Tabung Haji and Felda as well, especially making the country become hub for halal Islamic consumer products and Islamic centre halal food and many more... don't need to write further...

  Finally, I use the word from Warren Buffet, "Invest for productivity Asset". If one belief Brahim can grow at 20% per year for the next 5 years, meaning in next 4 to 5 years, the profit will double. Do you think the "share price" will still same as today?  With current market price of RM2.30, investor who believe the story can buy on dip and keep the stocks for next few years. For those who like to trade (or I call it speculate), try to buy 2 unit for each trade and if the stock going up, trade only 1 unit and let the other unit keep for 2 years to see the result. If the story become true, you will double your fund. Good Luck!