One of the more common misconception about the re-quotation of Maxis on our exchange is that it is attractive as the retail IPO price for the re-quotation of Maxis at RM5.20 apiece is lower than the price of RM15.60 apiece that Ananda Krishnan paid to take it private in 2007. Before we examine this issue, let's refer to the Maxis that was privatized in 2007 as Maxis 2007 & the new Maxis to be listed as Maxis 2009.
Maxis 2007 was listed on the exchange in 2002 with the retail IPO price was RM4.36. In 2007, Ananda paid RM17.5 billion to acquire the remaining 53.3% of Maxis 2007 that he did not own (or, at a price of RM15.60 per share). This deal valued the entire company at RM32.9 billion. Maxis 2007 consists of the Malaysian operation and two overseas operation, i.e. a 74%-stake in Aircel Ltd, India and a 95%-stake in PT Natrindo Telepon Seluler, Indonesia.
Maxis 2009 has a capital base of 7.5 billion shares (compared with 2.1 billion shares for Maxis 2007 at the point of privatization). The retail IPO price is RM5.20 per share- valuing the company at RM39.0 billion. Maxis 2009 is a purely Malaysian telco play. The Indian & Indonesian operations have been stripped off and joined Ananda's private group of companies.
So, Maxis 2009 is valued at 18.5% higher than Maxis 2007 and it does not come with Indian & Indonesian operations. While not discounting the possibility that Maxis may surprise us on the upside in the years to come, we must accept the fact that Maxis 2009 as offered is anything but cheap. If you buy into this stock, you must be prepared to hold it for long term.
Friday, October 30, 2009
Thursday, October 29, 2009
HPI- awaiting bonus issue
HPI has just announced its results for QE31/8/2009 (its 1Q2010). Compared to the previous corresponding quarter, its net profit increased 42% despite a 10%-drop in turnover. The increased net profit was attributable to the contribution of subsidiary at Perak and the paper mill company. Compared to the immediate preceding quarter, its net profit dropped by 20% despite a 15%-increase in turnover. The decline in net profit was due to the higher raw material prices in corrugator companies during the reporting quarter.
HPI (closed at RM1.64 at the end of the morning session) is now trading at a trailing PE of 3.3 times (based on last 4 quarters' EPS totaling 49 sen). At this multiple, HPI is still very attractive.
Technically speaking, HPI is poised to test its recent August high of RM1.84. The share price seems to be trapped in an expanding triangle in the past 3 weeks. An upside breakout of the triangle (at RM1.80) as well as the recent high could set the stage for the next upleg for this stock. This could coincide with the entitlement for the 1-for-4 Bonus Issue which was approved by shareholders in an EGM held on Oct 28.
Chart: HPI's daily chart as at Oct 29, 2009_4.15pm (Source: Quickcharts)
Based on satisfactory financial performance and upcoming bonus issue, HPI could be a trading BUY.
HPI (closed at RM1.64 at the end of the morning session) is now trading at a trailing PE of 3.3 times (based on last 4 quarters' EPS totaling 49 sen). At this multiple, HPI is still very attractive.
Technically speaking, HPI is poised to test its recent August high of RM1.84. The share price seems to be trapped in an expanding triangle in the past 3 weeks. An upside breakout of the triangle (at RM1.80) as well as the recent high could set the stage for the next upleg for this stock. This could coincide with the entitlement for the 1-for-4 Bonus Issue which was approved by shareholders in an EGM held on Oct 28.
Chart: HPI's daily chart as at Oct 29, 2009_4.15pm (Source: Quickcharts)
Based on satisfactory financial performance and upcoming bonus issue, HPI could be a trading BUY.
Maxis- all maxed out
Maxis Bhd ('Maxis') prospectus has posted on Bursa's website (go here). This IPO will involved the listing of 7.5 billion Maxis shares on the exchange on November 19. On Page 21 of the Prospectus, we can see the Summary of Selected Financial & Operating Data for the company (see Table 1 below). You will see that Maxis reported a Net Profit of RM1.141 billion for 6-month ended 30/6/2009. Based on this, we can expect Maxis' Net Profit for FY2009 to be about RM2.282 billion. As such, Maxis share will have an EPS of about 30.4 sen. Based on the listing price of RM5.20 per share, the IPO is priced at a PE of 17.1 times.
Table 1: Maxis' Summary of Selected Financial & Operating Data
Maxis is very similar to Digi.com Bhd ('Digi') as both are involved in mobile telecommunication services in Malaysia only. Digi has just announced its results for 9-month ended 30/9/2009 yesterday (see Table 2 below). Digi ((closed at RM21.76 at the end of the morning session) is now trading at a PE of 16.8 times (based on the annualized EPS of 129.3 sen).
Table 2: Digi's latest 8 quarterly results
Based on the above, it is fair to say that Maxis' IPO is fully priced. While many investors maybe excited about Maxis' re-quotation on the exchange, it is hard to make a case for buying the stock. Funds managers, which have little choice but to own the stock, will buy it. Should retail investors buy this stock for dividend? Assuming Maxis pays out 90% of its earning, it would be pay a dividend of 27 sen (30.4 sen x 90%). At the IPO price of RM5.20, the dividend yield is about 5.2%. I guess that the only strong point I can make for owning the stock. I would prefer Axiata to Digi or Maxis anytime.
Table 1: Maxis' Summary of Selected Financial & Operating Data
Maxis is very similar to Digi.com Bhd ('Digi') as both are involved in mobile telecommunication services in Malaysia only. Digi has just announced its results for 9-month ended 30/9/2009 yesterday (see Table 2 below). Digi ((closed at RM21.76 at the end of the morning session) is now trading at a PE of 16.8 times (based on the annualized EPS of 129.3 sen).
