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Monday, June 30, 2014

Multico: Broke its long-term uptrend line.

Background

Multi-Code Electronics Industries (M) Bhd ['Multico'] is involved in the manufacturing of electronics parts and accessories for the automotive industries. From the chart below, we can see that it is a medium size company with annual net profit of about RM10 million.


Chart 1: Multico's 17 yearly results

Other Information

In QE31/7/2007, it incurred a huge loss of RM33 million due to provision for doubtful debts. In 2010, 2 former directors of Multico were found guilty of defrauding the company of RM18 million. For more, go here.

Valuation

Multico (closed at RM1.53 last Friday) is now trading at a PE of 7 times (based on annualized EPS of 22 sen). At this PE, Multico- a smallcap stock- is deemed fairly valued.

Technical Outlook

Multico is in a long-term uptrend line until March this year. Then the stock broke its uptrend line at RM1.60 and slid to a low of RM1.45 before rebounding. However Multico failed to climb back above the uptrend line. It is likely to trade sideways in the near term.


Chart 2: Multico's weekly chart as at Jun 27, 2014 (Source: Tradesignum)

Conclusion

Based on mildly bearish technical outlook & fair valuation, Multico is rated 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, Multico.

Friday, June 27, 2014

ULICorp: A bullish breakout!

ULICorp may have broken out of a Cu-with-handle yesterday. Its first target is RM1.40 & next one is RM1.70. It is trading at RM1.20 as at the time of writing (10.40am).


 Chart 1: Ulicorp's weekly chart as at June 26, 2014 (Source: Tradesignum)

ULICorp is involved in the manufacturing and trading of cable support systems, cable management systems, integrated ceiling systems, building materials and light fittings. It was successfully listed on the Second Board of Kuala Lumpur Stock Exchange on 23 April 2002.

ULICorp is a company with very healthy financial position. As at 31/3/2014, it has a current ratio & gearing ratio of 5.1 times & 0.2 time respectively. Its net cash stood at RM36.3 million or 28 sen per share.

Its financial performance is very steady, albeit minimal growth in top-line and bottom-line.


Chart 2: ULICorp's last 10 years' result  (Source: Equities Tracker)
 
Based on technical breakout, ULICorp 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, ULICorp.

Thursday, June 26, 2014

PWRoot: Breaking Out?


PWRoot is breaking to the upside of an ascending triangle at RM2.22 (see Chart 1). More importantly, it is on the verge of breaking above a much larger pennant (see Chart 2). As at 3.45pm, it is trading at RM2.25 on a relatively thin volume of 255000 units. For more on PWRoot, go here.


Chart 1: PWRoot's daily chart as at Jun 25, 2014 (Source: Tradesignum)


Chart 2: PWRoot's weekly chart as at Jun 25, 2014 (Source: Tradesignum)

Based on  mildly bullish technical outlook, PWRoot 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, PWRoot.

Tuesday, June 24, 2014

Greenyb: Bullish breakout!


Greenyield Bhd ('Greenyb') may have broken to the upside its 3.5-year trading range of RM0.18-0.28. It closed at RM0.30 yesterday. If this breakout can sustain - and this is a big IF- then the stock's upleg may begin. First target will be RM0.38-0.40.


Chart 1: Greenyb's weekly chart as at June 23, 2014 (Source: Tradesignum)

Greenyb is a profitable company. It develops, manufactures and markets agricultural systems, products and services based on agro-technology. It has a strong balance sheet. As at 31/1/2014, its current ratio at 4 times while it has negligible borrowing of RM382k  as compared to Shareholders' Fund of RM54 million. At the same time, it has net cash in hand of RM14.1 million (or, 4.2 sen per share).

At RM0.30, Greenyb is trading at a PE of 18 times (based on annualized earning of 1.7 sen for FY14). At this multiple, Greenyb is deemed overvalued.
 

Chart 2: Greenyb's last 8 years' result (plus estimate for FY14) (Source: Equities Tracker & Nexttrade)

Based on technical breakout, Greenyb 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, Greenyb.

Prlexus: Time to take profit!

Results Update

For QE30/4/2014, Prlexus's net profit dropped 67% q-o-q by 17% y-o-y to RM2.2 million while revenue was mixed- dropped 37% q-o-q but rose 14% y-o-y to RM53 million. Revenue dropped q-o-q from RM84.4 million to RM53.3 million due to lower revenue from the garment division. Net profit dropped q-o-q due to lower revenue and unrealised forex loss of RM1.7 million as compared to a unrealised forex gain of RM2.2 million in QE31/1/2014.

