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Wednesday, May 29, 2013

Aji- bottom-line still sliding


Result Update

For QE31/3/2013, Aji's net profit rose 47% q-o-q but dropped 24% y-o-y to RM4.4 million while revenue rose 5% q-o-q or 2% y-o-y to RM85 million. Bottom-line improved q-o-q due to higher sales of Industrial Seasoning products as well as lower factory overhead costs incurred.


Table: Aji's last 8 quarterly results


Chart 1: Aji's last 31 quarterly results

Valuation

Aji (closed at RM4.45 today) is now trading at a PE of 14 times (based on last 4 quarters' EPS of 32 sen). At this multiple, Aji is deemed fairly valued. However, the declining bottom-line could lead to PE contraction which would depress the share price.

Technical Outlook

Aji is in an uptrend line with support at RM4.25-4.30. If this uptrend line is violated, the share price may drop to the psychological RM4.00 mark. The next support would be the horizontal line at RM3.50.


Chart 2: Aji's weekly chart as at May 29, 2013_12.30pm (Source: Quickcharts)

Conclusion

Based on declining profit & profit margin, AJI is a stock to be avoided. For those holding the stock, you may choose to SELL INTO STRENGTH for now.

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, AJI.

DLady- Top-line and bottom-line slipped


Result Update

For QE31/3/2013, DLady's net profit dropped 14% q-o-q but rose 6% y-o-y to RM29 million while its revenue dropped by 9% q-o-q or 4% y-o-y to RM206 million. The decline in revenue was contributed by lower sales of powder and liquid products. This in turn led to lower bottom-line when compared to the immediate preceding quarter.


Table: DLady's last 8 quarterly results


Chart 1: DLady's last 20 quarterly results

Valuation

DLady (closed at RM48.50 yesterday) is now trading at a PE of 25 times (based on last 4 quarters' EPS of 195 sen). With the earning growth rate slowing from 50% a year ago to 16%, DLady's PEG ratio is now well over 1 times. Thus, the valuation for this stock is deemed expensive.

Technical Outlook

DLady is still in an uptrend line with support at RM45.00-45.50. If the share price were to break below this uptrend line, DLady will then move sideway, with support at RM40.00.


Chart 2: DLady's weekly chart as at May 29, 2013_12.30pm (Source: Quickcharts)

Conclusion

Based on demanding valuation, DLady is to be avoided. Since the stock is still in an uptrend line, those holding the stock may choose to SELL INTO STRENGTH for now.

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.

Tuesday, May 28, 2013

Fitters- depends on property development


Result Update

For QE31/3/2013, Fitters's net profit dropped 18% q-o-q but rose 92% y-o-y to RM8.5 million while revenue dropped 39% q-o-q or 21% y-o-y to RM70 million. See Table 1.


Table 1: Fitters's last 8 quarterly results

Looking at Table 2 and Chart 1, we can see that the Property Development & Construction and Fire Serives divisions are now the main division for the group. Renewable & Waste-to-Energy division suffered a sharp drop in revenue and continued to breed.Can the Property Development & Construction division repeat its sterling performance in QE31/3/2013 where it recorded a pre-tax profit of RM9.6 million from a revenue of RM42 million? I have my doubt as the group has very small land bank (see my previous post).


Table 2: Fitters's segmental results for Mar 2013 & Mar 2012



Chart 1: Fitters's last 19 quarterly results

Valuation

Fitters (closed at RM0.845 at the end of the morning session) is now trading at a PE of 6.2 times (based on last 4 quarters' EPS of 13.6 sen). While the PE multiple is low, a drop in its earning could easily push the PE to double digit.

Technical Outlook

Fitters has broken above its downtrend line at RM0.65. Its immedaite ressiatnce is at the horizontal line at RM0.83 (which it may have surpassed) and then at RM0.93.


Chart 2: Fitters's weekly chart as at May 28, 2013_12.30pm (Source: Quickcharts)

Conclusion

Based on reasonable valuation & positive technical outlook, Fitters could continue to rise. However, I have serious concern that the company may not repeat its profit level again as the bulk of the profit came form the Property Development & Construction division which does not much land bank. As such, I feel that Fitters should be rated SELL INTO STRENGTH.

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, Fitters.

