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Thursday, November 28, 2013

KSL- an attractive property stock



Result Update

For QE30/9/2013, KSL's net profit increased by 3% q-o-q or 61% y-o-y to RM68 million while revenue increased by 1% q-o-q or 83% y-o-y to RM217 million.The group's property development projects in Johor Bahru & Klang are doing fairly well.


Table: KSL's last 8 quarterly results


Chart 1: KSL's last 36 quarterly results

Financial Position


As at 30/9/2013, KSL's financial position is deemed satisfactory, with current ratio at 2.1 times & gearing ratio at 0.16 time.

Valuation

KSL (closed at RM2.04 yesterday) is now trading at a PE of 3.6 times (based on last 4 quarters' EPS of 57 sen). At this PE multiple, KSL is deemed very attractive.

Technical Outlook

KSLis in an uptrend line, with support at RM1.68-1.70. Its immediate support level is the horizontal line at RM2.00.


Chart 2: KSL's weekly chart as at Nov 27, 2013 (Source: Quickcharts)

Conclusion

Based on good financial performance, attractive valuation & positive technical outlook, KSL is 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, KSL.

Wednesday, November 27, 2013

Daiman- not trying hard enough!

Result Update

For QE30/9/2013, Daiman's net profit increased by 105% q-o-q or 219% y-o-y to RM32.6 million while revenue dropped by 40% q-o-q or 38% y-o-y to RM28 million. The improved performance q-o-q was "due mainly to gain arising from the accounting of the 12.3 acres of land to be jointly developed with Rainbow Crest Sdn Bhd. This has more than covered for the decline in profit from lower sales from the property development business". The amount of the exceptional gain was RM39.5 million. In QE31/3/2013, Daiman also recorded an exceptional gain from sale of investment property of RM28.9 million.

There were occasional reports about how cheap is this stock- including a report in the Edge this week- but all the analysts who tracked this stock would look askance when they see a quarterly result like this. The question in everyone's mind is this: Why is the management of Daiman so easily contented!!! FYI, I posted on its breakout in March (here).


Table: Daiman's last 8 quarterly results


Chart 1: Daiman's last 25 quarterly results

Valuation

Daiman (closed at RMRM3.35 today) is now trading at a PE of 8 times (based on last 4 quarters' EPS of 43 sen). It also traded at a Price to Book of 0.7 time (based on NTA of RM5.06 p.s. as at 30/9/2013). Its dividend yield is a decent 3.6%.

Note: If the exceptional gain totaling RM68.4 million in QE30/9/2013 & QE31/3/2013 are excluded, the net profit for the past 4 quarters would be adjusted to RM22.8 million. Without exceptional gain, Daiman's bottom-line would be much lower going forward. 

Technical Breakout

Daiman broke above the line AB at RM2.15-2.20 in April. Since then, its share price has rallied strongly.


Chart 1: Daiman's weekly chart as at Nov 26, 2013 (Source: Quickcharts)

Conclusion

Based on cheap valuation (Price to Book) and technical breakout, Daiman could continue to rise. However, this stock has been a dull stock for many years and we can only hope that the Johore property play has legs to carry Daiman higher. If the Johore property play comes to a premature end, this stock would come down to earth again.

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, Daiman.

DLady- yet another good quarter!


Result Update

For QE30/9/2013, DLady's net profit increased by 22% q-o-q or 32% y-o-y to RM42 million while its revenue increased by 6% q-o-q or 17% y-o-y to RM264 million. The improved in top-line and bottom-line was contributed by higher sales of powder and liquid products. The q-o-q increase in revenue was "mainly contributed by higher sales of powder and liquid products" while increased net profit was "mainly due to the higher revenue and lower operating expenses during the quarter".


Table: DLady's last 8 quarterly results


Chart 1: DLady's last 22 quarterly results

Valuation

DLady (closed at RM47.00 yesterday) is now trading at a PE of 22 times (based on last 4 quarters' EPS of 218 sen). With the earning growth rate of 18%, DLady's PEG ratio is at 1.2 times. As such, Dlady is deemed fully valued. However, its dividend yield is fairly attractive at 5.5%, making this a good income stock.