 
Table 1: Prlexus's last 8 quarterly results


Chart 1: Prlexus's last 23 quarterly results

Valuation

Prlexus (closed at RM1.81 yesterday) is now trading at a PE of 8.6 times (based on last 4 quarters' EPS of 21 sen). At this PE, Prlexus is deemed fully valued.

Technical Outlook

Prlexus is in a long-term uptrend. The stock should have good support at the 10-week SMA line and 20-week EMA line at RM1.62 & RM1.50 respectively.


Chart 2: Prlexus's weekly chart as at Jun 23, 2014 (Source: Tradesignum)

 Conclusion

Based on weaker financial performance & full valuation, it may be time to take profit on Prlexus. However, there is no need to rush to sell as the technical outlook for Prlexus is still positive. 

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, Prlexus.

Monday, June 23, 2014

MRCB: Time to go!


MRCB broke above its downtrend line at RM1.55 in February. After the breakout, the stock moved sideways between RM1.52 & RM1.68. Today, MRCB went above the RM1.68 level to touch an intra-day high of RM1.72.

If MRCB can stay above the RM1.68 level, the stock is poised to start its next upleg. Based on this, MRCB could be a trading BUY or a medium-term investment.


Chart: MRCBs weekly chart as at June 19, 2014 (Source: Tradesignum)

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, MRCB.

Friday, June 20, 2014

SKPetro: A New Chapter for SKPetro!

Result Update

For QE30/4/2014, SKPetro's net profit increased by 51% q-o-q or 444% y-o-y to RM509 million while revenue increased by 30% q-o-q or 51% y-o-y to RM2.44 billion.

Revenue & PBT jumped due to the inclusion of SapuraKencan Energy Inc. Group ('SKEI') business' financial results subsequent to the completion of its acquisition on Feb 11, 2014. SKEI (formerly known as Newfield Malaysia Holding Inc.) was acquired by SKPetro for USD896 million (or RM3.0 billion). The acquisition was completed in February 2014. 

The group also recognized RM177.8 million gain on acquisition of SKEI business during the quarter. If this one-off gain is adjusted, SKPetro's net profit would actually drop 2% q-o-q or rose 253% y-o-y to RM332 million (assuming the gain is not subject to tax).


Table: SKPetro's last 8 quarterly results


Chart 1: SKPetro's last 12 quarterly results

Valuation

SKPetro (closed at RM4.33 yesterday) is now trading at a trailing PE of 19.7 times (based on last 4 quarters' EPS of 22 sen). Most analysts are valued SKPetro at a forward PE of 24-25 times its 2015F earning. On that basis, SKPetro's fair value would be about RM5.00. (Note: TA valued SKPetro at RM5.98 while CIMB valued it at RM7.00.)

Technical Outlook

SKPetro is still in an uptrend line with support at RM4.00. Immediate resistance level is RM4.35 and then at RM4.75.


Chart 2: SKPetro's weekly chart as at June 19, 2014 (Source: Tradesignum)
 
Conclusion

Based on good financial performance, exciting prospects & positive technical outlook, SKPetro is still 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, SKPetro.

AEONCR: Bottom-line jumped

Result Update

For QE20/5/2014, AEONCR's net profit increased by 18% q-o-q or 36% y-o-y to RM56 million while revenue increased by 7% q-o-q or 40% y-o-y to RM201 million.

Revenue increased 40% y-o-y due to increase in interest income, profit revenue & finance charges (from RM120.2 million to RM173.2 million) as well as increase in fee income (from RM23.7 million to RM27.7 million). Because of these, AEONCR was able to record a 35%-increase in pre-tax profit, notwithstanding marginally  higher funding cost, higher non-performing loans (NPL) ratio (of 2.18% as at May 2014 compared to 1.57% as at May 2013);  and higher ratio of total operating expenses against revenue (at 54.57% as compared to 54.01% previously).

How AEONCR achieved this improved results since its Total Assets only inched up by 6.3% from RM3.767 billion to RM4.005 billion? With narrower interest margin; higher operating expenses; and a smaller increase in Total Assets - the bulk of which consisted of Financing Receivables which rose 7.6% to RM3.84 billion from RM3.57 billion - how did they do it? Fee income alone does not explain it.