RCECap- hit by impairment provision


Result Update

for QE31/3/2013, RCECap reported a net loss of RM28.5 million as compared to a net profit of RM9.4 million for QE31/12/2012 or RM16.5 million for QE31/3/2012. The net loss arose mainly due to the increase in loan impairment of RM38.6 million arising from the "refinement and enhancement in the classification of NPLs in its personal loan financing segment", in compliance with the requirements of individual assessment under MFRS 139, Financial Instruments: Recognition and Measurement (“MFRS 139”).

While the loan impairment is a one-off item, there is no denying that RCECap's top-line and bottom-line is in a steady & probably irreversible downtrend. What would it take to arrest this development?


Table: RCECap's last 8 quarterly results


Chart 1: RCECap's last 24 quarterly results

Valuation

RCECap (closed at RM0.28 at the end of the morning) is now trading at a PE of 70 times (based on last 4 quarters' EPS of 0.4 sen). However, if the one-off impairment provision of RM38.6 million is is excluded, the full-year EPS would bound back to 14.7 sen; thus giving a decent PE of 1.9 times. At the price of RM0.28, RCECap is also trading at a Price to Book of 0.5 time and has a dividend yield of 5.4%. All in all, RCECap is a cheap stock. If the wind blows at the right direction, it may begin to sail higher.

Technical Outlook

RCECap is in a downtrend line with resistance at RM0.30. Its immediate support is the line, AB wt RM0.24-0.25.


Chart 2: RCECap's weekly chart as at May 28, 2013_12.30pm (Source: Quickcharts)

Conclusion

Despite a net loss in the latest quarter, RCECap is a stock worth tracking. It is trading at very undemanding multiples and pays a decent dividend yield of 5.4%. It is owned by Azman Hashim, the founder of AMMB, a man with strong background in the world of finance. If your investment horizon is measured in years (like Azman), this stock may fit the bill. As such, I rate this stock 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, RCECap.

Kossan- top-line & bottom-line increased


Result Update

For QE31/3/2013, Kossan's net profit increased 12% q-o-q or 51% y-o-y to RM33 million while revenue increased 2% q-o-q or 13% y-o-y to RM327 million. Bottom-line increased q-o-q due to higher pre-tax profit contribution from the Gloves division (from RM33 million to RM40 million) which more than offset the drop in pre-tax profit contribution from the Technical Rubber Products division (from RM7 million to RM4 million). This improved performance for the Gloves division is partly contributed by the increased output capacity utilization achieved from its research and development on machines optimization and also slight decrease in the price of raw materials.


Table: Kossan's last 8 quarterly results

Kossan's steady improvement in top-line & bottom-line is indeed very encouraging. It as managed to bring its pre-tax profit margin back up to the high of 14% that was enjoyed in FY2010. This is a testimonial to its efficient production process.


Chart 1: Kossan's last 27 quarterly results

Valuation

Kossan (closed at RM4.06 yesterday) is now trading at a PE of 11.3 times (based on last 4 quarters' EPS of 36 sen). I believe Kossan should trade at the same PE multiple of 17 times enjoyed by the top two rubber gloves producers (Harta & Topglov). Thus, I believe Kossan may see an upside of 40-50% over the next 12 months due to PE expansion.

Technical Outlook

Kossan is in an uptrend line with support at RM3.30. It has just broken above its horizontal resisatnce at RM4.00. With this breakout, Kossan's uptrend may accelerate.


Chart 2: Kossan's weekly chart as at Mar 28, 2013_9.30am (Source: Quickcharts)

Conclusion

Based on improved financial performance, attractive valuation & positive technical outlook, Kossan is a good stock for long-term investment. It would now be my top pick for the rubber glove sector.

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.

Monday, May 27, 2013

PIE- decline in both top-line & bottom-line


Result Update

For QE31/3/2013, PIE's net profit dropped 49% q-o-q or 6% y-o-y to RM5.5 million while revenue was mixed- dropped 12% q-o-q but rose 2% y-o-y to RM82 million. Top-line dropped q-o-q due to lower demand for electronics manufacturing products. Net profit has similarly dropped due to lower profit margin on product mix, lower forex gain & higher provision of slow moving inventories.


