Thursday, September 19, 2019

DLady: Attractive Enough?

DLady reported a poor set of result in QE30/6/2019. Its net profit dropped 49% q-o-q or 44% y-o-y to RM17 million. This was accompanied by revenue decline of 8% q-o-q or 4% y-o-y to RM244 million. The q-o-q profit decline was due to lower revenue, category product mix changes, coupled with strategic pricing, increase in raw material prices, negative forex changes and investment in advertising and promotional spend.

Table: DLady's last 8 quarters' financial performance

Following the poor results, DLady's share price began to tumble. As at yesterday, DLady has dropped nearly RM8 over  the past 2 weeks to RM56.70. The next strong support is at the horizontal line at RM50.00-51.00. 

Chart 1: DLady's weekly chart from 2012 to Sep 18, 2019 (Source: Malaysiastock.biz)

I have overlaid 3 extreme moving average lines, i.e. the 100-week, 200-week and 250-week SMA lines (see Chart 1). The last time DLady went as low as the 250-week SMA line was during the Global Financial Crisis of 2008 (see Chart 2). DLady is now slightly below the 250-week SMA line (see Chart 1). 

Chart 2: DLady's weekly chart from 2003 to 2011 (Source: Malaysiastock.biz)

If you owned this stock or planned to invest in it, the current price level is quite tempting. Among the reason given for the decline in profits is "investment in advertising and promotional spend". This item can be a wild card that has exaggerated its profit decline, and its absence could also help to swing the profits the other way. 

Based on past strong financial performance and steady market leadership, I believe DLady could be a good stock for long-term investment. To be on the safe side, we should wait for the results for the next quarter before taking an oversize position in the stock.

Genting: Approaching Long-term Uptrend Line

For the past 2 weeks, Genting has been struggling to stay around the RM5.90 level which was the low recorded in December 2018. It traded to intra-day lows of RM5.81 before closing at around RM5.85.

However, Genting broke below the RM5.80 level yesterday to an intraday low of RM5.73. It managed to climb back up to close at RM5.80 in the last hour of trading.

If Genting failed to stage a strong rebound in the next 1-2 days, it may continue to go lower. However, if you look at the monthly chart, we can draw a tentative long-term uptrend line where the support is at RM5.40-5.50.

Based on this technical analysis, Genting's near-term outlook is negative as the share price has now convincingly broken below the last low of RM5.90-5.91. If Genting continued to slide, then the next support at the tentative long-term line at RM5.40-5.50 would be critical. We will have to wait and see how Genting will fare in the weeks ahead.


Chart 1: Genting's weekly chart as at Sep 18, 2019 (Source: Malaysiastock.biz)


Chart 2: Genting's monthly chart as at Sep 18, 2019 (Source: Malaysiastock.biz)

Monday, September 16, 2019

BAUTO: Earnings Dipped

Results Update

For QE31/7/2019, BAuto's net profit dropped 16% q-o-q but up slightly by 0.5% y-o-y to RM50.5 million while revenue dropped slightly by 0.6% q-o-q but rose 10% y-o-y to RM535 million.

Group revenue dropped marginally by 0.6% or RM3.3 million q-o-q mainly attributed to lower sales volume recorded from the Philippine operations because of supply constraint from Mazda Japan for the new Mazda3 and affected demand for Mazda CZ-3 due to the launch of the facelift model in the next quarter. Revenue growth from the domestic operations was flattish as its sales volume was comparable to the preceding quarter.

Group pre-tax profit dropped RM12.6 million or 16.2% q-o-q mainly due to compressed gross profit margin from the domestic operations following the Mazda CX-5 run-out promotion where more sales incentives were given to hasten the sale of this model to clear the inventories as the upcoming launch date of the facelift model draws closer.


Table: BAuto's last 8 quarters' financial performance


Graph: BAuto's last 31 quarters' financial performance  

Financial position

As at 31/7/2019, BAuto's financial position is deemed satisfactory with current ratio at 2.37 times and total liabilities to total equity at 0.87 time.

Valuation

BAuto (closed at RM2.39 last friday) has a fair PER of 10.4 times (based on last 4 quarters' EPS of 22.88sen). BAuto paid quarterly dividends which totaled 22 sen over the past 4 quarters. This translates to a dividend yield of 9.2%. Based on the above, BAuto is an attractive stock.

Technical Outlook

BAuto has been moving in sideways manner between RM1.90 and RM2.40 from late 2015 until middle of 2019. In June 2019, BAuto broke above the RM2.40 resistance and rose to RM2.75 in July. After peaking at RM2.78, the share price dropped back into the trading range again in late August. 


Chart: BAuto's weekly chart as at Sep 13, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on satisfactory financial performance & financial position and fair valuation, BAuto is a good stock for long-term investment.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Oil & Gas Stocks May Rally This Week

On Saturday, Saudi oil processing facility at Abqaiq and the nearby Khurais oil field were attacked by drones. These attacks knocked out 5.7 million barrels of daily crude production or 50% of Saudi's oil output (here). The tighter supply of crude oil led to prices soaring more than 10% today (here). Brent crude oil price was trading at USD65.45 as at 6:42 AM EDT on Sep 16. The attack will lead to increased geopolitical risk of a war in the Middle East, as the U.S. has already pointeda finger at Iran (here).

