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Friday, November 30, 2012

Genting- bottom-line dropped sharply

Result Update

For QE30/9/2012, Genting's net profit dropped by 48% q-o-q or 53% y-o-y to RM279 million while revenue dropped by 7% q-o-q or 14% y-o-y to RM4.21 billion. Genting's bottom-line dropped due mainly poorer performance by the Leisure & Hospitality division. The main items which dragged down this division are:
1. RWS- drop in the win percentage in premium play business
2. RWG- increase payroll cost & promotion expenses
3. UK operation- drop in volume of business & hold percentage of its London casino operation, plus increase in bad debts write-off

These negative items had more than offset the increase in EBITDA by the Power division & the Plantation division (which was attributable to higher output than more than compensate for the softer prices).



Table 1: Genting's last 8 quarterly results


Chart 1: Genting's last 25 quarterly results 

Valuation

Genting (closed at RM8.95 at the end of the morning session) is now trading at a PE of 14.5 times (based on last 4 quarters' EPS of 61.75 sen). At this PE, Genting is deemed fairly valued.

Technical Outlook

Genting is still in a long-term uptrend. That uptrend line support is at RM5.00- something which is not likely to be tested anytime soon. The immediate support is the horizontal line RM8.50.


Chart 2: Genting's monthly chart as at Nov 27, 2012  (Source: Tradesignum)

(Note: You may like to check out my most recent post on Genting where the technical outlook could be bearish for the medium-term.)

Conclusion

Based on poorer financial performance & nearly full valuation, I would rate Genting a HOLD. Given my recent technical study on this stock, you may even want to take a more cautious stand by avoiding the stock for a while.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Genting.

GENM- hit by impairment write-off

Result Update

For QE30/9/2012, GENM's net profit dropped by 62% q-o-q or 45% y-o-y to RM190 million while revenue  dropped by 8% q-o-q or 16% y-o-y to RM1.94 billion. Net profit dropped q-o-q due to the following:
1. RWG's EBITDA dropped by RM35.4 million
2. UK Operations reported a loss before interest, tax, amortization & depreciation of RM13.8 million as compared to a EBOTDA of RM130.2 million oreviously
3. impairment losses totaling RM178.9 million, which came from goodwill written off for acquisition of Omni Center in Miami (RM87.5 million), provision for casino licences & assets in UK (RM647.5 million) and write-off the carrying value of casino concession agreement in Egypt booked in UK operation (RM26.9 million).


Table 1: GENM's last 8 quarterly results


Chart 1: GENM's last 18 quarterly results 

Valuation

GENM (closed at RM3.50 at the end of the morning session) is now trading at a PE of 15 times (based on the last 4 quarters' EPS of 23.06 sen). At this multiple, GENM is deemed full valued.

Technical Outlook

GENM is still in a long-term uptrend line, SS with support at RM3.20.


Chart 2: GENM's weekly chart as at Nov 27, 2012  (Source: Tradesignum)

Conclusion

Based on poorer financial performance & full valuation, GENM's rating is downgraded to a HOLD.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, GEMN.

Orient- uptrend to continue

Orient closed at the horizontal/psychological resistance of RM8.00 yesterday. This morning, it broke above its recent high at RM8.10. See Chart 1. These double breakouts signals the continuation of its uptrend, with a potential target of RM9.50-10.00.

Based on  technical consideration, Orient could be a trading BUY.


Chart 1: Orient's daily chart as at Nov 30, 2012_12.10pm (Source: Quickcharts)


Chart 2: Orient's monthly chart as at Nov 30, 2012_12.10pm (Source: Quickcharts)

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Orient.

Wednesday, November 28, 2012

FB- base formation completed

FB has completed its base formation. It has closed the gap at USD26.80. The next move above the USD26.80, will be the start of its upleg. Based on the positive outlook, FB could be a good trading BUY.


