Sunday, May 19, 2019

N2N: Earnings Rebounded on Lower Provision for Trade Debts

Result Update

In QE313/2019, N2N's net profit rose 99% q-o-q but dropped 16% y-o-y to RM5.6 million while its revenue dropped 2% q-o-q but rose 6% y-o-y to RM27 million. The Group’s revenue dropped marginally q-o-q due to a one-time implementation fees recorded in the previous quarter. Compared to the immediate preceding quarter, the Group’s core profits improved by 53.72% to RM4.45 million (Q4 2018: RM2.89 million) mainly due to lower provisions for trade receivables and other non-recurring administration costs.


Table: N2N's last 8 quarters' P&L


Graph: N2N's last 22 quarters' P&L

Latest Financial Position

As at 31/3/20198, N2N's financial position is very healthy, with current ratio of 6.4x and gearing ratio of 0.19x.

Valuation

N2N (closed at RM0.745 last Friday) is now trading at a PER of 34x (based on annualized core EPS 2.18 sen). At this PER, N2N is deemed fully valued.

Technical Outlook

N2N is in a long-term uptrend line (SS) with support of RM0.73 (previously stated at RM0.80).


Chart: N2N's weekly chart as at May 17, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on satisfactory, albeit weaker, financial performance, healthy financial position and positive technical outlook, N2N could be a good stock for long-term investment. It may benefit from a pick-up in equities trading in the region this year.

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.

Kotra: Earnings Improved on Better Cost Control

Result Update

In QE31/3/2019, Kotra's net profit rose 7% q-o-q or 41% y-o-y to RM5.2 million while its revenue dropped 10% q-o-q or 9% y-o-y to RM41 million. The Group's revenue dropped q-o-q mainly due to lower sales of health supplement products to both the local and export markets and decrease in tender supply to local markets in current quarter. The Group's profit before tax rose q-o-q mainly due to rationalization of selling and administration expenses and lower advertisement & promotional expenses incurred in current quarter.


Table: Kotra's last 8 quarters' P&L


Graph: Kotra's last 49 quarters' P&L

Latest Financial Position

As at 31/3/2019, N2N's financial position is satisfactory, with current ratio of 2.4x and gearing ratio of 0.48x.

Background

Kotra is involved in manufacturing & trading of pharmaceutical and healthcare products. 

Kotra's MD, Jimmy Piong Teck Onn & the group's range of products

You can read about this group 's plan in 2018 (here). I post about Kotra once in October 2006 (here).

Valuation

Kotra (closed at RM1.71 last Friday) is now trading at a PER of 11x (based on last 4 quarterly EPS of 15.62 sen). At this PER, Kotra is deemed fairly attractive.

Technical Outlook

Kotra has been range-bound between RM1.60 & RM1.80 for the past 2 years. An upside breakout of the range at RM1.80 could set the stage for an upswing in the share price. Alas, there is no sign yet that this is about to happen.


Chart: Kotra's monthly chart as at May 17, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on satisfactory financial performance, satisfactory financial position and fairly attractive valuation, Kotra could be 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.

Friday, May 17, 2019

Carlsbg: Earnings boosted by CNY promotions

Results Update

In QE31/3/2019, Carlsbg's net profit increased 30% q-o-q or 8% y-o-y to RM88 million while revenue rose 26% q-o-q or 20% y-o-y to RM660 million.

The Group's revenue increased q-o-q mainly due to higher sales in Malaysia following the successful execution of Chinese Near Year promotions. The Group’s profit from operations increased q-o-q mainly due to higher revenues in Malaysia partly offset by the increase in commercial investments.


Table: Carlsbg's last 8 quarterly results

From Chart 1 below, we can see that Carlsbg's quarterly revenue and profits are all at all-time high.



Graph: Carlsbg's last 54 quarterly results

Valuation

Carlsbg (closed at RM24.24 yesterday) is now trading at a PE of 26 times (based on an annualized EPS of 92.86 sen). At this PER, Carlsbg is deemed fairly valued. In addition, it has an attractive dividend yield of 4.2%.

Technical Outlook

From the monthly chart, it looks like Carlsbg may continue with its prior uptrend. As the MACD has crossed above its MACD signal line, it is likely that Carlsbg may experience near term weakness.


Chart 1: Carlsbg's weekly chart as at May 15, 2019(Source: Malaysiastock.biz))


Chart 2: Carlsbg's monthly chart as at May 15, 2019(Source: Malaysiastock.biz))

Conclusion

Based on satisfactory financial results, fair valuation & constructive technical outlook, I would rate Carlsbg a HOLD for now.

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.

Thursday, May 16, 2019

CMSB: Earning Remained Stable

Results Update

For QE31/3/2019, CMSB's net profit dropped 29% q-o-q but rose 5% y-o-y to RM41 million while revenue was mixed, down 16% q-o-q but up 18% y-o-y to RM418 million. All Divisions except the Strategic Investment Division reported higher revenue in PE2019 compared to PE2018. The Strategic Investment Division reported higher losses in PE2019 due to higher losses from the education subsidiary and losses from Malaysian Phosphate Additives (S) Sdn. Bhd. (MPAS). Previously, MPAS was classified under associates.