Prior to the attack, Brent crude oil was drifting lower- pressed by an intermediate downtrend line, RR with resistance at USD68. The downside would not valid the longer term uptrend line, SS with the support at USD55. This morning, Brent crude oil price shot to a high of USD71.95 but it has since dropped back below the intermediate downtrend line, RR. As the situation in the Middle East will remain fluid, the crude oil price may retest the downtrend line again in the days ahead.


Chart 1: Brent's daily chart as at Sep 13, 2019 (Source: Stockcharts.com)

Our Energy index has been trending higher ever since it broke above its downtrend line at the start of the year. I expect the index to test its recent high at 1130 tomorrow.


Chart 2: Bursa Energy index's daily chart as at Sep 13, 2019 (Source: Kenanga BTX)

I have short-listed a few O&G stocks that are rated as Out-perform by Kenanga for your consideration.

Table: Selected Kenanga Oil & Gas stocks

Friday, September 13, 2019

ASTRO: Earnings Rebounded

Results Update

For QE31/7/2019, Astro's net profit rose 9 folds y-o-y to RM169 million on the back of a 13%-drop in revenue to RM1.24 billion. Compared to the immediate preceding quarter (QE30/4/2019), net profit dropped 4% while revenue rose marginally by 0.2%.

Revenue was lower by RM180 million or 13% against corresponding quarter mainly due to a decrease in subscription revenue and licensing income. EBITDA margin improved by 15.0% against corresponding quarter, due to lower content costs and marketing and distribution expenses. Net Profit increased by RM153 million or 10 folds compared with the corresponding quarter mainly due to increase in EBITDA and lower net finance costs, offset by higher tax expenses.


Table: Astro's last 8 quarterly results


Graph: Astro's last 32 quarterly results

Financial Position

Astro's financial position improved slightly with current ratio of 0.98 time and gearing ratio of 6.6 times.

Valuation

Astro (closed at RM1.39 in the morning session) is now trading at a trailing PE of 11 times (based on last 4 quarters' EPS of 11.83 sen). In addition, Astro paid out dividend quarterly which amounted to 6 sen for the last 4 quarters; giving the stock an attractive DY of 4.3%. Based on these PER and DY, Astro is deemed fairly attractive.

Technical Outlook

Astro is trapped in a triangle, with the upside capped at RM1.45 and downside supported at RM1.30. Until Astro can break out of this triangle, it will likely be around the RM1.40 level.


Chart 1: Astro's daily chart as at Sep 13, 2019_12.30 (Source: Malaysiastock.biz)


Chart 2: Astro's weekly chart as at Sep 13, 2019_12.30 (Source: Malaysiastock.biz)

Conclusion

Based on improved financial performance, I believe Astro is still a good stock for long-term investment based on fair valuation.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Wednesday, September 11, 2019

Magni: Earnings Continued to Rise

Results Update

In QE31/7/2019, Magni's net profit rose 40% q-o-q or 39% y-o-y to RM30.5 million while revenue rose 40% q-o-q or 20% y-o-y to RM327 million.

Revenue rose 40% q-o-q due to 45%-increase in Garment revenue mainly due to higher sale orders received while packaging revenue slipped by 5.9% amid lower sale orders received.

PBT increased by 50% q-o-q due to 59%-increase in Garment PBT mainly due to higher revenue, better gross profit margin mainly driven by the improvement in operational efficiency, and the lower foreign exchange loss of RM0.011 million versus foreign exchange loss of RM1.126 million in QE30/4/2019. Packaging PBT was 37.9% lower mainly due to weaker revenue, gross profit margin and dividend income.


Table: Magni's last 8 quarterly results


Graph: Magni's last 50 quarterly results

Financial Position

As at 31/7/2019, Magni's financial position was very healthy with current ratio at 5.3 times and gearing ratio at only 0.21 time.

Valuation

Magni (closed at RM5.40 yesterday) has a trailing PE of 7.9 times (based on last 4 quarters' EPS of 68.3 sen). At the same time, Magni  paid quarterly dividend which totaled 23 sen; giving the stock a DY of 4.26%. Overall, Magni is still fairly attractive.

Technical Outlook

Magni has been gradually rising in the past 9 months. It has now surpassed the resistance from the horizontal line at RM5.25 as well its July high at RM5.38. It may continue to climb higher and test the resistance at the horizontal line at RM5.65


Chart: Magni's weekly chart as at Sep 10, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on good financial performance and position, attractive valuation and mildly bullish technical outlook, Magni is a good stock to consider for long-term investment.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Tuesday, September 10, 2019

Axiata & Telenor: Merger Deal off


Axiata and Telenor (DIGI's parent company) have just called off their merger deal (here and here). This should bring down the share prices of Axiata & DIGI to the levels just preceding the announcement on 6 May (here and here). If we were to factor in the unwinding of any position built-up after the merger announcement, then the price levels may go down a bit more (say, another 10 sen lower). Thus, if you want to buy into the selldown of Axiata and DIGI, the good price to aim for would be RM3.85-4.00 for Axiata and RM4.30-4.40 for DIGI.