Chart: FB's daily chart as at Nov 27, 2012 (Source: Stockcharts)

Tongher- bottom-line fell sharply

Result Update

For QE30/9/2012, Tongher's net profit dropped 82% q-o-q or 83% y-o-y to RM695k while revenue declined by 7% q-o-q or 24% y-o-y to RM112 million. Tongher's profit dropped due to lower revenue (due to weaker demand from Europe) and share of losses from associates of RM2.8 million.


Table 1: Tongher's last 8 quarterly results


Chart 1: Tingher's last 32 quarterly results 

Valuation

Tongher (closed at RM1.80 at the end if morning session) is trading at a PE of 12 times (based on last 4 quarters' EPS of 15.38 sen). At this PE, Tongher- a medium-size stock- is deemed fully valued.

Technical Outlook

Tongher has corrected back to its long-term uptrend line, support at RM1.80. If this level is violated, the next support is the horizontal line at RM1.70. I think the stock could trade between these support levels for sometimes- awaiting better results or other catalysts for a rise.


Chart 2: Tongher's weekly chart as at Nov 27, 2012 (Source: Tradesignum)

Conclusion

Based on poor financial performance, full valuation & unexciting technical outlook, Tongher is rated as a HOLD or REDUCE.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Tongher.

Coastal- attractive but unexciting

Result Update

Coastal's net profit increased by 5.6% q-o-q but dropped 17% y-o-y to RM30.5 million while revenue increased by 10% q-o-q or 61% y-o-y to RM177 million. Despite higher revenue y-o-y, net profit declined because of adverse impact of USD depreciation & lower margin on sale of vessels by the Shipbuilding division.

The continued slide in profit margin over the past two years reflects the competitive environment in shipbuilding industry. Coastal may have to re-examine its business model of building for inventory, which resulted in huge working capital requirement and being a price-taker in a depressed market.


Table 1: Coastal's last 8 quarterly results


Chart 1: Coastal's last 33 quarterly results 

Valuation

Coastal (closed at RM1.91 at the end of the morning session) is now trading at a PE of 6.5 times (based on last 4 quarters' EPS of 29.35 sen). At this PE, Coastal is deemed fairly attractive.

Technical Outlook

Coastal is range-bound, with support at RM1.75 & resistance at RM2.00. An upside breakout above the RM2.00 horizontal line as well as the intermediate downtrend line at RM2.15 could be the start of an upleg for this stock. Until then, the stock is likely to trade sideway.


Chart 2: Coastal's weekly chart as at Nov 23, 2012 (Source: Quickcharts)

Conclusion

Based on reasonably attractive valuation, Coastal is rated a HOLD. The unexciting technical outlook and the persistence low profit margin argue against a bullish stance for the stock.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Coastal.

DLady- bottom-line continued to impress

Results Update

For QE30/9/2012, DLady's net profit increased by 7% q-o-q or 36% y-o-y to RM32 million while revenue increased by 3% q-o-q or 11% y-o-y to RM225 million. from Chart 1 below, we can see that DLady's outstanding is due to rising revenue & profit margin. This means that there is still room for the earning growth for this company.



Table 1: DLady's last 8 quarterly results


Chart 1: DLady's last 18 quarterly results 

Valuation

DLady (closed at RM44.30 at the end of the morning session) is now trading at a PE of 24 times (based on last 4 quarters' EPS of 184 sen). While the PE is high, the PEG (PE to Growth) ratio is about 0.8 time, which means the stock is still reasonably attractive. The only concern is that the company's growth may not be able to sustain at 30%.

Technical Outlook

DLady corrected back to its 100-day  EMA line or its 20-week SMA line. If this support is not violated, DLady would recover from this support.


Chart 2: DLady's daily chart as at Nov 28, 2012_12.30pm (Source: Quickcharts)



Chart 3: DLady's weekly chart as at Nov 27, 2012  (Source: Tradesignum)

Conclusion

Based on continued good financial performance, reasonable valuation & positive technical outlook, DLady could be a good stock for long-term investment.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Dlady.


Market Outlook as at November 28, 2012

As at 11.00am, FBMKLCI recovered back to positive territory- from a low of 1591 to 1599 (a gain of 1 point). If FBMKLCI can stay above the horizontal cum psychological support of 1600, we may have averted further selldown which could send the index to test its long-term uptrend line at 1510.


