Advertisement

Thursday, December 31, 2015

Happy New Year

I like to wish everyone a joyous new year. 


Source: happynewyear2016

Let 2016 be a new beginning for all Malaysians as we forge ahead to build a more perfect nation. We must cast aside our fear and prejudice and work together as one people to build a home that our children and their children can be proud of.


Source: happynewyearwishes2015s

Apollo: Slight Uptick in Bottom-line & Top-line

Result Update

For QE31/10/2015, Apollo's pre-tax profit increased by 12% q-o-q or 106% y-o-y to RM14.5 million while revenue also increased by 8% q-o-q or 5% y-o-y to RM54 million. Increased demand from both export and local markets had contributed to higher sales & profits. In addition, profits was also boosted by foreign exchange gain on the depreciation of Ringgit Malaysia against USD dollar. Despite higher pre-tax profit recorded, Apollo's net profit dropped q-o-q due to higher tax expense resulting from Deferred Tax charge of RM3.1 million.


Table 1: Apollo's last 8 quarterly results

Apollo's quarterly revenue & profits have been stagnant around RM50 million & RM10 million, respectively. Despite the lower exchange rate, Apollo's top-line and bottom-line did not show significant improvement. If MYR were to recover in 2016, profits could well drop back below RM10 million mark.


Chart 2: Apollo's last 31 quarterly results

Valuation

Apollo (closed at RM5.71 yesterday) is now trading at a PE of 12.8 times (based on last 4 quarters' EPS of 44.5 sen). Apollo is deemed fairly valued.

Technical Outlook

Apollo is in a long-term uptrend line. Its immediate resistance is around the RM6.00 mark. If it fails to clear this resistance, it could turn out to be a double-top reversal.


Chart 2: Apollo's monthly chart as at Dec 30, 2015 (Source: ShareInvestor.com) 

Conclusion

Despite the better financial performance, reasonable valuation & positive technical outlook, Apollo's upside potential is limited. It could be a good idea to TAKE PROFIT if you have a position in this 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, Apollo.

Sunday, December 27, 2015

AEONCR: Earnings improved

Result Update

For QE30/11/2015, AEONCR's net profit rose 10% q-o-q & y-o-y to RM53 million while revenue rose 7.5% q-o-q or 13.7% y-o-y to RM246 million.

PBT rose 8.4% y-o-y due to 13.7%-increase in revenue which resulted from a 3.6%-growth in total transaction and financing volume and a 29.5%-growth in financing receivables; 65.0%-increase in other opearting incomes (mainly comprised bad  debts recovered, commission income from sale of insurance products and AEON Big loyalty programme processing fee); partially offset by higher ratio of opex to revenue of 60.4% (compared to 58.7% previously due to higher impairment loss provision on financing receivables); and higher funding cost.


Table: AEONCR's last 8 quarterly results


Chart 1: AEONCR's last 34 quarterly results

Valuation

AEONCR (closed at RM11.84 yesterday) is now trading at a PE of 98.4 8.4 times (based on last 4 quarters' EPS of 141 sen). At this PER, AEONCR is deemed fairly attractive.

Technical Outlook

AEONCR is still in a long-term uptrend line, SS with support at RM12.00. 


Chart 2: AEONCR's monthly chart as at Dec 23, 2015 (Source: ShareInvestor.com)

Conclusion

Based on satisfactory financial performance, fairly attractive valuation and still positive technical outlook, AEONCR is rated as a HOLD 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, AEONCR.

Magni: Earnings continued to rise

Results Update

For QE31/10/2015, Magni's net profit rose 39% q-o-q or 170% y-o-y to RM21.6 million while revenue rose 2% q-o-q or 22% y-o-y to RM197 million. Revenue increased q-o-q mainly due to the favorable effects of USD against Ringgit arising from export of garments. PBT for the current quarter increased q-o-q mainly due to favorable currency exchange rate, lower operating expenses and higher other operating income.


Table: Magni's last 8 quarterly results


Chart 1: Magni's last 27 quarterly results

Valuation

Magni (trading at RM4.49 on Dec 23, 2015) has a trailing PE of 6.8 times (based on last 4 quarters' EPS of 65.7 sen). At this PER, Magni's valuation is still attractive. 

