Tuesday, December 24, 2013
Merry Christmas & Happy New Year
I would like to wish all my readers a Merry Christmas and a Happy New Year!
AEONCr- running faster to stay in place
Result Update
For QE20/11/2013, AEONCR's net profit was unchanged q-o-q but rose 22% y-o-y to RM43 million while revenue increased by 95 q-o-q or 47% y-o-y to RM178 million.
Table: Aeoncr's last 8 quarterly results
We can see the dip in the profit margin is shown on Chart 1. If you look at Chart 2, we can see that the average quarterly change in top-line and bottom-line seems to diverge in the past 6-7 quarters, with top-line quarterly growth inching higher while bottom-line quarterly growth drifting lower.
Chart 1: Aeoncr's last 26 quarterly results
Chart 2: Aeoncr's average quarterly change in top-line & bottom-line for last 22 quarterly results
Valuation
AEONCR (closed at RM15.10 yesterday) is now trading at a PE of 13.0 times (based on last 4 quarters' EPS of 116 sen). With weaker consumer sentiment and possible increase in finance cost, the earning of AEONCr is likely to slide further. Thus the PE ratio is likely to increase in the next few quarters. At this moment, AEONCr is deemed fairly valued.
Technical Outlook
AEONCR is still in an uptrend but it is corrected back to its 50-week EMA line at RM14.93 (or RM15.00). If the stock can stay above this support, the uptrend will still be intact. A break below this support would bring forth further consolidation. The next support could be at RM14 & RM12.
Chart 3: Aeoncr's weekly chart as at Dec 23, 2013 (Source: Tradesignum)
Conclusion
Based on satisfactory financial performance, fair attractive valuation & still positive technical outlook, AEONCR is rated a HOLD. However, if the share price were to break below the RM15.00 mark or the net profit were to drop next quarter, the rating would be adjusted to REDUCE.
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, AEONCR.
Wednesday, December 18, 2013
CPO- resting at RM2500 support
CPO pulled back from the recent high of RM2700. It is now resting on the horizontal line RM2500. If it doesn't break below the RM2500 mark, the bullish stance for CPO and plantation stocks would remain. A break below the RM2500 mark would be negative for CPO and plantation stocks. Let's wait & see how CPO will fare over the next few days.
Chart: CPO's weekly chart as at Dec 17, 2013 (Source: ifs.marketcenter)
Chart: CPO's weekly chart as at Dec 17, 2013 (Source: ifs.marketcenter)
Hiaptek- bottom-line inched higher
Background
Hiap Teck Ventures Bhd ('Hiaptek') is involved in the manufacture, rental, and distribution of steel pipes, hollow sections, scaffolding equipment and accessories, and other steel products.It has a 55%-stake in a JV with China Shougang International Trade & Engineering Corporation of China to build an integrated steel mill in Kemaman, Terengganu. The JV vehicle is Eastern Steel Sdn Bhd. The mill will have a production capacity of 1.5 million tonnes of steel slabs and cost RM750 million. The mill is currently under construction and expected to be completed end of the year (here).
Source: Company's website
Result Update
For QE31/10/2013, Hiaptek's net profit increased by 14% q-o-q or 13-fold to RM14 million while revenue dropped marginally to RM270 million. The improved bottom-line was attributed to the share of profit from jointly controlled entity.
Table 1: Hiaptek's last 8 quarterly results
From the chart below, we can see that Hiaptek's profit margin is slowly recovering. This could be a sign that the company's profit could improve in the years ahead.
Chart 1: HiaptekScientx's last 31 quarterly results
Valuation
Hiaptek (closed at RM0.745 yesterday) is now trading at a current PE of 14.1 times (based on annualized EPS of 5.28 sen). At this price, it has a Price/Book Value of 0.6 time (based on NTA of RM1.30 p.s.) The elevated PE will contract once the earning expands. For now, the P/BV ratio will be a better guide of the stock's valuation and that multiple seems to suggest that the stock is reasonably valued.