Table: PIE's last 8 quarterly results


Chart 1: PIE's last 20 quarterly results

Valuation

PIE (closed at RM4.55 at lunch time) is now trading at a PE of 9.3 times (based on last 4 quarters' EPS of 49 sen). At this  multiple, PIE is deemed fairly valued. Upside is limited due to poorer financial performance.

Technical Outlook

PIE has broken above its horizontal line at RM4.65 as investors chased after a dividend payout of 32 sen. This is the first day of trading after the entitlement date and the chart below has not been adjusted for this entitlement. The adjusted immediate horizontal support would be at RM4.33, instead of RM4.65. The stock is now trading at RM4.55.


Chart 2: PIE's weekly chart as at Mar 27, 2013_3.00pm (Source: Quickcharts)

Conclusion

Due to poorer financial performance, PIE is now rated as a HOLD in view of its mildly positive long-term technical outlook and fairly reasonable valuation. However, I believe the stock will face some selling pressure in the short-term due to the deteriorating financial performance.

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, PIE.

Bonia- benefiting from increased consumer spending


Result Update

For QE31/3/2013, Bonia's net profit increased by 73% q-o-q or 95% y-o-y to RM13 million while revenue was mixed - down 8% q-o-q but rose 12% y-o-y to RM154 million.

Despite the q-o-q drop in revenue, the bottom-line improved q-o-q due to lower promotional activities & reduced renovation & set-up costs incurred. The company opened 5 counters in Indonesia & 3 boutiques in Vietnam in QE31/3/2013. In QE31/12/2012, the company opened 5 boutiques in Vietnam and 1 in Indonesia.


Table: Bonia's last 8 quarterly results


Chart 1: Bonia's last 17 quarterly results

Valuation

Bonia (closed at RM1.99 on May 23) is now trading at a PE of 11 times (based on last 4 quarters' EPS of 18.4 sen). This compared favorably to Padini which trades at a PE of 17 times (based on share price of RM2.13 on May 23 and an EPS of 12.8 sen for the 4 quarters ended 31/12/2012.

Technical Outlook

As noted in my earlier post, Bonia is in an uptrend line, with support at RM1.75. Its immediate support is the 10-week SMA line at RM1.98. The intermediate downtrend line resistance at RM2.40 should cap the share price for a while.


Chart 2: MISC's weekly chart as at Mar 23, 2013 (Source: Quickcharts)

Conclusion

Based on improved financial performance, attractive valuation & positive technical outlook, Bonia 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, Bonia.

Maybank- Where is the Captain?

Result Update

For QE31/3/2013, Maybank's net profit increased by 3% q-o-q or 12% y-o-y to RM1.506 billion while evenue increased by 17% q-o-q or 5% y-o-y to RM8.23 billion.

 
 Table: Maybank's last 8 quarterly results

 
 Chart 1: Maybank's last 27 quarterly results

Wahid is leaving...

Maybank's current CEO, Wahid will be leaving Maybank to take up a ministerial post soon. Who will be piloting the great ship, Maybank through the choppy water?

Valuation

Maybank (closed at RM10.08 on May 23) is now trading at a PE of 13.8 times (based on last 4 quarters' EPS of 73 sen). I believe Maybank should trade at a PE of 15 times.

Technical Outlook

Maybank is in an upward channel, with support at RM9.00 & resistance at RM11.00.


 
Chart 2: Maybank's weekly chart as at Mar 23, 2013 (Source: Quickcharts) 

Conclusion

Based on steady growth in financial performance, attractive valuation & positive technical outlook, Maybank is a good stock to hold for long-term investment. However, the immediate concern will be the search for the right person to take over the helm in Maybank. Can the successor lead the bank as well as Wahid? In the interim, Maybank's share price should be capped at the present level.

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, Maybank.

MISC- normality returned?


Result Update

For QE31/3/2013, MISC's net profit increased by 3% q-o-q or 8% y-o-y to RM2.38 billion while net profit dropped 58% q-o-q to RM300 million (or from a net loss of RM470 million in QE31/3/2012). The q-o-q decline in the bottom-line was attributable to exceptional gains recorded in the preceding quarter, such as the recognition of a one-off gain from the lease commencement of two Floating Storage Units (FSUs) & realization of 50% intercompany profit on disposal of Gumusut-Kakap Semi Floating-Production System (L) Ltd.