Table 2: Digi's latest 8 quarterly results
Based on the above, it is fair to say that Maxis' IPO is fully priced. While many investors maybe excited about Maxis' re-quotation on the exchange, it is hard to make a case for buying the stock. Funds managers, which have little choice but to own the stock, will buy it. Should retail investors buy this stock for dividend? Assuming Maxis pays out 90% of its earning, it would be pay a dividend of 27 sen (30.4 sen x 90%). At the IPO price of RM5.20, the dividend yield is about 5.2%. I guess that the only strong point I can make for owning the stock. I would prefer Axiata to Digi or Maxis anytime.
Tuesday, October 27, 2009
Gold as permanent investment?
Jeffrey Saut contemplates the merit of gold as a permanent investment. He quoted from "Bernard Baruch, Park Bench Statesman" by Carter Field, 1944:
Via, Minyanville.
Looking at the chart below, we can see that gold is now continuing with its prior uptrend after breaking above its triangle pattern (denoted as 'B') recently.
Chart: Gold price from Jan 4, 1982 to Oct 21, 2009 (Source: Bloomberg)
“Baruch liked gold mines. There is always a market, he pointed out, for their product, and at a satisfactory price. Gold, he insisted, is one of the very few things in the world that approaches the status of a permanent investment. Baruch told the story of a Rothschild who set up a ‘permanent trust’ consisting of five different currencies. By the time Baruch heard about the trust, it had shrunk to one-fifth its original value. ‘But gold doesn’t yield any interest,’ a friend protested after listening to the story. ‘True’, replied Baruch, ‘but consider the fabulous wealth of some of the Indian princes and rajahs. I had dinner with the Maharajah of Kapurthala on one occasion in Vittel, France. Several of us talked afterward about his wealth, and someone said that among the treasures of these Indian moguls were gold coins brought to the East by Alexander the Great, hundreds of years before Christ.”
“Their gold and jewels had earned no interest during these more than 2,000 years, but they still had their capital. Suppose they had attempted to provide income from it. They might have been no more far-seeing than the Rothschild I mentioned. If they had tried speculation there have been many times in each century that they might have gone broke. No, save for gold, jewels, works of art, perhaps good agricultural land, and a very few other things, there ain’t no such animal as a permanent investment. Even in agricultural land, Baruch pointed out, there is some risk. Lands that made men rich in rice cultivation years ago in Baruch’s own state of South Carolina, are not nearly so valuable now that rice is produced more economically in other sections. City real estate is subject to all sorts of hazards, as he learned when he no longer needed his big Fifth Avenue mansion.”
Via, Minyanville.
Looking at the chart below, we can see that gold is now continuing with its prior uptrend after breaking above its triangle pattern (denoted as 'B') recently.
Chart: Gold price from Jan 4, 1982 to Oct 21, 2009 (Source: Bloomberg)
Market Outlook as at Oct 27, 2009
The market is undergoing a corrective phase, which may see the FBMKLCI testing the 20-day SMA line support at 1243 (similar to the last 2 correction denoted as 'B' & 'C'). If this level failed, then the KLCI may test the 50-day SMA line support at 1211 (see the correction in June & July, denoted as 'A').
Chart: FBMKLCI's daily chart as at Oct 26, 2009 (Source: Quickcharts)
After seeing a few uptrend line violations among blue chips & near blue chips, I have a feeling that the market may be nearing a temporary top. However, the relatively bullish undertone in the market is such that the price of these stocks has yet to drop significantly, but has instead been moving in a sideway fashion. Some of the stocks that had violated their uptrend line are Astro, Axiata, Boustead, Unisem and WCT.
Chart: FBMKLCI's daily chart as at Oct 26, 2009 (Source: Quickcharts)
After seeing a few uptrend line violations among blue chips & near blue chips, I have a feeling that the market may be nearing a temporary top. However, the relatively bullish undertone in the market is such that the price of these stocks has yet to drop significantly, but has instead been moving in a sideway fashion. Some of the stocks that had violated their uptrend line are Astro, Axiata, Boustead, Unisem and WCT.
Friday, October 23, 2009
BDI broke above 3000
Just a quick note that the Baltic Drybulk Index has recovered above the 3000-mark. This is a positive sign that international trade continued to recover, despite earlier uncertainties. Somebody should check whether the "Ghost Fleet of Recession" is still lying off the coast of Singapore.
Chart: Baltic Drybulk Rates' daily chart as at Oct 22, 2009 (Source: Investment.tools.com)
Chart: Baltic Drybulk Rates' daily chart as at Oct 22, 2009 (Source: Investment.tools.com)
Daiman- testing its long-term downtrend line
Background
Daiman Development Bhd ('Daiman') is a property developer with 3 on-going projects in Kota Tinggi, Kulai & Johor Bahru Tengah, Johor. Its investment properties are Wisma Daiman & Daiman Apartment.
Recent Financial Results
Daiman's financial performance is very unexciting for the past 8 quarters. For QE30/6/2009, its net profit increased significantly by six-fold q-o-q or 59% y-o-y to RM15 million while turnover was 56% higher than the immediately preceding quarter but 14% lower than the previous corresponding quarter. The improved bottom-line was attributable to higher sales & realized forex gain.