Technical Outlook

DLady is now moving in sideways, with upside resistance at the horizontal line at RM48.40-48.50.


Chart 2: DLady's weekly chart as at Nov 26, 2013 (Source: Quickcharts)

Conclusion

Based on good financial performance & attractive dividend yield, DLady may be a good income stock. However, its upside potential may be limited as it is already trading at a demanding PE multiple.

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.

TGuan- another good quarter!


Results Update

For QE30/9/2013, TGuan's net profit increased by 108% q-o-q or 86% y-o-y to RM11.1 million while turnover increased by 5% q-o-q or 21% y-o-y to RM188 million. The increase in revenue was mainly due to "the higher average prices of raw materials which translated to higher selling prices compared to the corresponding period in 2012". The increase in profit before tax was mainly due to "higher contribution from stretch films, industrial bags, compounding and other smaller divisions due to better selling prices. There is also a significant gains on foreign exchange as the USD appreciated markedly against the RM in the current quarter compared to the preceding quarter".


Table: TGuan's last 8 quarterly results


Chart 1: TGuan's last 34 quarterly results

Valuation

TGuan (closed at RM1.66 today) is now trading at a PE of 5.8 times (based on last 4 quarters' EPS of 28.8 sen). At this PE, TGuan is deemed fairly attractive.

Technical Outlook

TGuan is in a steady uptrend  since the beginning of 2009. That uptrend accelerated noticeably in October 2011 and in May this year, the share price suddenly spiked up. Since then, the share price has slid back in a medium-term downtrend (or a flag formation). Over the past few weeks, the share has been attempting to break above the downtrend line (or the upside of that flag formation) with resistance at RM1.65. A breakout of this level could send the stock into another rally- akin to the May rally.


Chart 2: TGuan's daily chart as at Nov 26, 2013 (Source: Quickcharts)

Conclusion

Based on good financial performance, attractive valuation & positive technical outlook, TGuan could be a good stock for a medium & 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, TGuan.

Tuesday, November 26, 2013

Unimech- may have a bullish breakout


Unimech group designs, fabricates, installs, and maintains boilers, combustion equipment, and piping systems. It also manufactures rubber flexible joint and mould products, pressure gauges and thermometer, and metal stamped parts.

For FYE31/12/2012, it reported a net profit of RM22 million (or, a pre-tax profit of RM34 million) on a revenue of RM220 million (here). For 1H2013, it reported a net profit of RM10.8 million (or, a pre-tax profit of RM12.6 million) on a revenue of RM108 million (here). Annualized EPS for FY2013 is 18 sen. As such, the stock is now trading at a PE of 9.5 times (based on share price of RM1.71 now)

The stock has broken above the ascending triangle at RM1.60, albeit on very thin volume. The warrant- with exercise price of RM1.50 & expiring in September 2018 (here)- has surpassed its recent high of RM0.33.

  
Chart 1: Unimech's daily chart as at Nov 26, 2013_2.50pm (Source: Quickcharts)

 
Chart 2: Unimech's weekly chart as at Nov 26, 2013_2.50pm (Source: Quickcharts)

 
Chart 3: Unimech-WA's daily chart as at Nov 26, 2013_2.50pm (Source: Quickcharts)

Based on technical breakout, Unimech & its warrant could be a trading BUY.

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, Unimech.

Success- bottom-line inched higher


Result Update

For QE30/9/2013, Success's net profit increased by 11% q-o-q or 1% y-o-y to RM8.5 million while revenue was mixed, dropped a fraction of a percent but rose 4% y-o-y to RM82.9 million. The bottom-line improved q-o-q due to better performance derived from transformer and industrial lighting segment.


Table: Success's last 8 quarterly results


Chart 1: Success's last 26 quarterly results

Valuation

Success (closed at RM1.22 yesterday) is now trading at a PE of 4.6 times (based on past 4 quarters' EPS of 26.34 sen). Price to book is about 0.6 time (based on NTA p.s. of RM1.83 as at 30/9/2013). Dividend yield is however small at 2.5%. As such, Success is deemed an attractive stock.

Technical Outlook

Success is now resting on its long-term uptrend line at RM1.00. Its resistance is at RM1.27-1.30 while its support is at RM1.10.