Chart 1: FBMKLCI's weekly chart as at Nov 28, 2012_11am (Source: quickcharts)

Meanwhile, FBM70 is still resting on its strong horizontal support at 11900. Again, this shows that the correction for the past few days is confined mainly to blue chip stocks that make up the FBMKLCI.


Chart 2: FBM70's weekly chart as at Nov 28, 2012_11am (Source: quickcharts)

If FBMKLCI can stay above the 1600 mark, this could be one level to accumulate some beaten down stocks, such as telcos and consumer stocks.

Tuesday, November 27, 2012

CPO testing a critical support

CPO is resting on the horizontal support of RM2200 today. Important to note that the Parabolic SAR (short for 'stop-and-reversal' indicator) has moved above the price- signaling the potential for a downside move. More importantly, CPO is now trading below the lower Bollinger Band, which could lead to an expansion of a downside move.


 
 Chart 1: CPO's daily chart as at November 27, 2012 (source: ifs.marketcenter.com)

Plantation index has just broken below its long-term uptrend line, SS at 8000. The last time, Plantation index broke its long-term uptrend line was in July 2008, where the index dropped from the breakdown level of 7600 to 3000. As such, it is critical that the Plantation index must recover quickly above the long-term uptrend line in order to avoid a similar downfall.


Chart 2: Plantation index's weekly chart as at Nov 27, 2012 (Source: Quickcharts)

Monday, November 26, 2012

SCC revised to a HOLD

Result Update

For QE30/9/2012, SCC's net profit dropped by 58% q-o-q or 59% y-o-y to RM355k while revenue increased marginally by 3% q-o-q or 5% y-o-y to RM8.45 million. Net profit dropped q-o-q due to higher admin & other op expenses as a result of its expansion to East Malaysia & allowance for impairment of fixed assets due to a burglary In July 2012.


Table 1: SCC's last 8 quarterly results


Chart 1: SCC's last 9 quarterly results 

Valuation

SCC (closed ay RM0.865 at the end of morning session) is now trading at a PE of 8.4 times (based on last 4 quarters' EPS of 10.32 sen). For a smallcap, SCC is deemed fully valued.

Technical Outlook

SCC is in an uptrend. If we used the 40-week SMA line as a proxy for the uptrend line, the stock is now trading just above the uptrend line.


Chart 2: SCC's weekly chart as at Nov 23, 2012 (Source: Tradesignum)

Conclusion

Based on poorer financial performance & full valuation, SCC's rating has been revised to a HOLD.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, SCC.

EForce- rating downgraded to HOLD

Result Update

For QE30/9/2012, EForce's net profit dropped by 72% q-o-q or 63% y-o-y to RM569k while revenue was mixed- dropped by 27% q-o-q but rose 11% y-o-y to RM3.7 million. Net profit dropped q-o-q due to the expiry of pioneer tax status, lower sales generated by the Application Solutions (AS) business, higher operating and personnel expenses.


Table 1: EForce's last 8 quarterly results


Chart 1: EForce's last 19 quarterly results 

Valuation

EForce (closed at RM0.29 at the end of the morning session) is now trading at a PE of 10 times (based on last 4 quarters' EPS of 2.9 sen). At this PE, EForce is deemed fully valued.

Technical outlook

EForce is now trapped in a triangle. Since the stock has traded to the apex of that triangle, a 'breakout' would not be very significant. The likely price direction is sideway and then range-bound trading between RM0.23 & RM0.33.


Chart 2: EForce's weekly chart as at Nov 26, 2012_11am (Source: Quickcharts)

Conclsuion

Based on poorer financial performance, full valuation & uncertain technical outlook, EForce's rating is now revised to a HOLD.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, EForce.

UMW- improved its bottom-line


Results Update

For QE30/9/2012, UMW's net profit rose 33% q-o-q or 104% y-o-y to RM299 million while revenue was mixed- rose 7.4% y-o-y but declined 4.2% q-o-q to RM3.96 billion.


