Advance Information Marketing (0122)

AIM is listed in Mesdaq since 2005. Its EPS on 2006 was 6.22 sen. Current financial year EPS is expected achieving 5 sen. http://www.aim-net.com.my/index.html

AIM core business is doing customer loyalty program. It is a marketing company that provide business solution to entreprise, for running customer loyalty program. CFY, it is expanding its business to china via a new subsidiary.

Attracting point in AIM is not the business nature (since it is a new company, need time to prove its moat or entry barrier). Actually, AIM is facing a decreasing in their profit margin. 2006, its ROE is 25%,but 2007 drops to 19%.

Actually, i think its buying price is attractive. according to peter lynch selection, i classified AIM under 资产富裕型. Or we also can say its buying price give us a margin of safety. Its current NTA is RM0.27 , compare to current share price is RM0.32. It has RM1 million long term debts, compare to its cash of RM20million++. So, it is a net cash company. divide by 155miilion issued share, its net cash per share is RM0.13. Means, actual price is less than RM0.20. it is a great discount.

I bought AIM for a few times, now already accumulated 11,500 units with average price of RM0.32. Refer to its EPS 5 sen this year, PE is just around 6.3 and this is not include the discount of net cash in hand.

On 11/12/07, it just announced that interim dividend of 10%,tax exempted, pay at 26/12/07. refer to RM0.32, this dividend is equal to 3.3%. So, current financial year, its dividend is expected more that 5% at least.

with EPS of 5 sen, its return rate is 0.05/0.32= 17.5%, which is extremely high. from my own calculation, if AIM able to maintain ROE of at least 15% for next 5 years, buying AIM with RM0.32, i will enjoy 20% compound interest grow with its share.

For my opinion, AIM is greatly undervalued. Its business maybe competative, maybe not. It is still new and has to be studied. But, the investment is valuable with its high dividend yield and high cash in hand. Actual buying price that is lower than NTA, also offer investors a great margin of safety. If AIM grow well, then this is extra benefits to investors.