Fajar- hit by a double whammy!

Fajar- a company with an annual revenue of RM181 million for FYE30/6/2011- reported a revenue for QE30/6/2012 of only RM8 million!! The company explained that the sharp drop in turnover was due to delay in hangover of full work areas for 4 awarded project & slower progress at site for construction contracts undertaken by the Group. On top of that, it booked in the cost of some variation orders of which recovery are pending the approval of the clients (meaning the revenue wasn't booked in but the cost has been taken into the books). [Note: This unbalanced treatment is a sign that the probability of the revenue being booked in later is not very high.] The net results of this double whammy is a pre-tax loss of RM27 million & a net loss after tax of RM20 million.

Fajar is a stock that is well-covered by many research houses. I have only one post on this stock, where I noted the 'strange' discount in its warrant vis-a-vis the share price in June this year. To me, a discount of this nature is always a red flag. We can see from teh weekly chart below that the stock has since dropped back & has now broken below the strong horizontal line at RM0.80.

 
 Chart: Fajar's weekly chart as at Aug 30, 2012_3.00pm (Source: Quickcharts)

Incidentally, there is another stock - with a related warrant- that is currently exhibiting a similar inconsistent pricing. That stock is Ingens (closed at RM0.395 yesterday) & its warrant is Ingens-WA (closed at RM0.12). As the exercise price of the warrant is RM0.10, it is now trading at a discount of RM0.175 or 45%. A discount of this magnitude is unthinkable and one question that begs an answer is simply this: Why aren't the insiders buying more of the warrants? Arbitraging- the selling of the shares & buying of the warrants- should take place  and the price would then converge. Since this isn't happening, we must be very careful with this stock & the warrant.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Fajar & Ingens.

GENM- bottom-line jumped

Results Update

For QE30/6/2012, GenM's net profit increased by 83% q-o-q or 58% y-o-y to RM496 million while its revenue increased by 11% q-o-q or 12% y-o-y to RM2.12 billion. The improvement was attributed to increased earning from its Malaysian, UK & US operations.


Table 1: GenM's last 8 quarterly results


Chart 1: GenM's last 25 quarterly results

Valuation

GenM (closed at RM3.30 yesterday) is now trading at a PE of 13 times (based on last 4 quarters' EPS of 25.8 sen). If GenM can maintain the same level of earning as the quarter under review for the next 4 quarters, its forward EPS would be 35 sen. This would give a forward PE of 9 times. I believe the PE of this stock lies in between 9 & 13 times, which is quite attractive.

The negative for this stock is its stingy dividend payout policy & the setback in obtaining casino licenses in New York & Florida. If there is a change in any of these negative factors, the share price could rally higher. One positive spot that has yet to be fully factored into the share price is the return of Singaporeans to Resort World in Genting Highland. Due to the stiff fee of S$100 levied on any Singaporean visiting the Singapore casinos, some of these players have returned to the Malaysian casino where S$100 could be used as capital for their next roll of the dice rather than for paying the door fee!!

Technical Outlook

GenM is now resting on its intemediate uptrend line support at RM3.30. This is also the strong horizontal support for the stock.


Chart 2: GenM's weekly chart as at Aug 29, 2012 (Source: Quickcharts)

Conclusion

Based on good financial performance, attractive valuation & positive technical outlook, GenM is definitely a good stock to consider for long-term investment.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, GenM.

Dividend- Should we pay for it?

I have posted this ridiculous question because I saw a fair bit of illogical behaviors in this strange market. For example, when NCB announced in April 26 that it proposed a dividend of 56 sen, the share price rose nearly RM1.00. After the payout, the share price dropped back to where it was before the dividend announcement. See the chart below.

I always tell my client not to chase after a stock for dividend. It is not that I do not believe in buying good dividend stocks, but one should not get into a stock which had risen substantially just to get its dividend. Those who bought into NCB at RM4.60 to get the dividend of 56 sen, would find it very painful to see the stick dropped back to RM3.90- a drop of 70 sen. Paying 70 sen upfront for a dividend of 56 sen sounds like a bad trade to me!