Chart 2: Success's weekly chart as at Nov 25, 2013 (Source: Quickcharts)

Conclusion

Based on good financial performance, attractive valuation and positive technical outlook (albeit unexciting performance), Success is rated a good stock for long-term 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, Success.

GCB- reported its maiden loss?!


Results Update

For QE30/9/2013, GCB -formerly, Guanchg- reported a net loss of RM11.8 million on a revenue of RM328 million. This is mainly due to "higher net loss on foreign exchange and higher net fair value loss on commodity future contracts for current quarter ended 30 September 2013". In additions, "inventories write down, attributable largely to lower in net realization value of cocoa powder and cocoa cake also contributed to loss before tax for the current quarter". My take on the loss incurred:

1) "higher net loss on foreign exchange"- This probably came about because GCB sold their USD sale proceed forward and lost out due to a strengthening USD
2) "higher net fair value loss on commodity future contracts"- This probably due to GCB had long-term contracts to purchase cocoa beans at higher price than the prevailing price. If you look at Chart 2, you will see that cocoa futures have been rising since March this year and GCB should be benefiting from this rise if they had locked the price in early 2013.
3) "inventories write down, attributable largely to lower in net realization value of cocoa powder and cocoa cake"- This is probably due to GCB producing more cocoa butter (to meet demand by chocolate makers heading into the year end) but the other products- cocoa powder and cocoa cake- were getting lower prices due to excess supply. In addition, GCB's existing inventory of cocoa powder and cocoa cake that was produced at higher cost earlier were marked down to reflect the prevailing lower net realization value.

This quarterly loss confirmed my earlier thought that GCB's past out-performance was due to fortuitous timing in the forex market and buying of cocoa beans (here). That's not to take away the great job done by GCB's management in the past few years which saw the company enjoying a period of rapid growth. We can only hope that GCB will bound back from this setback and enter another period of exciting growth accompanied by gang-busting results. 


Table: GCB's last 8 quarterly results


Chart 1: GCB's last 36 quarterly results


 
Chart 2: Cocoa futures as at Nov 25, 2013 (Source: futures.tradingcharts.com)
 
Valuation

GCB (closed at RM1.51 yesterday) is now trading at a PE of 19.4 times (based on last 4 quarters' EPS of 7.75 sen). At this PE, GCB is overvalued.

Technical Outlook

GCB is now in a sideways move with support at the horizontal line RM1.50. Its next support is at the horizontal line RM1.20.


Chart 3: GCB's weekly chart as at Nov 25, 2013 (Source: quickcharts)

Conclusion

Based on poor financial performance & high valuation, GCB is rated a 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, GCB.

Monday, November 25, 2013

Jobst- top-line & bottom-line slipped sequentially


Result Update

For QE30/9/2013, JOBST's net profit was mixed- down 2% q-o-q but up 2% y-o-y to RM16.3 million while revenue was similarly mixed- down marginally q-o-q but up 12% y-o-y to RM46 million.


Table: JOBST's last 8 quarterly results

 
 Chart 1: JOBST's last 29 quarterly results

Valuation

JOBST (closed at RM2.14 on May 23) is now trading at a PE of 21.4 times (based on last 4 quarters' EPS of 10.0 sen). At this multiple, JOBST is deemed fully valued as its PEG ratio is about 1 time (as its 3-year CAGR for its net profit is 20%).
(Note: JOBST had completed a 1-for-2 share split on September 2, 2013)

Technical Outlook

JOBST continued its uptrend after it broke above its resistance at RM1.40 (or RM2.80 before the share split in September). With the stock trading in all-time territory, the technical outlook is bullish. However, you would notice that the MACD has hooked down and the same negative signals are also clearly displayed in the RSI & DMI indicators. These negative indicators reading could be signaling a near-term weakness in the stock. From Chart 3, we can see that JOBST is now trading above its irregular upward channel. Is the stock about to go into an exponential rise? I don't think so as JOBST is not a stock that has been rallied in the manner in the past. Is the negative indicator readings a signal that the stock may drop back into the channel? we will have to wait & see.

 
Chart 2: JOBST's weekly chart as at Nov 22, 2013 (Source: Quickcharts)

 
Chart 2: JOBST's monthly chart as at Nov 22, 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.