Table 1: UMW's last 8 quarterly results

The improved bottom-line was attributable to substantially better results for the Oil & Gas segment. The same can be said for the Automotive segment which continued to improve. However, the Equipment segment was mixed- better than last year but was lower compared to the immediate preceding quarter.


Table 2: UMW's segmental performance for 9-month ended 30/9/2012


Chart 1: UMW's last 22 quarterly results 

Valuation

UMW (closed at RM10.08 at the end of the morning session) is now trading at a PE of 15 times (based on last 4 quarters' EPS of 68.02 sen). At that multiple, UMW is deemed fairly valued.

Technical Outlook

UMW is rising in a long-term upward channel, with support at RM7.00 and resistance at RM14.00.


Chart 2: UMW's weekly chart as at Nov 23, 2012 (Source: Tradesignum)

Conclusion

Based on good financial performance & positive technical outlook, UMW is still a good stock for long-term investment. Its upside potential is limited as it is fairly valued.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, UMW.

SPSetia broke its uptrend line

SPSetia broke its uptrend line at RM3.60 on November 16. This morning, it is breaking below the strong horizontal support of RM3.30. If this support is violated, SPSetia may test the psychological RM3.00 mark or even the strong horizontal support of RM2.90.

Based on technical consideration, SPSetia is now rated a trading SELL.


Chart: SPSetia's weekly chart as at Nov 26, 2012_11am (Source: Quickcharts)

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, SPSetia.

Friday, November 23, 2012

Kossan- cheaper than Topglov & Harta

Result Update

For QE30/9/2012, Kossan's net profit increased b y 24% q-o-q & 24% y-o-y to RM29 million while revenue improved by 6% q-o-q or 16% y-o-y to RM323 million. Profit improved due to lower raw material cost as well as higher capacity utilization.


Table 1: Kossans last 8 quarterly results

Kossan has just commenced trial production of clean-room gloves. This resulted in a small loss which were the development cost of the gloves. I personally prefer Kossan's diversification exercise [into other rubber downstream industries] to Topglov's diversification exercise [of going into rubber plantation]. I feel that plantation business involved a different kind of skills which the management of Topglov may find difficult to acquire.


Table 2: Kossan's segmental performance for 9-month ended 30/9/2012


Chart 1: Kossan's last 25 quarterly results

Valuation

Kossan (closed at RM3.19 yesterday) is now trading at a PE of 10.3 times (based on last 4 quarters' EPS of 30.86 sen). At this PE multiple, Kossan is cheaper than Topglov & Harta which are trading at PE of 17 times each. (Note: Topglov, which closed at RM5.48, has a EPS of 33 sen for the past 4 quarters. Harta, which closed at RM4.87, has a EPS of 29 sen for the past 4 quarters.)

Technical Outlook

Kossan has been trading in a range between RM2.80 & RM3.30 for the past two years (except for a short spell in Jan-Feb 2012 & Aug-Oct 2011). Prior to this, Kossan appears to be in a long-term uptrend. Will it recommence its uptrend again?


Chart 2: Kossan's weekly chart as at Nov 22, 2012 (Source: Tradesignum)

Conclusion

Based on improved financial performance and attractive valuation, Kossan is rated a good stock for long-term investment.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Kossan.

Consumer stocks- down but not out yet!

Consumer stocks- the darling of our market- have succumbed to profit-taking in the past 2-3 weeks. The Consumer index is still in a long-term uptrend line, with support at 480. It is currently at 515.


Chart 1: Consumer's weekly chart as at Nov 23, 2012_12.15pm (Source: Quickcharts)

Among the big losers are Nestle and BAT, both are at or tested their respective 40-week EMA line (which I regard as the proxy for the medium-term uptrend). We need to see a strong rebound from this level if these stocks are to stay in their uptrend. Let's wait & see.


