Thursday, February 25, 2021

EFORCE: Revenue & Earnings Continued to Grow

Result Update

For QE31/12/2020, EForce's net profit rose 48% q-o-q or 142% y-o-y to RM3.9 million while revenue rose 3% q-o-q or 59% y-o-y to RM9.2 million. Revenue grew steadily due to "continuing interest of retail investors in Bursa securities sustained the overall high daily trading volume in quarter 4. Hence the sustained growth in our increase in Application Services Providers (“ASP”) revenue. However, our Application Solution (AS) segment performance was flat to last year. System enhancement project implementations resumed earnestly in this quarter, and billings for work done expected next year."


Table: EForce's last 8 quarterly results


Graph: EForce's last 48 quarterly results  

Financial Position

As at 31/12/2020, EForce's financial position is deemed very healthy with current ratio at 5.7 times. The company has cash balance of RM22.9 million (or equivalent to 3.7 sen per share). It has no borrowing. 

Valuation

EForce (closed at RM0.46 yesterday) is now trading at a PE of 24 times (based on last 4 quarters' EPS of 1.90 sen). Based on this PE ratio, EForce is deemed fairly valued.

Technical outlook

EForce is trading not far from the line connecting the last 5 years' lows (excluding the Mar 2020 extreme low) at RM0.40-0.42. If we drew a line connecting all the lows (including the Mar 2020 extreme low), that baseline will act as support at RM0.25. At this moment, there is no sign that EForce share price is poised for an upside move.

 
Chart: EForce's monthly chart as at Feb 24, 2021 (Source: Malaysiastock.biz)

Conclusion 

Based on improved financial performance, good financial position & reasonable valuation, EForce 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.

BOXPAK: Decent Earnings Continued

Result Update

For QE31/12/2020, Boxpak's net profit dropped 7% q-o-q but rose 101% y-o-y to RM5.9 million while revenue rose 8% q-o-q or 10% y-o-y to RM187 million.

The group revenue increased q-o-q mainly contributed by increase in sales volume in Malaysia, Vietnam and Myanmar operations. As a result of improvement in revenue, the Group's gross profit improved q-o-q from RM21.7 million to RM23.0 million. Consequently, the Group recorded a profit before taxation of RM7.3 million in QE31/12/2020.


Table 1: Boxpak's last 8 quarterly results

Looking at the full year segmental reporting, you can see clearly that Boxpak's earnings turnaround was due to lower operating expenses. 


Table 2: Boxpak's full year segmental performance for FY2020 and FY2019


Graph: Boxpak's last 53 quarterly results

Financial Position

Due to its rapid growth, Boxpak's financial position is a bit stretched. Liquidity is tight with current ratio at 0.94 time as at 31/12/2020 while gearing is elevated with total liabilities to total equity at 1.6 times.

Valuation

Boxpak (closed at RM1.50 yesterday) is now trading at a PE of 15 times (based on last 4 quarters' EPS of 9.95 sen). While the PE ratio is fair, this ratio can improve as the earnings of the company continue to improve. 

Technical Outlook

Boxpak has started on its uptrend. While the uptrend is not strong, it is likely to pick up pace once the MACD cross into the positive territory.


Chart 1: Boxpak's monthly chart as at Feb 24, 2020 (Source: Malaysiastock.biz)

Conclusion

Based on improved financial performance and positive technical outlook, Boxpak 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.

Wednesday, February 17, 2021

Banking Stocks: Bullish Breakout Achieved

The Financial Services index has broken above its intermediate downtrend line, RR at 14700. This may lead to an uptrend in Financial Services index in the near term.

Chart 1: Financial Services index's daily chart as at Feb 16, 2021 (Source: Malaysiastock.biz)

Two banking stocks that may likely join in an uptrend in Financial Services index are Maybank and CIMB. Both of these stocks have also broken above their respective downtrend lines.

