After thinking over weekend, i decided to close my position in TGuan.
I have been buying and selling this stocks. Thus the average cost for the stocks i bought is 0.825 , selling price is 0.90 with dividen 4 cent. Total earning for this stocks is (0.115 / 0.825) 100% = 13.9 % Net earning = 11% over 6 mths. Not impressive at all. The reasons why i am selling this stocks is because , i see KLSE are way too hot , today transaction volume hit RM1.7billion, this is abnormal at the rainny days, is market really that good/hot? I
When i gone into details of TGuan financial report, i discover something. For 100miliion+ revenue it makes, it only return with 5 % net profit. The profit margin is too low. I have not seen any progressions to improve net profit. TGuan are targeting overseas market for it export business . Apparently, Strong Ringgit policy will not benefit them. For every 1 % when Ringgit appreciate, it will result profit decline of 1% in Tguan. If their price are no longer competetive, they will not have advantage in overseas market.
Considering a few factor, i decided to withdraw my stacks from this company. I do not know wheter i will regret or bitch about it if it soars, but i practice to invest cautiously. KlSE has reach 1430,while world market has been volatile. Obviously, there is risk. My experience told me that i should close this position and wait the right timing for better stocks. I had one in my mind. I need to be patience and wait.
"In this picture Volkswagon Tiguan "
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