Table: Aeoncr's last 8 quarterly results


Chart 1: Aeoncr's last 28 quarterly results

Valuation

AEONCR (closed at RM14.92 yesterday) is now trading at a PE of 11.3 times (based on last 4 quarters' EPS of 132 sen). Based on past 2-year historical CAGR of 35%, AEONCR's PEG ratio is about 0.3 times. At this low PEG ratio, AEONCR looks like an attractive growth stock again!

Technical Outlook

After the 6-month correction in 2H13, AEONCR transitioned into sideways movement for the past 4-5 months. If it can break above RM15.40, it may continue with its prior uptrend.


Chart 2: Aeoncr's weekly chart as at June 19, 2014 (Source: Tradesignum)

 
Chart 3: Aeoncr's weekly chart as at June 19, 2014 (Source: Tradesignum)

Conclusion

Based on good financial performance & attractive valuation, AEONCR is still a good stock for long-term investment. If it can surpass the RM15.40 resistance, AEONCR may rise 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, AEONCR.

Thursday, June 19, 2014

Astro: Better Results, Still Expensive

Results Update

For QE30/4/2014, Astro's net profit increased by 15.2% q-o-q or 12.4% y-o-y to RM128 million while revenue was mixed: down marginally by 0.5% q-o-q but up 11.4% y-o-y to RM1.254 billion.

The increased revenue y-o-y was attributed to higher subscription, advertising & licensing income and sales of decoders. Higher subscription was the results of higher ARPU (from RM94.20 last year to RM97.10) as well as increased subscribers (from 3.32 million to 3.47 million).

In addition to higher y-o-y revenue, Astro's bottom-line also benefited from lower marketing & market research costs, staff-related costs & lower tax bill.

Table: Astro's last 8 quarterly results


Chart 1: Astro's last 11 quarterly results

Valuation

Astro (closed at RM3.54 yesterday) is now trading at a trailing PE of 40 times (based on last 4 quarters' EPS of 8.9 sen). At this PE, Astro is over-valued.

Technical Outlook

Astro broke above its recent high of RM3.23 in early April (here). It rallied to a high of RM3.70 before correction set in. From the chart below, we can see that Astro share price has hit the line connecting its recent highs. If it pulled back to RM3.30-3.40 (between the 20-d SMA line and 50-d SMA line), the stock could be a good trading BUY.


Chart 2: Astro's daily chart as at Jun 18, 2014 (Source: Tradesignum)

Conclusion

Despite the improved financial performance, Astro is rated a SELL INTO STRENGTH at RM3.60-3.70 due to demanding valuation and mildly challenging technical set-up.

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, Astro.

Tuesday, June 17, 2014

BAT: What Are You Smoking?

BAT broke above its recent high of RM67-68 today. At the time of writing this post, it was trading at RM70.22. This bullish breakout (albeit on thin volume) signals the continuation of its prior uptrend.


Chart 1: BAt's weekly chart as at June 16, 2014 (Source: Tradesignum)

BAT's recent financial performance is shown in the table and chart below.


Table: BAT's last 8 quarter's result


Chart 2: BAT's last 29 quarter's result

BAT (at RM70.22 now) is trading at a trailing PE of 24 times. At this PE, its upside potential is limited.

Why is the share price rallying today? I believe it has to be something big, like a takeover or privatization exercise. We will have to wait & see.

Based on technical breakout, BAT 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, BAT.

Monday, June 16, 2014

MESB: Share rallied on exceptional gain

MESB has been rising fairly well over the past few days. This follows the announcement of its 4Q14 results (here). On quick glance, MESB looks like a pretty attractive stock. However, on further study, you will find that the last 2 years of good performance was due to exceptional gain of about RM10 million each in FY14 & FY13. If this exceptional gain is excluded, the company's NP would drop to RM5 million or EPS of 11 sen.

Having said that, MESB's financial position is quite strong. It has net cash of RM15 million as at 31/3/2014 or 36 sen per share. Its current ratio is high at 3x while its gearing ratio is low at 0.3x.

At the current price of RM1.30, the stock is trading at a PE of 12x (or, 8.5x if the net cash is deducted from the share price). Either way, the PE multiples shows the stock to be fairly valued at best for a small-cap stock.

Thus, I believe the current rally is a good opportunity to exit this stock. 


Chart 1: MESB's weekly chart as at June 13, 2014 (Source: Tradesignum)


Table: MESB's last 11 yearly results (Source: Equities Tracker & Nexttrade)


Chart 2: MESB's last 11 yearly results (Source: Equities Tracker & Nexttrade)

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, MESB.

