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Monday, October 31, 2016

PMetal: Earnings Dipped Sequentially

Results Update

For QE30/9/2016, PMetal's net profit dropped by 16% q-o-q but rose 317% y-o-y to RM123 million while revenue rose 10% q-o-q or 71% y-o-y to RM1.737 billion.  PBT dropped 23.4% q-o-q as preceding quarter profit include insurance claim of RM45 million and unrealized forex gain of RM4 million. Excluding these 2 exceptional items, PBT rose 1% to RM201.5 million.


Table 1: PMetal's last 8 quarterly results


Chart 1: PMetal's 36 quarterly results

Valuation

PMetal (closed at RM4.35 last Friday) is now trading at a PER of 14 times (based on last 4 quarters' EPS of 30.93 sen). In addition, it pays a decent dividend, with a yield of 2.0%. Based on these, PMetal is deemed to be fairly valued.

Corporate Exercise

PMetal will be carrying out a share split of 1-to-2; and bonus share issue of 2-for-5 (after the split) [here]. The ex-date dates of this exercise is November 4 (here and here). As the exercise will be carried out soon, I expect PMetal share price to be well-supported for the next few days.

Technical Outlook

PMetal broke above the 'horizontal' line, AB at RM3.20 in April. It is now rising in an intermediate uptrend line, SS with support at RM4.20.


Chart 2: PMetal's weekly chart as at Oct 28, 2016 (Source: ShareInvestor.com)

PMetal is rising in a long-term uptrend since late 2005. In fact, PMetal also seems to be moving in a steady cycle, where its share price had peaked every 3-4 years. If the cyclical price movement persists, PMetal may not peak until mid-2017.


Chart 3: PMetal's monthly chart as at Oct 28, 2016 (Source: ShareInvestor.com)

Conclusion

Based on satisfactory financial performance, fairly attractive valuation and bullish technical outlook, PMetal is a good stock for long-term investment.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Gadang: Earning Took A Heavy Knock

Result Update

For QE31/8/2016, Gadang's net profit dropped by 45% q-o-q or 20% y-o-y to RM17 million while revenue dropped by 58% q-o-q or 30% y-o-y to RM105 million. Gadang recorded lower revenue of RM105 million for the current quarter as compared to RM249 million in the preceding quarter mainly due to completion of various construction projects. In line with this, the Group’s profit before tax decreased from RM38 million in the preceding quarter to RM22 million in the current quarter.


Table 1: Gadang's last 8 quarters' P&L


Table 2: Gadang's segmental results for QE31/8/2016 & QE31/5/2016


Chart 1: Gadang's last 11 quarters' P&L

Valuation

Gadang (closed at RM2.92 last Friday) is now trading at a trailing PER of 8.4x (based on last 4 quarters' EPS of 34.8 sen). At this PER, Gadang is deemed fairly attractive.

Corporate Exercise


On October 7, Gadang announced a share split of 1-to-2; bonus share issue of 1-for4 (after the split) and bonus warrant issue of 1-for-4 (after the split) [here]. We have seen a few of these "massive" exercises in the past 1-2 years and they have generally been well-received by the market.

Technical Outlook

Last Friday, Gadang dropped sharply from RM3.29 to close at RM2.92, after the announcement of the latest quarterly result. Gadang is now hanging onto the 50-day SMA line support. If this support fails, its next support is at the horizontal line at RM2.58.


Chart 2: Gadang's daily chart as at Oct 28, 2016 (Source: Shareinvestor.com)


Chart 3: Gadang's weekly chart as at Oct 28, 2016 (Source: Shareinvestor.com)

Conclusion

Despite the surprisingly weak financial performance, Gadang is rated aHOLD based on fair valuation and positive long-term technical outlook

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Tasek: Earnings Took A Knock

Results Update

For QE30/9/2016, Tasek's net profit dropped by 58% q-o-q and y-o-y to RM7.6 million while revenue rose 14% q-o-q or 10% y-o-y to RM149 million. Revenue dropped q-o-q mainly due to lower sales by both the cement and ready-mixed concrete segments, which in turn was due to the lower average net pricing from the intensive price competition and shorter business cycle. Lower revenue plus higher costs of production in the cement segment - arising from plant maintenance - and lower interest income, led to lower profit before tax of RM9.9 million as compared to RM23.3 million recorded in QE30/6/2016


Table: Tasek's last 8 quarterly results

 
Chart 1: Tasek's last 34 quarterly results & dividend payout 

Valuation

Tasek (closed at RM14.60 last Friday) is now trading a PE of 27 times (based on last 4 quarters' EPS of 54.87 sen). At this PER, Tasek is deemed overvalued. With the decline in profit, Tasek's dividend payment also declined, leading to a drop in its dividend yield to 5.5%. At this rate, one is hard-pressed to make a case that Tasek is a good income stock.

