Thursday, December 16, 2010

Topglov's top-line dropped but bottom-line maintained

Results Update

Topglov has just announced its results for QE30/11/2010, where its net profit dropped 20% q-o-q or 45% y-o-y to RM36.0 million Its turnover declined 9% q-o-q but rose 4% y-o-y to RM492 million. Topglov attributed its poorer performance for the last 2 quarters to "higher latex prices & weaker US Dollar".


Table: Topglov's last 8 quarterly results



Chart 1: Topglov's last 18 quarterly results

Valuation

Topglov (closed at RM5.45 yesterday) is now trading at a trailing PE of 15.5 times (based last 4 quarters' EPS of 35.6 sen). At this PE multiple, Topglov is deemed fairly valued.

Technical Outlook

From the 2 charts below (plotted on log & linear scale), we can see that Topglov is now trading between the 10-month SMA line & the 20-month SMA line. The 10-month SMA line has flatted out & poised to curve downward. The likely outlook for Topglov is either a sideway trend or downtrend. The last time Topglov's 10-month SMA line curved downward as well as breaking below its 20-month SMA line was in August 2007. The stock then entered into a downtrend for the next 14 months. That downtrend was reversed in January 2009 when the stock once again broke above its 10-month SMA line & curve upward.


Chart 2: Topglov's weekly chart as at Dec 13, 2010 (Source: Tradesignum)

Conclusion

Based on poor financial results & technical outlook, I maintain the SELL call for Topglov.
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10 comments:

  1. Ethan LeeThursday, December 16, 2010 11:09:00 AM

    Dear Alex,

    Can you please give your comment for MHB?

    Thank you in advance.

    ReplyDelete
  2. YeeThursday, December 16, 2010 1:56:00 PM

    Hi Alex,

    Need your comment on MahSing (8583). Recently, Mahsing has acquisited alot of lands mainly in Klang Valley, Johor & Penang. Please advise what is the support price?

    Thank you.

    ReplyDelete
  3. Alex LuThursday, December 16, 2010 5:21:00 PM

    Hi Ethan Lee

    It is too short a time-frame to form a strong opinion about MHB. Based on limited data, one can only say that a short-term uptrend is in place. The horizontal support of RM5.10 may backstop a sharp slide in the share price. This however may not happen anytime soon due to fairly consistent buying. For now, the 20-period SMA line plotted on the 60-min intra-day chart points to support at RM5.29-5.30.

    ReplyDelete
  4. Alex LuThursday, December 16, 2010 5:28:00 PM

    Hi Yee

    I will give you the technical outlook for MahSing. If one can overlook the sharp selldown in late May 2010 (where MahSing plunged to RM1.41-1.42), then you may be able to plot a nice accelerated uptrend line for the stock, with support at RM1.70. The longer term uptrend line that stretches back to July 2008 will give a support at RM1.70.

    So, MahSing is in an uptrend line and if you wish to get into this stock, the RM1.70-1.80 level is a good entry level.

    ReplyDelete
  5. solomonThursday, December 16, 2010 8:22:00 PM

    Good evening Alex,

    Can u provide some guidance on Taliwork and Petra Energy?

    Traditionally, for the 10 year record, accumulation of rubber glove counter occur at pe 10-13. Well having said that, it might change becoz of the pandemic situation.

    ReplyDelete
  6. jimmyFriday, December 17, 2010 1:33:00 AM

    hi alex,

    Today F&B counter GUAN CHONG had start rally adi, its posible for OFI as it MACD had cross and its ADX also getting closer. please comment on OFI, its suitable for short trading. thanks!

    ReplyDelete
  7. leslieroycarterFriday, December 17, 2010 10:11:00 AM

    Hi Alex:
    I would like your comment on scientx on its fundamentals n TA. Is this stock good for long term investment looking at the prevailing returns? Looking forward for your comments . Thanks

    ReplyDelete
  8. Alex LuFriday, December 17, 2010 4:30:00 PM

    Hi solomon

    My take on Taliwork and Petra Energy:

    1) Taliwork has been in downtrend since 2008! During that period, it has 3 decent rallies- May 2008, December 2008 & April 2010. These rallies happened after the share price has surpassed the 20-week SMA line (now at RM1.30). It looks like Taliwork is at the cusp of another rally.

    2) Petra energy is still in a downtrend line that began in April 2009. The breakout level for this downtrend line is RM1.65-1.70.

    Like you, I have also heard many a comment about how rubber glove makers may benefit from a recurrent of the H1N1 flu. I doubt this scenario would increase demand sufficiently to offset the jump in supply.

    ReplyDelete
  9. Alex LuFriday, December 17, 2010 4:42:00 PM

    Hi jimmy

    OFI has been consolidating since its rally in June/July this year. It is now resting on its 200-day SMA line at RM1.60. There is no sign that it is about to move up. But, who knows. The rally may come sooner that you thought.

    ReplyDelete
  10. Alex LuFriday, December 17, 2010 5:09:00 PM

    Hi ayseng


    Scientex has reported a good set of results for QE31/10/2010. Its net profit increased by 34% y-o-y on the back of a 13%-increase in turnover. Compared to the immediate preceding quarter (QE31/7/2010), its net profit declined by 5% while its turnover was lower by 3%.

    Scientex's recent strong performance is due to the performance of its property division. For 9-month ended 31/10/2010, that division made an operating profit of RM13.5 mil on sales of RM48 mil. Last year, the same division made an operating profit of only RM6.2 mil on sales of RM29 mil. Its manufacturing division's operating profit was unchanged at RM7-8 mil while sales was at RM136-138 mil.

    Technically speaking, it broke above its recent high at RM1.96- a bullish sign. However, the traded volume has been sliding- a bearish divergence. If you want to trade this stock, you must watch out for a slide below the RM1.96 mark. If that happened, it is a very negative signal.

    Good luck.

    ReplyDelete