Friday, March 23, 2012

JTiasa proposed a 2-for-1 Bonus Issue


Results Update

JTiasa had just announced its results for QE31/1/2012. Its net profit increased by 11% q-o-q or 14% y-o-y to RM45.5 million while turnover was marginally lower at RM238 million. JTiasa benefited from lower effective tax rate due to no tax effect from the disposal of a subsidiary; thus boosting its profit after tax. It should be noted that its pre-tax profit actually declined by 13% q-o-q or 15% y-o-y to RM50.0 million.


Table: JTiasa's last 8 quarterly results



Chart 1: JTiasa's last 22 quarterly results

Valuation

JTiasa (RM8.39 as at 11.00am) is now trading at a PE of 11.4 times (based on its last 4 quarters ' EPS of 73.82 sen). At this PE multiple, JTiasa is deemed fully valued.

Proposed Capital Exercise

JTiasa has proposed a private placement up to 15% of its share capital and a bonus issue of 2-for-1 thereafter. It has also fixed the ex-date for a dividend-in-specie of 1 Treasury share for every 20 shares owned. These capital exercise is driving up the share price currently.

Technical Outlook

From the monthly chart below, we can see that JTiasa has broken above its long-term downtrend line at RM5.00 in early 2011. It has just broken above its horizontal resistance at RM7.80. It may attempt the next resistance at the horizontal line at RM10.00.


Chart 2: JTiasa's monthly chart as at March 1, 2012 (Source: Tradesignum)

Conclusion

Based on generous capital exercise & positive technical outlook, JTiasa could be a good trading BUY. However, this will be a medium to high risk trade since the stock has rallied quite substantially over the past 3 years. For those who are holding this stock for investment purpose, I would recommend to take profit on this stock.

12 comments:

luckystock2 said...

Hi Alex,
Can you comment on Media technical outlook? It looked strong a few days ago but it suddenly slumped today.
Tx!

Unknown said...

Hi Alex,

What is your view about Benalec, will it rise after the expiry of Benalec-CA?

How about AncomLB? It seem like moving yesterday?

Thanks.

Alex Lu said...

Hi Unknown

Benalec is in a gradual downtrend. I expect it to find support its horizontal line at RM1.20. If this support is violated, it could drop further- maybe retesting its low at RM1.00.

The weakness in this stock is somewhat surprising given its promising prospect in Johor.

I don't think the CW has much impact on the performance of the stock.

Alex Lu said...

Hi luckystock2

Media looks like it has made a top. It could be in the process of reversing from a gradual uptrend to a downtrend.

Stanley said...

Hi Alex, do u stii think there will be another run up on Puncak or on its gradual down trend

YY said...

hi Alex, regarding chart#2, the starting point of peak & bottom reference was in 90s. As this stock start diversify into plantation / oil palm sector in 2009, is this a good reference to predict the price will drop to ~RM5 (before bonus adjustment)?

Jimmy Yeoh said...

Hi Alex,

Worth to buy MFLOUR before the exercise ex-date?

Fei said...

Hi Alex,

Do you hv any comment for Muhiibbah?

Alex Lu said...

Hi Fei,

After the announcement of a restructuring in APH, I feel much more positive about Muhibah. APH owes RM300-400 million to Muhibah. The restructuring will be led by CIMB.

Chartwise, Muhiabh is trapped within a giant triangle with support at RM1.10 & resistance at RM1.40. I think the stock could be a good long-term BUY now.

Alex Lu said...

Hi Jimmy Yeoh

I guess you can say the earlier question on MFLOUR may be irrelevant now. Nevertheless, I like to add that I feel that MFlour is still a SELL INTO STRENGTH.

Alex Lu said...

Hi YY,

That's a valid question. The fair answer is probably NO. However, there are some remnants of sahreholders who bought the shares at the high prices in 1990s and they may try to sell to recoup their investment. Technical analysis works on this principle. However, the principle may not apply if these shareholders choose to hold onto their shares. If you are them, would you sell? Some probably would.

Alex Lu said...

Hi Stanley

We can't be sure whether Puncak will have another run-up. However, it looks like it has good support at RM1.30-1.35.