QL- Top-line & bottom-line improved


Results Update

For QE30/9/2013, QL's net profit increased by 21% q-o-q or 15% y-o-y to RM42 million while revenue increased by 4% q-o-q or 10% y-o-y to RM605 million. The q-o-q increase in top-line was attributable to higher revenue for all 3 segments while higher bottom-line was due mainly to higher pre-tax profit from the Marine Products Manufacturing & Integrated Livestock Farming segments.



Table: QL's segmental performance compared


Table: QL's last 8 quarterly results

Note that the profit margin has started to hook up after a 3-4 year of decline.


Chart 1: QL's last 19 quarterly results

Valuation

QL (closed at RM4.23 last Friday) is now trading at a PE of 25 times (based on last 4 quarters' EPS of 16.9 sen). Based on this PE multiple, QL is deemed overvalued.

Technical Outlook

QL continued its uptrend after it surpassed the resistance at RM3.30. As the stock is trading in all-time high territory, the upside is anyone's guess.


Chart 2: QL's weekly chart as at Nov 23, 2013 (Source: quickcharts)

Conclusion

Based on improved financial performance & bullish technical outlook, QL is a good stock for long-term investment. Its high valuation can be justified by expected improvement in its Palm Oil Activities segment as its estates start to produce FFB or become more productive.

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, QL.

Friday, November 22, 2013

Vitrox- Recovery shall begin?

Background



ViTrox Corporation Berhad ('Vitrox') is involved in the design, manufacture, and marketing of automated vision inspection systems and system-on-chip embedded electronics devices to semiconductor and electronic packaging industries. Among its solutions are:


Recent Financial Results

For QE30/9/2013, Vitrox's net profit soared 83% q-o-q or 189% y-o-y to RM11.9 million while revenue increased by 28% q-o-q or 52% y-o-y to RM36 million. The company attributed the improved financial performance to "increase in sales recorded for ABI. Increase in sales recorded for ABI was mainly derived from positive acceptance of our Advanced X-ray Inspection System. Sales from ABI have recorded an increase of 98% against the immediate preceding quarter".


Table: Vitrox's last 8 quarterly results

Vitrox had a volatile financial performance over the past 2 years. That may reflect the uncertainties in the electronic industries during the period.


Chart 1: Vitrox's last 4 quarterly results

Financial Position

As at 30/9/2013, Vitrox's financial position is deemed satisfactory, with current ratio at 6 times and debts to equity ratio at a negligible 0.1 time.

Valuation

Vitrox (closed at RM0.99 yesterday) is now trading at a PE of 9 times (based on last 4 quarters' EPS of 11.4 sen). At this PE multiple, Vitrox is deemed fairly valued.

Technical Outlook

Vitrox has formed a base between RM0.60-080 over the past 2 years. Over the past 4 weeks, it broke above the horizontal line at RM0.85 and it has just broken above the horizontal line RM1.00 this morning. If it can stay above the RM1.00 mark, this stock could begin its next upleg.


Chart 2: Vitrox's weekly chart as at Nov 21, 2013 (Source: Quickcharts)

Conclusion

Based on improving financial performance, good financial position & bullish technical outlook, AHealth Vitrox could be both a trading BUY and a good stock for long-term investment. However, it is fairly valued and its upside may be limited, unless its top-line & bottom-line expand substantially.

 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,Vitrox.

Maybank- bottom-line continued to grow

Results Update

Maybank reported a very good set of result for QE30/9/2013. Its net profit increased by 11% q-o-q or 16% y-o-y to RM1.746 billion while revenue was mixed- down 3% q-o-q but rose 5% y-o-y to RM8.392 billion,


Table: Maybank's last 8 quarterly results


Chart 1: Maybank's last 32 quarterly results

Technical Outlook

Please refer to my earlier post, but do note that the stock is still in a long-term uptrend line, with support at RM9.40. This means that the stock's technical outlook is still positive.

Valuation

Maybank (closed at RM9.55 yesterday) is now trading at a PE of 13.2 times (based on last 4 quarters' EPS of 73 sen). At this PE, Maybank is deemed attractive. From Table 2 below, we can see that Maybank is trading at PE multiple similar to AMBank & CIMB but nearly 20% cheaper than PBBank. As the top bank in Malaysia, I believe Maybank should command a higher multiple than 13 times.