Chart: NCB's daily chart as at Aug 28, 2012 (Source: Tradesignum)

The better approach is to identify the high dividend paying stocks and go to the Bursa website to identify when the stock's next dividend payout will be. For example, you can identify the dividend payout date for NCB by going to this web page (here). Once you have identified the approximate announcement date (normally, coinciding with the announcement of quarterly results), then you can track this stock & buy it during correction or on weakness as the relevant date approaches.

NCB- a attractive utility stock

Background

NCB  Holdings Bhd ('NCB') is involved in port operations, management of a distribution centre, warehousing and freight forwarding services. These activities are carried out by 2 subsidiaries, Northport (Malaysia) Bhd and Kontena Nasional Berhad.

Recent Financial results

For QE30/6/2012, NCB's pre-tax profit increased by 7% q-o-q or 36% y-o-y to RM63 million while revenue increased by 8% q-o-q or 10% y-o-y to RM261 million. Its net profit is mixed- declined by 10% q-o-q but rose by 55% y-o-y to RM45 million. The drop in net profit was due to higher effective tax rate as certain expense items were not tax deductible.

The improved financial performance was due to higher revenue generated by the logistics operation while the port operation remained relatively unchanged. 

Table 1: NCB's last 8 quarterly results


Chart 1: NCB's last 17 quarterly results

Financial Position

As at 30/6/2012, NCB's financial position is deemed very healthy. Its current ratio was at 2.3 times while gearing ratio was only 0.01 time. In fact, the borrowings totaled RM19 million pared in comparison to cash reserves of RM345 million or shareholders' Funds of RM1.409 billion.

NCB paid out a huge special dividend of 56 sen in May this year. With annual operating cash flow of more than RM200 million, NCB could maintain its high dividend payout which has been rising steadily over the past4 years. However, I do not think that a special dividend of 56 sen can be maintained for long unless the company undertakes borrowings to pay out its dividend- something which I do not think is likely for this conservative company.


Chart 2: NCB's dividend payout for last 17 quarterly

Valuation

NCB (clsoed at RM4.27 yesterday) is now trading at a PE of 11 times (based on last 4 quarters' EPS pf 38.2 sen). Assuming a dividend payout of 37 sen (as per FY2010 instead of 73 sen as per FY2011), NCB's dividend yield is 8.7%.  For a utility company, I expect this dividend payout to sustain. As such, investors who are looking for income & a bit of growth should seriously look at NCB.

Technical Outlook

NCB broke above its long-term downtrend line in 2009. Its current uptrend dates back to 2003. Its immediate resistance is at RM4.60 and then at RM5.80.


Chart 3: NCB's monthly chart as at Aug 28, 2012 (Source: Tradesignum)

Conclusion

Based on good financial performance, healthy financial position, attractive valuation & positive technical outlook, NCB is a good stock for long-term investment.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, NCB.

SMRTech- the bottom-line sored

Results Update

For QE30/6/2012, SMRTech's net profit increased by 186% q-o-q or 103% y-o-y to RM4.2 million while revenue increased by 70% q-o-q or 95% y-o-y to RM20.3 million. The improved performance was due to special projects with Pembangunan Sumber Manusia Bhd, Ministry of Human Resources of Malaysia and Petro Rabigh of Saudi Arabis.


Table 1: SMRTech's last 8 quarterly results


Chart 1: SMRTech's last 17 quarterly results

Valuation

SMRTech (closed at RM0.26 today) is trading at a gross PE of 3.8 times (based on last 4 quarters' gross EPS of 6.83 sen). At this PE multiple, SMRTech is deemed attractive.