Technical Outlook

Magni is in an upward channel with support at RM2.80 & resistance at RM4.80.


Chart 2: Magni's monthly chart as at Dec 23, 2015 (Source: ShareInvestor.com)

From the daily chart, we can see a line ('AB') connecting all the recent peaks. If the stock can breajk through this at RM4.60, it may go to RM5.50-5.60.


Chart 3: Magni's daily chart as at Dec 23, 2015 (Source: ShareInvestor.com)
 

Conclusion

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

Sunday, December 20, 2015

Merry Christmas

I like to wish everyone a Merry Christmas. I will be on leave for the next few days & won't be posting anything for the rest of the week.


Via freelargeimages

 

BJToto: Helped by weaker MYR

Results Update

For QE31/10/2015, BJToto's pre-tax profit increased by 1.7% q-o-q but dropped 19.8% y-o-y to RM115 million while its revenue rose 7.8% q-o-q  or 15.1% y-o-y to RM1.44 billion. Revenue increased q-o-q was mainly attributed to improved results of Sports Toto and H.R. Owen whilst pre-tax profit increased due to the better results of Sports Toto partly offset by lower earnings reported by H.R. Owen in the current quarter under review.

Its net profit dropped by 2.5% q-o-q or 29% y-o-y to RM70.6 million due to much higher effective tax rate as certain expenses were disallowed for taxation purposes and profits in certain subsidiary companies are separately assessed for tax and not relieved by losses in other companies within the Group.


Table: BJToto's last 8 quarterly results


Chart 1: BJToto's last 29 quarterly results

Valuation

BJToto (closed at RM3.00 last Friday) is now trading at a fair PE of 12.5 times (based on the last 4 quarters' EPS of 24.2 sen). Its dividend yield is fairly attractive at 6.6% pa.

Technical Outlook

BJToto has been in downtrend for the past 2 years. It may retest its September low of RM2.92. I believe that the current price of RM3.00 is at a good psychological support. A failure to breach the recent low could signal the end of the downtrend.


Chart 2: BJToto's monthly chart as at Dec 18, 2015 (Source: ShareInvestor.com)

Conclusion

Despite weaker financial performance, BJToto is worth close tracking as its valuation & technical outlook could be indicative of a bottom in the near future.

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, BJToto.

Tuesday, December 15, 2015

Topglov: Earnings soared!

Results Update

For QE30/11/2015, Topglov's net profit rose 24% q-o-q or 164% y-o-y to RM128 million on the back of a revenue which rose 13% q-o-q or 41% y-o-y to RM800 million. Revenue increased due to increase in sales volume of 15% y-o-y, largely attributed to nitrile glove sales which increased 54% compared with 1QFY15. PBT soared y-o-y due to  increased levels of efficiency throughout the manufacturing process as a result of intense focus on automation,  R&D  and  re-engineering, which led to enhanced quality output and substantially reduced downtime. The Group's bottom-line was also boosted by the strong US Dollar and lower raw material prices.


 
Table: Topglov's last 8 quarterly results


Chart 1: Topglov's last 38 quarterly results

Valuation

Topglov (traded at RM11.90 as at 3.45pm) is now trading at a PE of 20.5 times (based on last 4 quarters' EPS of 58 sen). At this PE multiple, Topglov is fairly valued as compared to Harta & Kossan which are trading at their respective trailing PERs of 40 & 30 times..

Technical Outlook

Topglov is still in an uptrend. The current move may mirror the strong rally of 2009 when the stock rose 280% after surpassing the 20-month EMA line. If Topglov can chalk up a similar gain of 280% after surpassing the 20-month EMA line, then the potential target is RM14.00.
 

Chart 2: Topglov's monthly chart as at Dec 15, 2015_3.00pm (Source: ShareInvestor.com)


Chart 3: Topglov's monthly chart as at Dec 15, 2015_3.00pm (Source: ShareInvestor.com)

Conclusion

Based on satisfactory financial performance, fairly attractive valuation & positive technical outlook, Topglov 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, Topglov.

NTPM: Quarterly Earnings Soared to New High!

Result Update

For QE31/10/2015, NTPM's net profit increased by 32% q-o-q or 85% y-o-y to RM17.0 million while revenue was increased by 6% q-o-q or 11% y-o-y to RM152.6 million. Profits rose due to the increase in sales and improvement in margin. Revenue increased y-o-y mainly due to the increase in sales of personal care products.


