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Thursday, November 30, 2017

Waseong: Earning Jumped

Results Update

For QE30/9/2017, Waseong's net profit rose 241% q-o-q on the back of a 68%-rise in revenue to RM750 million. Waseong returned to profitability last quarter as compared to a loss before tax of RM23 million in QE30/9/2016.

The Group's PBT rose y-o-y due to sharp rise in revenue & PBT from the O&G segment as a result of the commencement of full execution of several significant projects. The Industrial & Services segment reported a lower loss before tax due to higher revenue as a result of higher sales from trading of building material. The Renewable Energy segment reported a lower PBT due to lower revenue while Plantation segment reported a loss before tax as compared to a profit before tax previously due to slowdown in plantation activities. The positive variance in the O&G segment had more than offset the negative variance in the other segments.


Table: Waseong's last 8 quarterly results


Graph: Waseong's last 24 quarterly results

Financial Position

As at 30/9/2017, Waseong's financial position is deemed marginal with fairly tight liquidity position as reflected by the current ratio at 1.0x and elevated leverage position based on gearing ratio at 2.4x.

Technical Outlook

Waseong broke above the rising wedge at RM1.05 in November 9. Its next resistance will be from the horizontal line at RM1.40 & then the long-term downtrend line at RM1.50.


Chart 1: Waseong's daily chart as at Nov 29, 2017 (Source: Malaysiastock.biz)


Chart 2: Waseong's weekly chart as at Nov 29, 2017 (Source: Malaysiastock.biz)

Valuation

Waseong (closed at RM1.20 yesterday) is trading at a PE of 15 times (based on annualized EPS of 8 sen). Though the PER is on the high side, Waseong's earning is likely to improve with the increased activity from the O&G segment.

Conclusion

Based on improved financial performance & exciting prospect, Waseong is a good stock to long-term investment. Good entry is at RM1.05-1.10.

For more on Waseong, please check out my earlier post.

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.

Tenaga: The Race is On?

The on-again, off-again next upleg for Tenaga may be settled today. If Tenaga can maintain the price level achieved yesterday or, better still, surpass the intra-day high of RM15.46 recorded on October 27, Tenaga rally is on.

Chartwise, we can see that Tenaga has already broken above the horizon line at RM14.50. However many are very suspicious about the "true intention" of the upside breakout for Tenaga as this stock has often been used as a lever to catapult our main market barometer, FBMKLCI. Even yesterday, many market observers are scratching their heads and probably decided to sit on their laurels. If this is a real deal, Tenaga maybe on the way to RM19.00-20.00.

Please exercise careful discretion if you choose to buy into this technical buy signal.

Chart: Tenaga's monthly chart as at Nov 29, 2017 (Source: Malaysiastock.biz)

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.

Freight: Earning Maintained

Results Update

For QE30/9/2017, Freight's net profit increased by 1.8% q-o-q & 12.5% y-o-y to RM5.9 million while revenue rose 2.9% q-o-q & 21.9% y-o-y to RM128 million. Revenue increased q-o-q mainly due to higher activities in Airfreight, 3PL & Warehousing, Landfreight and other Supporting services.
PBT decreased by 1.7% due to higher losses in Tug & Barge service despite better performance from other divisions such as Seafreight and Airfreight. NP however rose q-o-q due to lower tax expense as a result of higher deferred tax recognized.


Table: Freight's last 8 quarterly results


Graph: Freight's last 38 quarterly results

Financial Position

As at 30/9/2017, Freight's financial position is deemed satisfactory with current ratio at 2.3x and gearing ratio at 0.6x.

Technical Outlook

Freight is struggling to hang onto its long-term uptrend line, though it's not very convincing. Strictly speaking, it is below my preferred uptrend line, SS. However if we choose to be a bit lenient, we can fit the price trend into the next uptrend line, S-S1. The deciding factor will be whether the MACD can climb back above the zero line. the jury is out.