Valuation
Daiman (closed at RM1.62 today) is now trading at trailing PE of 15 times (based on last 4 quarters' EPS of 11 sen). While this is high for unexciting property counter, the stock is trading at a Price to Book of 0.4 times only. Daiman is a cash-rich company with cash or near-cash reserves of RM278 million as at 30/6/2009. This gives the stock a cash backing of RM1.18 per share. If this is deducted from the share price, Daiman is now trading at a PE of 4 times only. However, I must caution that many investors have sunk money into this stock on the same rationale but they have yet to enjoy their just reward.
Technical Outlook
The main reason why we should be looking at this stock is because there are some signs that this stock is poised for a possible upside breakout of its very, very long-term downtrend line. The resistance for that downtrend line is at RM1.65 (see Chart 1 below).
Chart 1: Daiman's daily chart from 1992 to Oct 22, 2009(source: Tradesignum)
The stock has already broken above its downward channel at RM1.50 in July this year (see Chart 2). Since then, the stock has entered into a consolidation phase where sellers came out & disposed off their holding quite aggressive. This selling seems to have been exhausted. Today, we might have witnessed the continuation of the prior short-term uptrend. For this stock to go higher, it must break above the long-term downtrend line at RM1.65. This level was tested today.
Chart 2: Daiman's weekly chart as at Oct 23, 2009_10.00am (Source: Quickcharts)
Chart 3: Daiman's 60-min chart as at Oct 23, 2009_11.15am (Source: Quickcharts)
Conclusion
Daiman maybe on the verge of an upside breakout of its long-term downtrend line. It is a fairly attractive property stock, with relatively thin trading volume. It is worth tracking closely for a potential sizeable return.
Daiman Development Bhd ('Daiman') is a property developer with 3 on-going projects in Kota Tinggi, Kulai & Johor Bahru Tengah, Johor. Its investment properties are Wisma Daiman & Daiman Apartment.
Recent Financial Results
Daiman's financial performance is very unexciting for the past 8 quarters. For QE30/6/2009, its net profit increased significantly by six-fold q-o-q or 59% y-o-y to RM15 million while turnover was 56% higher than the immediately preceding quarter but 14% lower than the previous corresponding quarter. The improved bottom-line was attributable to higher sales & realized forex gain.
Valuation
Daiman (closed at RM1.62 today) is now trading at trailing PE of 15 times (based on last 4 quarters' EPS of 11 sen). While this is high for unexciting property counter, the stock is trading at a Price to Book of 0.4 times only. Daiman is a cash-rich company with cash or near-cash reserves of RM278 million as at 30/6/2009. This gives the stock a cash backing of RM1.18 per share. If this is deducted from the share price, Daiman is now trading at a PE of 4 times only. However, I must caution that many investors have sunk money into this stock on the same rationale but they have yet to enjoy their just reward.
Technical Outlook
The main reason why we should be looking at this stock is because there are some signs that this stock is poised for a possible upside breakout of its very, very long-term downtrend line. The resistance for that downtrend line is at RM1.65 (see Chart 1 below).
Chart 1: Daiman's daily chart from 1992 to Oct 22, 2009(source: Tradesignum)
The stock has already broken above its downward channel at RM1.50 in July this year (see Chart 2). Since then, the stock has entered into a consolidation phase where sellers came out & disposed off their holding quite aggressive. This selling seems to have been exhausted. Today, we might have witnessed the continuation of the prior short-term uptrend. For this stock to go higher, it must break above the long-term downtrend line at RM1.65. This level was tested today.
Chart 2: Daiman's weekly chart as at Oct 23, 2009_10.00am (Source: Quickcharts)
Chart 3: Daiman's 60-min chart as at Oct 23, 2009_11.15am (Source: Quickcharts)
Conclusion
Daiman maybe on the verge of an upside breakout of its long-term downtrend line. It is a fairly attractive property stock, with relatively thin trading volume. It is worth tracking closely for a potential sizeable return.
Axiata & TM- being sold to make room for Maxis
The re-listing of Maxis on our exchange has caused fund managers to re-balance their portfolio by reducing their holding in existing telephony stocks & positioning to buy into Maxis- either before its listing or shortly thereafter. The losers in this exercise appear to be Axiata & TM.
From Chart 1, we can see that Axiata broke below its medium-term uptrend line support at RM3.10 yesterday. Its immediate horizontal support of RM3.00 is being tested now. If the stock does not recover above its medium-term uptrend line soon, it is likely to trade sideway or drift lower.
Chart 1: Axiata's daily chart as at Oct 22, 2009(source: Tradesignum)
TM may have broken below its medium-term uptrend line support at RM3.10 in mid-September. TM has been trading sideway, between RM3.05 & RM3.15 for the past few weeks. I have presented below 2 charts of TM, either unadjusted or adjusted for the capital repayment of RM0.98 in May.
Chart 2: TM's daily chart as at Oct 22, 2009 (source: Tradesignum)
Chart 3: TM's daily chart as at Oct 22, 2009- adjusted for Capital repayment of RM0.98 in May 2009 (source: Tradesignum)
I do not have any comment on the Maxis re-listing at this moment. However, I think that the current selling of Axiata may present a good buying opportunity for the stock. A good entry level is at the 100-day SMA of RM2.85-90, notwithstanding my earlier take on the technical outlook for this stock.
From Chart 1, we can see that Axiata broke below its medium-term uptrend line support at RM3.10 yesterday. Its immediate horizontal support of RM3.00 is being tested now. If the stock does not recover above its medium-term uptrend line soon, it is likely to trade sideway or drift lower.