Table: NTPM's last 8 quarterly results

NTPM's net profit of RM17.0 million for QE31/10/2015 has surpassed the previous highest quarterly net profit of RM16.6 million recorded in QE31/1/2010.


Chart 1: NTPM's last 41 quarterly results

Valuation

NTPM (closed at RM0.745 yesterday) is now trading  at a PE of 14.6 times (based on last 4 quarters' EPS of 5.1 sen). At this PE multiple, NTPM is deemed fairly valued.

Technical Outlook

NTPM is in a long-term uptrend line, SS with support at RM0.68-0.70. Its immediate resistance is at the horizontal line at RM0.80. If it can surpass this resistance, it may go to RM0.90.


Chart 2: NTPM's monthly chart as at Dec 14, 2015 (Source: ShareInvestor.com)

Conclusion

Based on satisfactory financial performance, fair valuation & positive technical outlook, NTPM's rating is upgraded from REDUCED to 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, NTPM.

Monday, December 14, 2015

Market Outlook as at December 14, 2015

Running through the various charts for our local market, we can see that the corrective rebound off the low in August is over. The downtrend is likely to continue and this may send the market back to the August low.


Chart 1: FBMKLCI's weekly chart as at Dec 14, 2015_10.00am (Source: ShareInvestor.com)


Chart 2: FBM70's weekly chart as at Dec 14, 2015_10.00am (Source: ShareInvestor.com)


Chart 3: FBMSCAP's weekly chart as at Dec 14, 2015_10.00am (Source: ShareInvestor.com)


Chart 4: FBMACE's weekly chart as at Dec 14, 2015_10.00am (Source: ShareInvestor.com)


Chart 5: FBMFLG's weekly chart as at Dec 14, 2015_10.00am (Source: ShareInvestor.com)

Looking at  the monthly chart, I believe that FBMKLCI will have a very strong support at 1540-1550, the middle line of the upward channel (B-B1). 
 

Chart 6: FBMKLCI's monthly chart as at Dec 14, 2015_12.30pm (Source: ShareInvestor.com) 

US stock markets are at a critical juncture this week. Two of the main market barometers, DJIA & Nasdaq are set to test their respective uptrend line. If S&P500 is a guide, these 2 indices are likely to break below their uptrend line and set the stage to revisit their August low.


Chart 7: DJIA, Nasdaq & S&P500's daily chart as at Dec 14, 2015_10.00am (Source: Stockcharts) 

In Europe, the 3 main stock barometers (FTSE, DAX & CAC) have broken their intermediate uptrend line and are set to revisit their August low.

 
Chart 8: FTSE, DAX & CAC's daily chart as at Dec 14, 2015_10.00am (Source: Stockcharts) 

In Asian, HK and Singapore markets continue to drift down. Nikkei is likely to join them after breaking below its intermediate uptrend line last week.


Chart 9: HSI, STI & Nikkei's daily chart as at Dec 14, 2015_10.00am (Source: Stockcharts) 

All in all, the stock markets worldwide are looking rather gloomy. This will add to the continued weak sentiment in Malaysia.

POS: Poor timing!!

Recently, I posted on POS as a potential stock for long-term investment. Shortly after that post, POS announced that it has entered into a Related Party Transaction ('RPT') involving the purchase of two assets from its related companies, DRBHcom. The assets are:
1) 100%-stake in KL Airposrt Services Sdn Bhd ('KLAS') for RM766.16 million; and
2) a piece of land measuring 9.9 acres in Pekan HICOM, Section 28, 40400 Shah Alam for RM69.0 million.[This information was accidentally left out earlier.]
Any RPT is viewed suspiciously and these two acquisitions will be no exception. The main concern is the bigger transaction involving the acquisition of KLAS.

Firstly, the purchase price of RM766.16 million is very high relative to KLAS's most recent profits. For FY2015, KLAS made a pre-tax profit of RM7.2 million. This means POS is buying KLAS at a PER of more than 100x. Going forward, we can expect POS's PER to above the 20x.