However, all Divisions except the Construction & Road Maintenance Divisions reported higher profits in PE2019 due to higher revenue and gross profit margin. The higher gross profit margin was attributable to a land sale by the Property Development Division. However, this has been partially negated by lower share of results of associates and joint ventures.


Table: CMSB's last 8 quarters' P&L

Graph: CMSB's last 23 quarters' P&L

Valuation

CMSB (closed at RM3.30 yesterday) has a PER multiple of 13 times (based the last 4 quarters' EPS of 24.96 sen). At this PER, CMSB is deemed fairly attractive.

Technical Outlook

CMSB is moving in a downward channel, with resistance at RM3.60-3.70. Due to the presence of a rising intermediate uptrend line (within the downward channel), CMSB will have good support at RM3.00.


Chart: CMSB's weekly chart as at May 15, 2019(Source: Malaysiastock.biz)

Conclusion

Based on good financial performance, exciting prospect, fairly attractive valuation and positive technical outlook, CMSB could be 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.

Penta: Earnings Continued to Grow

Results Update

For QE31/3/2019, Penta's PBT increased by 4% q-o-q or 171% y-o-y to RM19.6 million while revenue rose 6% q-o-q or 20% y-o-y to RM119 million. Group revenue rose q-o-q due to increase in sales from automated equipment operating segment. Group profit before taxation rose by 9% q-o-q which was in tandem with the increase in revenue.


Table: Penta's last 8 quarterly results

 
Graph: Penta's last 25 quarterly results 

Financial Position

Penta's financial position is satisfactory, with current ratio at 3.6 times and gearing ratio at 0.3 time. In addition, it is noted that Penta has a net cash balance of RM373 million or RM1.18 per share!!

Valuation

Penta (closed at RM4.20 yesterday) is now trading at a PER of 19 times (based on last 4 quarters' EPS of 21.9 sen). Based on an earning CAGR of 42% over the past 3 years, PENTA's PEG ratio is at 0.5 time. At this PEG ratio, Penta is deemed a very attractive growth stock.

Technical Outlook

Penta is rising in a long term uptrend (in blue). However the current rally may be hitting the resistance from the line connecting its recent peaks (in red). Unless there is a breakout above the red line (at RM4.50), Penta's upside will be limited.


Chart: Penta's weekly chart as at May 15, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on good financial performance & financial position and attractive valuation, Penta 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.

Wednesday, May 15, 2019

Construction & Building Material Stocks Uptrend Intact

Construction stocks, such as Gamuda and IJM, had a strong rally over the past 4-5 months. They too underwent correction in the past 2 weeks. It is good to see that their uptrend lines are still intact. 

 
 Chart 1: Gamuda daily chart as at May 15, 2019_10.45am (Source: Malaysiastock.biz)


Chart 2: IJM daily chart as at May 15, 2019_10.45am (Source: Malaysiastock.biz)

The same goes for building material stocks such as Annjoo and Tasek. Tasek reported another loss-making quarter for QE31/3/2019 (here).


 Chart 3: Annjoo daily chart as at May 15, 2019_10.45am (Source: Malaysiastock.biz)


 Chart 4: Tasek daily chart as at May 15, 2019_10.45am (Source: Malaysiastock.biz)

Despite weaker market sentiment, construction & building material stocks still gather buying support as the revival of ECRL and Bandar Maalysia will spur recovery for both sectors going forward.

Market Outlook as at May 15, 2019

FBMKLCI has managed to climb back above 1600. The index may continue to go higher in the next few days though it may be interrupted by the public holidays on next Monday & Wednesday. After the short rebound - which may touch 1630-1635 - the market will likely drift sideways for a while due to global uncertainties such as geopolitical problems between US & Iran (impacting crude oil prices) as well as continuing trade war rhetoric between US and China (impacting global trade). 


Chart 1: FBMKLCI daily chart as at May 15, 2019_10.54am (Source: Malaysiastock.biz)

It is worth noting that USD-MYR has broken above the 4.15 mark, and it could rally quickly to 4.19-4.20. A break above 4.20 will bring out fear of economic problem in the country, which would depress the market sentiment.


Chart 2: USD-MYR daily chart as at May 15, 2019_11:00am (Source: Investing.com)

There will always be winners and losers if the ringgit were to weaken. The usual winners will be the exporters, and none would benefit more than the glove makers. You can see Harta has once again broken above its intermediate downtrend line today.


Chart 3: Harta daily chart as at May 15, 2019_10.45am (Source: Malaysiastock.biz)

As always, a sharp plunge in the market after a prolonged decline has a cathartic effect on the market players. We are seeing a relief rally today and we can adjust our position accordingly so that we will be better position for the next move. Good luck!

Tuesday, May 14, 2019

US Stock Markets Outlook as at May 14, 2019

Yesterday, DJIA plunged 617.4 points (or, 2.4%) to 25222.5 while S&P500 plunged 69.5 points (or, 2.4%) to 2811.9. That came after China gave a reply to US tariff hike from 10% to 25% for goods imported by US from China totaling USD200 billion. The reply is a Chinese tariff hike to 25% for goods imported by China from US totaling USD60 billion. 