TAGB: A bullish breakout beckons

TAGB has broken above its downtrend line at RM0.31-0.32. Today, it broke above the horizontal resistance at RM0.33. See Chart 1.


Chart 1: TAGB's weekly chart as at June 13, 2014 (Source: Tradesignum)

Its preference shares, TAGB-PA broke above its downtrend line today. See Chart 2.


Chart 2: TAGB-PA's weekly chart as at June 13, 2014 (Source: Tradesignum)

With these breakout, there is a good chance that TAGB may go into an upleg. Since, we are in the early days of a probable upside move, we should open account with only a small position in case the anticipated play does not pan out.

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, TAGB.

NARRA: A limit-up in a quiet market!

NARRA score a limit-up today when it zoomed to an intra-day high of RM2.70. Its powerful rally began after it broke above its flag formation at RM1.80 last week (see Chart 1). The limit-up price is near the first target of RM2.60 (see Chart 2). At the time of writing, NARRA has eased back to RM2.50.


Chart 1: NARRA's daily chart as at June 13, 2014 (Source: Tradesignum)



Chart 2: NARRA's weekly chart as at June 13, 2014 (Source: Tradesignum)

NARRA is in the midst of a restructuring which will turn it into an attractive cement stock.

The proposed restructuring of NARRA Industries Bhd involves:

1) A 2-to-1 capital reduction to be followed a 2-to-1 share consolidation
2) Acquisition of 100%-stake in Hume Cement from HL Manufacturing Group and 175m ICPS in Hume Cement & 100%-stake in Hume Industries from HLInd. These acquisitions will be settled by issuance of 448m new shares.

By owning 100%-stake in Hume Cement, NARRA will become a cement stock. Hume Cement currently owns a cement plant in Gopeng, Perak which commenced operation last year. It has clinker capacity to 1.5 mtpa and cement grinding capacity of 1.8 mtpa. It has recently received Environmental Impact Assessment approval for its next phase of expansion which would double its output.

Based on RHB report in February, NARRA’s earning is expected to jump in FY15 when the full impact of the acquisition of Hume Cement & Hume Industries will be booked in. Its total revenue will increase to RM743m while PBT & PAT will increase to RM97m & RM72.5m, respectively.

RHB valued NARRA at RM2.27 basing on a PE of 15x FY15E (which is at a discount of 15% to its West Malaysia peers).

Based on RHB's valuation and technical projection, NARRA is deemed a good trading SELL for those fortunate enough to get in earlier. 


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, NARRA.

Thursday, June 12, 2014

Kamdar: Poised for Breakout?


Kamdar (closed at RM0.66 yesterday) has proposed a 4-sen first & final dividend wuth the entitlement date fixed on July 7, 2014. It paid out dividend of 3 sen in 2013and 4 sen in 2012. This gives Kamdar, a cloth trader, an attractive dividend yield of 6%.

Kamdar's EPS for the last 4 quarters amounted to 8.05 sen. It has a NTA of RM1.12. This means the stock has a trailing PE of 8.2 times and a PB of 0.6 time.

Kamdar's financial position is deemed satisfactory as at 31/3/2014 with current ratio at 2.6 times and gearing ratio at 0.44 time.

A quick look at Chart 1 shows that Kamdar has a good profit track record. Its profit margin has also been rising steadily.


Chart 1: Kamdar's last 13 years P&L, Cashflow & Profit Margin (Source: Nexttrade, EquitiesTracker)

What is interesting is that the stock has just broken above its strong horizontal resistance at RM0.65, albeit on very thin volume. Its next resistance is at RM0.90.


Chart 2: Kamdar's monthly chart as at June 11, 2014 (Source: Chartnexus.com)


Chart 3: Kamdar's weekly chart as at June 11, 2014 (Source: Chartnexus.com)


Based on technical breakout, satisfactory financial performance & position and reasonably attractive valuation, Kamdar could be a good medium-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, Kamdar.

Friday, June 06, 2014

Orient: Poised to go higher?



Results Update

For QE31/3/2014, Orient's NP dropped 6% q-o-q but rose 27% y-o-y to RM70 million while revenue was down 3% q-o-q but rose 16% y-o-y to RM733 million.


Table: Orient's last 8 quarterly results


Chart 1: Orient's last 34 quarterly results

Valuation

Orient (closed at RM7.80 yesterday) is now trading at a PE of 24 times (based on last 4 quarters' EPS of 33 sen). At this PE, Orient is deemed overvalued.