Chart: Freight's monthly chart as at Nov 29, 2017 (Source: Malaysiastock.biz)

Valuation

Freight (closed at RM1.25 yesterday) is trading at a PE of 10.7 times (based on last 4 quarters' EPS of 11.67 sen). The stock is trading near its fully value.

Conclusion

Based on good financial performance and position, Freight is considered a good stock for long-term investment. However its next upleg may not begin until it has sorted out the technical picture, which is mildly negative.

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, November 29, 2017

Wellcal: Earnings Approaching Recent Peaks

Results Update

For QE30/9/2017, Wellcal's net profit increased by 22% q-o-q & 26% y-o-y to RM9.9 million while revenue rose 12% q-o-q & 35% y-o-y to RM44 million. Revenue rose q-o-q due to improved global demand for industrial rubber hoses. Profits rose q-o-q mainly due to continuous improvement in sales.


Table: Wellcal's last 8 quarterly results


Graph: Wellcal's last 41 quarterly results

Financial Position

As at 30/9/2017, Wellcal's financial position is deemed satisfactory with current ratio at 4.45x and gearing ratio at 0.25x.

Technical Outlook

Wellcal is in a long-term uptrend line with support at RM1.30. However its upside is capped by an intermediate downtrend line at RM1.45-1.47. As the share price has been pressing against this downtrend line, we await a convincing breakout that may lead to the continuation of the long-term uptrend.


Chart: Wellcal's weekly chart as at Nov 28, 2017 (Source: Malaysiastock.biz)

Valuation

Wellcal (closed at RM1.46 yesterday) is trading at a PE of 19 times (based on last 4 quarters' EPS of 7.6 sen). The stock is trading near its fully value.

Conclusion

Based on good financial performance and position, Wellcal is considered a good stock for long-term investment. However its upside is limited due to high valuation and technical resistance.

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.

MBL: Earnings Continued to Rise

Results Update

In QE30/9/2017, MBL's net profit increased by 17.8% q-o-q or 34.0% y-o-y to RM3.3 million while revenue increased by 8.6% q-o-q but declined by 7.6% y-o-y to RM50 million. Revenue increased 8.6% q-o-q due to increased revenue from both the Oil Milling and Trading & Services divisions which more than offset the lower revenue achieved by the Manufacturing division. Similarly, the lower PBT of the Manufacturing division was more than offset by higher PBT achieved by both the Oil Milling and Trading & Services divisions. The performance of the Manufacturing division was affected by lower project sales. Better performance for the Oil Milling division was attributed to higher average selling price and higher production output of CPKO, while better performance for the Trading & Services division was due to the income recognized to the extent of the completed project works.


Table: MBL's last 8 quarterly results


Graph: MBL's last 28 quarterly results

Note:

The company's plan to dispose of its oil palm plantation company, Sokor Gemilang Ladang Sdn Bhd for RM35 million was not successful as the MOU expired and lapsed in September 2017. Currently the main business operations of MBL is Oil Milling and Manufacturing of Oil Seed Crushing machines.

Financial Position

As at 30/9/2017, MBL's financial position is deemed strong with current ratio at 3.4x and gearing ratio at 0.4x.

Valuation

MBL (closed at RM1.33 yesterday) is now trading at a trailing PE of 10 times (based on last 4 quarters' EPS of 13.65 sen). At this multiple, MBL is deemed fairly attractive.

Technical Outlook

MBL appears to have broken above the line connecting the recent peaks, AB at RM1.15. This upside breakout may lead to the next upleg for the stock.


Chart: MBL's weekly chart as at Nov 28, 2017 (Source: Malaysiastock.biz)

Conclusion

Based on good financial performance and position, fair valuation & mildly bullish technical outlook, MBL 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.