Chart 1: Axiata's daily chart as at Oct 22, 2009(source: Tradesignum)
TM may have broken below its medium-term uptrend line support at RM3.10 in mid-September. TM has been trading sideway, between RM3.05 & RM3.15 for the past few weeks. I have presented below 2 charts of TM, either unadjusted or adjusted for the capital repayment of RM0.98 in May.
Chart 2: TM's daily chart as at Oct 22, 2009 (source: Tradesignum)
Chart 3: TM's daily chart as at Oct 22, 2009- adjusted for Capital repayment of RM0.98 in May 2009 (source: Tradesignum)
I do not have any comment on the Maxis re-listing at this moment. However, I think that the current selling of Axiata may present a good buying opportunity for the stock. A good entry level is at the 100-day SMA of RM2.85-90, notwithstanding my earlier take on the technical outlook for this stock.
Thursday, October 22, 2009
Supermx in a super rally
Supermx recently announced its results for QE30/9/2009. Its net profit increased by 56% q-o-q or 155% y-o-y to RM40 million. Its turnover increased by 26% q-o-q to RM238 million but was 2.7% lower than the previous corresponding quarter, QE30/9/2008.
Table 1: Supermx's 8 quarterly results
From the chart of the last 12 quarterly results, we can see the improvement in Supermx's performance for the past 3 quarters. This sharp recovery in its bottom-line should lead to further re-rating of this stock.
Chart 1: Supermx's 12 quarterly results
In August, I have posted on Supermx's long-term expanding triangle pattern which might capped the rise in the share rise (go here). However the strong rally in the past 3 weeks has blown away the resistance posed by that pattern (see Chart 2 below).
Chart 2: Supermx's daily chart from 2000 to Oct 21, 2009(source: Tradesignum)
From Chart 3 below, we can see that the strong rally since March this year can be viewed as an imperfect upward channel. The share price is now pushing against the resistance from the upper boundary of that channel at RM4.00. Can Supermx surpass this medium-term resistance?
Chart 3: Supermx's daily chart as at Oct 22, 2009_10.50am (Source: Quickcharts)
For traders, you may take the opportunity to take some profit on this stock after a strong rally from RM2.50 to RM4.00 over the past 3 weeks. Long-term investors can choose to hold onto this stock as this stock may still have more upside.
Note: CIMB has a year-end target of RM6.40 for Supermx which pegged the stock to a PE of 10.5 times its 2010 earning. The date of the report is Oct 21.
Table 1: Supermx's 8 quarterly results
From the chart of the last 12 quarterly results, we can see the improvement in Supermx's performance for the past 3 quarters. This sharp recovery in its bottom-line should lead to further re-rating of this stock.
Chart 1: Supermx's 12 quarterly results
In August, I have posted on Supermx's long-term expanding triangle pattern which might capped the rise in the share rise (go here). However the strong rally in the past 3 weeks has blown away the resistance posed by that pattern (see Chart 2 below).
Chart 2: Supermx's daily chart from 2000 to Oct 21, 2009(source: Tradesignum)
From Chart 3 below, we can see that the strong rally since March this year can be viewed as an imperfect upward channel. The share price is now pushing against the resistance from the upper boundary of that channel at RM4.00. Can Supermx surpass this medium-term resistance?
Chart 3: Supermx's daily chart as at Oct 22, 2009_10.50am (Source: Quickcharts)
For traders, you may take the opportunity to take some profit on this stock after a strong rally from RM2.50 to RM4.00 over the past 3 weeks. Long-term investors can choose to hold onto this stock as this stock may still have more upside.
Note: CIMB has a year-end target of RM6.40 for Supermx which pegged the stock to a PE of 10.5 times its 2010 earning. The date of the report is Oct 21.
Wednesday, October 21, 2009
Penergy has a bullish breakout...
Petra Energy Bhd ('Penergy') has broken to the upside of its triangle in early September at the RM1.80 level. Penergy is a fairly profitable Oil & Gas stock. For the 6-month ended 30/6/2009, it reported a net profit of RM13.8 million on the back of a turnover of RM228 million. Its 6-month EPS is 7.1 sen while NTA per share as at 30/6/2009 stood at RM1.56.
Chart 1: Penergy's 1-year daily chart as at Oct 20, 2009(source: Tradesignum)
The stock has broken above its downward channel in May (see Chart 2 below). After that breakout, the share price consolidated in a triangle pattern. With the recent breakout of the triangle pattern, the stock's next up-leg may have started. Its upcoming resistance will be at RM2.20 (its May high); RM2.50-60; and RM3.00.
Chart 2: Penergy's daily chart from July 2007 to Oct 20, 2009 (source: Tradesignum)
Chart 1: Penergy's 1-year daily chart as at Oct 20, 2009(source: Tradesignum)
The stock has broken above its downward channel in May (see Chart 2 below). After that breakout, the share price consolidated in a triangle pattern. With the recent breakout of the triangle pattern, the stock's next up-leg may have started. Its upcoming resistance will be at RM2.20 (its May high); RM2.50-60; and RM3.00.
Chart 2: Penergy's daily chart from July 2007 to Oct 20, 2009 (source: Tradesignum)
Masteel may have a bullish breakout
Masteel broke to the upside of its triangle at RM0.97. It is presently trading at RM1.04 as at 3.50pm. The next resistance for the stock is at RM1.10 & thereafter at RM1.20. There is a news report that the company had secured a deal to export steel worth millions of ringgit to Australia. Overall, the steel sector is expected to benefit from the government’s pump-priming efforts in 2010 and 2011.
