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Friday, June 22, 2018

Superln: Earning Failed to Back Up Recent Price Rally

Result Update

In QE30/4/2018, Superln's net profit dropped 63% q-o-q or 78% y-o-y to RM1.4 million while its revenue dropped 7% q-o-q or 22% y-o-y to RM25 million. Revenue dropped q-o-q mainly attributable to lower insulation sales volume and competitive pricing environment in the current quarter.  The drop in the sales volume was mainly attributed to the fewer workdays resulting from festive holidays, weak local market sentiment prior to the Malaysian General Election and competitive global market. The competitive pricing environment, lower sales volume, coupled with higher cost in production resulting from installation and commissioning of machinery in the production process led to the group registering profit before tax of RM1.4 million in the current quarter as compared to RM5 million in the preceding quarter. Profit after tax of the Group has decreased by RM2.3 million to RM1.4 million as compared to preceding quarter.


Table: Superln's last 8 quarters' results


Graph: Superln's last 21 quarters' results

Valuation

Superln (closed at RM1.52 yesterday) is now trading at a trailing PER of 20x (based on last 4 quarters' EPS of 7.7 sen). At this PER, Superln is deemed fully valued.

Technical Outlook

Superln peaked in August 2017 and went into a steady decline that's captured by the downtrend line, RR. That decline caused the stock to break its long-term uptrend line, SS at RM1.65 in March. In May, the continuous price decline has formed a bottom when the share price managed to climb back above the intermediate downtrend line, RR. From here, Superln will form a base to launch its next upleg. Until then, it is likely to move sideways.


Chart: Superln's weekly chart as at Jun 21, 2018 (Source: Malaysiastock.biz)

Conclusion

Based on weaker financial performance and mildly negative technical outlook, Superln is rated as a SELL until earning has improved or technical outlook has changed.

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 June 22, 2018

FBMKLCI has been sliding for the past 9 days. Yesterday it broke the horizontal support at 1710 as well as the psychological 1700 support. It found support at the intermediate uptrend line, S1-S1 at 1690. Between 1690 and 1650, there are multiple support which may stop the decline and provide the stage for a rebound. 


Chart 1: FBMKLCI's weekly chart as at Jun 22, 2018 (Source: MalaysiaStock.biz)


Chart 2: FBMKLCI's weekly chart as at Jun 22, 2018 (Source: MalaysiaStock.biz)

Many are anxiously watching the technical picture for DJIA. this index is approaching the 200-day moving average line at 24250 as well as the long-term uptrend line, SS at 24000. A break of these supports will bring out even more selling that may end a fine run. Until then, we will have to wait and see how this index will perform in the next few days.


Chart 3: DJIAs weekly chart as at Jun 22, 2018 (Source: Stockcharts.com)

Based on substantial decline over the past few days, I believe our market could be poised for a technical rebound. If you wish to reduce position due to uncertainty in the market, the best time to do that will be on a rebound. Good luck.

Tuesday, June 19, 2018

Topglov: Earnings Growth Continued


Results Update

For QE31/5/2018, Topglov's net profit rose 8% q-o-q or 51% y-o-y to RM118 million while revenue rose 15% q-o-q or 27% y-o-y to RM1,101 million. Topglov attributed its improved revenue to increased in sale volume of about 8% q-o-q while higher profits was due to improvements in production efficiency and quality, coupled with new capacity coming on-stream and strong demand growth. The bottom-line could have been better if not pricing pressure from the nitrile rubber glove segment which was brought on by the uptrend in nitrile latex prices compared with 2QFY18. As a comparison, the average natural rubber latex price eased 0.5%, while the average nitrile latex price was on the uptrend, increasing by 8.5%.

 
Table: Topglov's last 8 quarterly results


Graph: Topglov's last 48 quarterly results

Valuation

Topglov (closed at RM11.62 mid-day) is now trading at a trailing PE of 34X (based on last 4 quarters' EPS of 24.4 sen). At this PER, Topglov is deemed fully valued

Corporate Exercise 

Topglov has proposed a 1-for-1 bonus issue which is still pending.

Technical Outlook

Driven by strong earning growth & a generous bonus issue, Topglov share price has rallied in a steep uptrend. While the trend is your friend, a sharp rally is always a concern for me.


Chart: Topglov's monthly chart as at Jun 19, 2018_12.30 (Source: Shareinvestor.com)

Conclusion

Based on good financial performance and positive technical outlook, I think Topglov will likely to continue its 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.

Thursday, June 14, 2018

Selamat Hari Raya Aidilfitri

I like to wish all my Muslim readers Selamat Hari Raya Aidilfitri.