Monday, November 27, 2017

Kianjoo: Earning Dropped Sharply

Result Update

For QE30/9/2017, Kianjoo's net profit dropped by 37% q-o-q or 81% y-o-y to RM9.5 million while revenue increased by 7% q-o-q or 12% y-o-y to RM472 million. Profit before taxation decreased from RM18.9 million in QE30/6/2017 to RM13.8 million in QE30/9/2017 due to lower PBT for both the Can & Trading divisions which declined by RM7.7 million & RM0.9 million respectively while the Cartons division reported higher loss before tax of RM4.2 million as compared to RM3.9 million in QE30/6/2017. The Cartons division, which is undertaken by Boxpak, has started a new factory in Myanmar which is expected to incur losses in the remaining quarter of the year due to pre-operating cost incurred.


Table: Kianjoo's last 8 quarterly results


Graph: Kianjoo's last 44 quarterly results

Valuation

Kianjoo (closed at RM3.01 last Friday) is now trading at a PE of 19 times (based on last 4 quarters' EPS of 15.65 sen). At this multiple, Kianjoo is deemed fully valued.

Technical Outlook

Kianjoo is in a long-term uptrend line with support at RM3.00. A break below this uptrend line - which is also an important psychological level - could signal a reversal of its gradual uptrend that stretches back to 2010.


Chart 1: Kianjoo's monthly chart as at Nov 24, 2017 (Source: Malaysiastock.biz)


Chart 2: Kianjoo's daily chart as at Nov 24, 2017 (Source: Malaysiastock.biz)

Conclusion

Despite weaker financial performance and full valuation, I maintain my rating for Kianjoo a HOLD as it is still trading above its uptrend line.

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.

Sunday, November 26, 2017

Presbhd: More Than A Sharp Rebound Is Needed

Result Update

In QE30/9/2017, Presbhd's net profit dropped 21% q-o-q but rose more than 5-fold to RM4.6 million while revenue dropped 12% q-o-q but rose nearly 2-fold to RM48 million. Revenue was RM6.7 million or 12% lower than the preceding quarter due to lower contribution Software & Services. PBT rose RM1.2 million or 17% higher than the preceding quarter mainly due to contribution from Concession segment.


 Table: Presbhd's 8 quarters' P&L


 Graph: Presbhd's 20 quarters' P&L

Latest Financial Position

As at 30/9/2017, Presbhd's financial position is deemed satisfactory with current ratio at 3.8x and gearing ratio at 0.4x.

Valuation 

Presbhd (closed at RM1.35 last Friday) is now trading at a PER of 44x (based on last 4 quarters EPS of 3.1 sen). The fair value of this stock is given by DCF absolute valuation method that takes into account the new SKIN contract that it has secured. In an earlier post, I have noted that Presbhd was valued by AMInvestment and Public Investment Bank at around RM3.00. Thus Presbhd is deemed fairly attractive at the current price of RM1.35.

Technical Outlook

Presbhd has a negative technical outlook. Despite the sharp rebound on Friday, it is still too early to say that the worst is over for the stock. Its immediate support is at RM1.30 and its immediate resistance is at RM1.50. We will have to wait and see how far this rebound can go.


Chart: Presbhd's weekly chart as at Nov 24, 2017 (Source: Malaysiastock.biz)

Conclusion

Based on satisfactory financial performance & position, and fairly attractive valuation, Presbhd is considered a good stock for long-term investment. The main concern is the weak technical outlook which may lead to further price weakness in the near term. In view of this, you should exercise careful discretion if you wish to add this stock to your portfolio.

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.

Market Outlook as at November 24, 2017 (AMENDED)

Our market has been hanging onto the 1717 support for the past 7 days. It rebounded on last Wednesday when the US markets rallied to new high. For us, the rally could not sustain and it was back to the 1717 support last Friday.