Chart: Masteel's daily chart as at Oct 20, 2009 (source: Tradesignum)
Chart: Masteel's daily chart as at Oct 20, 2009 (source: Tradesignum)
Tuesday, October 20, 2009
Lonbisc- an attractive consumer stock
Background
London Biscuit Bhd ("Lonbisc") is involved in the manufacture & sale of confectionery and other related foodstuffs.
Lonbisc has a 23.49%-stake in Lay Hong Bhd, a listed company involved in poultry farming. The rationale for the acquisition is to gain control and ownership of a major supplier to ensure adequate, regular and continuous supply of liquid eggs at "controlled prices" to meet its ongoing expansion plans. In addition, Lonbisc has a 32.97% in Khee San Berhad, another listed company, which is engaged in dealing and manufacturing of sweets and confectionery products.
Recent Financial Results
Lonbisc reported a good set of results for QE30/62009. Its net profit increased by 47% q-o-q or 112% y-o-y to RM6.7 million while turnover was up 15% q-o-q or 37% y-o-y to RM55 million. The increased turnover was attributable to the incorporation of the turnover of its associate, Khee San Berhad into Lonbisc's P&L account. This also helped to boost Lonbisc's steady top-line growth (see Chart 1 below).
Table 1: Lonbisc's 8 quarterly results
Chart 1: lonbisc's 18 quarterly results
Valuation
If Lonbisc can maintain the same results as achieved in QE30/6/2009, then its full year EPS can be as high as 34 sen (derived by annualizing its EPS of 8.58 sen for QE30/6/2009). Lonbisc (closed at RM1.10 today) is trading at a trailing PE of 3.2 times. Its Price to Book is also very attractive at 0.5 times (based on NTA per share of RM2.23 as at 30/6/2009). All in all, Lonbisc is an attractive consumer stock worth considering.
Technical Outlook
Lonbisc is still in a long-term downtrend line, with resistance at RM1.30-35 (based on the weekly chart, Chart 2). The share price is rising in a short-term upward channel, with support at RM1.00 (see the daily chart, Chart 3).
Chart 2: Lonbisc's weekly chart as at Oct 20, 2009 (Source: Quickcharts)
Chart 3: Lonbisc's daily chart as at Oct 20, 2009 (Source: Quickcharts)
Conclusion
Lonbisc is an attractive consumer stock worth tracking. For those with a long-term investment horizon, you may accumulate this stock now (or, preferably at RM1.00 level). Trading BUY may be initiated if the stock broke above the downtrend line at RM1.30-35.
London Biscuit Bhd ("Lonbisc") is involved in the manufacture & sale of confectionery and other related foodstuffs.
Lonbisc has a 23.49%-stake in Lay Hong Bhd, a listed company involved in poultry farming. The rationale for the acquisition is to gain control and ownership of a major supplier to ensure adequate, regular and continuous supply of liquid eggs at "controlled prices" to meet its ongoing expansion plans. In addition, Lonbisc has a 32.97% in Khee San Berhad, another listed company, which is engaged in dealing and manufacturing of sweets and confectionery products.
Recent Financial Results
Lonbisc reported a good set of results for QE30/62009. Its net profit increased by 47% q-o-q or 112% y-o-y to RM6.7 million while turnover was up 15% q-o-q or 37% y-o-y to RM55 million. The increased turnover was attributable to the incorporation of the turnover of its associate, Khee San Berhad into Lonbisc's P&L account. This also helped to boost Lonbisc's steady top-line growth (see Chart 1 below).
Table 1: Lonbisc's 8 quarterly results
Chart 1: lonbisc's 18 quarterly results
Valuation
If Lonbisc can maintain the same results as achieved in QE30/6/2009, then its full year EPS can be as high as 34 sen (derived by annualizing its EPS of 8.58 sen for QE30/6/2009). Lonbisc (closed at RM1.10 today) is trading at a trailing PE of 3.2 times. Its Price to Book is also very attractive at 0.5 times (based on NTA per share of RM2.23 as at 30/6/2009). All in all, Lonbisc is an attractive consumer stock worth considering.
Technical Outlook
Lonbisc is still in a long-term downtrend line, with resistance at RM1.30-35 (based on the weekly chart, Chart 2). The share price is rising in a short-term upward channel, with support at RM1.00 (see the daily chart, Chart 3).
Chart 2: Lonbisc's weekly chart as at Oct 20, 2009 (Source: Quickcharts)
Chart 3: Lonbisc's daily chart as at Oct 20, 2009 (Source: Quickcharts)
Conclusion
Lonbisc is an attractive consumer stock worth tracking. For those with a long-term investment horizon, you may accumulate this stock now (or, preferably at RM1.00 level). Trading BUY may be initiated if the stock broke above the downtrend line at RM1.30-35.
Monday, October 19, 2009
Suncity- uptrend to continue
Suncity will continue with its medium-term uptrend since breaking above its short-term downtrend line resistance at RM3.26 last week (see Chart 1 below). Its overhead resistance will come from its recent high of RM3.50 as well as the horizontal resistance of RM4.00 (see Chart 2 below).
Chart 1: Suncity's daily chart as at Oct 19, 2009_12.30noon(source: Quickcharts)
Chart 2: Suncity's weekly chart as at Oct 19, 2009_12.30noon(source: Quickcharts)
Chart 1: Suncity's daily chart as at Oct 19, 2009_12.30noon(source: Quickcharts)
Chart 2: Suncity's weekly chart as at Oct 19, 2009_12.30noon(source: Quickcharts)
HLInd- worth a closer look
HLInd broke above its long-term downtrend line resistance at RM3.70 in August. Despite the breakout, the share price did not rise much. It merely floated higher. With investors scouting around for cheap stocks, HLInd may have come under the radar & some buying may have started. The technical reading suggests that the stock may rally soon like what it did in April-November 2006. Watch out for increased volume! If that happened, the game would have started. Upside resistance can be seen at RM4.40-50, RM5.00 & RM5.80-6.00.