Technical Outlook
Hiaptek has broken above its downtrend line in May. A short-term uptrend has begun but it is capped by the immediate resistance at RM0.75. If it can surpass this level, its next resistance is at RM0.90.
Chart 2: Hiaptek's weekly chart as at Dec 17, 2013 (Source: Tradesignum)
Conclusion
Based on improving financial performance and positive technical outlook, Hiaptek could be 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, Hiaptek.
Hiap Teck Ventures Bhd ('Hiaptek') is involved in the manufacture, rental, and distribution of steel pipes, hollow sections, scaffolding equipment and accessories, and other steel products.It has a 55%-stake in a JV with China Shougang International Trade & Engineering Corporation of China to build an integrated steel mill in Kemaman, Terengganu. The JV vehicle is Eastern Steel Sdn Bhd. The mill will have a production capacity of 1.5 million tonnes of steel slabs and cost RM750 million. The mill is currently under construction and expected to be completed end of the year (here).
Source: Company's website
Result Update
For QE31/10/2013, Hiaptek's net profit increased by 14% q-o-q or 13-fold to RM14 million while revenue dropped marginally to RM270 million. The improved bottom-line was attributed to the share of profit from jointly controlled entity.
Table 1: Hiaptek's last 8 quarterly results
From the chart below, we can see that Hiaptek's profit margin is slowly recovering. This could be a sign that the company's profit could improve in the years ahead.
Chart 1: Hiapte
Valuation
Hiaptek (closed at RM0.745 yesterday) is now trading at a current PE of 14.1 times (based on annualized EPS of 5.28 sen). At this price, it has a Price/Book Value of 0.6 time (based on NTA of RM1.30 p.s.) The elevated PE will contract once the earning expands. For now, the P/BV ratio will be a better guide of the stock's valuation and that multiple seems to suggest that the stock is reasonably valued.
Technical Outlook
Hiaptek has broken above its downtrend line in May. A short-term uptrend has begun but it is capped by the immediate resistance at RM0.75. If it can surpass this level, its next resistance is at RM0.90.
Chart 2: Hiaptek's weekly chart as at Dec 17, 2013 (Source: Tradesignum)
Conclusion
Based on improving financial performance and positive technical outlook, Hiaptek could be 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, Hiaptek.
Scientx- weaker outlook for next few months
Result Update
For QE31/10/2013, Scientx's net profit dropped 4% q-o-q but rose 15% y-o-y to RM29.3 million while revenue also dropped 2% q-o-q but rose 51% y-o-y to RM365 million. The y-o-y increase in top-line & bottom-line is attributable to the acquisition of GW Plastic which was completed in January 2013. The q-o-q decline in top-line & bottom-line is attributable to thefollowing:
Table 1: Scientx's last 8 quarterly results
Chart 1: Scientx's last 33 quarterly results
Prospects Ahead
Scientx's Manufacturing Division may see another wave of growth after it has completed its acquisition of SEACERA Polyfilms SB, a company involved in the production of biaxially oriented polypropylene films. The cost of acquisition is RM40 million and the expected completion will be in November 2014.
In addition, Scientx's Property development Division will launch another 7 property development projects. This will bring its total projects to 14. The total GDV of these 14 projects is RM7 billion and they will last for 10 years. However, property development is currently weak after the Government's fiscal measures to curb speculation. Recovery is only expected in the middle of 2014.
Valuation
Scientx (closed at RM5.61 yesterday) is now trading at a current PE of 10.6 times (based on annualized EPS of 52.7 sen). At this PE, Scientx is deemed fairly valued.
Technical Outlook
Scientx is in an uptrend since 2009. Currently, the stock is trading sideways with resistance at RM5.60-5.70. The breakout above this resistance may only come once the property sector shows recovery and Scientx has completed its acquisition of SEACERA.