To be fair, the signs of a potential temporary top in US stock markets was present for the past 1-2 weeks. The MACD indicators for both DJIA and S&P500 show bearish divergence despite going higher from February to April. In early May, the -DMI crossed above +DMI signaling a potential reversal for both DJIA & S&P500. With these indices breaking below the 50-day SMA lines, the temporary top is in, and we will likely see a decline to at least 24000 for DJIA and 2650 for S&P500.

 
Chart 1: DJIA daily chart as at May 13, 2019 (Source: Stockcharts.com)

Chart 2: S&P500 daily chart as at May 13, 2019 (Source: Stockcharts.com)

Meanwhile, FBMKLCI tested the lower boundary of a downward wedge formation (aka a bullish wedge!) at 1600 yesterday. It is likely the index will break thru this level today. The next support level will be at 1550.


Chart 3: FBMKLCI daily chart as at May 13, 2019 (Source: Malaysiastock.biz)

Monday, May 13, 2019

Market Outlook as at May 13, 2019

Our market has been declining for the past 4-5 days. Pressured by foreign funds selling, FBMKLCI continued its loosing streak which stretches back to May 2018. The decline takes the shape of a downward wedge. FBMKLCI may soon test the lower line of the wedge at 1605, and hopefully this will probably a rebound for the index.


Chart 1: FBMKLCI daily chart as at May 10, 2019 (Source: Malaysiastock.biz)

The other indices have been rising for the past 4 months but they all broke their medium-term uptrend lines last week.


Chart 2: FBM70 daily chart as at May 10, 2019 (Source: Kenanga's BTX chart)


Chart 3: FBMSCAP daily chart as at May 10, 2019 (Source: Kenanga's BTX chart)


Chart 4: FBMACE daily chart as at May 10, 2019 (Source: Kenanga's BTX chart)


Chart 5: FBMFLG daily chart as at May 10, 2019 (Source: Kenanga's BTX chart)

Based on the simultaneous breakdown of all the 2nd and 3rd liner stock indices, our market will likely go lower in the near future. Trading in this market will be very tricky and not advisable. Investors will have to accept a longer time horizon for their investment.

Wednesday, May 08, 2019

Harta: Earnings Dipped

Result Update

For QE31/3/2019, Harta's net profit dropped 24% q-o-q or 22% y-o-y to RM91 million while revenue was mix- down 5% q-o-q but up 11% y-o-y to RM684 million. Revenue dropped q-o-q mainly due to lower average selling price for the quarter. Profit before tax for the quarter eased by RM36.3 million or 24% mainly due to sharp strengthening of the ringgit in a short time frame as the Group was unable to pass on the corresponding cost increase to customers in a timely manner. Other factors such as lower average selling price, higher upkeep of office equipment, plant & machinery cost and labor also contributed to lower profits for the quarter.


 Table: Harta's last 8 quarterly results


Graph: Harta's last 53 quarterly results

Financial Position

As at 31/3/2019, Harta's financial position is deemed healthy with current ratio at 1.85x and gearing ratio at 0.32x.

Valuation

Harta (closed at RM5.05 yesterday) is trading at a trailing PER of 37 times (based on last 4 quarters' EPS of 13.74 sen). At this PER, Harta is deemed fully valued.

Technical Outlook

Harta has been declining in a downtrend line (RR) with resistance at RM.10. Until Harta had surpassed this downtrend line, its share price will remain weak. However, the rising low may provide support (SS) at RM4.70.


Chart: Harta's daily chart as at May 7, 2019 (Source: Malaysiastock.biz)

Conclusion

Despite weaker result & demanding valuation, Harta is considered a good stock for long-term investment based on capable management team and strong leadership in the glove sector.

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.

Dufu: Earnings Dropped Sharply

Result Update

For Q31/3/2019, Dufu's net profit dropped 72% q-o-q or 28% y-o-y to RM4.2 million while revenue dropped 22% q-o-q or 6% y-o-y to RM49 million. Profits dropped mainly due to the decreased in revenue, unfavorable foreign exchange rate and lower production output which has resulted in higher absorption fixed overhead costs.


Table: Dufu's last 8 quarterly result


Graph: Dufu's last 23 quarterly result

Financial Position

Dufu's financial position as at 31/3/2019 is deemed healthy. Its current ratio and gearing ratio stood at 4.6 times and 0.3 times respectively.

Valuation

Dufu (closed at RM1.70 yesterday) is now trading at a trailing PER of 8.3x (based on last 4 quarters' EPS of 20.43 sen). At this PER, Dufu is deemed fairly attractive.

Technical Outlook

Dufu has been sideways (with a slight upward bias) for the past 4  months. The current price decline will likely test the lower price range of RM1.55. 


Chart: Dufu's daily chart as at May 7, 2019 (Source: Malaysiastock.biz)

Conclusion

Despite poor financial performance last quarter, Dufu is still a good stock for long-term investment based on healthy financial position and fairly attractive 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.