Chart 1: FBMKLCI's weekly chart as at Nov 24, 2017 (Source: Malaysiastock.biz)

In my last market outlook, I compared our market today with what we experienced in late 2014. In September 2014, the index broke below the 200-day SMA line. Tday we saw a similar breakdown in late October. In 2014, the index dropped another 9-10% after it breached the 200-day SMA line. Today I think we are more likely to see a smaller decline, say 5% after the breach. Assuming it dropped 5%, then we may see a low of 1662.


Chart 2: FBMKLCI's daily chart as at Nov 24, 2017 (Source: Malaysiastock.biz)


Chart 3: FBMKLCI's daily chart as at October 2013 to Mar 2015 (Source: Malaysiastock.biz)


Chart 4: FBMKLCI's daily chart in late 2014 & Nov 2017 (Source: Malaysiastock.biz)

The past few days we have seen many articles on the strengthening of our MYR. I feel that the effective uptrend line for USD-MYR is represented by SS on the chart below. That uptrend line was violated when USD broke below MYR4.20. The immediate support is the horizontal line at 4.10-4.11. If this support is taken out, USD-MYR will quickly test the psychological 4.00 mark. Below that, the next support levels are 3.88-3.90 & 3.72-3.73.


Chart 5: USD-MYR's monthly chart as at Nov 24, 2017 (Source: Investing.com)

Below is the chart of SGD-MYR. The long-term uptrend is unmistakable. We can draw an uptrend line, SS to represent that uptrend. Within this long-term uptrend line, we can see 2 periods where SGD-MYR spiked up. The first one was in 1997-1998 (see uptrend line, S1-S1). The next one was in 2014-2017 (see uptrend line, S2-S2).

After SGD-MYR broke the accelerated uptrend line, S1-S1, it slowly dropped back towards the long-term uptrend line, SS - over a period of 3 years. After the pullback, SGD-MYR hovered above SS for the next 8 years and only touched SS in 2010, 2012 & 2013.

As you can see, SGD-MYR has broken below the latest accelerated uptrend line in September this year. If the earlier movement can be a guide, we can expect SGD-MYR to pullback towards the long-term uptrend line, SS over a period of 3 years. Thus SGD-MYR may go down to 2.90 by 2018, 2080 by 2019 & 2.70 by 2020.


Chart 6: SGD-MYR's monthly chart as at Nov 24, 2017 (Source: Investing.com)

In an environment of a stronger MYR, we can expect importers to show better earnings. Thus car makers should do better for that reason as well as the penned up demand. I also expect big-ticket consumer companies, such as Panamy to do better. Amway, which imports from US, should do better. The opposite is true for exporters. How much of an impact is the big question! We have been living in a period of weak MYR for a long 3 years that we almost assume that it would be a permanent affair. Clients and readers have asked me whether I am serious whenever I talked about the strengthening of the MYR. I don't base it on politics nor the price of crude oil; I based it on charts. The charts tell me that the times they a-changin'. We better change with the time.

****

In an earlier market outlook in July, I took the view that our market could make new high culminating with a market top in 2019. The strengthening of MYR may play a role in that scenario.




The chart above shows that FBMKLCI tracks S&P500 very closely. The correlation failed in 1998 & in the past 3 years. It was due to the weakening of MYR. Once MYR has stabilized, our market should participate in the rally. That's still my view. Thus I believe that the correction in the weeks ahead could be an opportunity to buy in the market.

As always, good luck in your investment!

Tuesday, November 21, 2017

Presbhd: SKINned in the Sell-down

Background

One of the many stocks that have dropped sharply in the current sell-down is Presbhd. You may recall, Presbhd - thru its 70%-owned subsidiary, Prestariang Services Sdn Bhd ('PServices') - has secured the contract to upgrade our immigration system in July this year. The cost of developing the system, known as SKIN, is about RM1 billion and the work will take about 3 years. Upon completion, PServices is entitled to collect RM294.7 million a year for the next 12 years.