Technical Outlook

SMRTech is still in an uptrend. The uptrend support could be the 40-week SMA line at RM0.21 or the uptrend line (SS) at RM0.17. I believe the psychological & horizontal support at RM0.20 will be a very support for this stock.


Chart 2: SMRTech's weekly chart as at Aug 27, 2012 (Source: Tradesignum)

Conclusion

Based on good financial performance, attractive valuation & positive technical outlook, SMRtech remained a good stock for long-term investment.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, SMRTech.

Mudajya- profit margin continued to slide

Results Update

For QE30/6/2012, Mudajya's net profit declined 19% q-o-q but remained unchanged y-o-y at RM60 million while revenue increased 27% q-o-q or 57% y-o-y to RM559 million. The drop in the bottom-line on the back of higher revenue was due to more local jobs secured which are generally of lower profit margin.


Table 1: Mudajya's last 8 quarterly results


Chart 1: Mudajya's last 15 quarterly results

Valuation

Mudajya (closed at RM2.73 yesterday) is now trading at a PE of 5.3 times (based on last 4 quarters' EPS of 52.48 sen). While this PE multiple is undemanding, the continued slide in profit margin is a concern.

The catalyst for re-rating of this stock could be the finalization of the coal supply agreement between Coal India Ltd to the 26%-owned associate, RKM Pwergen- an IPP with four 360-MW coal-fired plants in Raigarh, Chhattisgarh, India. Some research houses viewed the recent poer blackout in India as the spark which could see an early conclusion of the negotiation on coal supply.

Technical Outlook

Mudajya is stuck in between its long-term downtrend line (with resistance at RM2.850 and its intermediate uptrend line (with support at RM2.60). Mudajya should hold above the strong horizontal support at RM2.65 for the near term.


Chart 2: Mudajya's weekly chart as at Aug 27, 2012 (Source: Quickcharts)

Conclusion

Based on reasonably good financial performance & valuation, Mudajya remained a good stock for medium-term investment. If it can break above the long-term downtrend line at RM2.85, we may see a more exciting time for this stock.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Mudajya.

TSH- bottom-line keeps sliding

Results Update

For QE30/6/2012, TSH's net profit dropped by 3% q-o-q or 59% y-o-y to RM14.6 million while revenue was mixed- rose 23% q-o-q but declined 15% y-o-y to RM279 million.


Table 1: TSH's last 8 quarterly results


Chart 1: TSH's last 17 quarterly results

A look at Chart 1 above shows that the company has been experiencing declining bottom-line for the past 4 quarters. If you compared the segmental results for 1H2012 & 1H2011 (see Table 2 below), you would notice that all segments (especially the Palm & Bio-integration segment) have experienced decline in top-line & bottom-line. I post on this stock in 2006 and did not look at it for quite a while. All this time, I was having a generally positive impression of this stock from newspaper reports and the share price movement. The sliding financial performance made me change my mind about the stock.


Table 2: TSH's segmental results for 1H2012 & 1H2011

Valuation

TSH (closed at RM2.59 yesterday) is now trading at a PE of 23 times (based on last 4 quarters' EPS of 11.04 sen). At this multiple, TSH is overvalued.

Technical Outlook

The stock is still in an uptrend.


Chart 2: TSH's monthly chart as at Aug 22, 2012 (Source: Tradesignum)

Conclusion

Based on declining financial performance & expensive valuation, I feel that TSH should be rated REDUCE.

EForce- an attractive value stock

Results Update

For QE30/6/2012, EForce's net profit increased by 2% q-o-q or 36% y-o-y to RM2.1 million while revenue increased by 2% q-o-q or 20% y-o-y to RM5.0 million. The company's top-line and bottom-line jumped in that past 2 quarters as it secured more business from stockbrokers as a result of Bursa Malaysia's decision to discontinue its Broker Front End ('BFE') system.

Table: EForce's last 8 quarterly results


Chart 1: EForce's last 18 quarterly results

Financial position

As at 30/6/2012, EForce's financial position is deemed satisfactory. Its current ratio is at 9 times while gearing ratio is only 0.05 time. It has cash reserves of RM26.6 million or equivalent to 13 sen per share.