Technical Outlook

Tasek has been in an uptrend since 2006. If it can stay above the support from the horizontal line at RM14.00 (which may be its uptrend line support), there is still a chance that the uptrend will remain intact. A break below the RM14.00 mark could signal the end of the uptrend.


Chart 2: Tasek's monthly chart as at Oct 28, 2016 (Source: ShareInvestor.com)


Chart 3: Tasek's monthly chart as at Oct 28, 2016 (Source: ShareInvestor.com)

Given the amount of construction projects announced over the past 1-2 years, it is hard to believe that Tasek uptrend would come to an end. Then again, if we look at the leader of this sector, LAFMSIA, we can see that LAFMSIA had broken its uptrend line at RM9.00 in early 2016.


Chart 4: LAFMSIA's monthly chart as at Oct 28, 2016 (Source: ShareInvestor.com)

Conclusion

Based on poorer financial performance, demanding valuation and challenging operating environment, I revise the rating for Tasek to a SELL.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Saturday, October 29, 2016

Happy Deepavali



I wish all my readers of the Hindu faith a Happy and Prosperous Deepawali. Let there be peace and harmony among people of all faiths in Malaysia.



Wednesday, October 26, 2016

Gtronic: Bottom-line Maintained, Top-line Slid Further

Result Update

For QE30/9/2016, Gtronic's net profit increased by 40% q-o-q to RM9.2 million while revenue was dropped 9% q-o-q to RM52 million. Compared to the same quarter last year, net profit dropped 55% while revenue was down by 41%.

Revenue dropped q-o-q due to the continuous softer volume loadings from some of the Group's customers as a result of reduction in end customers' demand. Net profit rose q-o-q mainly due to cost control program carried out in the Group and forex gain (net) recognized (RM1.6 million) compared to forex gain of RM0.3 million in the preceding quarter and grant income of approximately RM1.4 million recognized as compared to preceding quarter of RM0.2 million


Table 1: Gtronic's last 8 quarterly results


Chart 1: Gtronic's last 38 quarterly results
  
Financial Position
 
Gtronic's financial position remained healthy with current ratio at 6.2x and gearing ratio at 0.2x. 
Valuation 

Gtronic (closed at RM3.56 yesterday) is now trading at a PE of 28 times (based on last 4 quarters' EPS of 12.46 sen). At that PER, Gtronic is deemed overvalued with no sign of a rebound in top-line.

Technical Outlook

Yesterday afternoon, we saw a sudden sharp selldown in Gtronic. It sent the share price plunging from RM3.90 to an intra-day low of RM3.40 before technical rebound pushed back the share price to close at RM3.57.


Chart 2: Gtronic's daily chart as at Oct 25, 2016 (Source: ShareInvestor.com)

The selldown capped a steady recovery in the share price made a low of RM2.75 on August 4. Gtronic failed to stay above the intermediate downtrend line at RM3.80. It may hover around RM3.40-3.80 until we can get clarity on the outlook for the business.


  Chart 3: Gtronic's weekly chart as at Oct 25, 2016 (Source: ShareInvestor.com)

Conclusion

Based on continued weak demand, high valuation & bearish technical outlook, I revised my rating for Gtronic to a SELL.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.
 

Tuesday, October 25, 2016

IBhd: Good Earnings Reported

Result Update

For QE30/9/2016, IBhd's net profit rose 53% q-o-q or 162% y-o-y to RM22.4 million while revenue rose 31% q-o-q or 106% y-o-y to RM114 million. The better performance in both the revenue and profit was mainly due to higher revenue recognition of on-going projects for the Property Development segment as well as higher revenue and profit before tax for the Leisure segment.


Table: IBhd's last 8 quarterly P&L


Chart 1: IBhd's last 13 quarterly P&L

Valuation

I-Bhd (closed at RM0.61 yesterday) is now trading at a trailing PER of 9.4x (based on last 4 quarters' EPS of 6.53 sen). At this PER, I-Bhd is deemed fairly valued.

Technical Outlook

IBhd will soon test the strong resistance from the horizontal line at RM0.63. Looking at the charts for IBhd-LB & IBhd-WA, I believe that there is a fairly good chance that IBhd will soon break above this horizontal line.