At this moment, there is no news whether PServices has achieved the financial close for SKIN. In an October report, AmInvestment Bank has gathered that "the group is in discussion with several financial investors, and is in the midst of securing the best offer(s)". AmInvestment Bank is prepared to raise the fair value for Presbhd from RM2.08 to cica RM3.00 once the financial close for SKIN is attained. In September, Public Investment Bank has assigned a 12-month target for Presbhd of RM2.87.

We should not be too surprised by the sell-down for Presbhd as there were signs earlier that one or more of the substantial shareholders had been selling (as pointed out in my earlier report). Having said that, I am quite perplexed as to why the selling is so aggressive at this low price level. Chartwise, Presbhd is now struggling to hold at its long-term uptrend line support of RM1.20-1.25. If this support failed, it can easily drop to the psychological RM1.00 mark.


Chart: Presbhd's weekly chart as at Nov 21, 2017 (Source: Malaysiastock.biz)

Recent Financial Performance

As you can see, Presbhd' financial performance is fairly decent.


 Table: Presbhd's 8 quarters' P&L


 Graph: Presbhd's 19 quarters' P&L

Latest Financial Position

As at 30/6/2017, Presbhd's financial position is deemed satisfactory with current ratio at 3.7x and gearing ratio at 0.3x.

Conclusion

Based on satisfactory financial performance & position, and fairly attractive valuation, Presbhd is considered a good stock for long-term investment. The main concern is the weak technical outlook which may lead to further price weakness in the near term. In view of this, you should exercise careful discretion if you wish to add this stock to your portfolio.

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, November 15, 2017

Market Outlook as at November 14, 2017

Our market has been sliding in the past 3 days. FBMKLCI lost a total of 13.20 points during the 3-day period, with significantly higher losers than gainers. This is borne out by the intra-day chart below.


Chart 1: FBMKLCI's intra-day chart as at Nov 14, 2017 (Source: Shareinvestor.com)

From the daily chart, we can see that FBMKLCI is once again at the low recorded in October 25-26 of 1733. If FBMKLCI were to go below 1733, the downtrend of the index will continue.


Chart 2: FBMKLCI's daily chart as at Nov 14, 2017 (Source: Malaysiastock.biz)

Looking at the weekly chart, we can see that the 10-week SMA line has cut below the 20-week EMA line and is poised to also cut below the 30-week EMA line. This is marked as "X" on the chart. At the same time, we can see the MACD is almost about to go below the zero line.

The current price action is similar to what we saw in the last quarter of 2014 - marked as "X1" - when the 10-week SMA line cut below the 20-week EMA line and then cut below the 30-week EMA line. What followed was a sharp sell-off where we saw a 120-point drop in the index from 1840 to 1720.

I have given the above price action as a possible sell-off scenario if FBMKLCI were to break below 1733. Any sell-off that may happen, might not be as sharp as what we saw in late 2014 because the earlier sell-off came after a long rally that started in 2009. The current developing price action - if it turned out negatively - is a retracement of a 6-month rally from January 2017 to June 2017. Nevertheless, we have to be careful, especially in our trading activities in the near term, because we have seen daily how volatile the market can be. As always, good luck to everyone out there!


Chart 3: FBMKLCI's weeky chart as at Nov 14, 2017 (Source: Malaysiastock.biz)

Tuesday, November 14, 2017

Construction Stocks Took A Knock

Last Tuesday, Gamuda took a sharp knock on news that it will not play the role of Project Delivery Partner ('PDP') for MRT3 because the Government has opted for the 'build and finance' model by a turnkey contractor to undertake that project. This decision was taken to remove the Government's funding burden as earlier phases. MRT1 & MRT2 were financed by the Government via Danainfra bonds.

The market has now come to apply this decision to other big-ticket projects, such as the High Speed Rail Link ('HSRL') between KL & Singapore as well as the East Coast Rail Link ('ECRL'). This would effectively preclude our big construction companies from these projects and it would hit their order books as well as bottom-line going forward.