Chart 2: Nestle's weekly chart as at Nov 23, 2012_12.15pm (Source: Quickcharts)


Chart 3: BAT's weekly chart as at Nov 23, 2012_12.15pm (Source: Quickcharts)

Note: 
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Nestle & BAT.

Market Outlook as at November 23, 2012

In the past 2 days, FBMKLCI & FBMEmas have both broken below their uptrend line; transitioning to either a sideway movement or even a downtrend. The drop in these indices are due to correction among the blue chip stocks which led these indices higher over the past one year. See Chart 1 & 2 below.


Chart 1: FBMKLCI's daily chart as at Nov 23, 2012_10.15am (Source: Quickcharts)


Chart 2: FBMEmas's daily chart as at Nov 23, 2012_10.15am (Source: Quickcharts)

The second liners, as reflected in FBM70 index, have been consolidating since February. FBM70's upside has been capped by the 'horizontal' line at  12500 while its downside was well-supported by the rising line (currently at 12000). Since they didn't rise much in the past few months, they don't have to fall too much now.


Chart 3: FBM70's daily chart as at Nov 23, 2012_10.15am (Source: Quickcharts)

Further drop in the price of blue chip stocks could worsen the poor sentiment and trigger sell-off among the second liners. If the market continues to slide, we could see a test of its long-term uptrend line at 1510 (see Chart 4). Let's hope that won't happen as time soon.


Chart 4: FBMKLCI's weekly chart as at Nov 23, 2012_10.15am (Source: Quickcharts)

Thursday, November 22, 2012

Kianjoo- bottom-line boosted by one-off gain

Result Update

For QE30/9/2012, Kianjoo's net profit increased by 53% q-o-q but declined by 1% y-o-y to RM28 million while revenue dropped by 8% q-o-q but rose by 1% y-o-y to RM280 million. The increased net profit q-o-q was attributable to the gain on disposal of a subsidiary of RM8.1 million. If this one-off item is excluded, the net profit only increased by 8.5% q-o-q & dropped by 30% y-o-y to about RM20 million.


Table: Kianjoo's last 8 quarterly results


Chart 1: Kianjoo's last 24 quarterly results

Valuation

Kianjoo (closed at RM2.18 yesterday) is now trading at a PE of 12 times (based on last 4 quarters' EPS of 18 sen- adjusted for one-off gain). At this multiple, Kianjoo is deemed fully valued.

Technical Outlook

Kianjoo broke its strong horizontal support at RM2.25 yesterday. Its next support will be the psychological RM2.00 mark which coincides with the uptrend line, S-S1.


Chart 2: Kianjoo's monthly chart as at Nov 22, 2012_2.45pm (Source: Tradesignum)

Conclusion

Based on full valuation & weaker technical outlook, Kianjoo is rated either a HOLD or a trading SELL.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Kianjoo.

WTHorse- bottom-line slid further

Result Update

For QE30/9/2012, WTHorse's net profit declined by 16% q-o-q or 29% y-o-y to RM8.5 million while revenue dropped 6% q-o-q but rose 13% y-o-y to RM149 million. The company's profit margin continued to decline over the past two years due to higher production costs & higher operating costs. With continued slide in profit margin and weakness in the property market, I do not expect WTHorse's bottom-line to rebound soon.


Table: WTHorse's last 8 quarterly results


 Chart 1: WTHorse's last 27 quarterly results

Valuation

WTHorse (closed at RM1.65 yesterday) is trading at a PE of 7.7 times (based on last 4 quarters' EPS of 21.31 sen). While this multiple is fair, the continued decline in its bottom-line points the price direction of the stock, which is likely to be downward.

Technical Outlook

For the past 13 years, WTHorse has traded between RM1.10 & RM2.10. It has rotated between these two extremes- after touching the high, it would go down to the low or vice versa. If these two patterns persist, then we may see WTHorse visiting the low of RM1.10 over the next few years.


Chart 2: WTHorse's monthly chart as at Nov 21, 2012 (Source: Tradesignum)

Conclusion

Based on weaker financial performance and uncertain technical outlook, I would rate WTHorse as a REDUCE.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, WTHorse.