Wednesday, April 07, 2010

Yongnam (Y02) could be a trading BUY

Background

Yongnam Holdings Limited is a leading Singapore based multi-discipline engineering and construction services provider with more than 30 years experience. Its Key business areas are: structural steelworks (engineering coordination, detailing, full service fabrication and erection of steel structures), specialist civil engineering and mechanical engineering. Yongnam currently operates in Singapore, Malaysia, Thailand and Hong Kong.

Yongnam (Y02) is listed on the Singapore Stock Exchange.

Recent Financial results

For FYE31/12/2009, Yongnam's net profit increased by 18.1% to S$40.1 million from S$33.9 million, while turnover inched up to S$347 million from S$338 million. See the Table below.


Table: Yongnam's results for FY2009 & FY2008 (Source: Company's website)

Financial Position

Yongnam's financial position is mixed, with adequate liquidity as reflected by current ratio of 1.3 times but relatively high leverage as reflected by total borrowings to shareholders' funds of 0.8 times.

Valuation

Based on its closing price of S$0.285 & FY2009 EPS of 3.24 cent, Yongnam's PER is about 9.3 times.

Technical Outlook

What drew my attention to this stock is its bullish technical breakout yesterday. Yongnam broke above its flag formation (or, medium-term downtrend) yesterday at S$0.285. This formation has been in place after Yongnam made a high of S$0.325 in August last year.


Chart: Yongnam's daily chart as at Apr 6, 2010(Source: SGX)

Conclusion

Based on reason valuation, improving financial performance & bullish technical outlook, Yongnam (Y02) could be a good stock for short-term investment or trading BUY.
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7 comments:

  1. solomonWednesday, April 07, 2010 12:04:00 PM

    Good day Alex,

    Do u see any upside for AFFIN?

    ReplyDelete
  2. tanWednesday, April 07, 2010 12:17:00 PM

    hi alex,

    what is your opinion on mphb?, will it inching up to 2.70 to 2.80 level before moving sideway in short term or it will be at current 2.35 to 2.45 level . technically the MA is quite strong but vol is decreasing

    ReplyDelete
  3. BappyWednesday, April 07, 2010 1:54:00 PM

    hi Alex,

    may i know what tool you use to plot the chart of this counter? thanks


    regards

    ReplyDelete
  4. Alex LuWednesday, April 07, 2010 4:04:00 PM

    Hi solomon,

    Affin has surpassed its 2007 high of RM3.08. Its next resistance is RM3.30-50 and then RM4.00. Based on technical analysis, Affin's uptrend is likely to continue.

    ReplyDelete
  5. Alex LuWednesday, April 07, 2010 4:10:00 PM

    Hi ks,

    MPHB's immediate resistance is at RM2.50 and then RM2.60 & RM2.70. This stock may go even higher than this in the long term. If you wish to take a bit of profit (or, do a trading SELL), the good level to do is RM2.60-70.

    ReplyDelete
  6. tanWednesday, April 07, 2010 4:35:00 PM

    thanks on your opinions, i hv the thinking of profit taking at 2.70 level also, & buy back on dip

    ReplyDelete
  7. Alex LuWednesday, April 07, 2010 4:36:00 PM

    Hi Bappy,

    To get the chart of SGX stocks,do the following:
    1) go to SGX website
    2) select the counter
    3) click on the stock code ('CDE')
    You will go to the page for that particular counter, with the chart of the stock displayed thereon. You can save the chart using Microsoft Office Document Image Writer.

    ReplyDelete