Chart 2: Scientx's weekly chart as at Dec 17, 2013 (Source: Tradesignum)
Conclusion
Based on satisfactory financial performance and reasonable valuation, Scientx remains a good stock for long-term investment. However, its neutral technical outlook reflects its weaker near-term prospect as one of its 2 business segments would be weaker for the next 2-3 quarters. I would rate Scientx a HOLD.
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, Scientx.
For QE31/10/2013, Scientx's net profit dropped 4% q-o-q but rose 15% y-o-y to RM29.3 million while revenue also dropped 2% q-o-q but rose 51% y-o-y to RM365 million. The y-o-y increase in top-line & bottom-line is attributable to the acquisition of GW Plastic which was completed in January 2013. The q-o-q decline in top-line & bottom-line is attributable to thefollowing:
- Manufacturing Division's revenue increased from RM277 million to RM289 million while operating profit dropped from RM21 million to RM17 million; and
- Property Development Division's revenue dropped from RM94 million to RM75 million and operating profit also similarly dropped from RM31 million to RM22 million
Table 1: Scientx's last 8 quarterly results
Chart 1: Scientx's last 33 quarterly results
Prospects Ahead
Scientx's Manufacturing Division may see another wave of growth after it has completed its acquisition of SEACERA Polyfilms SB, a company involved in the production of biaxially oriented polypropylene films. The cost of acquisition is RM40 million and the expected completion will be in November 2014.
In addition, Scientx's Property development Division will launch another 7 property development projects. This will bring its total projects to 14. The total GDV of these 14 projects is RM7 billion and they will last for 10 years. However, property development is currently weak after the Government's fiscal measures to curb speculation. Recovery is only expected in the middle of 2014.
Valuation
Scientx (closed at RM5.61 yesterday) is now trading at a current PE of 10.6 times (based on annualized EPS of 52.7 sen). At this PE, Scientx is deemed fairly valued.
Technical Outlook
Scientx is in an uptrend since 2009. Currently, the stock is trading sideways with resistance at RM5.60-5.70. The breakout above this resistance may only come once the property sector shows recovery and Scientx has completed its acquisition of SEACERA.
Chart 2: Scientx's weekly chart as at Dec 17, 2013 (Source: Tradesignum)
Conclusion
Based on satisfactory financial performance and reasonable valuation, Scientx remains a good stock for long-term investment. However, its neutral technical outlook reflects its weaker near-term prospect as one of its 2 business segments would be weaker for the next 2-3 quarters. I would rate Scientx a HOLD.
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, Scientx.
REIT- sufficiently attractive for consideration
Over the past few months, high-yield assets were sold off as interest rate regime began to show signs of reversing after a long decline (see Chart 1 below). Among the high-yield assets, REITs have corrected significantly over the past few months. If you look at Chart 2, you will see that DJ Equity REIT has dropped below its 200-day SMA line. The index seems to have found support at around the 250-mark (with the reaction low converging at that level). The last time the index dropped below the 200-day SMA line was in late 2011. Back then, the reaction lows reflect an inverted head-and-shoulder pattern. Will the index recover from here? We will have to wait and see.
Chart 1: Treasury Yield 30 year's monthly chart as at Dec 13, 2013 (Source: Yahoo Finance)
Chart 2: DJ Equity REIT's weekly chart as at Dec 13, 2013 (Source: Yahoo Finance)
In our local bourse, we do not have an index for REITs. But we can see that the individual charts below, the drop in the prices of REITS had been horrific. Unlike the US markets, our REITs were hit by a double whammy - ongoing foreign find outflow and fear of interest rate hikes to come.
I will look at the top 3 REITs in term of market capitalization, excluding IGBREIT as it was listed only 1 year ago. All 3 have a P/BV of about 1.1 times. In term of yield, SUNREIT and CMMT have higher yield than PAVREIT. See the table below.