Tuesday, June 12, 2018

3 Trading Prospects


 There are a few stocks that are poised to begin their upleg. They are:

1) Binacom

This stock broke above its downtrend line in April. It then moved sideways for 2 months and it broke above the horizontal line at RM0.45 last week.



Chart 1: Binacom's daily chart as at Jun 12, 2018_3.00pm (Source: Shareinvestor.com)

2) Dnex

This stock also broke above its downtrend line in May. It then moved sideways for past few weeks and it finally broke above the horizontal line at RM0.42 last week. Today, it is trading slightly below the breakout level- probably due to forced selling. If it can stay above the RM0.42 breakout level, its upleg may begin.

 
Chart 2: Dnex's daily chart as at Jun 12, 2018_3.00pm (Source: Shareinvestor.com)

3) Prlexus

This stock has broken to the upside of its symmetrical triangle at RM0.75. This could be the begin of its upleg.


Chart 3; Prlexus's daily chart as at Jun 12, 2018_3.00pm (Source: Shareinvestor.com)

Based on technical breakout, these 3 stocks could be potential trading BUYs.

Thursday, June 07, 2018

Market Outlook as at June 7, 2018

We saw strong rally in FBMKLCI of about 50 points over the last 2 days ( assuming no sharp drop before the close today). The index tested the 1800 psychological resistance but it failed to stay above that level. At the time of writing this, FBMKLCI is at 1795.


Chart 1: FBMKLCI's daily chart as at Jun 7, 2018_4.00pm (Source: ShareInvestor)

FBM70, representing the 2nd liner stocks, is still in a downtrend. The same goes for FBMSCAP, which represents the 3rd liner stocks.


Chart 2: FBM70's daily chart as at Jun 7, 2018_4.00pm (Source: ShareInvestor)


Chart 2: FBMSCAP's daily chart as at Jun 7, 2018_4.00pm (Source: ShareInvestor)

The recovery in FBMKLCI is to a large extend brought on by the receovery in the banking stocks. We can see that the Finance index rallied from 17500 on Tuesday to 18100 today (Thursday).


Chart 4: Finance's daily chart as at Jun 7, 2018_4.00pm (Source: ShareInvestor)

The construction index has hardly recovered. It is a long way below where it was before GE14. Many pundits and analysts are fairly bearish about this sector. To me, it is too late to be bearish. At such low prices, it is time to consider buying slowly into this sector. In my opinion, the Government will have to do pump-priming very soon. Our economy is at a critical juncture and we can ill afford to tighten our belt any further. As you know, any pump-priming will involve the construction sector. Before long, the stocks you shunned yesterday may be the stocks you will crave for tomorrow. Buy them before the stampede begins.


Chart 5; Construction's daily chart as at Jun 7, 2018_4.00pm (Source: ShareInvestor)

Lastly, the market is likely to be subdued next week due to Hari Raya Aidilfitri holiday. The market will be closed Friday and Thursday will be a half-day. If you have not bought any stock since GE14, next week may be a good time to get some stocks. Good luck!

3 Banking Stocks

The following 3 banking stocks caught my attention yesterday. RHBBANK closed at RM5.61- just slightly above its strong horizontal resistance of RM5.60. This tentative breakout was preceded by steady built-up of volume over the past few days. If it can stay above the breakout level, I think RHBBANK may go to RM6.40-6.50.


Chart 1: RHBBANKS's weekly chart as at Jun 6, 2018 (Source: ShareInvestor)

If RHBBANK can break above the strong horizontal line, ABMB may follow suit and break above its horizontal line at RM4.48-4.50.


Chart 2: ABMBS's weekly chart as at Jun 6, 2018 (Source: ShareInvestor)

Now for the much-maligned AMBANK; this stock has broken above its downtrend line at RM3.65. The last breakout of a downtrend line (in December 2017) saw the stock rallied from RM4.20 to RM4.90.


Chart 3; AMBANKS's weekly chart as at Jun 6, 2018 (Source: ShareInvestor)

Good luck on your trading or bargain hunting!

Thursday, May 31, 2018

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.

Wednesday, May 30, 2018

MUDA: Earnings Stayed Heallthy

Results Update

For QE31/3/2018, Muda's net profit dropped 56% q-o-q or 13% y-o-y to RM15.7 million while its turnover was mixed - down 18% q-o-q but rose 17% y-o-y to RM372 million.