Valuation

EForce (closed at RM0.32 yesterday) is now trading at a PE of 9.4 times (based on last 4 quarters' EPS of 3.39 sen). If the cash backing per share of 13 sen is deducted from the share price, the PE is only 5.6 times.

Another Bonus Issue next year?

Since its listing at end 2004, EForce has issued 1-for-2 bonus issue twice- in August 2007 and October 2010. Will the company propose another bonus issue next year?

Technical Outlook

The stock has been hoovering around the RM0.30 level for the past 12 months. There is no sign of the next price direction.


Chart 2: EForce's monthly chart as at Aug 17, 2012 (Source: Tradesignum)

Conclusion

Based on good financial performance & position & attractive valuation, EForce is a good stock for long-term investment.

Notion- top-line & bottom-line inched up

Results Update

For QE30/6/2012, Notion's net profit increased by 28% q-o-q or 96% y-o-y to RM19.8 million while revenue increased by 13% q-o-q or 57% y-o-y to RM96 million. Revenue increased due to higher shipment of camera orders. In addition, there was a writeback of RM3.3 million of over-provision of losses in regards to the Thailand flood (actual loss was RM2.2 million compared to. RM5.5 million provided for in QE31/3/2012).


Table: Notion's last 8 quarterly results


Chart 1: Notion's last 23 quarterly results

Valuation

Notion (closed at RM1.21 last Friday) is now trading at a PE of 7.6 times (based on last 4 quarters' EPS of 15.93 sen). At this multiple, Notion is deemed reasonably priced.

Technical Outlook

Over the past 2 years, Notion seems to be trading in a range between RM0.80 & RM1.30. Until it breaks above the RM1.30 resistance, the stock's upside is deemed limited.


Chart 2: Notion's weekly chart as at Aug 17, 2012 (Source: Tradesignum)

Conclusion

Based on good financial performance & reasonable valuation, Notion is considered a good stock for medium-term investment. Its upside is however limited due to the strong resistance at RM1.30.

Boxpak- a proxy to the consumer theme play

 Background

Box-pak (Malaysia) Bhd ('Boxpak') is involved in the manufacturing and sales of quality Corrugated Carton Boxes, Die-cut Trays, Wraparound Cartons, Point of Purchase (POP), and Paper Palette for use in the packaging industry. Boxpak operates in Malaysia and Vietnam.

Recent Financial Results

Boxpak is a profitable company which enjoyed a steady top-line growth albeit flattish bottom-line. For QE30/6/2012, Boxpak;s net profit increased by 50% q-o-q or 37% y-o-y to RM5.3 million while revenue increased by 13% q-o-q or 10% y-o-y to RM67 million. The increased revenue on q-o-q basis was attributed to higher demand in foot wear, food & beverages (F&B) and also electronic sectors in Vietnam as well as strong demand from F&B sector in Malaysia. Boxpak will benefit from the strong consumer demand in the region &, as such, it is a good proxy to the the consumer theme play.


Table: Boxpak's last 8 quarterly results


Chart 1: Boxpak's last 19 quarterly results

Financial Position

As at 30/6/2012, Boxpak's financial position is deemed satisfactory with current ratio at 1.7 times and gearing ratio at only 0.2 time. Inventory turnover is healthy at 40 days while debtors' turnover is reasonable at 80 days.

Valuation

Boxpak (closed at RM2.08 on Friday) is now trading at a PE of 6.7 times (based on last 4 quarters' EPS of 30.68 sen). For a medium-size company, this PE is deemed fairly attractive, with room for expansion to 8-9 times.

Technical Outlook

Boxpak is in a gradual uptrend, rising from a low of RM0.50 to the present price over a period of 3 years. It is currently resting on the horizontal support of RM2.00. Its next resistance is the horizontal line at RM2.50.


