GHLSYS: Earnings at a New High

Result Update

For QE31/3/2018, GHLSYS's net profit rose 19% q-o-q or 10% y-o-y to RM5.9 million while revenue dropped 6% q-o-q or 12% y-o-y to RM60 million. Despite a -12% -o-y decline in group revenue to RM59.8 million vs RM68.0 million in 1Q2017, the net profit after tax rose due to better product mix as well as better performance from solutions services and TPA divisions whereas shared services were flat. Net margins also improved to 9.8% (1Q17 – 7.8%) due to higher solutions software sales as well as higher TPA transaction fees earned.


Table: GHLSYS's last 8 quarters' P&L

You can see that GHLSYS's profit is now at a new high.

Graph : GHLSYS's las22 quarters' P&L

Valuation

GHLSYS (closed at RM1.44  yesterday) is now trading at a PER of 44x (based on last 4 quarters' adjusted EPS of 3.21 sen). Based on its earning CAGR of 35% over the past 3 years, GHLSYS's PEG ratio is only 1.25x. As such, GHLSYS is deemed reasonably priced

Technical Outlook

GHLSYS is now testing its medium-term downtrend line at RM1.45. If it can break above this level, the stock may go into an uptrend.


Chart: GHLSYS's monthly chart as atMay 30, 2018 (Source: ShareInvestor)

Conclusion

Based on satisfactory financial performance and reasonable valuation as a growth stock, GHLSYS is rated a good stock for long-term investment. If it can break above the RM1.45 level, the stock can go into an uptrend.

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.

Presbhd: Earnings recovered

Result Update

In QE31/12/2017, Presbhd's profit before tax rose 117% q-o-q or 9-fold y-o-y to RM18 million while revenue rose 48% q-o-q or 191% y-o-y to RM72 million. Revenue rose q-o-q due to higher contribution Software & Services and Concession segments. The Group recorded higher PBT mainly contributed by contribution from Software & Services and Concession segments. The Group's NP dropped q-o-q due to higher tax expenses of RM10.1 million which in turn was due to under-provision of taxation of RM7.78 million and deferred tax charge of RM2.29 million.


 Table: Presbhd's 8 quarters' P&L


 Graph: Presbhd's 21 quarters' P&L

Latest Financial Position

As at 31/12/2017, Presbhd's financial position is deemed satisfactory with current ratio at 2.1x and gearing ratio at 0.5x.

Valuation 

Presbhd (closed at RM1.63 last Friday) is now trading at a PER of 44x (based on last 4 quarters EPS of 3.7 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. Presbhd is valued by AMInvestment at RM2.08, CIMB at RM2.69 and Public Investment Bank at RM2.87.

Technical Outlook

Presbhd is in an intermediate downtrend line, with resistance at RM1.95-2.00. See Chart 1 below. However it may be in a long-term uptrend line with support at RM1.40. See Chart 2.

Chart 1: Presbhd's weekly chart as at Mar 2, 2018 (Source: Shareinvestor.com)


Chart 2: Presbhd's monthly chart as at Mar 2, 2018 (Source: Shareinvestor.com)

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 price weakness in the near term.

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.

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.

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.

Presbhd: Game Changer Can Wait

In August last year, I posted a trading BUY call for Presbhd. At that point of time, Presbhd has tendered for a contract to upgrade our immigration system. Last week, Presbhd has announced that its 70%-owned subsidiary, Prestariang Services Sdn Bhd has finally secured the contract (here). The cost of developing the system is about RM1 billion and the work will take about 3 years. After that, it's entitled to collect RM294.7 million per annum for the next 12 years.

Market reaction to this game-changer for Presbhd was a big disappointment. Instead of a sharp price rally, we have a price drop! This obviously shows that investors are lukewarm about any project that involves large sum of investment and long gestation period. Then again, one should not be too surprised by the price drop if you look at the occasional bouts of selling over the past 2 years. However, if you draw a line connecting the recent bottoms, the stock should have support at RM1.85-1.90. If Presbhd can rebound back and stay above its long-term uptrend line at RM2.00, the technical outlook would still be positive. (As at 2.45pm, Presbhd was trading at RM1.95.)

Based on the project secured, I believe Presbhd is a good stock to consider for long-term investment.


Chart 1: Presbhd's weekly chart as at July 24, 2017 (Source: ShareInvestor.com)


Chart 2: Presbhd's monthly chart as at July 24, 2017 (Source: ShareInvestor.com)

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.