Table: Top 3 REITs on BURSA as at Dec 13, 2013
If you look at the charts below, you will see that all 3 REITs had dropped substantially. The retracement is about 56% for SUNREIT and 62-63% for PAVREIT and CMMT. All these REITs are now trading at or near their horizontal support.
Chart 3: CMMT's weekly chart as at Dec 16, 2013 (Source: Tradesignum)
Chart 4: PAVREIT's weekly chart as at Dec 16, 2013 (Source: Tradesignum)
Chart 5: SUNREIT's weekly chart as at Dec 16, 2013 (Source: Tradesignum)
Based on technical consideration, I believe that you can consider buying this asset for your portfolio. In addition, these REITs are approaching their book value soon. With yield better than 6%, these REITs could be attractive assets for income purpose. (Note: SUNREIT pays income 4 times a year.)
However, with interest rate hikes a distinct possibility and the outflow of foreign fund a continuing drag, I do not believe we will see a strong recovery any time soon. We can only hope for a bottom and then a slow climb-up many months down the road. Thus, any buying should be carried out very slow.
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, CMMT, PAVREIT & SUNREIT.
Chart 1: Treasury Yield 30 year's monthly chart as at Dec 13, 2013 (Source: Yahoo Finance)
Chart 2: DJ Equity REIT's weekly chart as at Dec 13, 2013 (Source: Yahoo Finance)
In our local bourse, we do not have an index for REITs. But we can see that the individual charts below, the drop in the prices of REITS had been horrific. Unlike the US markets, our REITs were hit by a double whammy - ongoing foreign find outflow and fear of interest rate hikes to come.
I will look at the top 3 REITs in term of market capitalization, excluding IGBREIT as it was listed only 1 year ago. All 3 have a P/BV of about 1.1 times. In term of yield, SUNREIT and CMMT have higher yield than PAVREIT. See the table below.
Table: Top 3 REITs on BURSA as at Dec 13, 2013
If you look at the charts below, you will see that all 3 REITs had dropped substantially. The retracement is about 56% for SUNREIT and 62-63% for PAVREIT and CMMT. All these REITs are now trading at or near their horizontal support.
Chart 3: CMMT's weekly chart as at Dec 16, 2013 (Source: Tradesignum)
Chart 4: PAVREIT's weekly chart as at Dec 16, 2013 (Source: Tradesignum)
Chart 5: SUNREIT's weekly chart as at Dec 16, 2013 (Source: Tradesignum)
Based on technical consideration, I believe that you can consider buying this asset for your portfolio. In addition, these REITs are approaching their book value soon. With yield better than 6%, these REITs could be attractive assets for income purpose. (Note: SUNREIT pays income 4 times a year.)
However, with interest rate hikes a distinct possibility and the outflow of foreign fund a continuing drag, I do not believe we will see a strong recovery any time soon. We can only hope for a bottom and then a slow climb-up many months down the road. Thus, any buying should be carried out very slow.
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, CMMT, PAVREIT & SUNREIT.
Tuesday, December 17, 2013
Apollo- top-line & bottom-line declined
Result Update
For QE31/10/2013, Apollo's net profit dropped 38% q-o-q or 14% y-o-y to RM6.6 million while revenue dropped 16% q-o-q or 8% y-o-y to RM48 million. The decline in revenue & profit was attributed to lower demand from both local & overseas markets.
Table 1: Apollo's last 8 quarterly results
Chart 2: Apollo's last 25 quarterly results
Valuation
Apollo (closed at RM4.98 yesterday) is now trading at a PE of 12 times (based on last 4 quarters' EPS of 42 sen). Apollo is deemed fairly valued.
Technical Outlook
After it broke above its horizontal resistance at RM3.50, Apollo went into a steady uptrend that sent it to a high of RM5.60-5.70. The strong uptrend may have ran its course and the stock is likely to consolidate for a while.