Chart 2: Maybank's daily chart as at Feb 16, 2021 (Source: Kenanga's BTX chart)

Chart 3: CIMB's daily chart as at Feb 16, 2021 (Source: Kenanga's BTX chart)

 

Tuesday, February 16, 2021

ARBB: A Promising Small Cap Stock

Background

ARB Berhad ("ARBB") is involved in the manufacture and sales of wood products primarily in Malaysia. It also engages in the provision of scows and tug boats hiring services; consulting services for project management; management services; and timber contracting activities. In addition, the company is involved in reselling customized enterprise resource planning software system and information technology related services.

Results Update

In QE31/12/2020, ARBB's net profit rose 135% q-o-q or 54% y-o-y to RM19.7 million while revenue rose 24% q-o-q or 61% y-o-y to RM72.5 million. The increase in revenue is contributed by Enterprise Resource Planning (ERP) and Internet of Things (IoT) segments. ERP segment is involved in designing and reselling of customised ERP solutions, whereas IoT segment involves in integrated solutions in system (IoT SEPCM). 

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

Graph: ARBB's last 58 quarters' of P&L

Financial Position

As at 31/12/2020, ARBB's financial position is deemed satisfactory with current ratio at 6.3 times while Total Liabilities to Total Equity stood at 0.4 times.

Valuation

ARBB (at yesterday's closing price of RM0.335) is now trading at a PE of 3.1 times (based on last 4 quarters' EPS of 10.87 sen). At this PE, ARBB is deemed fairly attractively.

Technical Analysis

ARBB is poised to break above its downtrend line, RR at RM0.33-0.34.

Chart 1: ARBB's daily chart as at Feb 15, 2021 (Source: Malaysiastock.biz)

Chart 2: ARBB's weekly chart as at Feb 15, 2021 (Source: Malaysiastock.biz)

Conclusion

Based on good financial performance & position and attractive valuation, ARBB can be a good stock for medium-term investment. Its potential share price performance will depend on the ability of its share price to go above the immediate downtrend line at RM0.33-0.34. 

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, February 11, 2021

Happy Chinese New Year

 I like to wish all my Chinese readers a very happy new year. , Gong Xi Fa Cai.

Source: Freepik
  

Thursday, February 04, 2021

LPI: Trading at Attractive Valuation

Result Update

For QE31/12/2020, LPI's net profit rose by 10.5% q-o-q or 10.0% y-o-y to RM95 million while revenue rose 6.7% q-o-q or 5.8% y-o-y to RM422 million. Profit before tax grew by 6.9% y-o-y to RM123.3 million from RM115.3 million in the corresponding quarter in 2019. The growth in PBT was contributed by profit from the general insurance segment, which increased by 7.9% to RM124.5 million from RM115.4 million, as well underwriting profit, which grew by 16.3% to RM112.7 million from RM96.9 million previously mainly contributed by the lower net claims incurred and the growth in net earned premium as compared to corresponding quarter in 2019. The investment holding segment recorded higher loss before tax of RM1.2 million as compared to RM0.1 million in the corresponding quarter in 2019 mainly due to lower interest income received and higher management expenses during the current quarter.

 
Table: LPIs last 8 quarterly results


Graph: LPI's last 56 quarterly results

Valuation

LPI (closed at RM13.46 yesterday) is now trading at a trailing PE of 15.9 times (based on last 4 quarters' EPS of 84.52 sen). LPI paid out dividend totaling 72 sen during the period. This means LPI has a decent DY of 5.3%. Based on these 2 valuation models, LPI is deemed fairly attractive.

Technical Outlook

From Chart 1, we can see LPI has been moving in a saucer formation around RM13.00-14.00 in the past 7 months. From Chart 2, we can see that the monthly MACD is poised to hook up. When that happens, the technical outlook will turn positive for the stock.


Chart 1: LPI's daily chart as at Feb 3, 2021 (Source: Malaysiastock.biz)


Chart 2: LPI's monthly chart as at Feb 3, 2021 (Source: Malaysiastock.biz)

 Conclusion

Based on good financial performance, fair valuation & mildly positive technical outlook, LPI is still 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.

Thursday, December 24, 2020

Merry Christmas & Happy New Year 2021

 I like to wish everyone a Merry Christmas and a Happy New Year 2021.