MYEG: Earnings Continues To Rise

Results Update

In QE31/12/2016, MYEG's net profit rose 18% q-o-q or 57% y-o-y to RM48 million while revenue rose 13% q-o-q or 40% y-o-y to RM89 million. The increase in Revenue and PAT is primarily attributable to an increase in revenue contribution from foreign worker rehiring program services as well as from motor vehicle trading related services. However, the increase in Revenue was offset by higher marketing expenses and personnel related expenses. [Note: Myeg's result for QE31/12/2016 was released Feb 27, 2017.]


Table: MYEG's last 8 quarters' P&L


Graph: MYEG's last 17 quarters' P&L

"New" Development

Last Friday, MyEG confirmed that the value of the five-year concession awarded by the Government to provide online renewal of temporary employment passes for foreign workers (from May 23, 2015 to May 22, 2020) is RM553.85mil (here). This concession is expected to contribute positively to the earnings and net assets per share for the financial years ending June 30, 2017 onwards until the expiry of the project. This concession was already made public in January (here).
 

Valuation

MYEG (closed at RM1.77 last Friday) is now trading at a trailing PER of 37x (based on last 4 quarters' EPS of 4.8 sen). Based on average earning CAGR of 70% over the past 2 years, PEG ratio is comfortably below 1- which means that MYEG valuation is deemed "attractive" for a growth stock.

Technical Outlook

MYEG has been in a steady uptrend after it broke above the resistance from the horizontal line at RM0.15 in 2013.


Chart 1: MYEG's monthly chart as at Mar 3, 2017 (Source: ShareInvestor)

Last week, MYEG broke above the line connecting the peaks for the past 15 months (AB) at RM1.73-1.75. With this upside breakout, MYEG may continue its prior uptrend.


Chart 2: MYEG's weekly chart as at Mar 3, 2017 (Source: ShareInvestor)
Conclusion

Based on good financial performance, attractive valuation (supported by rapid growth) and positive technical outlook, MYEG could be a good stock for long-term investment. Good entry level is at RM1.75.

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.

GHLSYS: Earnings Growth Slowed

Result Update

For QE30/9/2016, GHLSYS's net profit rose 3-fold y-o-y to RM4.7 million on the back of a 16%-crease in revenue to RM60 million. Compared to the immediate preceding quarter last year, GHLSYS's net profit dropped dropped marginally by less than 0.2% on the back of a 3%-decline in revenue.  GHLSYS's revenue rose y-o-y primarily driven by increase in the Transaction Payment Acquisition, Shared Services and Solutions Services divisions of 14.1%, 27.6% and 82.3%. Net profit margins during this quarter improved due to improved operating margins; lower interest expenses; and a more normalized tax rate as compared to QE30/9/2015.


Table: GHLSYS's last 8 quarters' P&L

Graph : GHLSYS's las16 quarters' P&L

Valuation

GHLSYS (closed at RM0.81 yesterday) is now trading at a PER of 31x (based on last 4 quarters' adjusted EPS of 2.60 sen). Based on its earning CAGR of 65% over the past 3 years, GHLSYS's PEG ratio is only 0.5x. As such, GHLSYS is deemed fairly attractive as a growth stock. For more on GHLSYS, check out my earlier post.

Technical Outlook

GHLSYS is now consolidating at the horizontal line of RM0.80. If it can break above the downtrend line, RR at RM0.90, it will continue with its prior uptrend. The main concern is that the support at RM0.80 may be violated, in which case it may drop to the next support at RM0.70.
 

Chart: GHLSYS's monthly chart as at Dec 7, 2016 (Source: ShareInvestor)
 
Conclusion

Based on satisfactory financial performance and attractive valuation as a growth stock, GHLSYS is rated 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.

DSONIC: Better Days Ahead?

Results Update

In QE30/6/2016, DSonic's net profit rose 10% q-o-q or 68% y-o-y to RM20.8 million while revenue rose 3% q-o-q or 40% y-o-y to RM76 million.  Revenue rose q-o-q principally due to commencement in supplying components for smart cards. This led to higher profits.