Chart 2: Apollo's monthly chart as at Dec 16, 2013 (Source: Tradesignum)
Conclusion
Despite the poorer financial performance, Apollo remained a good stock for a long-term investment based on reasonable valuation. For that, the stock is rated a HOLD.
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, Apollo.
Monday, December 16, 2013
NTPM- profit margin starting to expand
Result Update
For QE31/10/2013, NTPM's net profit increased by 34% q-o-q or 31% y-o-y to RM16.0 million while revenue inched up 2% q-o-q or 7% y-o-y to RM127 million. The improvement in top-line & bottom-line came from both the paper products & personal care products divisions.
Table: NTPM's last 8 quarterly results
NTPM's profit margin is beginning to improve and this could set the stage for an increase in its net profit. The last time this happened was in early 2008 which led to a rally in NTPM.
Chart 1: NTPM's last 33 quarterly results
Valuation
NTPM (closed at RM0.75 last Friday) is now trading at a PE of 15.3 times (based on last 4 quarters' EPS of 4.9 sen). At this PE multiple, NTPM is deemed fairly valued.
Technical Outlook
NTPM is in an uptrend after it broke above the horizontal line at RM0.62 in September.
Chart 2: NTPM's weekly chart as at Dec 13, 2013 (Source: Tradesignum)
Conclusion
Despite trading at its fair valuation, NTPM could continue its uptrend based on improving financial performance & still-positive technical outlook,
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, NTPM.
For QE31/10/2013, NTPM's net profit increased by 34% q-o-q or 31% y-o-y to RM16.0 million while revenue inched up 2% q-o-q or 7% y-o-y to RM127 million. The improvement in top-line & bottom-line came from both the paper products & personal care products divisions.
Table: NTPM's last 8 quarterly results
NTPM's profit margin is beginning to improve and this could set the stage for an increase in its net profit. The last time this happened was in early 2008 which led to a rally in NTPM.
Chart 1: NTPM's last 33 quarterly results
Valuation
NTPM (closed at RM0.75 last Friday) is now trading at a PE of 15.3 times (based on last 4 quarters' EPS of 4.9 sen). At this PE multiple, NTPM is deemed fairly valued.
Technical Outlook
NTPM is in an uptrend after it broke above the horizontal line at RM0.62 in September.
Chart 2: NTPM's weekly chart as at Dec 13, 2013 (Source: Tradesignum)
Conclusion
Despite trading at its fair valuation, NTPM could continue its uptrend based on improving financial performance & still-positive technical outlook,
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, NTPM.
Friday, December 13, 2013
SKPetro- just broke to a new high
SKPetro broke above its recent high of RM4.50 today. With this breakout, the stock may continue its uptrend. Previous breakout of the preceding high was in May and the stock rose from the breakout level of RM3.20 to RM4.50. Will the same happen again? We will wait & see.
Based on technical consideration, SKPetro could be a trading BUY.
Chart : SKPetro's weekly chart as at Dec 12, 2013 (Source: tradesignum)
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, SKPetro.
Based on technical consideration, SKPetro could be a trading BUY.
Chart : SKPetro's weekly chart as at Dec 12, 2013 (Source: tradesignum)
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, SKPetro.
Thursday, December 12, 2013
L&G- has a bullish breakout
Thanks to a very bullish report from Hwang DBS - an extract is published in the Edge - L&G managed to surge through its triangle formation yesterday. The gist of the report is:
Chart: L&G's daily chart as at Dec 11, 2013 (Source: Tradesignum)
Based on technical consideration & reasonable valuation, L&G could be a potentially trading BUY.
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, L&G.
1. L&G has RM800 million of unbilled sales from Elements@Ampang & Damansara Foresta Phase 1. These two developments will be completed in 2QCY2014 & 4QCY2015. Thus, L&G will book in profit of RM200 million over the next 3 years.In view of the above, Hwang DBS valued L&G at RM0.65.