Chart 1: HLind's weekly chart as at Oct 19, 2009_11.00am(source: Quickcharts)
From the monthly chart below, we can see that the longer-term downtrend line would act as resistance at RM5.30-40.
Chart 2: HLind's monthly chart as at Oct 19, 2009_11.00am(source: Quickcharts)
Chart 1: HLind's weekly chart as at Oct 19, 2009_11.00am(source: Quickcharts)
From the monthly chart below, we can see that the longer-term downtrend line would act as resistance at RM5.30-40.
Chart 2: HLind's monthly chart as at Oct 19, 2009_11.00am(source: Quickcharts)
GenM- what are we waiting for?
There have been a number of research reports touting the strong points for Genting Malaysia, such as its solid Balance Sheet with Cash reserves of RM5 billion and its attractive valuation as it trades only at PE multiple of 13 times. Technically speaking, we are all wanting for an upside breakout of its long-term downtrend line at RM2.90. If you want to be ahead of the curve, then buy when this stock pulled back to RM2.70-80 level. The fact that this stock still hasn't broken above its downtrend line is hard to fathom.
Chart 1: GenM's weekly chart as at Oct 19, 2009_11.00am(source: Quickcharts)
Chart 1: GenM's weekly chart as at Oct 19, 2009_11.00am(source: Quickcharts)
Friday, October 16, 2009
Cenbond may have a bullish breakout
Cenbond has a nice bullish breakout yesterday. Before this, it was consolidating in a triangle with the upside resistance at RM0.72.
Chart 1: Cenbond's daily chart as at Oct 15, 2009 (Source: Quickcharts)
The RM0.72 level happened to be a very strong horizontal resistance too. With yesterday's breakout, this will become a strong horizontal support.
Chart 2: Cenbond's weekly chart as at Oct 15, 2009 (Source: Quickcharts)
Today, Cenbond shed RM0.07 to close at RM0.76. Look out for this stock. I think it is a good trading BUY when it comes closer to RM0.72. Hat tip to reader Solomon for alerting me on this stock. I have posted on Cenbond a long time ago (go here).
Chart 1: Cenbond's daily chart as at Oct 15, 2009 (Source: Quickcharts)
The RM0.72 level happened to be a very strong horizontal resistance too. With yesterday's breakout, this will become a strong horizontal support.
Chart 2: Cenbond's weekly chart as at Oct 15, 2009 (Source: Quickcharts)
Today, Cenbond shed RM0.07 to close at RM0.76. Look out for this stock. I think it is a good trading BUY when it comes closer to RM0.72. Hat tip to reader Solomon for alerting me on this stock. I have posted on Cenbond a long time ago (go here).
Freight may have a bullish breakout
Freight Management Holdings Bhd ("Freight") has broken to the upside of its ascending triangle yesterday- made a high of RM0.715 before closing at the breakout level of RM0.675. Today it gained RM0.125 to close at RM0.80- thus achieving a clear bullish breakout. Its next resistance levels are RM0.85, RM0.90 & RM0.95.
Chart: Freight's daily chart as at Oct 15, 2009 (Source: Tradesignum)
Chart: Freight's daily chart as at Oct 15, 2009 (Source: Tradesignum)
Tenaga may have a bullish breakout
Tenaga has just broken to the upside of its symmetrical triangle at RM8.43-44. It closed at RM8.48 today. The next resistance will be RM8.50 & thereafter RM9.00.
Chart: Maybank's daily chart as at Oct 15, 2009 (Source: Tradesignum)
Besides buying into Tenaga, you can also consider its CWs. From the table below, you can choose from 3 CWs. My preference is for Tenaga-CL & Tenaga-CM.
Table: Tenaga's CWs terms & valuation
Chart: Maybank's daily chart as at Oct 15, 2009 (Source: Tradesignum)
Besides buying into Tenaga, you can also consider its CWs. From the table below, you can choose from 3 CWs. My preference is for Tenaga-CL & Tenaga-CM.
Table: Tenaga's CWs terms & valuation
Crude Oil rally to continue
Crude Oil is expected to rally after it achieved a bullish breakout of its triangle formation yesterday. You can see from Chart 1 that WTIC has broken to the upside of the triangle at USD75.
Chart 1: WTIC's daily chart as at Oct 15, 2009 (Source: Stockcharts.com)
To gain direct exposure to the Crude Oil price rally, one may consider buy into an Oil funds or ETF, such as United States Oil Fund LP ETF (or USO).
Chart 2: USO's daily chart as at Oct 15, 2009 (Source: Stockcharts.com)
We have a CW for USO listed on Bursa, called USO-C1. The main terms are:
Expiry Date: April 7, 2010
Exercise Price: USD36.70
Exercise Ratio: 200:1
Based on yesterday's closing price for USO-C1 at RM0.125 & USO at USD39.91 and an exchange rate of USD1=RM3.40, USO-C1 is now trading a reasonable premium of 10%.
Chart 3: USO-C1's daily chart as at Oct 15, 2009 (Source: Quickcharts)
If you do not fancy buying into a thinly traded security such as USO-C1, you can look at the oil services stocks listed on our exchange. My preference is for Dialog (go here). I am sure more stocks in this sphere will join in the rally soon. Good luck
Chart 1: WTIC's daily chart as at Oct 15, 2009 (Source: Stockcharts.com)
To gain direct exposure to the Crude Oil price rally, one may consider buy into an Oil funds or ETF, such as United States Oil Fund LP ETF (or USO).