Secondly, we do not have any idea about the financial position and financial commitment of KLAS. This missing information caused analysts to worry about the impact on POS's dividend payout. As such, the acquisition of KLAS is deemed a negative development for POS. 

Chartwise, we can see that the stock has broken below its long-term uptrend line, SS. Its immedaite support will be the horizontal line at RM2.50. If that support is violated, the stock may test the next horizontal line at RM2.00. For now, I would re-rate POS as a HOLD if you have bought into it. If you have not bought into it, you should wait until the stock has found its support - be that at RM2.50 or RM2.00- before getting in.


Chart: POS's monthly chart as at Dec 14, 2015_9.30am (Source: ShareInvestor.com)

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, POS.

Thursday, December 10, 2015

RSENA: The odds just got better

I will admit it upfront; I do not like SPACs or Special Purpose Acquisition Companies. According to Wikipedia, SPACS are shell or blank-check companies that have no operations but go public with the intention of merging with or acquiring a company with the proceeds of the SPAC's IPO. They reminded me of those insane companies that were listed in England in 1700s or 1800s where their main purpose was to invest in a business that would make a profit (obviously). What business would that be, you asked. They didn't say. And, they all quickly went bust.

SPACs have been around in the US for more than 20 years. As an asset class, its return has been very disappointing. Studies in the US have shown that "SPACs that have succeeded in making acquisitions have severely underperformed the overall market. Out of 162 SPACs that have come public since 2003, 91 (56%) have completed acquisitions and on average they have returned a negative 19.7% per year, compared to a negative 2.7% for the Russell 2000 small-cap index. In contrast, SPACs that are still looking for a combination partner or have announced a proposed acquisition beat the market by significant amounts." (The irony may be lost to some: you succeed by not trying!!!) For more, go here.

If you choose to invest in a SPAC, investorplace recommends the following process for evaluation:

First, who are the people involved in the SPAC? What is their track record? What areas of expertise do they have? Are they planning to purchase something in their wheelhouse of expertise? Have they launched other SPACs and how did those perform?
Most importantly, only select a SPAC that wants an acquisition in an area you understand. It’s no different than buying a stock in a business you understand.
If you feel like management and sector pass muster, then you can buy in.
The next step is to evaluate the potential acquisition once it is announced. While you should read everything the SPAC provides, you should then set it aside and do your own due diligence as if you were buying the company yourself. Remember, once you approve the acquisition, you’re stuck with the company. If it craters, so does your investment. You don’t have to approve the acquisition. You have the option to cash out and get your money back.
One last thing — if a SPAC is headed for an acquisition, then abruptly changes course, get out. It means management didn’t get the deal it wanted, was running out of time to make a deal, and is probably grasping at straws.
Let's comeback to Malaysia. We have seen a spate of SPACs listed in the past 2 years that specialize in the Oil & Gas sector. Fortunately for the management and unfortunately for the shareholders, the O&G sector went South in the past few months. The front runner, Hibiscus had seen its share price dropping to less than RM0.30. This stock was listed in 2012 at an IPO price of RM0.75.


Chart: Hibiscus's monthly chart as at dec 8, 2015 (Source: ShareInvestor.com)

This morning we have the listing of RSENA, a new SPAC that will invest in regional F&B sector. Its sponsors include 2 former senior executives of Fraser & Neave, one of the best managed F&B companies in Malaysia. To me, RSEAN satisfied 2 points - management expertise and sector familiarity - that would put many investors at peace to part with their money.

Mercury Securities valued the stock at RM0.60 based on the assumption of a 20% return over the IPO price. To everyone's surprise (mine included), RSENA opened at RM0.385 while the free warrant opened at RM0.095. This means that an investor who bought 1 RSENA at RM0.50 and received 1 free RSENA-WA would be sitting on a paper loss of 2 sen.

The term of this SPAC requires that 92% of the gross proceed be kept in a Cash Trust Account. Because the management team got their 20%-share at special price of RM0.05 per share, the amount of gross proceed would be about RM410 million (consisting of normal shareholders' contribution of RM400 million & management's contribution of RM10 million). If 92% of this amount is set aside, that means RM377.2 million will be sitting in the Cash Trust Account until a qualifying investment is completed. On paper, each share has a cash backing of at least RM0.38 (rounded up to the nearest sen). 