Chart 2: Boxpak's weekly chart as at Aug 17, 2012 (Source: Tradesignum)

Conclusion

Based on good financial performance, reasonable valuation & positive technical outlook, Boxpak is a good stock for long-term investment.

Allianz- top-line & bottom-line continued to grow

Results update

For Qe30/6/2012, Allianz's net profit increased 8% q-o-q or 39% y-o-y to RM57.4 million while revenue increased by 4% q-o-q or 14% y-o-y to RM772 million. The improved bottom-line on q-o-q basis was due to higher surplus from life insurance operations, offset by lower profit before tax from the general insurance operations.


Table: Allianz's last 8 quarterly results


Chart 1: Allianz's last 26 quarterly results

Valuation

Allianz (closed at RM6.37 on Friday) is now trading at a PE of 11.5 times (based on last 4 quarters' diluted EPS of 55.5 sen#). Allianz is trading at the same PE multiple as Manulife (closed at RM3.18 on Friday and has an annualized EPS of 26.6 sen).

(#Note: The EPS stated in the above table is the gross EPS. Allianz has issued equal number of Allianz-PA (which stands for ICPS or Irredeemible Convertible Preference shares) and to arrive at the diluted EPS, you need to divide the stated EPS by 2.)

Technical Outlook

In one single swoop, Allianz rebounded from the strong horizontal support of RM4.50 & broke above the strong horizontal resistance at RM5.50 and then nearly reach the potential target of the current rally of RM6.50. All these happened in a matter of past 3 months.


Chart 2: Allianz's weekly chart as at Aug 17, 2012 (Source: Tradesignum)

Conclusion

Based on good financial performance & reasonable valuation, Allianz remained a good stock for long-term investment. However, after a strong rally over the past 3 months, the stock is likely to consolidate at the present level for a while. Rating is thus downgraded to HOLD.

Selamat Hari Raya

I like to wish all Muslim readers a Happy & Peaceful Hari Raya.


(Source: Mesraonline)

UMW- breaking above the RM10.00 psychological level

Results Update

For QE30/6/2012, UMW's net profit increased by 2% q-o-q or 70% y-o-y to RM224 million while revenue increased by 12% q-o-q or 31% y-o-y to RM4.14 billion. The improved bottom-line was attributed to higher profit contributions from UMW's automotive segment which recorded a profit of RM490 million as compared to RM371 million for QE31/3/2012. Profit contribution from equipment segment remained steady at RM57 million (an increase from RM54 million from QE31/3/2012) while profit contribution from oil & gas segment slipped from RM29 million to a mere RM2 million.


Table: UMW's last 8 quarterly results


Chart 1: UMW's last 21 quarterly results

Valuation

UMW (at RM10.04) is now trading at a PE of 17.6 times (based on last 4 quarters' EPS of 56.93 sen). However, if we calculate the annualized EPS using the results for the last 2 quarters, then UMW's EPS could be 76 sen. On this basis, its PE would be lowered to 13.2 times. This would suggest that UMW could have further upside if it can command a PE of 14-15 times.

Technical Outlook

UMW is in an uptrend. It has just broken above the psychological resistance at RM10.00. This means that UMW can continue with its uptrend.


Chart 2: UMW's daily chart as at Aug 17, 2012_3.30pm (Source: Quickcharts)

Conclusion

Based on good financial performance, UMW is rated a good stock for long-term investment. The upside breakout above the psychological resistance at RM10.00 would mean that UMW could continue with its prior uptrend.

MISC- the recovery shall begin

Results Update

MISC returned to profit in QE30/6/2012 when it recorded a net profit of RM381 million. Revenue was up 3.4% q-o-q but declined by 4.0% y-o-y to RM2.49 billion. The improved bottom-line was attributed to “ higher contributions from the offshore and tank terminal businesses. In addition, one-off settlement arising from early redelivery of vessels on time charter contracts has also reduced the losses in the petroleum business.” MISC's bottom-line has also benefited from lower losses incurred by the liner related business since it exited that business during QE30/6/2012.