Chart 2: USO's daily chart as at Oct 15, 2009 (Source: Stockcharts.com)
We have a CW for USO listed on Bursa, called USO-C1. The main terms are:
Expiry Date: April 7, 2010
Exercise Price: USD36.70
Exercise Ratio: 200:1
Based on yesterday's closing price for USO-C1 at RM0.125 & USO at USD39.91 and an exchange rate of USD1=RM3.40, USO-C1 is now trading a reasonable premium of 10%.
Chart 3: USO-C1's daily chart as at Oct 15, 2009 (Source: Quickcharts)
If you do not fancy buying into a thinly traded security such as USO-C1, you can look at the oil services stocks listed on our exchange. My preference is for Dialog (go here). I am sure more stocks in this sphere will join in the rally soon. Good luck
Wednesday, October 14, 2009
CPO broke above its medium-term downtrend line
CPO has broken above its downtrend line at RM2150 on Oct 12. The MACD indicator has also put in a positive crossover. With these 2 signals or readings, the recovery in CPO prices should be more assured in the weeks ahead.
Chart: CPO's daily chart as at Oct 14, 2009 (Source: ifs.marketcenter.com)
Based on this, you can expect plantation stocks to rise in the weeks ahead.
Chart: CPO's daily chart as at Oct 14, 2009 (Source: ifs.marketcenter.com)
Based on this, you can expect plantation stocks to rise in the weeks ahead.
Second & third-liners poised to rally?
FBM-KLCI is back above its uptrend line again. There is very little that I can add to what you can see from Chart 1 below.
Chart 1: FBM-KLCI's daily chart as at Oct 14, 2009 (Source: Quickcharts)
What's interesting is the movement in the following indices- FBM-SCAP, FBM-ACE & FBM-FLG. Before going into my observation, let's see what are these indices?
1. FBM-SCAP- comprises all small cap stocks on the Main Board which are not constituents of FBM-Emas
2. FBM-ACE- comprises all stocks on the ACE Board (formerly, the MESDAQ Board)
3. FBM-FLG- comprises all stocks on the Main Board which are not constituents of FBM-Emas nor FBM-SCAP
So, all the stocks in the above indices are the smaller and usually weaker companies listed on the exchange. Over the past few days, many stocks that fall into this category are starting to inch up. As a result, FBM-FLG has now broken to the upside of its ascending triangle while FBM-ACE may soon follow. FBM-SCAP is slowly catching up.
The last time we saw a strong play in this category of stocks was in early 2007 when the volume traded in the market hit high of 3-4 billion a day. Are we heading there soon? Are the retailers punting in the market again? I think so.
Chart 2: FBM-SCAP's weekly chart as at Oct 14, 2009 (Source: Quickcharts)
Chart 3: FBM-ACE's weekly chart as at Oct 14, 2009 (Source: Quickcharts)
Chart 4: FBM-FLG's weekly chart as at Oct 14, 2009 (Source: Quickcharts)
Chart 1: FBM-KLCI's daily chart as at Oct 14, 2009 (Source: Quickcharts)
What's interesting is the movement in the following indices- FBM-SCAP, FBM-ACE & FBM-FLG. Before going into my observation, let's see what are these indices?
1. FBM-SCAP- comprises all small cap stocks on the Main Board which are not constituents of FBM-Emas
2. FBM-ACE- comprises all stocks on the ACE Board (formerly, the MESDAQ Board)
3. FBM-FLG- comprises all stocks on the Main Board which are not constituents of FBM-Emas nor FBM-SCAP
So, all the stocks in the above indices are the smaller and usually weaker companies listed on the exchange. Over the past few days, many stocks that fall into this category are starting to inch up. As a result, FBM-FLG has now broken to the upside of its ascending triangle while FBM-ACE may soon follow. FBM-SCAP is slowly catching up.
The last time we saw a strong play in this category of stocks was in early 2007 when the volume traded in the market hit high of 3-4 billion a day. Are we heading there soon? Are the retailers punting in the market again? I think so.
Chart 2: FBM-SCAP's weekly chart as at Oct 14, 2009 (Source: Quickcharts)
Chart 3: FBM-ACE's weekly chart as at Oct 14, 2009 (Source: Quickcharts)
Chart 4: FBM-FLG's weekly chart as at Oct 14, 2009 (Source: Quickcharts)
Media to cut loss on its Philippines TV operations
Media Prima Bhd has announced that it is currently in talks to divest its loss-making TV operations in the Philippines, Primedia to the Philippine Long Distance Telephone Co (PLDT). This was reported in the Star newspaper today (go here).
This news has triggered a strong rally in Media today. The other possible reason for the rally is its expected takeover of NSTP, which also rallied strongly today. From the technical perspective, Media appears to have broken above its downtrend line at RM1.60 level. Media (closing at RM1.77 today) has also surpassed its horizontal resistance at RM1.75. Its next resistance is at RM2.00.
Chart: Media's weekly chart as at Oct 14, 2009_4.35pm (Source: Quickcharts)
Based on the bullish breakout, Media is a trading BUY.
“The company is in the final stage of the disposal. It will happen very soon,” a source said. “Media Prima will recover its investment. No more exposure. No more losses. Clean cut.”
The bleeding Philippine operations, referred to by some as Media Prima’s “Achilles’ heel”, has been a major drag on the group’s bottom line.