Chart 2: I-Bhd's weekly chart as at Oct 24, 2016 (Source: Chartnexus)


Chart 3: I-Bhd-LB's weekly chart as at Oct 24, 2016 (Source: Chartnexus)


Chart 4: I-Bhd-LB's weekly chart as at Oct 24, 2016 (Source: Chartnexus)

Conclusion

Based on good financial performance and fair valuation, I-Bhd could be a good stock to consider for long-term investment. Its near-term outlook may still be neutral as the stock has not yet launched into its next upleg.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.
 

Monday, October 24, 2016

Ekovest: No Longer A Hidden Gem

Background

Ekovest Bhd is involved in civil engineering and building works, owning of highway concessions and property development. Currently it owns 2 highway concessions, DUKE & DUKE 2 which collectively form the Duta-Ulu Kelang Expressway. The group will soon build, own & operate a third highway, the Setiawangsa-Pantai Expressway (SPE). 

In addition, Ekovest has fairly exciting prospect in property development. It has a few projects coming up, such as EkoGateway, EkoCheras and EkoTitiwangsa (which is a part of the KL River City project).


Picture: EkoGateway, EkoCheras & EkoTitiwangsa

Historical Financial Performance

Ekovest's top-line and bottom-line had been on an upswing since 2015. The increase in bottom-line was very sharp in FY2016 and it came from fair value adjustment from investment properties of RM113 million.


Chart 1: Ekovest's last 10 years' P&L

Recent Financial Result

Ekovest's quarterly result shows a group with relatively thin profit margin. In the past 10 quarters, the 4th quarters had shown bumper profits due to fair value adjustment from either investment properties or new financial liabilities (or refinancing of borrowings at lower rates).

The recent sale of a 40%-stake in DUKE and DUKE2 highway to EPF at a price of RM1.13 billion reveals just how much of the "hidden value" is in Ekovest balance sheet. The sale effectively valued Ekovest's stake in the DUKE highway at RM2.825 billion.


Table: Ekovest's last 10 quarterly P&L


Chart 2: Ekovest's last 10 quarters' P&L

Financial Position

As at 30/6/2016, Ekovest's financial position is deemed mixed, with current ratio at 1.9x and gearing ratio at 2.0x. The high gearing ratio is due to borrowings taken to finance its concession. The proceed from the sale of the 40%-stake in DUKE highway will help to reduce the gearing of the group until the start of the SPE project. It would enable the group to raise capital for the equity investment in the company undertaking the SPE project.

Valuation

Ekovest was valued at RM3.00 by UOB Kay Hian in September. I believe that the valuation to be fair. (Note: Ekovest is currently trading at RM2.18.)

Technical Outlook

Ekovest broke above the line, AB which connects the peaks for the past 14 years. Its next resistance is at the horizontal line at RM2.80 or its 2000 high of RM3.00-3.10.


Chart 3: Ekovest Matrix's monthly chart as at Oct 24, 2016 (Source: shareinvestor.com)

Conclusion

Based on exciting prospects, potential upside and bullish technical outllok, I rate Ekovest as a good Trading BUY.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Thursday, October 13, 2016

Topglov: Earning Improved

Results Update

For QE31/8/2016, Topglov's net profit rose 5% q-o-q but dropped 36% y-o-y to RM66 million while revenue rose 7% q-o-q or 2% y-o-y to RM722 million. The increase in revenue has more than offset the decline in PBT margin, leading to a 2.8%-increase in PBT. PBT margin declined to 10.5% from 11.0% in QE31/5/2016,  due to intensive competition and cost increases stemming from hikes in minimum wage, as well as the natural gas tariff.

 
Table: Topglov's last 8 quarterly results


Chart 1: Topglov's last 41 quarterly results

Valuation

Topglov (closed at RM5.00 yesterday) is now trading at a trailing PE of 17.3X (based on last 4 quarters' EPS of 28.91 sen). This compared favorably to Harta's PER of 32X or Kossan's PER of 21.8x. (Note: Harta closed at RM4.90 yesterday & its rolling 4 Qs' EPS is 15.3 sen. Kossan closed at RM6.90 yesterday & its rolling 4 Qs' EPS is 31.7 sen.)

Technical Outlook

Topglov broke above its intermediate downtrend line, RR at RM4.70 5 weeks ago. Topglov then rallied past the strong horizontal line at RM5.00 before correcting. If it can surpass the RM5.00 resistance again, it may continue with its prior uptrend.