Table: DSonic's last 8 quarter's result


Chart 1: DSonic's last 17 quarter's result

Big Government Contracts In Hand

DSonic has 3 large government contracts in hand worth about RM802.53 million. The contracts are to do the following work:

• To supply Malaysian Passport booklets for a period of five years or 13.416 million passports commencing December 1, 2016 (Value: RM222.38 million) 
• To supply12 million MyKad raw cards and MyKad consumables for three years and six months commencing July 1, 2016 (Value: RM260.4 million) 
• To supply Malaysian passport chips for five years commencing Dec 1, 2016 (Value RM318.75 million)

Valuation

DSonic (closed at RM1.54 yesterday) is now trading at a PE of 29 times (based on last 4 quarterly EPS of 5.3 sen). In June, RHB was reported to have valued DSonic at RM2.00 (based on a 2017F PE of 25x).
 
Technical Outlook

DSonic has just broken above its downtrend line, RR at RM1.50. If the bullish breakout can sustain, the stock may begin its next upleg.


Chart 2: DSonic's daily chart as at Sep 8, 2016 (Source: Shareinvestor.com)

Conclusion

Based on improved financial performance & mildly bullish technical outlook, DSonic could be re-rated as TRADING BUY from a TRADING 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.

GHLSYS: Earnings Improved

Results Update

In QE30/6/2016, GHLSYS's net profit rose 8% q-o-q or 72% y-o-y to RM4.7 million while revenue rose 12% q-o-q or 26% y-o-y to RM62 million. Revenue rose y-o-y by RM12.7 million primarily driven by increase in the TPA, Shared Services and Solutions Services divisions of 14.1%, 27.6% and 82.3% respectively. Net profit margins during this quarter improved due to a more normalized tax rate as compared to 2Q15, as well as improved operating margins and lower interest expenses. 


Table: GHLSYS's last 8 quarters P&L


Chart 2: GHLSYS's last 15 quarters P&L
 
Valuation

GHLSYS (closed at RM0.84 yesterday) is now trading at a PER of 41x (based on last 4 quarters' EPS of 2.05 sen). Based on average earning CAGR of 45% over the past 2 years, PEG ratio is still below 1. Thus, GHLSYS's valuation is deemed acceptable for a growth stock.

Technical Outlook

GHLSYS broke above the horizontal line at RM0.30 in 2013 and rallied to a high of RM1.25-1.30 in May 2015 (right after the start date of GST in Malaysia). Thereafter, it dropped back and found support at the 30-month EMA line at RM0.80. In addition, it has support from the horizontal lines at RM0.70 & RN0.60.


Chart 2: GHLSYS's monthly chart as at Sep 2, 2016 ( (Source: Shareinvestor.com)

Zooming into the weekly chart, we can see that the stock is trending lower in a downtrend line with resistance at RM0.95. An upside breakout above this downtrend line could signal the continuation of its prior uptrend.


Chart 3: GHLSYS's weekly chart as at Sep 2, 2016 (Source: Shareinvestor.com)

Conclusion

Based on good financial performance and 'acceptable' valuation for a growth stock, GHLSYS could be a good stock for long-term investment. Good entry is at RM0.70.

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.

MYEG: Earnings Jumped

Results Update

In QE30/6/2016, MYEG's net profit rose 54% q-o-q or 122% y-o-y to RM51 million while revenue rose 24% q-o-q or 94% y-o-y to RM87 million. The increase in revenue and PAT was primarily attributable to an increase in revenue contribution from FWP and foreign worker rehiring program services; and contribution from our newly acquired subsidiary, Cardbiz Holding Sdn Bhd and its group of companies


Table: MYEG's last 8 quarters' P&L


Chart 1: MYEG's last 14 quarters' P&L

Valuation

MYEG (closed at RM2.18 last Friday) is now trading at a trailing PER of 36x (based on last 4 quarters' EPS of 5.95 sen). Based on average earning CAGR of 65% over the past 2 years, PEG ratio is comfortably below 1- which means that MYEG valuation is deemed 'attractive" for a growth stock.

Technical Outlook

MYEG has been in a steady uptrend after it broke above the resistance from the horizontal line at RM0.22.


Chart 2: MYEG's monthly chart as at Sep 2, 2016 (Source: ShareInvestor)

Since MYEG made a high of RM2.40 in early January this year, it has been sliding down in a channel. It made a low of RM1.70 in July and then rebounded strongly. In August, It broke above the downward channel at RM2.00. The stock could retest the January high of RM2.40 in the current rally.