Thus far, Media Prima has recognised accumulated losses of RM68.1mil – RM45.3mil in financial year 2008 and RM22.8mil in the first half ended June 2009.
This news has triggered a strong rally in Media today. The other possible reason for the rally is its expected takeover of NSTP, which also rallied strongly today. From the technical perspective, Media appears to have broken above its downtrend line at RM1.60 level. Media (closing at RM1.77 today) has also surpassed its horizontal resistance at RM1.75. Its next resistance is at RM2.00.
Chart: Media's weekly chart as at Oct 14, 2009_4.35pm (Source: Quickcharts)
Based on the bullish breakout, Media is a trading BUY.
Maybank's uptrend continued
Maybank has just broken above its symmetrical triangle at RM6.80. It has also surpassed its August 5 high of RM6.86. As at 11.45 am this morning, it was trading at RM6.94. This is the third bullish breakout of a continuation pattern since the stock recovery begun in March this year. I have denoted this pattern as "C" and the earlier patterns as "A" and "B".
Chart: Maybank's daily chart as at Oct 13, 2009 (Source: Tradesignum)
Besides buying into Maybank, you can also consider the CWs. From the table below, you can choose from 4 CWs. My preference is for Maybank-CJ and Maybank-CK.
Table: Maybank's CWs terms & valuation
Chart: Maybank's daily chart as at Oct 13, 2009 (Source: Tradesignum)
Besides buying into Maybank, you can also consider the CWs. From the table below, you can choose from 4 CWs. My preference is for Maybank-CJ and Maybank-CK.
Table: Maybank's CWs terms & valuation
Friday, October 09, 2009
Topglove's results justified its high share price
Results Update
Topglove has just announced its results for 3Q2009 ended 31/8/2009. Its net profit increased by 35% q-o-q or 126% y-o-y to RM56.8 million while turnover increased by 15% q-o-q or 17% y-o-y to RM427 million.
Table 1: Topglove's 8 quarterly results
The improved bottom-line is attributable to higher sales and higher pre-tax profit margin, which increased to 18.5% in 3Q2009 from 14.6% in 2Q2009 or 10.4% in 3Q2008. For a good idea of Topglove's past 9 years' performance, see Table 2 below. I have also appended a chart showing Topglove's last 13 quarters' track record which shows the growth rate of its top-line & bottom-line are accelerating.
Table 2: Topglove's 9 yearly results
Chart 1: Topglove's 13 quarterly results
Valuation
Topglove (closed at RM8.23 today) is now trading at a trailing PE of 14.4 times (based on last 4 quarters' EPS of 57 sen). We can also compute its Price/Earnings To Growth ('PEG') ratio using the top-line growth rate of about 12% over the past 3 years (instead of bottom-line growth rate) and a dividend yield of 1.9% today [based on total dividend of 16 sen (excluding special dividend of 6 sen) for FY2009]. Topglove's PEG ratio is about 1.04 times. While a PEG ratio of less than 1 means that the stock is attractive, Topglove's present PEG ratio is not excessive despite its recent strong run-up.
The computation of PEG ratio is carried out as follows:
PEG ratio = PE / (Growth Estimate + Dividend Yield)
= 14.4 / (12 + 1.9)
= 1.04 times
Technical Outlook
From the chart below, we can see that Topglove's next resistance is at the horizontal line of RM8.50. It is possible that Topglove may re-test its all-time high at RM10.00 recorded in Dec 2006.
Chart 2: Topglove's weekly chart as at Oct 9, 2009 (Source: Quickcharts)
Conclusion
Based on good results and bullish technical outlook, I believe Topglove's present rally may still continue.
Topglove has just announced its results for 3Q2009 ended 31/8/2009. Its net profit increased by 35% q-o-q or 126% y-o-y to RM56.8 million while turnover increased by 15% q-o-q or 17% y-o-y to RM427 million.
Table 1: Topglove's 8 quarterly results
The improved bottom-line is attributable to higher sales and higher pre-tax profit margin, which increased to 18.5% in 3Q2009 from 14.6% in 2Q2009 or 10.4% in 3Q2008. For a good idea of Topglove's past 9 years' performance, see Table 2 below. I have also appended a chart showing Topglove's last 13 quarters' track record which shows the growth rate of its top-line & bottom-line are accelerating.
Table 2: Topglove's 9 yearly results
Chart 1: Topglove's 13 quarterly results
Valuation
Topglove (closed at RM8.23 today) is now trading at a trailing PE of 14.4 times (based on last 4 quarters' EPS of 57 sen). We can also compute its Price/Earnings To Growth ('PEG') ratio using the top-line growth rate of about 12% over the past 3 years (instead of bottom-line growth rate) and a dividend yield of 1.9% today [based on total dividend of 16 sen (excluding special dividend of 6 sen) for FY2009]. Topglove's PEG ratio is about 1.04 times. While a PEG ratio of less than 1 means that the stock is attractive, Topglove's present PEG ratio is not excessive despite its recent strong run-up.
The computation of PEG ratio is carried out as follows:
PEG ratio = PE / (Growth Estimate + Dividend Yield)
= 14.4 / (12 + 1.9)
= 1.04 times
Technical Outlook
From the chart below, we can see that Topglove's next resistance is at the horizontal line of RM8.50. It is possible that Topglove may re-test its all-time high at RM10.00 recorded in Dec 2006.
Chart 2: Topglove's weekly chart as at Oct 9, 2009 (Source: Quickcharts)
Conclusion
Based on good results and bullish technical outlook, I believe Topglove's present rally may still continue.