If you like the F&B sector of a fast growing region & you have faith in the 2 former F&N executives (Joseph Tan & Datuk Tan Ang Meng), this could be a good stock to consider. RSENA is an interesting stock for speculation (for now) as it trades at or below RM0.38.

(Note: Those who bought into Hibiscus at RM0.60 in September 2012, would have made a decent profit if they had taken profit after the announcement of the qualifying investment.)


Diagram: Terms of RSENA (Source: Mercury Securities)

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, RSENA, Hibiscus or any other SPACs.

Wednesday, December 09, 2015

Kimlun: Poised for Next Upleg

Background

Kimlun Corporation Bhd ('KimLun') is involved in infrastructure and building construction, project management, industrial building systems (IBS) and manufacture of pre-cast concrete products (such as tunnel lining segments).


Diagram 1: Tunnel Lining Segment under production


Diagram 2: Tunnel Lining Segment

Recent Financial Results

For QE30/9/2015, Kimlun's net profit rose 26% q-o-q or 118% y-o-y to RM19.6 million while revenue dropped 6.7% q-o-q or 18.2% y-o-y to RM241 million.

The Group dropped q-o-q mainly due to lower revenue being achieved by the construction and manufacturing and trading divisions. Construction revenue dropped due to the completion of some of the older projects, while new projects secured had yet to reach the stage of active execution during the current quarter. Manufacturing revenue dropped due to lower sales of tunnel lining segments (‘TLS’), as the supply to one of the TLS sales orders was nearing the tail end.

Despite of lower revenue achieved, the Group recorded a higher gross profit due to better gross profit margin of the construction and manufacturing divisions. Selling and administrative expenses were lower due to the increase in foreign exchange gains by RM1.65 million. Share of profit of a joint venture was higher due to relatively higher construction progress, during the current quarter. As a result of the increase in gross profit and share of profit of a joint venture, and the decline in selling and administrative expenses, profit before and after tax rose q-o-q.


Table: Kimlun's last 11 quarters' P&L accounts


Chart 1: Kimlun's last 11 quarters' revenue, profits & profit margins


Financial Position

Kimlun's financial position as at 30/9/2015 is deemed mixed, with adequate liquidity as reflected by a current ratio of 1.69x but elevated leverage as shown by a gearing ratio of 1.16x. The high current ratio & gearing ratio are the result of high trade receivables with collection period of 160 days. This high term given out could be a practice in this industry.

Valuation

Kimlun (closed at RM1.43 this morning) is now trading at a PER of 7.5X (based on last 4 quarters' EPS of 19 sen). At this PER, Kimlun is deemed fairly valued. And, despite the financial burden of carrying a heavy receivable, Kimlun still paid a decent dividend of 3.8 sen last year- translating into a DY of 2.7%.

Technical Outlook

Kimlun has broken above its downtrend line, RR at RM1.25 in early September. Its rally after breakout was capped by the horizontal line RM1.40. In the past few days, it has broken above this horizontal line. If this breakout can sustain, the stock may soon launch into its next upleg- similar to what we have seen in May 2013. The target of this developing rally could be its May 2013 high of RM2.00.


Chart 2: Kimlun's weekly chart as at Dec 8, 2015 (Source: ShareInvestor.com)

Conclusion

Based on good financial performance, fair valuation & mildly positive technical outlook, Kimlun could be a good stock for a trading BUY or even a 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, Kimlun.

Astro: Earnings dropped

Results Update

For QE31/10/201530/9/2015, Astro's net profit dropped by 22.8% q-o-q or 7.4% y-o-y to RM106 million while revenue was up marginally by 0.4% q-o-q or 7.4% y-o-y to RM1.374 billion.

Revenue rose y-o-y due to an increase in other revenue of RM23.1 million, offset by decrease in subscription and advertising of RM10.5 million and RM7.2 million respectively. The increase in other revenue is due to an increase in merchandise sales of RM14.6 million from home-shopping business and sales of programming rights of RM8.4 million.

Net profit decreased by RM31.7 million mainly due to decrease in EBITDA of RM16.1 million, higher net finance costs by RM36.4 million due to unrealised forex impact primarily arising from unhedged finance lease liability of RM54.5 million and unhedged vendor financing of RM8.8 million, offset by decrease in discounting of transponder’s deposit to its present value of RM22.0 million. The decrease was offset by lower depreciation of set-top boxes of RM10.2 million and lower tax expenses of RM16.1 million.


