Leong Hup Holdings Bhd ('LHH') is involved in poultry farming and breeding, processing and marketing of chickens and related products as well as manufacturing and trading of food products. In addition, it is also involved in housing development and oil palm cultivation.
Technical Outlook
Recently, LHH has broken to the upside of its symmetrical triangle at RM1.15-18 (see Chart 1). From the monthly chart (Chart 2), we can see that LHH has a cycle of 2 years, where the stock has a sharp rally. That cycle was broken in 2008. The same disruption in the 2-year cycle was also observed in 1998- during the Asian Financial Crisis. After the Asian Financial Crisis, LHH rose steadily until it peaked in 2000. Could LHH repeat the same performance now (with the Global Financial Crisis over) & re-establish the 2-year cycle again? Only time will tell...
Chart 1: LHH's daily chart as at Jan 8, 2010_9.25am (Source: Quickcharts)
Chart 2: LHH's monthly chart as at Jan 7, 2010 (Source: Tradesignum)
Financial results
I have appended below LHH's results for the past 8 quarters, which is nothing to shout about. In addition, I have appended the charts of its last 17-quarter results (Chart 3) and for the last 10-year results (Chart 4). Chart 3 presents the results in reverse chronological order, while Chart 4 presents the results in chronological order. We can see that LHH's top-line has been rising steadily while its bottom-line remain unchanged over the years.
Table: LHH's 8 quarterly results
Chart 3: LHH's 17 quarterly results
Chart 4: LHH's 10 yearly results
Conclusion
LHH is a speculative stock which may be played again. If you like to get into this play, you must do so asap on the next pullback.
7 comments:
Hi Alex,
Can you comment about the current market?
Hi Teh,
FBM-KLCI has surpassed its November high of 1288 on Jan 5 on high volume. The next resistance will be at 1300.
The market action over the last 2 days & today indicates some correction & profit-taking which is quite healthy. The current political tension arising from the 'ALLAH' furore will probably dampen the sentiment somewhat. Unless the FBM-KLCI dropped below 1288, the bullish breakout will still hold & the CNY rally is still likely.
How high LHH can go?
LHH and D&O, which u think have better chance to go higher ?
Hi Alex Lu
Did you know anything about JAKS, what I know is JAKS also is a speculative type of share.
Now the price is RM0.71 and it about to issue warrant, will it use this warrant to speculate up the share price?
Beside the warrant news I also hear JAKS pipe fitting is closing down due to not order from US since end of 2008, however JAKS had got the Kelau Dam project so they are a good news and a bad news will it speculated the share?
Thanks for any advise.
Hi Cheer,
I think LHH may shoot for RM2.00 level. Then again, it may not move as anticipated.
D&O has a nice breakout of its long-term downtrend line at RM0.42 at the end of Dec last year. D&O has surpassed 2005 high of RM0.64-65. A stock that has made new high is always very exciting. How far can it go? Nobody knows.
I cannot answer your question which stocks is better. You have to weigh the risk & the reward before deciding.
Hi Durian Edge,
Jaks is still in a long-term downtrend line until it has surpassed RM0.95.
The issuance of new warrants seems to spark interest in a stock. Part of the reason could be that it's easier to play up the newly-issued warrants as compared to the existing share, which has large hangover (or, stale bulls). We have seen how Media-WB was issued & how it has generated strong interest for Media. The same can also be seen in the case of Scomi-WA & Scomi. The management of Jaks maybe hoping to do the same for the share.
Hi Alex Lu
Thanks for the reply.
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