Table: MISC's last 8 quarterly results


Chart 1: MISC's last 25 quarterly results

Valuation

MISC (at RM4.49) is now trading at a PE of 13 times (based on annualized EPS of 34 sen). At this PE multiple, MISC is deemed fully valued. However, without the drag from the liner related business, MISC's results may surprise on the upside.

Technical outlook

MISC is still in an intermediate downtrend line with resistance at RM4.60.


Chart 2: MISC's daily chart as at Aug 17, 2012_3.00pm (Source: Tradesignum)

Conclusion

Based on improving financial performance and the exit from the liner related business, MISC is rated a good stock for long-term investment. If MISC can break above the RM4.60, it can even be a trading BUY.

Maybank- broke above the RM9.00 ressitance

Results Update

For QE30/6/2012, Maybank's net profit increased by 7% q-o-q or 25% y-o-y to RM1.44 billion while its revenue increased by 3% q-o-q or 20% y-o-y to RM6.88 billion. From Chart 1, we can see the steady growth in its revenue & net profit.


Table: Maybank's last 8 quarterly results


Chart 1: Maybank's last 27 quarterly results

Valuation

Maybank (at RM9.02) is now trading at a PE of 12.7 times (based on last 4 quarters' EPS of 71 sen). I think Maybank can command a PE of 14-15 times.

Technical Outlook

Maybank is in an uptrend. Over the past 18 months, the share price has been capped by a line connecting its peak (acting like a horizontal resistance). Today, Maybank is breaking above that resistance at RM9.00. If this breakout can recruit more buying support, Maybank could test the psychological RM10.00 soon.


Chart 2: Maybank's weekly chart as at Aug 17, 2012_3.00pm (Source: Tradesignum)

Conclusion

Based on good financial performance, attractive valuation & possible bullish breakout, Maybank is a good banking stock to hold for long-term. The breakout above the RM9.00 could make it a good trading BUY. 

Penergy broke above its long-term downtrend line

Penergy has just broken above its long-term downtrend line at RM1.80. It even tested its horizontal resistance at RM1.95. The stock may consolidate its recent gain around RM1.80, before re-testing the RM1.95 horizontal resistance or even the psychological RM2.00 mark.

Based on bullish technical outlook, Penergy continued to be rated a trading BUY or a HOLD if you have bought earlier.


Chart: Penergy's weekly chart as at Aug 17, 2012_3.00pm (Source: Quickcharts)

JCY crossed the tipping point

Results Update

For QE30/6/2012, JCY's net profit dropped 35.5% q-o-q to RM105 million while revenue was unchanged at RM573 million. Profit margin eroded from about 28% in QE31/3/2012 to 18% in QE30/6/2012.


Table: JCY's last 8 quarterly results


Chart 1: JCY's last 15 quarterly results

Valuation

JCY (at RM1.47) is now trading at a PE of 6.6 times (based on the last 4 quarters' EPS of 22.35 sen). While the PE multiple is relatively low, the stock is a cyclical stock which has benefited from surging demand for HDD due to the supply disruption from the Thailand flood in late 2011. If the supply chain situation normalized (and there are signs of that now), then the super-normal profit will no longer be forthcoming. With that, JCY's earning and share price should drift down.

Technical outlook

JCY is consolidating after a sharp rally. The immediate support is at the 100-day SMA line at RM1.45.


Chart 2: JCY's daily chart as at Aug 16, 2012 (Source: Tradesignum)

Conclusion

Based on the above, I would rate JCY as a SELL INTO STRENGTH.

CBIP- another bumper dividend???