Technical Outlook

Orient broke above its downtrend line at RM7.70 in April. With this breakout, Orient's downtrend is over and the stock may move either sideways or up. To start the next upleg, Orient needs to surpass the April high of RM8.02. Today, it made an intra-day high of RM8.05. At the time of writing, it is trading at RM8.00.
 

Chart 3: Orient's weekly chart as at June 5, 2014 (Source: Tradesignum)

Conclusion

Based on slightly better financial performance & mildly positive technical outlook, Orient could be a good stock for a recovery play. If it can break above the RM8.02 mark, the stock could be a trading BUY. Nevertheless, the stock's s upside potential may be limited as it is trading at demanding valuation.

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.

Thursday, June 05, 2014

Suria: Breaking above its downtrend line at RM2.67

Suria Capital Bhd ('Suria') is the owner/operator of all the ports in Sabah, which were previously under the purview of Sabah Port Authority. As part of the Privatization Agreement signed in 2004, Suria was granted a 30-year concession to develop & operate all the ports under Sabah Port Authority. In addition,Suria was granted 23.25 acres of land within the vicinity of KK Port for mixed commercial & tourism-related development.

The stock has been valued by RHB Invest (at RM3.50) & Alliance Research (at RM3.38) in November last year and by MIDF Research (at RM3.15) in April this year.

Chartwise, the stock has been consolidating in a triangle. Alternatively, it was in a downtrend line until yesterday. It broke above the triangle (or downtrend line) at RM2.67. With this breakout, the stock will continue its prior uptrend. Next target will be RM3.00-3.20.

Based on bullish breakout, Suria could be a good trading BUY.


Chart: Suria's weekly & daily chart as at June 4, 2014 (Source: Tradesignum)

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,  Suria.

Wednesday, June 04, 2014

CPO: Heading to RM2300

CPO broke its medium-term uptrend line at RM2600 two weeks ago. Last week, it broke the horizontal line at RM2500. It is destined to test the next horizontal line at RM2300. If that line is also violated, CPO may revisit the July 2013 low of RM2150.

Based on bearish outlook for CPO, Plantation stocks would be negatively affected.


Chart: CPO's weekly chart as at June 2, 2014 (Source: ifs.marketcenter)
Note: The unattractive composite chart is much regretted. 

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, CPO and/or any Plantation stocks.

Monday, June 02, 2014

Dsonic: Bottom-line dropped sharply

Results Update

For QE31/3/2014, Dsonic's net profit declined by 46% q-o-q or 17% y-o-y to RM12.5 million while revenue dropped by 29 %q-o-q or 13% y-o-y to RM52 million. The decline was attributed to lower revenue from the supply of data pages, personalization solutions & site preparation for personalization centres. In addition, the company also experienced a drop in the sales of consumables.


Table: Dsonic's last 8 quarter's result


Chart 1: Dsonic's last 8 quarter's result

As noted in my previous post, Dsonic's bottom-line dipped slightly in QE31/12/2013. Any further slide in the financial performance would be a matter of serious concern since the share price has risen multiple folds in the past 1 year.

Another Bonus Issue coming...

Dsonic's proposed 1-for-1 bonus issue will go ex on June 6. Since listing in September 2012, the stock has underwent a 1-for-2 bonus issue & a 1-to-5 share split.

Valuation

DSonic (closed at RM3.75 on Friday) is now trading at a PE of 28 times (based on last 4 quarterly EPS of 13.3 sen). At that PE multiple, the future earning must be very compelling to draw in more investors. The drop in earning could be a wake-up call to these investors.

Technical Outlook

DSonic broke its uptrend line, SS in April. The price direction for the next 1 week will be anybody's guess. Will it go up ahead of the bonus issue's entitlement date of June 6? Would it succumb to profit-taking due to poor set of result? Ideally, you should take profit under 2 scenarios:
1. The unlikely scenario of Dsonic climbing back to RM4.80-5.00 to reclaim its uptrend line
2. The possible scenario of Dsonic breaking above its horizontal resistance at RM3.90-4.00.


Chart: Dsonic's daily chart as at May 30, 2014 (Source: Tradesignum)

Conclusion

Based on the drop in financial performance, demanding valuation & mildly bearish technical outlook, Dsonic is rated a TRADING SELL. However, it is possible that the stock may surprise us with a late surge as the entitlement sate for the 1-for-1 bonus issue approaches. If that happens, you would get even prices for the stock and has a better reason to push out your 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, Dsonic.