 
Chart 2: Topglov's weekly chart as at as at Oct 12, 2016 (Source: ShareInvestor.com)
 

Chart 2: Topglov's monthly chart as at as at Oct 12, 2016 (Source: ShareInvestor.com)

Conclusion

Based on satisfactory financial performance, fairly valuation & mildly bullish technical outlook, Topglov could be a good stock for a trading BUY if it can surpass the RM5.00 mark.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Thursday, October 06, 2016

MATRIX: At a New High


Background

Matrix Concepts Group Berhad ('Matrix') is involved in property development, education, clubhouse operator and construction. It was listed on Bursa Malaysia in June 2013. Currently the group has 2 major on-going township developments, namely Bandar Sri Sendayan in Seremban, Negeri Sembilan and Bandar Sri Impian in Kluang, Johor.

Matrix's Sendayan Icon Park, Seremban and Taman Seri Impian, Kluang

Technical Outlook
MATRIX broke above its all-time high of RM2.56 last week. With this upside breakout, Matrix will recommence its uptrend which dates back to September 2013.


Chart 1: Matrix's weekly chart as at Oct 5, 2016 (Source: Chartnexus)

Recent Financial Performance

Matrix's last quarterly results was in QE30/6/2016, which shows its net profit rose 8% q-o-q or 74% y-o-y to RM52 million. Its revenue is mixed- down 7% q-o-q but rose 63% y-o-y to RM196 million.


Table: Matrix's last 8 quarterly P&L


Chart 2: Matrix's last 14 quarterly P&L

Valuation

Matrix (closed at RM2.63 yesterday) is now trading at a trailing PER of 9.1 times (based on last 4 quarters' EPS of 29 sen). Its price to book is at 1.62 times (based on NTA of RM1.62 per share as at 30/6/2016). Matrix paid out dividend totaling 19.4 sen n FY2016, which translates into a DY of 7.4%. Overall, Matrix is deemed fairly valued.

Conclusion

Based on satisfactory financial performance, fairly valuation & bullish technical outlook, Matrix could be a good stock for a trading BUY.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

AMBANK: Another One Bites The Dust?


In late September, I shared my thoughts on a few bank stocks in the finance sector. AMBANK was one of the stocks that I mentioned. I felt that AMBANK should have good support from its long-term uptrend line at RM4.20. The stock broke that support this week. Yesterday, it broke the psychological RM4.00 mark!


Chart 1: AMBANK's weekly chart as at Oct 5, 2016 (Source: ShareInvestor.com)

I re-examined the long-term monthly chart. It looks like AMBANK is in an upward channel, with 2 upper lines and 2 lower lines. in the past, the breakdown of the inner lines allowed the share price to test but failed to breach the outer lines. If the same thing happens again, then AMBANK share price may test the lower line at RM3.50 before recovering.


Chart 2: AMBANK's monthly chart as at Oct 5, 2016 (Source: ShareInvestor.com)

Based on the above, I would recommend to defer any accumulation of AMBANK until we have seen a convincing rebound from the outer/lower line support at RM3.50.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Wednesday, October 05, 2016

Market Outlook as at October 4, 2016

Everyday I hear my fellow remisiers and investors bemoan the sad state of our stock market. Who can blame them since our stock market has been drifting lower for the past 3 years! Today, I'm going to make a case that our market could have made a bottom and we could see the start of the recovery by the end of the year.

Let's begin with the main market barometers: FBMT100, FBM70 and FBMKLCI. We often look at FBMKLCI and no more. FBMKLCI consists of 30 component stocks. Together with the 70 component stocks (that make up FBM70), we have FBMT100. Below we can see that FBMT100 is moving sideways as it balances the rising FBM70 and the declining FBMKLCI.


Chart 1: FBMT100, FBM70 & FBMKLCI's monthly chart as at Oct 4, 2016 (Source: Shareinvestor.com)

The component stocks of FBMKLCI include mainly stocks in trading services and finance sectors. Below we can see the Trad/Serv Index rebounded off its low in 2015 and then moves sideways for the past 13 months while the Finance Index has not rebounded from its low in August 2015 or January 2016.


Chart 2: Trad/Serv & Finance's monthly chart as at Oct 4, 2016 (Source: Shareinvestor.com)

In addition if you look beyond the top 100 stocks, you will find that the Ace Market stocks, Small-cap stocks and the Fledgling stocks are doing reasonably well. FBMACE and FBMFLG are still in a long-term uptrend line while FBMSCAP is moving sideways.