Chart 1: Axiata's daily chart as at Sep 10, 2019_9.15am (Source: Malaysiastock.biz)


Chart 2: DIGI's daily chart as at Sep 10, 2019_9.15am (Source: Malaysiastock.biz)

Monday, September 02, 2019

Market Outlook as at August 30, 2019

Last Friday, our market had a decent rally ahead the Merdeka holiday. The index, which was hovering at 1602 around 3:00 pm, was pushed up to close at 1612 in the last 1 hour. Coupled with the morning gain, FBMKLCI rose nearly 17 points last Friday. 


Chart 1: FBMKLCI's daily chart as at Sep 2, 2019 (Source: Malaysiastock.biz)

Given the hour push-up, I expect the index to cede easily 10 points on opening Tuesday. However, if you were to take a closer look at the FBMKLCI chart, the index is poised for recovery after a long decline from 1690 in late July. Thus I believe the index will likely trade around 1600 next week.


Chart 2: FBMKLCI's daily chart as at Sep 2, 2019 (Source: Malaysiastock.biz)

Market will remain lethargic next week. Cautious buying of attractive good stocks, is still advisable. Of those stocks which had announced their results last week, CIMB and Maybank look quite attractive, and worth buying on weakness. Good luck!

BURSA BEGINNER WEBINAR: THE POWER OF EARNINGS

I will be presenting a webinar entitled The Power of Earnings under Bursa Beginner Webinar series.



I will cover the following topics:
          Underlying assumptions
          How to assess a stock’s earnings
          Finding stocks with earnings breakout
          Finding stocks with rising earnings
          Earning trend and Price trend
          Using PEG ratio

          How to assess a loss-making stock

Click here to register for the webinar.

Friday, August 30, 2019

Maybank: Steady as she goes

Results Update

For QE30/6/2019, Maybank's net profit rose 7% q-o-q but dropped 1% y-o-y to RM1.94 billion while revenue was up 1% q-o-q or 13% y-o-y to RM13.05 billion. The increase in net profit was attributable to increase in Other Operating Income of RM302 million - the biggest item is net investment income of RM219 million - and (wait for this) decrease in impairment losses on loans, advances, financing and other debts of RM212 million. The latter would be a positive development as the market has been holding its breath- expecting Maybank to take a big hit from Hyflux and other big names.


Table: Maybank's last 8 quarterly results


Graph: Maybank's P&L for last 55 quarterly results

Valuation

Maybank (closed at RM8.57 yesterday) has a PER of 11.8 times (based the last 4 quarters' EPS of 72.79  sen). In addition, it is trading a price to book of 1.2 times (based on NTA of RM7.07 as at 30/6/2019). It has a dividend yield of 6.7%. At these multiples, Maybank is deemed fairly attractive, especially for income-seeking investors.

Technical Outlook

Maybank tested the line connecting the troughs/lows for the past 2 years at RM8.50. It came fairly close to the "uptrend line" SS, where the support would be at RM8.30. Maybank is likely to find support at these prices unless some terribly bad events happened.


Chart: Maybank's weekly chart as at Aug 29, 2019 (Source: MalaysiaStock.Biz)

Conclusion

Based improved financial performance, fairly attractive valuation and long-term positive technical outlook, Maybank remains a good stock for long-term investment.

Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

CIMB: A Better Performance Actually

Results Update

For QE30/6/2019, CIMB reported a net profit which dropped 24% y-o-y but rose 27% q-o-q to RM1.51 billion. As reported (above), PBT & NP dropped about 20-24% 40% y-o-y due to two exceptional one-off items booked into the account last year (QE30/6/2018): RM928 million gain on sale of 20% of CPAM and 10% of CPIAM. If these 2 items are excluded, the Group operating income rose 13.5% y-o-y, "emanated from the stronger capital market-driven NOII, reflected in the 78.2% y-o-y jump in Wholesale Banking PBT. Consumer Banking PBT was 74.2% lower y-o-y from reduced NII, higher operating expenses and provisions. Commercial Banking improved 89.0% y-o-y from reduced provisions. GVPF improved 229.9% y-o-y from the improved performance in the Group’s fixed income portfolio in 2Q19, which contributed to the Group’s 43.3% y-o-y growth in 2Q19 net profit.


Table 1: CIMB's last 8 quarterly results


Table 2: CIMB's results for QE30/6/2019 cf. QE30/6/2018


Graph: CIMB's P&L for last 32 quarterly results

Valuation

CIMB (closed at RM4.94 yesterday) has a PER of 7.7 times (based the last 4 quarters' EPS of 63.96  sen). In addition, it is trading a price to book of 0.9 time. It has a dividend yield of 5.3%. At these multiples, CIMB is deemed very attractive.

Technical Outlook

CIMB is now resting on the strong support from the horizontal line at RM5.00.


Chart: CIMB's daily chart as at Aug 29, 2019 (Source: MalaysiaStock.Biz)

Conclusion

Based improved financial performance and attractive valuation, CIMB is an excellent stock for long-term investment.

Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.