POHUAT: Earnings Stayed Firm

Results Update

For QE31/10/2020, Pohuat's net profit rose 91% q-o-q or 49% y-o-y to RM22 million while revenue rose 63% q-o-q or 13% y-o-y to RM217 million. The Group’s turnover increased 63% q-o-q to RM217 million due to the recovery of demand and planned inventory building by US importers for the year end festive seasons, shipment to our US customers from both our Malaysian and Vietnamese operations increased substantially. In Malaysia, turnover grew by more than 40% whereas Vietnam’s turnover grew by a whopping 80%.

Correspondingly, profit before tax grew more than doubled to RM28 million as absolute gross profit grew 82.7% to RM47 million. Gross profit margin improved from 19.2% to 21.5% on the backdrop of stable raw material prices and better overhead absorption from the higher plant utilisation rate. In line with the higher turnover, selling, distribution and administrative expenses were broadly higher but were consistent as a percentage of sales with those in the preceding reporting period under review. The higher gross profit, coupled with the stable operating expenses, the Group’s profit before tax rose more than double from RM13.74 million.


Table: Pohuat's last 8 quarterly results


Graph: Pohuat's last 52 quarterly results

Financial Position

As at 31/10/2020, Pohuat's financial position is very healthy with current ratio at 2.9 times while total liabilities to total equity was at 0.3 time. Net cash in hand was equivalent to 83 sen per share.

Valuation

Pohuat (closed at RM1.78 yesterday) is now trading at a trailing gross PER of 9.3 times (based on last 4 quarters' EPS of 19.14 sen). At this PER, the stock is fairly attractive. In addition, the stock pays dividend totaling 8 sen in last 4 quarter, which translates to an attractive Dividend Yield of 4.5%.

Technical Outlook

Pohuat has recovered from the low of RM0.68 in Mar to a recent high of RM2.06. An intermediate uptrend line, SS will provide support if the share price were to retreat in the near future.



Chart 1: Pohuat's daily chart as at Dec 23, 2020 (Source: Malaysiastock.biz)

Looking at the weekly chart, we can see a line connecting the recent peaks for the stock. This line, denoted as RR, will provide resistance for any near term rally. However, if the share price can surpass this resistance, the ensuing rally can be expected to be strong.


Chart 2: Pohuat's weekly chart as at Dec 23, 2020 (Source: Malaysiastock.biz)

Conclusion

Based on good financial performance, healthy financial position and fairly attractive valuation, Pohuat 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, December 21, 2020

SCGM: Earnings Continue to Rise

Results Update

In QE31/10/2020 (2Q21), SCGM's net profit rose 16% q-o-q or 138% y-o-y to RM9.6 million while revenue increased 7% q-o-q or 14% y-o-y to RM61 million. The group revenue increased 7% q-o-q resulting from higher sales contribution from local market on higher deliveries of F&B packaging. The Group recorded 24% higher profit before tax of RM10.7 million in 2Q21 compared to profit before tax of RM8.7 million in 1Q21, which is in line with higher local sales recorded in 2Q21. In line with the increased revenue, the Group noted 16% higher net profit of RM9.6 million in 2Q21 versus RM8.3 million in the preceding quarter

 
Table: SCGM's last 8 quarterly results

 
Graph: SCGM's last 47 quarterly results

Financial Position

SCGM's financial position is deemed healthy with current ratio at 1.49 times while gearing ratio is elevated at 0.67 time.

Valuation

SCGM (closed at RM2.48 yesterday) is now trading at a PE of 16.6X (based on the last 4 quarters' EPS of 14.92 sen).  At this PE, SCGM is deemed fairly attractive.

Technical Outlook

SCGM peaked at RM3.95 in early August. It has dropped back to around the RM2.50 level in the past few days. Its 200-day SMA line support is not far away at RM2.32.


Chart 1: SCGM's daily chart as at Dec 21, 2020 (Source: Malaysiastock.biz)


Chart 2: SCGM's weekly chart as at Dec 21, 2020 (Source: Malaysiastock.biz)

Conclusion

Based on improved financial performance, healthy financial position & fairly attractive valuation, SCGM is a good stock for long-term investment. The current price downtrend is likely to continue until a reversal is achieved, which may come once the share prices have surpassed the RM3.00 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.