Table: Astro's last 8 quarterly results


Chart 1: Astro's last 17 quarterly results

Valuation

Astro (closed at RM2.86 yesterday) is now trading at a trailing PE of 27 times (based on last 4 quarters' EPS of 10.6 sen). At this PER, Astro is over-valued. However, Astro paid out dividend quarterly which amounted to 12.5 sen for the last 4 quarters. Thus, its DY is at a decent 4.4%.

Technical Outlook

Astro has been drifting downward after it peaked at RM3.70 in June 2014. Its immediate support is at RM2.80-2.90 while its immediate resistance is at RM3.00-3.10.


Chart 2: Astro's weekly chart as at Dec 8, 2015 (Source: ShareInvestor.com)

Conclusion

Based on weak financial performance, expensive valuation & weak technical outlook, Astro's rating remains at best a HOLD but preferably an AVOID.

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.

Monday, December 07, 2015

POS: Share price dragged down by lower earnings

Results Update

For QE30/9/2015, POS's net profit plummeted by 85% q-o-q or 90% y-o-y to RM3.5 million while revenue increased by 2% q-o-q or 7% y-o-y to RM399 million.


Table: POS's last 8 quarterly results

From Chart 1, we can see that the lower profit for QE30/9/2015 was due to lower profits for all segments (especially, the Mail segment) and continued losses for the Retail segment.


Chart 1: POS's last 4 quarters' segmental revenue & profits


Chart 2: POS's last 40 quarterly results

Valuation

POS (closed at RM3.29 as at 3.45pm today) is now trading at PE of 13.9 times (based on last 4 quarters' EPS of 23.7 sen). At this PER, POS is deemed fairly valued, provided its earnings recover from in the following quarters.

Technical Outlook

POS may soon test its long-term uptrend line, with support at RM3.30-3.20. Those who had sold off in May based on my earlier recommendation, can look to buyback into the stock. See earlier post (here).


Chart 3: POS's monthly chart as at Dec 7, 2015_3.00pm (Source: ShareInvestor.com)

Conclusion

Despite poorer financial performance, I would rate POS a BUY ON WEAKNESS as it approaches the long-term uptrend line support at RM3.00-3.20.

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, POS.

KSeng: Next Upleg Starting?

Results Update

For QE30/9/2015, KSeng's net profit rose 152% q-o-q or 149% y-o-y to RM117 million on the back of a revenue of RM243 million, which rose 8% q-o-q but dropped 19% y-o-y. The sequential rise in revenue was mainly due to higher quantity of refined oil sold in 3Q 2015. Profits increased q-o-q due to better performance by the manufacturing segment & forex gain of RM104.55 million.


Table: KSeng's last 12 quarterly results


Chart 1: KSeng's last 12 quarterly results

If the forex gain of RM104.55 million is excluded from the bottom-line, KSeng's huge profits would shrink to a size of the disappointing QE30/6/2014.


Chart 2: KSeng's last 12 quarterly results- unadjusted & adjusted
 
Valuation

KSeng (closed at RM5.62 as at 11.30am this morning) is now trading at a trailing PER of 8.5 times (based on the last 4 quarters' EPS of 66 sen). If the exceptional forex gain is excluded, the last 4 quarters' EPS would reduce to 36 sen, the trailing PER would rise to 15.6 times. At this PER, KSeng is deemed fully valued.

Technical Outlook

KSeng broke above its intermediate downtrend line at RM5.20 last week.


Chart 3: KSeng's weekly chart as at Dec 7, 2015_11.30am (Source: ShareInvestor,com)

The upside breakout came after the stock tested its long-term uptrend line, SS at RM4.50. The upside breakout last week is very similar to the past 2 breakouts, which was followed by a decent rally to the upside.


Chart 4: KSeng's monthly chart as at Dec 7, 2015_11.30am (Source: ShareInvestor,com)

Conclusion

Based on technical breakout, KSeng could be a good stock for a trading BUY. Its valuation & financial performance are unexciting at this moment and would not warrant a rating of 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, KSeng.