Table 2: Top 5 Banks in Malaysia

Conclusion

Notwithstanding my earlier post, I believe that Maybank is a good banking 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, Maybank.

Thursday, November 21, 2013

Airasia- when the going gets tough...

Results Update

For QE30/9/2013, Airasia's net profit dropped by 39% q-o-q or 78% y-o-y to RM35 million while revenue inched up 3% q-o-q & y-o-y to RM1.28 billion.

 
Table 1: Airasia's last 8 quarterly results

From the next table, we can see that the q-o-q decline in net profit was attributable to fuel costs increase, forex losses on borrowing & absence of gain on disposal of interest in Japan Airasia which were partially offset by lower staff costs, higher other incomes and deferred tax credit. For y-o-y decline, the reasons are higher fuel cost, higher depreciation and forex losses on borrowing which were partially offset by forex gain versus forex loss on amount owing by associate companies, higher other incomes and deferred tax credit.


Table 2: Airasia's P&L account compared, q-o-q & y-o-y

Over the past 3 years, Airasia's bottom-line seems to be getting weaker while top-line continued to rise. With Malindo muscling into the market, the profit margin will be under greater threat. The slide in profitability can only persist in a competitive environment.


Chart 1: Airasia's last 30 quarterly results

Valuation

Airasia (closed at RM2.51 yesterday) is now trading at a PE of 26 times (based on annualized EPS of 9.6 sen). As such, Airasia is deemed overvalued.

Technical Outlook

From the daily chart (Chart 2), we can expect Airasia to find support at the gradual uptrend line (SS) at  RM2.45. However, the stock has been moving in a 2-year downward channel (see Chart 3) where the support is at the lower boundary (at RM2.30). If this support level (from RM2.30-2.45) cannot hold, Airasia will test the psychological RM2.00 mark. Below that, it may test the long-term uptrend line support at RM1.60.


Chart 2: Airasia's daily chart as at Nov 21, 2013_10.30am (Source: quickcharts)


Chart 3: Airasia's weekly chart as at Nov 21, 2013_10.30am (Source: quickcharts)

Conclusion

Based on challenging operating environment, poor financial performance, demanding valuation & deteriorating technical outlook, I rate Airasia a 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, Airasia.

Maybank & CIMB- Just some random thoughts

Lately, we noticed that Maybank has been relatively weak. If Maybank were to go below RM9.40, it would break the horizontal line as well as the long-term uptrend line. Maybank may follow the footsteps of CIMB which broke its horizontal-cum-uptrend line support at RM7.55 in January 2011. Since then, CIMB has been moving sideway, between RM6.20 & RM8.40. See Chart 1 & 2 below.


Chart 1: Maybank's weekly chart as at Nov 21, 2013_11.00am (source; quickcharts)


Chart 2: CIMB's weekly chart as at Nov 21, 2013_11.00am (source; quickcharts)

A study of Maybank & CIMB's monthly charts revealed that Maybank moved sideway for 4 years from 2004 to 2008, supported by the line Am-Am (see Chart 3). The breakdown of that line- coinciding with the 2008 US Financial Crisis & its ill-timed acquisition of BII in Indonesia- sent the stock plunging below RM3.00. From Chart 4, we can see that CIMB has been in a similar holding pattern for the past 3 years- supported by the line, Ac-Ac (at RM7.00). If CIMB breaks below the RM7.00 level, would the fall be as sharp as Maybank's fall in 2008?

From Chart 3, we can see that Maybank had a sharp spike-up in January 2008- just before the selldown. Would CIMB do the same today, i.e. spike up to RM8.00-8.20? If so, should we consider selling CIMB into strength at RM8.00.

From Chart 4, we can see that CIMB's 2-year uptrend from January 2009 & January 2011 topped off after a double-top at RM8.30-8.40. The first visit to RM8.40 was in January 2011 and the next visit was in June-July 2011. Would Maybank revisit its July 2013 high of RM10.55? If so, should we consider selling Maybank into strength at RM10.50.


