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Tuesday, July 10, 2018

Topglov: Technical Rebound


Topglov is having a strong technical rebound today. If you managed to buy yesterday, you may be keen to know what are the resistance levels to aim to take some profit. I think the natural level will be the psychological level of RM10.00. I have drawn a few horizontal lines where resistance can be expected- RM9.90, RM10.35 & RM10.70.


Chart: Topglov's daily chart as at July 10, 2018_2.45pm (Source: Shareinvestor.com)

Despite the strong rebound in the share price, some Topglov call warrants are still dropping. In selecting call warrants to buy, you follow this set of rules:
1. Select CWs with adequate time to expiry (say more than 3 months)
2. Select CWs with low premium (say, 10% or less)
3. Select CWs with good gearing
4. Select CWs that's not too deeply OTM

Of course, we have skipped the first rule in picking CWs to buy; that's select the tight right stock. In this case, I believe that Topglov is still a good stock to BUY.

From klsescreener, I have extracted all the CWs of Topglov. I have sorted them according to their expiry dates. Only 4 CWs meet the first rule on time to expiry (highlighted in yellow). Only one CW, Topglov-C29 meets the remaining 3 rules (Note: The premium of slightly above 10% is stretching the rule a bit).


Table: Topglov's CWs terms & valuation (Source: Klsecreener)

Topglov-C24, C27, C28, C30 & C31 have very short time to expiry and carry substantial (time value) premium. Avoid these 5 CWs.

Good luck!

Monday, July 09, 2018

Topglov: The Gloves Are Off

Last Friday, Topglov announced that it have taken legal proceedings against Adventa Capital Pte Ltd (“Adventa”) vide the KL OS and the Singapore OS, as well as Low Chin Guan, Wong Chin Toh and ACPL Sdn Bhd (“ACPL”) vide the Writ Action on 29.6.2018 and 2.7.2018.

This is in relation to Topglov’s wholly-owned subsidiary’s Top Care Sdn Bhd (“Top Care”)’s purchase of the 270,850,119 shares in Aspion Sdn Bhd (“Aspion”) from Adventa Capital for a fixed amount of RM1.37 billion in January this year.

Topglov claimed that Adventa & its sponsors have made misrepresentations which resulted in Topglov & Top Care entering into the agreement to purchase Aspion. Topglov and Top care are claiming for a sum of not less than RM714,862,759 arising from a conspiracy to defraud them.

The loss of RM714.86 million for Topglov, with outstanding issue shares of 1.28 billion units, translates to a loss of 56 sen per share. Its NTA will be reduced from RM1.78 to RM1.22. If we exclude the impact of this one-off exceptional loss, Topglov (now at RM9.00 @9.45am) is trading at a PER of 26 times (based on  last 4 quarters' EPS of 34.3sen). That's fairly attractive for a rubber glove stock. Even Supermx is now trading at a PER of 28 times (based on price of RM4.50 & last 4 quarters' EPS of 15.9 sen).

Chartwise, Topglov's immediate support is at the horizontal line at RM8.00. next support will be at the tentative uptrend line, SS at RM6.50. 


Chart: Topglov's monthly chart as at july 9, 2018 (Source: Shareinvestor,com)

Based on good financial performance & attractive valuation, Topglov is a good BUY.

Thursday, July 05, 2018

Hohup-WA: What's UP?!


Hohup-wa (now at RM0.125) is one of the top volume security traded today. This warrant has the following terms:
Exercise price: RM0.60
Expiry date: December 21, 2018 (169 days)
Conversion ratio: 1-to-1
As Hohup is now trading at only RM0.515, Hohup-wa is out-the-money. The entire amount of the warrant price of RM0.125 is conversion premium, and this will slowly decay over the next 169 days. Be careful if you choose to get into Hohup-wa.


Chart 1: Hohup-wa's daily chart as at July 5, 2018_4.40pm (Source: Shareinvestor.com)


Chart 2: Hohup's daily chart as at July 5, 2018_4.40pm (Source: Shareinvestor.com)

Note: I spoke about this in a BURSA MALAYSIA webinar entitled Warrant 101 on July 3. The first trap to avoid in trading warrant is a warrant exactly like Hohup-wa.

Sunday, July 01, 2018

Cypark: Earning Soared

Result Update

For QE30/4/2018, Cypark's net profit rose 53% q-o-q or 62% y-o-y to RM12 million while revenue increased by 18% q-o-q & % y-o-y to RM99 million. Revenue and profit before tax rose q-o-q mainly due to the better income contributed by the intense specialist work activities performed in the current stage of the project cycle in Environmental Engineering division. 


 Table: Cypark's last 8 quarterly results


Graph: Cypark's last 32 quarterly results

Valuation

Cypark (closed at RM2.29 last Friday) is now trading at a PE of 9.3 times (based on last 4 quarters' EPS of 24.72 sen). At this multiple, Cypark is deemed fairly attractive.

Technical Outlook

Cypark broke its long-term uptrend line, SS at RM2.50 in April. Its decline has been checked by the horizontal line at RM2.20.


Chart 1: Cypark's monthly chart as at Jun 29, 2018 (Source: Shareinvestor.com)

On closer look, the horizontal support appears to be at RM2.25


Chart 2: Cypark's weekly chart as at Jun 29, 2018 (Source: Shareinvestor.com)

Conclusion

Based on the good financial performance and fairly attractive valuation, I consider a good stock for long-term investment. My rating is downgraded to a HOLD because of the breakdown below the 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.

AEONCR: Earning Rebounded Strongly

Result Update

For QE30/5/2018, AEONCR's net profit rose 21% q-o-q or 31% y-o-y to RM99 million while revenue rose 5% q-o-q or 8% y-o-y to RM326 million. Pre-tax profit rose 25% q-o-q mainly due to lower impairment loss on financial receivables.


Table: AEONCR's last 8 quarterly results

As noted previously, AEONCR's revenue & profits are at a new "high" territory!


Graph: AEONCR's last 44 quarterly results

Valuation

AEONCR (closed at RM14.40 last Friday) is now trading at a PE of 10.7 times (based on last 4 quarters' EPS of 135 sen). At this PER, AEONCR is deemed fairly attractive. In addition, it pays a decent dividend with DY of 2.9% (based on last year dividend of  41.13 sen).

Technical Outlook

Despite recent correction, AEONCR's uptrend seems intact as the decline was stopped by the 30-week EMA line.


Chart 1: AEONCR'sweekly chart as at Jun 29, 2018 (Source: Shareinvestor.com)


Chart 2: AEONCR's monthly chart as at Jun 29, 2018 (Source: Shareinvestor.com)

Conclusion

Based on satisfactory financial performance, fairly attractive valuation, steady growth prospect & positive technical outlook, AEONCR 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.