Chart 3: MYEG's weekly chart as at Sep 2, 2016 (Source: ShareInvestor)

Conclusion

Based on good financial performance & condition, "attractive" valuation (supported by rapid growth) and positive technical outlook, MYEG could be a good stock for long-term investment. Good entry level is at RM2.10.

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.

Presbhd: Poised for Next Upleg

Presbhd is an information and communication technology (ICT) company. It provides software licensing distribution and management as well as ICT training and certification courses in Malaysia.

Presbhd is currently working on revamping the IT infrastructure of our 20 years  old National Immigration Control System. The total revamp is expected to be a concession project. Currently, it is working on another public private partnership (PPP) project – to provide IT infrastructure and technical support for two polytechnics. Total capex is more than RM200mil for these two polytechnics and the concession is over 15 years. For more, go here.

 
Technical Outlook

Presbhd looks poised for its next upleg. Over the past 2 years, Presbhd had two nice upswing; in early 2015 & late 2015. The pattern looks set to repeat itself. What we look for are in the weekly chart are:
1. Prices had surpassed the 10-week SMA line and poised to challenge the 20 & 30-week EMA line
2. MACD had crossed above the MACD signal line and poised to go above the zero line
Will the follow-thru actions happen?


Chart 1: Presbhd's weekly chart as at Aug 16, 2016_10.00am (Source: ShareInvestor.com)

Let's look at the daily chart. We can see the following:
1. Share prices are above the 10-day SMA line and 20 & 30-day EMA lines
2. MACD, which crossed above the MACD signal line earlier, has gone above the zero line
3. +DMI is above the -DMI and ADX is hooking up
All the above are flagging the likelihood of the start of an uptrend. ADX hooking up is a possible prelude to it going above the 20-mark, which indicates momentum for the uptrend.  


Chart 2: Presbhd's daily chart as at Aug 16, 2016_10.00am (Source: ShareInvestor.com)

If Presbhd's upleg can take off, we may see the repeat of the last two rallies where it put in a gain of RM1.00 after it broke above the 30-week EMA line. For the current set-up, that breakout trigger will be at RM2.30.

Conclusion

Based on technical consideration, Presbhd looks like 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.

MYEG: Testing Strong Support

MYEG was fined RM2.272 million in June by the Malaysian Competition Commission for abusing its dominant position in the online foreign workers permit ('PLKS') renewals processing when its its wholly-owned subsidiary, My E.G. Commerce Sdn Bhd (MyEG Commerce) participates as an insurance agent in the PLKS applications. The participation of MyEG Commerce has caused competitors offering insurance coverage to be at a disadvantage. MYEG has been given 60 days to rectify the situation, failing which a higher daily fine will be levied against it.

From the chart below, we can see that MYEG peaked in early January at about RM2.30. After that, it has dropping in a downward channel, R-R, R1-R1). Today the share price touched the lower line, R1-R1 at RM1.72. This is also the accelerated uptrend line S1-S1 support as well as the horizontal line. Thus I believe the stock is likely to enjoy a technical rebound from here. We will have to wait for a while to see whether the low today the end of the current downtrend or merely a temporary bottom.

From the recent post, we can compute MYEG's trailing PER at 37x (based on current price of RM1.78 & EPS of 4.8 sen). MYEG's earning has a CAGR of 60%; giving it a PEG ratio of 0.6x. Thus, MYEG is deemed attractive as a growth stock as its PEG ratio is less than 1x.

Based on this valuation, MYEG could be a decent stock to consider for your investment at the current price of below RM1.80. You are advised to exercise careful discretion if you choose to trade this stock.


Chart: MYEG's weekly chart as at July 11, 2016_3.15pm (Source: Kenanga/Chartnexus)

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, MYEG.

GHLSYS: Promising Growth Stock

Background
GHL Systems Berhad (‘GHLSYS’) is involved in developing and selling software programs, sale and rental of electronic data capture (EDC) equipment and its related software and services. Its busineses can be grouped into 3: Transaction Payment Acquisition, Shared Services & Solutions.

GHLSYS's 3 main businesses

Recent Financial Performance

GHLSYS's financial performance has improved tremendously in the past 2 years. Its PBT went above RM10 million in FY2014 and its revenue soared above the RM100 million mark. In FY2015, PBT rose 45% to RM16 million while revenue surpassed the RM200 million mark.