Revenue increased y-o-y due to more projects completed by the Heavy Engineering division, comboned with the commencement of the lease of the 2 FSUs in August 2012. In addition, the freight rates in the Chemical business had improved. These have more than offset the decline in revenue from the Petroleum business due to smaller number of operating vessels. Pre-tax profit increased y-o-y from RM139 million to RM355 million due to higher operating profit - a result of  lower operating cost brought on by a smaller fleet of vessels- and decline in net unrealized forex losses from RM111 million to RM14 million & impairment of ships from RM116 million to RM22 million.


Table: MISC's last 8 quarterly results


Chart 1: MISC's last 27 quarterly results

Valuation

MISC (closed at RM4.39 last Thursday) is now trading at a PE of 13 times (based on last 4 quarters' EPS of 34 sen). At this PE multiple, MISC is deemed fully valued.

Technical Outlook

MISC has yet to break above its 2 years old downward channel, with resistance at RM5.40. However, the share price may have found a floor at RM410-4.20. This could be the result of buying support brought on by the conditional GO at RM5.50 by Petronas which lapsed in April (here). We will see whether this support can hold in the absence of the Petronas's GO.


Chart 2: MISC's weekly chart as at Mar 23, 2013 (Source: Quickcharts)

Conclusion

Based on improved financial performance, MISC could be a stock to watch for a recovery play. The catalyst for an upgrade would be improved freight rates or a price breakout (at RM5.40 mark). For now, this stock is rated as 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, MISC.

JOBST- trading at demanding valuation


Result Update

For QE31/3/2013, JOBST's net profit increased by 3% q-o-q or 48% y-o-y to RM15.4 million while revenue increased by 19% q-o-q or 14% y-o-y to RM43.2 million.  Revenue increased q-o-q due to higher sales from online recruitment services due to seasonality factors. Pre-tax profit rose by 21.5% q-o-q mainly due to the impact of higher sales from online  recruitment services, offset by the significant one-off item in the immediate preceding quarter (QE31/12/2012) such as the reversal of impairment loss on investment in an associate.


Table: JOBST's last 8 quarterly results

 
 Chart 1: JOBST's last 28 quarterly results

Valuation

JOBST (closed at RM3.65 on May 23) is now trading at a PE of 18.3 times (based on last 4 quarters' EPS of 19.9 sen). At this multiple, JOBST is deemed fully valued.

Technical Outlook

JOBST had a sharp rally over the past 5 months. I expect the share price to consolidate at RM3.50-3.60 for a while.

 
Chart 2: JOBST's weekly chart as at Mar 23, 2013 (Source: Quickcharts)

Conclusion

Based on improved financial performance & positive technical outlook, JOBST is a good stock to hold for long-term investment. However, its valuation is a bit stretched and this may lead to price consolidation for the weeks ahead.

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, JOBST.

Thursday, May 23, 2013

YeeLee- a very attractive consumer stock



Result Update

For QE31/3/2013, YeeLee's net profit increased by 5% q-o-q or 137% y-o-y to RM8.4 million while revenue dropped 2% q-o-q or 8% y-o-y to RM160 million. The decline in revenue was attributable to the discontinuance of distributorship of Procter and Gamble products in September 2012. The silver lining to this negative development is that the company's profit margin rebounded.

The performance of the two main divisions are:
1. The manufacturing division registered an increase in profit before tax by 53.8% y-o-y from RM4.00 million to RM6.16 million . This was achieved on the back of 1.2% drop in revenue. The better performance was mainly contributed from palm oil refinery and mill division as both divisions continued to achieve profitability arising from higher oil extraction rate ("OER") and better FOB olein margin over crude palm oil ("CPO") price.
2. The trading division managed to achieve higher profit before tax of RM3.38 million as compared to a loss of RM0.40 million in the same quarter of last year. This was contributed from higher sales of products portfolio with better profit margin coupled with lower advertisement and promotion expenses in this quarter.
Finally, the Share of profit from an associate, Spritzer increased from RM841k to RM1.33 million. 


Table: YeeLee's last 8 quarterly results


Chart 1: YeeLee's last 27 quarterly results

Valuation

YeeLee (closed at RM1.10 yesterday) is now trading at a PE of 6 times (based on annualized EPS of 18.6 sen, calculated using the average EPS of last 2 quarters of 4.65 sen). That's very cheap for a consumer stock.