This may explain why the share prices of large construction companies took a tumble over the past few days or weeks. Let's look at them individually: 

1) Gamuda is at its intermediate uptrend line, S1-S1 support at RM4.80. If this support breaks, it may drop to the long-term uptrend line, SS at RM4.00.


Chart 1: Gamuda's monthly chart as at Nov 13. 2017(Source: Malaysiastock.biz)

2) IJM has broken below its intermediate uptrend line, S1-S1 support at RM3.30. It is now at the long-term uptrend line, SS support of RM3.00. If this fails, IJM may slide to RM2.00-2.20 horizontal support.


Chart 2: IJM's monthly chart as at Nov 13. 2017(Source: Malaysiastock.biz)

3) YTL has broken its long-term uptrend line, SS support at RM1.50 in November 2016. It is now at the horizontal support area of RM1.10-1.30.


Chart 3: YTL's monthly chart as at Nov 13. 2017(Source: Malaysiastock.biz)

I think the Government's decision on the mode of financing large project must be balanced with the negative impact of undermining one of the important components of our economy, ie. the construction sector. If we let this sector to be weakened- just as we had for the property sector - then the impact on the overall economy will be very severe. If the Government decides to limit the new approach to only MRT3 & ECRL, then the construction sector may enjoy a recovery. Thus you should take a cautious approach when you decide to buy into these beaten-down large construction stocks. I think the Government will announce a limit to its decision with regards to the new 'build and finance' model of undertaking large projects. Good luck.

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.

SAMCHEM: Earnings Rose

Background

Samchem Holdings Bhd ('Samchem') is a leading industrial chemical distributor in Malaysia. Its operation covers most of the ASEAN countries, including Malaysia, Indonesia, Singapore, Vietnam & Cambodia



Recent Financial Performance

For QE30/9/2017, its net profit rose 22% q-o-q or 11% y-o-y to RM6.3 million while revenue rose 17% q-o-q or 12% y-o-y to RM243 million. The increased revenue was atributed to higher sales, which in turn was due to "the strategic market positioning of the Group in the ASEAN region."


Table: Samchem's last 11 quarterly results


Graph: Samchem's last 11 quarterly results

Financial Position

Samchem's financial position is deemed satisfactory with adequate liquidity (based on cyrrent ratio of 1.6x) while leverage is a bit elevated (based on total liabilities to total equity of 1.9x).

Valuation

Samchem (closed at RM1.04 yesterday) is now trading at a PER of 10x. Its dividend yield is decent at 3%. Based on recent strong growth (of at least 30%), Samchem has a PEG ratio of 0.3x. For a growth stock, this PEG ratio is deemed low and it makes the stock fairly attractive.

Technical Outlook

Samchem broke above its intermediate downtrend line, R1-R1 at RM0.60 in early September. It rallied to a high of around RM1.00 and then formed a rising wedge ('ABCD'). Today it broke to the upside of the wedge at RM1.03. If Samchem can stay above the breakout level, it may test the line connecting its recent peaks, XY at RM1.07. If it can also break above this line, it may go into its next upleg.


Chart: Samchem's daily chart as at Nov 13. 2017_10.00am(Source: Malaysiastock.biz)

Conclusion

Based on good financial performance and position and fairly attractive valuation, Samchem 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.

Sunday, November 12, 2017

Petdag: Earnings Soared

Result Update

For QE30/9/2017, Petdag's net profit increased 210% q-o-q or 206% y-o-y to RM762 million while revenue rose 3% q-o-q or 22% y-o-y to RM6.694 billion. Revenue rose q-o-q mainly due to higher sales volume by 7%, offset by a decrease in average selling price by 3%.

Group operating profit rose by RM131.8 million mainly due to:

  • improved margin of RM151.4 million from Mogas in line with the increasing MOPS price trend during the quarter; and
  • higher other income of RM4.1 million mainly from Mesra income.
This was partially offset by higher operating expenditure by RM24.5 million attributable to increase in salaries, wages and benefits.

