Press Metal Berhad ('PMetal') is an integrated aluminium producer, with an annal remelt capacity of 200,000 metric tonnes and an annual aluminium extrusion capacity of 160,000 metric tonnes. For more, go here.
Financial results
PMetal's results rebounded after incurring losses for QE31/12/2008 & QE31/3/2009. The net loss incurred was RM23.1 million for QE31/12/2008 due mainly to forex losses of RM16.4 million while that incurred for QE31/3/2009 was due to provision for inventory impairment loss as aluminium prices deteriorated as well as additional cost to re-start a smelting plant in China.
Financial Position
PMetal's financial position as at 30/9/2009 is marginal, with adequate liquidity position as reflected by a current ratio of 1.1 times but fairly high leverage position as shown by total borrowings to shareholders' funds of 1.5 times.
Valuation
PMetal (at RM1.37 as at 4.20pm) is trading at a current PER of 11 times. This is based on full-year EPS estimated at 12.5 sen (derived from the annualization of the last 2 qaurters' EPS of 2.51 sen & 3.76 sen, respectively). At this PER, PMetal is fully priced.
Technical Outlook
PMetal has just broken to the upside of a medium-term downtrend line at RM1.33 (see Chart 1). Its immediate horizontal resistance is at RM1.42 & thereafter at RM1.55. Its warrant has similar done an upside breakout at RM0.83 (see Chart 2).
Chart 1: PMetal's daily chart as at Jan 19, 2010_3.20pm (Source: Quickcharts)
Chart 2: PMetal-WB's daily chart as at Jan 19, 2010_3.22pm (Source: Quickcharts)
Conclusion
Based on technical consideration, PMetal could be a good trading BUY.
18 comments:
hi Alex, i am thinking to enter DUFU. Do u think is a good time now at the price of 0.60?
Thanks
hi alex... how do u think bout the REDTONE?
Good evening Alex,
I am researching on this company called Texcycle, a pretty decent outfit with biz in recycling.
Surprisingly, I have yet to see any research coverage. Any comment?
Any advice for the HLFG and HLBank target price?
any comments on johotin, seem that the price is erratic.
Good morning Alex. How u think PWORTH ?? Look like a uptrend is buiding now. How u think ? Can enter now ??
Hi Alex,
Do you have any recommendation on defensive , high dividend and growth potential stock ? I'm changing my focus to this type of stock because i got no time.
Thanks
Hi tan,
A late reply saved the day! Just kidding!
DUFU recorded a net profit of RM6.5 million on sale of RM80 million for 9-month ended 0/9/2009. Full-year EPS is about 7.2 sen. As such, DUFU (at RM0.52 now) is trading at a PER of 7 times.
It's now consolidating after its recent sharp rally. It may find support at RM0.47-0.50.
Hi Loryau
Redtone's immediate support is at RM0.35-36 and thereafter at RM0.28-29.
To be frank, I don't see how Redtone can fight off the deep pocket, Green Packet's P-1. I will avoid the stock, except for trading purposes.
Hi Solomon,
Texcycle is a thinly traded stock. It may have broken above the strong horizontal resistance at RM0.25, but the breakout is doubtful given the extremely thin volume of shares traded.
Texcycle recorded a net profit of RM4.0 million on sale of RM23 million for 9-month ended 30/9/2009. Full-year EPS is about 3.1 sen. As such, Texcycle (at RM0.28 now) is trading at a PER of 9 times.
Hi Ahmad,
Johotin is another thinly traded stock. It seems to be in an uptrend, with support at RM0.52. Overhead horizontal resistance is seen at RM0.70. However, it is noted that the application of technical analysis to thinly traded stocks can be misleading.
Johotin recorded a net profit of RM3.5 million on sale of RM82 million for 9-month ended 30/9/2009. Full-year EPS is about 7.1 sen. As such, Johotin (at RM0.595 now) is trading at a PER of 8.4 times.
Hi Ahmad,
Johotin is another thinly traded stock. It seems to be in an uptrend, with support at RM0.52. Overhead horizontal resistance is seen at RM0.70. However, it is noted that the application of technical analysis to thinly traded stocks can be misleading.
Johotin recorded a net profit of RM3.5 million on sale of RM82 million for 9-month ended 30/9/2009. Full-year EPS is about 7.1 sen. As such, Johotin (at RM0.595 now) is trading at a PER of 8.4 times.
Hi wong,
Pworth may have formed a short-term uptrend line, with support at RM0.51-52. Its immediate horizontal support is at RM0.50 while the immediate horizontal resistance is at RM0.60. The medium-term outlook is likely to be range-bound (or, moving sideway) unless it can surpass the resistance of RM0.60.
Pworth is a marginally profitable company, making pre-tax profit of less than RM1 million for the past two quarters.
Hi David,
That's a good area to park your money since the market may reverse in the weeks or months ahead. However, I do not have a ready list of stocks with good dividend payout at the moment. This is one area that I will look into when time permits.
Hi Alex, here are some stocks which I feel they are safe and are also dividend counters:
PARAMOUNT, DAIMAN , NCB and KIMHIN. Do share with me your thoughts.
Hi Alex,
Wait for your valueable post. I need it very much to save my money. I'm thinking of buying BJTOTO and MAXIS. What do you think?
Rgds,
KH CHAN
Hi Jefrey & David,
I can't promise I will do the list of high dividend yielding stocks any time soon. It is one of those projects that I have wanted to work on, which has been sitting on the back burner for quite a while. Some of the serious hurdles to overcome are how to get reliable raw data; how to sift out exceptional one-off special dividend & capital repayment; and how to value share dividend. Even thinking about these obstacles gives me the headache.
On the few stocks listed by you guys, my technical takes are:
1) Paramon is still in an uptrend, with support at RM2.80 & resistance from channel line at RM3.20.
2) Daiman may have broken above its long-term downtrend line. However, it appears to be trading in a range between RM1.45 & RM1.60.
3) NCB has been testing its medium-term uptrend line support (now at RM3.10). Upside is limited, with strong horizontal resistance at RM3.20 & tehreafter at RM3.40.
4) KimHin is in an uptrend, with support given by the 100-day SMA line at RM1.10-15. Overhead resistance is at RM1.30-35.
5) BJToto has been moving sideway, with prices trapped in what looks like an expanding triangle. The support & resistance would be at RM4.10 & RM4.60.
6) Maxis is range bound between RM5.33 & RM5.40.
For capital preservation, one may opt for Daiman, BJToto & Maxis as they are likely to hold at the present level, while paying out a decent dividend. However, these stocks are poor performers in term of capital appreciation. The other stocks had run up quite a bit and, as such, they have more to give back if their present uptrend were to reverse.
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