Chart 3: FBMACE, FBMSCAP & FBMFLG's monthly chart as at Oct 4, 2016 (Source: Shareinvestor.com)

When will finance stocks recover? Looking at the Finance Index over the past 20 years, we can see 4 instances of market top (denoted as T1, T2, T3 & T4). These market tops were followed by market bottoms (denoted as B1, B2, B3 and possibly B4). I say, possible B4 because the index is barely above the 10-minth SMA line, even though we can see the MACD crossing above the MACD signal (a bullish signal) plus a hook-down in the ADX (a weakening of the existing downtrend momentum).


Chart 4: Finance's monthly chart as at Oct 4, 2016 (Source: Shareinvestor.com)

The Finance Index will finally curve up when the downtrend in Maybank reversed. Thus, a recovery in Maybank will lead to a recovery in the Finance Index which will in turn lead to a recovery in FBMKLCI and our stock market. Unfortunately, the downtrend in Maybank is very much intact with momentum picking up in the past few months.


Chart 5: Maybank's monthly chart as at Oct 4, 2016 (Source: Shareinvestor.com)

Meanwhile I believe that a slow and steady accumulation of beaten stocks is the safer approach in investing in this market. The preferred sectors are construction, packaging & rubber glove.

Tuesday, October 04, 2016

BIMB: Potential Bullish Breakout

Technical Outlook

BIMB broke above its upper line of its very gradual downward channel at RM4.15 today. This downward channel dates back to August 2013 or 3 years old. Any price breakout of a long-established "trend" could lead to a significant move.


Chart 1: BIMB's weekly chart as at Oct 4, 2016-10.10am (source: Chartnexus)

Recent Financial Performance

BIMB's latest quarterly results shows its net profit rose 6% q-o-q or 11% y-o-y to RM144 million. Its revenue is mixed- down 6% q-o-q but rose 3% y-o-y to RM839 million.


Table: BIMB's last 8 quarterly P&L


Chart 2: BIMB's last 17 quarterly P&L

Valuation

BIMB (closed at RM4.14 last Friday) is now trading at a trailing PER of 11.5 times (based on last 4 quarters' EPS of 36 sen). Its price to book is at 1.66 times (based on NTA of RM2.48 per share as at 30/6/2016). In term of valuation, BIMB is fairly valued.

Conclusion

Based on satisfactory financial performance, fairly valuation & potentially bullish technical outlook, BIMB could be a good stock for a trading BUY.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Pantech: Struggling Against the Tide!


Recent Financial Results

For QE31/5/2016, Pantech's net profit increased by 9% q-o-q but dropped 11% y-o-y to RM8.1 million while its revenue increased by 14% q-o-q but dropped 11% y-o-y to RM124 million. Revenue & net profit improved q-o-q due to better contribution from trading division. The weaker y-o-y performance was mainly due to the increase in operating expenses and competitive pricing from trading division (arising from weaker demand from oil and gas sector). [Note: The latest quarterly results was announced on July 21.]


Table: Pantech's last 8 quarterly results


Chart 1: Pantech's last 37 quarterly results

Financial Position

Pantech's financial position is deemed satisfactory. As at 31/5/2016, its current ratio stood at 3.3 times while its gearing ratio stood at an elevated 0.4 time. While current ratio is satisfactory, its inventory level appears high with inventory turnover of 180 days. Debtors' turnover is probably within industry's standard at 90 days. ROE has dropped from  about 13% in FY14 to 7% today.

Valuation

Pantech (closed at RM0.535 last Friday) is now trading at a PE of 8.8 times (based on last 4 quarters' EPS of 6.08 sen). Dividend yield is at 3.9%. At these multiples, Pantech is deemed reasonably priced.

Technical Outlook

Pantech is struggling to stay at the horizontal line at RM0.55 in the past 3-4 weeks. Last Friday, it closed below this level. If it fails to rebound above it, it may continue to slide to its recent low of RM0.45.


Chart 2: Pantech's weekly chart as at Sep 30, 2016 (Source: Shareinvestor.com) 

The monthly chart shows the stock be hoovering at its long-term uptrend line, SS at RM0.54. This - plus the horizontal line support note earlier - may explain why the stock can stay at the RM0.55 for the past few months.


Chart 3: Pantech's monthly chart as at Sep 30, 2016 (Source: Shareinvestor.com) 

Conclusion

Despite weaker financial performance, Pantech can be a good stock for long-term investing based on reasonable valuation and healthy financial position.If its share price can stay above the RM0.54-0.55, it may begin to recover if its financial performance improves.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.