Group net profit jumped due to an extraordinary gain of RM424.6 million from the disposal of 100% equity interest in a subsidiary, PETRONAS Energy Philippines, Inc and 40% equity interest in an associated company, Duta Inc to P-H-O-E-N-I-X Petroleum Philippines, Inc., an external party of the Group for a fair value consideration of RM560.5 million.


Table: Petdag's last 8 quarterly results

 
Graph: Petdag's last 38 quarterly results

Valuation

Petdag (closed at RM21.60 last Friday) is now trading at a trailing PE of 19.6 times (based on last 4 quarters' estimated recurring EPS of 110 sen). Its dividend yield is decent at 3.6%. Overall, Petadg is deemed fairly attractive.

Technical Outlook

Over the past 2 weeks, Petdag has tumbled down to its intermediate uptrend line, S1-S1 support of RM21.50. If this support failed, Petdag may slide further to the psychological RM20.00 mark or even the long-term uptrend line, SS support at RM19.00. 


Chart 1: Petdag's monthly chart as at Nov 10. 2017(Source: Malaysiastock.biz)


Chart 2: Petdag's daily chart as at Nov 10. 2017(Source: Malaysiastock.biz)

Conclusion

Based the improved financial performance and positive long-term technical outlook , I revised my rating for Petdag from HOLD to a 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.

Wednesday, November 08, 2017

F&N: Earnings Dropped Sharply

Result Update

For QE30/9/2017, F&N's net profit dropped 72% q-o-q or 60% y-o-y to RM20 million while revenue dropped by 6% q-o-q - but remained unchanged y-o-y - to RM976 million. Overall revenue dropped q-o-q due to lower revenue for F&B Malaysia revenue due to earlier sell-in for the 2017 Hari Raya Puasa festive season (which took place in the third quarter ended 30 June 2017) and intense price pressure from competitors but partly offset by higher exports as well as lower revenue for F&B Thailand revenue mainly due to higher trade spend and input costs. This led to lower profits and in the case of F&B Malaysia, even a small operating loss of RM11.5 million - undoubtedly aggravated by higher advertising and promotions spending, plus lower exports contribution.


Table: F&N's last 8 quarterly results


Graph: F&N's last 44 quarterly results

Valuation

F&N (closed at RM25.44 yesterday) is now trading at a PE of 29 times (based on last 4 quarters' EPS of 88.3 sen). At this PE multiple, F&N is deemed overvalued.

Technical Outlook

F&N has limited upside due to the resistance from the horizontal line at RM25.50. it is likely that F&N will trade sideways for the next few quarters until earnings rise again.


Chart 1: F&N's weekly chart as at Nov 7. 2017(Source: Malaysiastock.biz)


Chart 2: F&N's monthly chart as at Nov 7. 2017(Source: Malaysiastock.biz)

Conclusion

Despite satisfactory financial performance, I rate F&N as a REDUCE due to demanding valuation.


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, November 07, 2017

Gamuda: At the Long-term Uptrend Line

Gamuda, the construction heavyweight, is coming under heavy selling today. It is now testing its first uptrend line, SS at RM4.80. Depending on the severity of this sell-down, the share price may even test the next long-term uptrend line, S1-S1 at RM4.50

At this moment, there is no news in the market that could explain the heavy sell-down in Gamuda. Based strictly on technical analysis, Gamuda share price may find support at RM4.50-4.80.

For investors who have been waiting to get into Gamuda, this could be an opportunity to do so at an attractive price. However the big price drop that we have seen so far today, it is not unlikely that the selling will continue tomorrow or even for the next few days. You would have to track the stock closely before pulling the trigger. Ideally you will try to get in at RM4.50. Is that possible? Let's wait & see.


Chart: Gamuda's weekly chart as at Nov 7, 2017_3.30pm (Source: Malaysiastock.biz)

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.