Technical Outlook

YeeLee has broken above a large descending triangle (ABC) at RM0.85-0.90. It should test the horizontal line at RM1.25 soon. An upside breakout of this resistance could send the stock to RM1.70. 


Chart 2: YeeLee's monthly chart as at Mar 22, 2013 (Source: Quickcharts)

Conclusion

Based on improved financial performance, attractive valuation & positive technical outlook, YeeLee is a good stock to hold 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, YeeLee.

Wednesday, May 22, 2013

Timecom- you have come a long way

Timecom broke above the horizontal line at RM4.70 earlier today. In the afternoon, it tested its long-term downtrend line at RM4.75-4.80- even hitting a high of RM4.85. It will be interesting to see whether Timecom can surpass the downtrend line - be it today or tomorrow. The indicators have turned upward and the chance of a successful breakout is good. Timecom's next resistance would be at the horizontal line at RM5.60 & then at RM7.00.


Chart 2: Timecom's weekly chart as at May 22, 2013_4.00pm (Source: quickcharts)

Conclusion

Based on potential bullish technical outlook, Timecom coudl be a good stock for trading BUY or 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, Timecom.

Kianjoo- look out for the Bonus Issue


Result Update

For QE31/3/2013, Kianjoo's net profit dropped 32% q-o-q but increased by 12% y-o-y to RM30 million while revenue has similarly dropped by 3% q-o-q but rose by 13% y-o-y to RM301 million. When compared to the immediate preceding quarter (QE31/12/2012), revenue from Cans & Cartons division dropped due to higher orders from customers in QE31/12/2012 to meet festive season demand. Pre-tax profit for Cans division dropped 19% q-o-q to RM34.9 million (due mainly to derivative losses of RM1.8 million cf. gain of RM4.2 million previously). Cartons division's pre-tax profit dropped 21% q-o-q to RM3.8 million due to lower sales & higher operating overhead & cost. Contract Packaging Services division reported lower revenue of  RM12.8 million (from RM14.7 million ) and a pre-tax loss of RM2.1 million cf. to a profit of RM0.3 million previously


Table: Kianjoo's last 8 quarterly results


Chart 1: Kianjoo's last 26 quarterly results

Valuation

Kianjoo (closed at RM2.66 yesterday) is now trading at a PE of 10 times (based on last 4 quarters' EPS of 27.3 sen). At this multiple, Kianjoo is deemed fairly attractive.

Outstanding Corporate Exercise

Kianjoo has proposed a Bonus Issue of 1-for-2 and a Rights Issue of warrant on the basis of 1-for-4 shares held after the Bonus Issue at a price of only RM0.01 each. This corporate exercise attracted opposition from Canone, the present majority shareholder earlier went it was not a registered owner of the shares which it successfully bid in an auction. With the ownership of Kianjoo registered in its name, Canone- like all Minority shareholders- should welcome the proposed Bonus Issue.

Technical outlook

Kianjoo is in an uptrend line with support at RM2.20. Presently it is resting on the horizontal line at RM2.65. From here, Kianjoo may slowly rise again, especially when the date of entitlement of the Bonus Issue has been finalized.


Chart 2: KIanjoo's weekly chart as at Mar 22, 2013_11.00am (Source: Quickcharts)

Conclusion

Based on improved financial performance, attractive valuation & positive technical outlook, Kianjoo is a good stock to hold 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, Kianjoo.

JTInter- bottom-line rebounded


Result Update

For QE31/3/2013, JTinter's net profit rebounded to RM40 million from RM3 million in QE31/12/2012 or RM38 in QE31/3/2012. Revenue was mixed- up 7% q-o-q but down 4% y-o-y to RM310 million. JTInter's revenues increased q-o-q due to higher sales volume. Bottom-line improved q-o-q, driven by higher sales volume, lower marketing investments and lower operating expenditures in the current quarter. In addition, there was a one-time restructuring impact of the Group leaf and stemmery operations amounting to RM12.2 million in the preceding quarter.