Revenue rose y-o-y 17.3% mainly attributable to higher selling price of industrial paper and paper packaging products and higher sales volume from the latter. Sales volume for industrial paper suffered a minor setback during the quarter due to competition from imported paper. Strengthening ringgit and increased supply from overseas paper mills to Malaysia has resulted in lower turnover during the quarter under review. However, the shortfall was compensated by better selling price. For paper packaging products, improving economy and the success of selling price increase to cover increased raw material cost has resulted in higher revenue to the Group.

Compared to the corresponding quarter in 2017, lower cost of waste paper, higher selling price of industrial paper and better selling price of paper packaging products contributed to improvement in gross margin of the Group despite higher operating cost for the quarter under review. The improved gross margin has resulted in higher profit before tax in the current quarter. Profit before tax for the quarter under review is 7.6%  higher than the corresponding period in 2017. If the impact of net compensation from the insurer for the fire which occurred in 2016 was eliminated, the adjusted profit of RM19.4 million for the current quarter under review is 2.4 times higher the adjusted profit of RM8.2 million in the corresponding quarter in 2017.


Table: Muda's last 8 quarterly results


Graph: Muda's last 48 quarterly results
 

Valuation

Muda (trading at RM2.15 as at 11.45am) is trading at a PE of 11.6 times (based on last 4 quarters' EPS of 18.5 sen). At this PER, Muda is deemed fairly attractive.

Technical Outlook

Muda is in a steep short-term uptrend based on the 10-week SMA line at RM2.20.


Chart 1: Muda's weekly chart as at May 30, 2018_11.45 (Source: ShareInvestor.com)

From Chart 2, we can see that Muda is in a long-term uptrend line, with support at RM1.40.


Chart 2: Muda's monthly chart as at May 30, 2018_11.45 (Source: ShareInvestor.com)

Conclusion

Based on improving financial performance, attractive valuation and bullish technical outlook, Muda is rated a BUY on WEAKNESS.

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.

RCECap: Earnings Growth Intact

Result Update

For QE31/3/2017, RCECap's net profit rose marginally by 0.5% q-o-q or 8% y-o-y to RM23 million. Its revenue is mixed - down 2% q-o-q but rose 10% y-o-y to RM63 million. Revenue rose y-o-y primarily led by higher interest and fee income backed by the expanded loan base from its consumer financing segment. Correspondingly, this led to a higher pre-tax profit of RM30.1 million in the current quarter as compared to RM28.9 million in the corresponding quarter.


Table: RCECap's last 8 quarterly results

RCECap's financial performance continued to crawl up after bottoming in last 2013.


Graph: RCECap's last 44 quarterly results

Valuation

RCECap (closed at RM1.33 on May 28, 2018) has a trailing PE of 5.1 times (based on last 4 quarters' EPS of 26.02 sen). Starting this financial year, it is paying out dividend twice yearly totaling 7 sen. Dividend yield is 5.3%. Based on this PER & DY, RCECap is deemed fairly attractive.

Technical Outlook

RCECap is in a medium-term downtrend with resistance at RM1.45.


Chart 1: RCECap's weekly chart as at May 28, 2018 (Powered by ShareInvestor.com)

However, RCECap is still in a long-term uptrend.


Chart 2: RCECap's monthly chart as at May 28, 2018 (Powered by ShareInvestor.com)

Conclusion

Based on continued good financial performance, and attractive valuation, RCECap is good stock for long-term investment. However it's medium-term outlook is still neutral as it is still in a downtrend 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.

Success: Earnings Plummeted

Results Update

For QE31/3/2018, Success's net profit plummeted 83% q-o-q or 88% y-o-y to RM1.1 million while revenue dropped 18% q-o-q or 17% y-o-y to RM76 million. PBT dropped sharply mainly due to decrease in sales from transformer and lighting segment and losses under process equipment segment due to its lower margin contribution from certain projects as compared to immediate preceding quarter ended 31 December 2017.


Table: Success's last 8 quarterly results


Graph: Success's last 44 quarterly results

Valuation

Success (closed at RM1.00 on 28/5/2018) is now trading at a PE of 10 times (based on past 4 quarters' EPS of 10.1 sen). At this PER, Success is deemed fairly valued.

Technical Outlook

Success has been in a steady decline after it peaked at RM2.15 in May 2017.


Chart 1: Success's weekly chart as at May 28, 2018 (Source: ShareInvestor.com)

Success is in a long-term uptrend line with support at RM0.80.


Chart 2: Success's monthly chart as at May 28, 2018 (Source: ShareInvestor.com)

Conclusion

Based on poor financial performance, I downgrade Success's rating to HOLD. Nevertheless Success would be fairly attractive if the share price dropped back to RM0.80.

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.