Results Update

For QE30/6/2012, CBIP's net profit soared 560% q-o-q or 580% y-o-y to RM163 million while revenue increased 34% q-o-q or 107% y-o-y to RM152 million. The sharp jump in net profit was attributable to the gain on disposal of investment in two subsidiaries, Sachiew & Empresa totaling RM139.6 million. These disposals were announced last year and they were completed only in the last quarter.

As a result of the disposal of these subsidiaries & other plantation assets, CBIP has adjusted its financial statements for QE30/6/2011 & QE31/3/2011 for comparison purpose. If you look at the table below, the revenue & profit numbers are not directly comparable as the numbers for QE31/12/2011, QE31/12/2010, QE30/9/2011 & QE30/9/2010 have not been adjusted.



Table: CBIP's last 8 quarterly results

Another Bumper Dividend?

The most important item to note in the account is the dividend of 30 sen. This is not a proposed dividend but the booking in a dividend that has actually been paid out in May [ex date: May 15. Payment Date: May 30]. For  more, go here.

Could this be the reason why the stock rallied 20 sen this morning?

Valuation

CBIP (at RM2.90) is trading at a PE of 9.4 times (based on estimated EPS of 31 sen). At this PE multiple, CBIP is not expensive. It could trade up to a multiple of 10-12 times.

Note: Estimated EPS of 31 sen is arrived at by dividing the estimated net profit of RM84 million by issued shares of 272 million. Estimated net profit of RM84 million is in turn arrived at by annualizing the combined net profit for QE30/6/2012 after deducting the extraordinary gain from disposal of Sachiew & Empressa was RM23 million and the net profit for QE31/3/2012 after deducting profit from discontinued operation would be RM19 million.

Technical Outlook

CBIP is in an uptrend line. It will encounter strong resistance from the horizontal resistance at RM2.90, which was the high recorded in 2007.


Chart: CBIP's monthly chart as at Aug 16, 2012 (Source: Tradesignum)

Conclusion

Based on good financial performance & still inexpensive valuation, CBIP is still a good stock for long-term investment. With the strong resistance at RM2.90, investors holding CBIP could do a trading SELL (i.e. sell now & buy back when the stock failed to surpass the RM2.90 level & drop back). Beware that the share price may have risen sharply today due to erroneous belief that the company is paying out 30-sen dividend (which has actually been paid out in May).

Panamy recovering from the stumble in QE31/3/2012

 Results Update

For QE30/6/2012, Panamy's net profit increased by 141% q-o-q but declined 4% y-o-y to RM18 million while revenue was up 33% q-o-q but declined by 5% y-o-y to RM210 million. The jump in the top-line & bottom-line on q-o-q basis was due to lower sales & profit in the preceding quarter as a result of fierce competition in the fan segment in the Middle East region which impact sales then. For QE30/6/2012, revenue rebounded due to higher domestic sales and this had resulted in higher profit. Bottom-line had also been boosted by increase in the share of profit from an associated company of RM4.6 million (compared to only RM400k in QE31/3/2012).


Table: Panamy's last 8 quarterly results


Chart 1: Panamy's last 22 quarterly results

Valuation

Panamy (at RM23.54 as at 12.15pm) is trading at a PE of 22 times (based on last 4 quarters' EPS of 108 sen). At this PE, Panamy is deemed fully value.

Please note that Panamy had subsequently announced its Special & Final Dividend for FY2011 totaling RM1.05. The slight decline in dividend may reflect the decline in earning for the period. Despite the lower dividend payout, Panamy's dividend yield is still attractive at 5.1%.


Chart 2: Panamy's dividend record for last 22 quarterly results

Technical Outlook

Panamy is well-supported by its 10 & 20-week SMA line at RM22.70 & RM23.20. Its strong resistance will be the recent high at RM25.00.

Chart 3: Panamy's weekly chart as at Aug 15, 2012 (Source: Tradesignum)

Conclusion

Based on valuation, I would maintain my earlier rating for this stock, which is to sell into strength (especially if it approached the recent high of RM25.00).