Chart 3: Maybank's monthly chart as at Nov 21, 2013_11.00am (source; quickcharts)


Chart 4: CIMB's monthly chart as at Nov 21, 2013_11.00am (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, Maybank & CIMB.

AHealth- profit remained flat

Results Update

For QE30/9/2013, AHealth's net profit dropped 5% q-o-q to RM6.5 million while revenue dropped marginally by 2% to RM102 million. Compared to same quarter last year, net profit was up less than 1% while revenue was up 4%.


Table: AHealth's last 8 quarterly results
For the past 3 years, AHealth's top-line has been rising but its bottom-line was flattish. Was this a deliberate strategy to gain market share?


Chart 1: AHealth's last 22 quarterly results

Financial Position

As at 30/9/2013, AHealth's financial position is deemed satisfactory, with current ratio at 2.6 times and debts to equity ratio at a negligible 0.01 time.

Valuation

AHealth (closed at RM4.79 yesterday) is now trading at a PE of 15 times (based on last 4 quarters' EPS of 32 sen). At this PE multiple, AHealth is deemed fairly valued, with limited upside potential. With earning relatively unchanged over the past 3 years, the increase in share price was due to expansion in PE multiple (from 10 times in March 2011 to 15 times today).

Technical Outlook

AHealth is in an uptrend. Its immediate resistance is at RM4.90 while its immeidate support is at RM4.20. The MACD indicator has a negative cross-under, which may signal correction ahead.


Chart 2: AHealth's weekly chart as at Nov 20, 2013 (Source: Quickcharts)

Conclusion

Based on good financial performance & financial position, AHealth is a good stock for long-term investment. However, with mildly negative technical outlook & nearly full valuation, the stock is a good stock for profit-taking.

 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, AHealth.

Trop- feeling the heat!

I had a quick look at Trop price chart after a reader wrote to me. This stock seems to be moving in an irregular upward channel (denoted in blue as ABCD). Within the channel, it has support & resistance. It broke its horizontal support at RM1.50 and the 40-week SMA line. It is now resting on the 100-week SMA line at RM1.34. If this support is also violated, it may test the strong horizontal support at RM1.10. That plus the psychological level of RM1.00 should hold back the strong downtrend for this stock.


Chart: Trop's weekly chart as at Nov 20, 2013 (Source: quickcharts)

I am not sure what trigger the selldown on Trop. There were two stories that could have a negative impact on the stock. The first would be Danny Tan's reverse takeover of Albedo in SGX where his attention may be diverted away from Trop, which many regard as his main listed vehicle (here). The second reason could be the decision by CapitalMalls Malaysia Trust to abort the purchase of Tropicana City Mall & Tropicana City Office Tower for an undisclosed price tag (possibly RM550-650 million) [here].

Based on technical analysis, I think Trop would be a trading BUY if it ever comes down to RM1.00-1.10 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, Trop.

TChong- bottom-line hit by import tax duties


Result Update

For QE30/9/2013, TChong's net profit dropped 53% q-o-q or 3% y-o-y to RM32 million while revenue  was up 11% q-o-q or 35% y-o-y to RM1.27 billion. The drop in the bottom-line was due to provision for import tax duties of RM56 mil charged by the Vietnamese givernment. TChong is appealing on the Vietnamese government decision.


Table: TChong's last 8 quarterly results

The RM56 million import tax duties provision knocked down TChong's profit numbers & profit margin substantially. If not for this negative item, TChong's profit and profit margin would have been higher than the same quarter last year and the immediate preceding quarter (see the arrows on Chart 1).

Chart 1: TChong's last 27 quarterly results

Valuation

TChong (closed at RM6.40 yesterday) is now trading at a PE of 17 times (based on last 4 quarters' EPS of 36 sen). At this PE multiple, TChong is deemed fairly valued.

Technical Outlook

TChong is in an uptrend with resistance at RM6.70-6.80 and support at RM6.10-6.20. Next support is the horizontal line at RM5.30.


Chart 2: TChong's weekly chart as at Nov 21, 2013_10.30am (Source: quickcharts)

Conclusion

Based on good financial performance (albeit the hiccup on the import tax duties matter) & positive technical outlook, TChong is a good stock for long-term investment. However, Its upside potential is limited as the stock is fully 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, TChong.