Chart 1: GHLSYS's last 14 years P&L

Recent Financial Performance

When we zoomed into the quarterly results, we can see that the big jump in its top-line and bottom-line happened in QE30/6/2014. That's when the group completed its acquisition of e-pay Asia. (Note: The acquisition of e-pay Asia, which was announced in October 2013, triggered an upside breakout of a triangle and the rally that ensued sent the share price to RM1.25-1.30 in 2015).


Table: GHLSYS's last 14 quarters P&L


Chart 2: GHLSYS's last 14 quarters P&L
 
Financial Position

GHLSYS's financial position as at 31/3/2016 is deemed healthy with current ratio at 2.6x and total liability to equity at 0.3x.

Valuation

GHLSYS (closed at RM0.835 yesterday) is now trading at a PER of 48x (based on last 4 quarters' EPS of 1.75 sen). Based on earnings CAGR of 55% over the past 2 years, PEG ratio is still below 1. Like MYEG, GHLSYS's valuation is deemed 'reasonable' for a growth stock.

Technical Outlook

As noted earlier, GHLSYS rallied to a high of RM1.25-1.30 in May 2015. Thereafter, it dropped back and broke its uptrend line, SS at RM0.90. The stock can expect strong support from the horizontal lines at RM0.70 & RN0.60.


Chart 2: GHLSYS's monthly chart as at May 31, 2016_12.30pm (Source: Shareinvestor.com)

Zooming into the weekly chart, we can see that the stock is trending lower in an irregular downward channel ('RR, R1R1"). Its immediate support will be the horizontal lines at RM0.70-0.73 & RM0.60.


Chart 3: GHLSYS's weekly chart as at May 31, 2016_12.30pm (Source: Shareinvestor.com)

Conclusion

Based on good financial performance & position and 'reasonable' valuation for a growth stock, GHLSYS could be a good stock for long-term investment. Slow accumulation should be the approach and that may begin at RM0.70 mark.

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, GHLSYS.

MYEG: A Steady Growth Stock

Background

My E.G. Services Bhd ('MYEG') provides E-Services between the Government and the people and businesses. Its services include electronic delivery of driver and vehicle registrations, licensing and summons services and utility bill payments. In the past 5-6 quarters, its new business - online renewal of foreign worker permits - has grown into a major business, contributing a sharp rise in its revenue & profits.

other businesses like the replacement of MyKad (the chip-based national identity card), paying Road Transport and police summonses, auto insurance, and road tax renewal, - See more at: http://www.themalaymailonline.com/tech-gadgets/article/facing-backlash-myeg-defends-deal-with-malaysian-government#sthash.OAhaHM9X.dpu
Recent Financial Performance

Recent Financial Performance

Over the past 5 quarters, MYEG's top-line and bottom-line have risen steadily. Earnings grew at a 85% in the last 4 quarters!


Table: MYEG's last 14 quarters' P&L


Chart 1: MYEG's last 14 quarters' P&L

Financial Position

MYEG's financial position as at 31/3/2016 is deemed healthy with current ratio at 2.2x and total liability to equity at 0.6x.

Valuation

MYEG (closed at RM2.05 yesterday) is now trading at a trailing PER of 42x (based on last 4 quarters' EPS of 4.8 sen). Based on CAGR of 60% over the past 2 years, PEG ratio is still below 1. Thus MYEG valuation is deemed 'reasonable' for a growth stock.

Technical Outlook

MYEG has been in a steady uptrend since it broke above the resistance from the horizontal line at RM0.23-0.24.


Chart 2: MYEG's monthly chart as at May 30, 2016 (Source: ShareInvestor)

During this uptrend, MYEG had 3 prolonged consolidation phases. The first was Jan-Aug 2014 & the second one was Mar-Oct 2015. It is currently in the 3rd consolidation phase. The 2nd consolidation phase was supported by the 40-week EMA line. If the same applies to the current consolidation, we can expect the share price to be supported at RM1.90-2.00. Continuation of the long-term uptrend will begin if the share price surpasses the recent high of RM2.30-2.35.


Chart 3: MYEG's weekly chart as at May 30, 2016 (Source: ShareInvestor)

Conclusion

Based on good financial performance & condition, "reasonable" valuation (supported by rapid growth) and positive technical outlook, MYEG could be a good stock for long-term investment. Good entry is at RM1.90-2.00.

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, MYEG.