 Table: JTInter's last 8 quarterly results

 
 Chart 1: JTInter's last 24 quarterly results

Valuation

JTInter (closed at RM6.80 yesterday) is now trading at a PE of 15.5 times (based on last 4 quarters' EPS of 44 sen, after adjusting for the one-time restructuring expenses of RM12.2 million incurred in QE31/12/2012). For a 'consumer' stock, JTInter is deemed fairly valued. It paid dividend of 41 sen in FY2012 & 54 sen in FY2011. Based on last FY dividend payout, its dividend yield is at a respectable 6%.

Technical outlook

 JTInter is still in an uptrend line. Its upside is capped at RM6.80-7.00. Until it can break above that level, JTInter is expected to swing between the uptrend line (at RM6.20) and the RM7.00 mark.


Chart 2: JTInter's weekly chart as at May 22, 2013_11.00am (Source: Quickcharts)

Conclusion

Based on improved financial performance, reasonable valuation & positive technical outlook, I would revise JTInter's rating from SELL INTO STRENGTH to 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, JTInter.

Sarawak stocks due for a correction?


Yesterday, I posited that property stocks may have overshot and are thus ready for a bit of correction. The other group of stocks that has done very well is the Sarawak stocks, whether Oil & Gas stocks or not. There are tentative signs that these stocks may have reached a temporary top. I have listed 3 of them below.


Chart 1: CMSB's daily chart as at May 22, 2013_9.30am (Source: quickcharts)



Chart 2: Deleum's daily chart as at May 22, 2013_9.30am (Source: quickcharts)


Chart 3: Dayang's daily chart as at May 22, 2013_9.30am (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, CMSB, Deleum & Dayang.

Tuesday, May 21, 2013

Shang- the Land of Elevated Valuation


Result Update

For QE31/3/2013, Shang's net profit increased by 128% q-o-q or 29% y-o-y to RM24 million while revenue increased by 4% q-o-q or 17% y-o-y to RM128 million. Bottom-line improved q-o-q due mainly to stronger profit contribution from Rasa Ria Resort and Shangri-la Hotel KL.


Table: Shang's last 8 quarterly results


Chart 1: Shang's last 28 quarterly results

Valuation

Shang (closed at RM6.10 yesterday) is now trading at a PE of 37 times (based on last 4 quarters' EPS of 16.5 en). Its Price to Book is 3.0 times (based on NTA of RM2.03 as at 31/3/2013). Its dividend yield is a minuscule 1.7%. How can this stock trade at such demanding valuation? The answer is expectation of privatization by Robert Kuok. To me, Shang is priced for disappointing return.

Technical Outlook

Shang has been rising gradually over the past 5 years. Lately, its share price has rocketed higher on rumor of privatization. Only time will tell whether this will happen or otherwise. If it does not materialize, the share price would correct (to a more gradual uptrend).


Chart 2: Shang's weekly chart as at May 21, 2013 (Source: quickcharts)

Conclusion

Despite the improved financial performance, Shang is difficult stock to call since it has risen so sharply over the past few months. I feel that the prudent approach is to SELL INTO STRENGTH.

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, Shang.

Boxpak- poised to rise?


Result Update

For QE31/3/32013, Boxpak's net profit dropped 13% q-o-q or 1% y-o-y to RM3.5 million while revenue was higher by 135 y-o-y but dropped 7% q-o-q to RM61 million. Revenue dropped q-o-q as previous quarter was higher due to festive carton in Vietnam operations. Bottom-line dropped q-o-q due to implementation of minimum wages in Malaysia & revision to minimum wages in Vietnam.


Table: Bixpak's last 8 quarterly results


Chart 1: Boxpak's last 22 quarterly results

Valuation

Boxpak (closed at RM2.45 yesterday) is now trading at a PE of 7.8 times (based on last 4 quarters' EPS of 31.6 sen). At this multiple, Boxpak is deemed fairly valued for a small-cap stock.

Technical Outlook

Boxpak is in a gradual uptrend. For the past 1 years, Boxpak has been trapped with a symmetrical triangle with resistance at RM2.30. On May 15, it broken above that resistance, albeit on thin volume. If it can recruit more support, Boxpak may continue with its prior gradual uptrend.


Chart 2: Boxpak's weekly chart as at May 21, 2013 (Source: quickcharts)

Conclusion

Based on satisfactory financial performance & potentially bullish technical breakout, Boxpak could be a good stock for long-term investment. Its valuation is however not cheap for a small-cap.

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, Boxpak.