2. L&G will be launching RM1.5 billion worth of projects in 2014- under Damansara Foresta Phase 2, Elements2@ Ampang & Seremban Phase 1.
3. L&G has cash in hand of RM250 million and likely to pay out dividend next year.
Chart: L&G's daily chart as at Dec 11, 2013 (Source: Tradesignum)
Based on technical consideration & reasonable valuation, L&G could be a potentially trading BUY.
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, L&G.
LBAlum- an attractive building material stock
Background
LB Aluminium Bhd ('LBAlum') is involved in the manufacturing, marketing & trading of aluminium products, such as aluminium extrusion, expanded mesh, sheets/coils, ceiling suspension system, fittings & accessories. Currently, its main market is Malaysia which accounts for 75% of its revenue while the remaining 25% are exported to Singapore and other neighboring countries.
Results Update
For QE31/10/2013, LBAlum's revenue has risen steadily over the past few quarters due to higher sales volume & higher average selling prices. Profit margin has risen from 2% in 2011 to 6% today. As a result, we can see that LBAlum's net profit rose 150% to RM22.0 million for the last 4 quarters compared to RM8.8 million achieved in the preceding 4 quarters.
Table: LBAlum's last 8 quarterly results
Chart 1: LBAlum's last 17 quarterly results
Financial position
LBAlum's financial position as at 31/10/2013 is deemed satisfactory with current ratio at 2.1x and gearing ratio at 0.3x. Working capital management improved marginally with debtors' collection period & inventory holding period improved from 170 days to 166 days and from 109 days to 98 days, respectively. Cash holdings rose from RM21 million as at 30/4/2013 to RM31 million as at 31/10/2013 (or, amounting to 12 sen per share).
Valuation
LBAlum (closed at RM0.52 yesterday) is now trading at a PE of 5.9 times (based on last 4 quarters' EPS of 8.8 sen) or at a P/BV of 0.5x. Dividend yield is at a decent 3.4%. At these PE & P/BV multiples, LBAlum is fairly attractive.
Technical Outlook
LBAlum broke above its downtrend line at RM0.38-0.40 in May this year. Its immediate resistance is at the recent high of RM0.55-0.57 and, beyond that, it may encounter resistance from the 2010 high of RM0.60-0.63. Its immediate support is at psychological level at RM0.50 and the horizontal line at RM0.47.
Chart 2: LBAlum's weekly chart as at Dec 11, 2013 (Source: Tradesignum)
Conclusion
Based on good financial performance & attractive valuation, LBAlum could be a good stock for a medium-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, LBAlum.
LB Aluminium Bhd ('LBAlum') is involved in the manufacturing, marketing & trading of aluminium products, such as aluminium extrusion, expanded mesh, sheets/coils, ceiling suspension system, fittings & accessories. Currently, its main market is Malaysia which accounts for 75% of its revenue while the remaining 25% are exported to Singapore and other neighboring countries.
Results Update
For QE31/10/2013, LBAlum's revenue has risen steadily over the past few quarters due to higher sales volume & higher average selling prices. Profit margin has risen from 2% in 2011 to 6% today. As a result, we can see that LBAlum's net profit rose 150% to RM22.0 million for the last 4 quarters compared to RM8.8 million achieved in the preceding 4 quarters.
Table: LBAlum's last 8 quarterly results
Chart 1: LBAlum's last 17 quarterly results
Financial position
LBAlum's financial position as at 31/10/2013 is deemed satisfactory with current ratio at 2.1x and gearing ratio at 0.3x. Working capital management improved marginally with debtors' collection period & inventory holding period improved from 170 days to 166 days and from 109 days to 98 days, respectively. Cash holdings rose from RM21 million as at 30/4/2013 to RM31 million as at 31/10/2013 (or, amounting to 12 sen per share).
Valuation
LBAlum (closed at RM0.52 yesterday) is now trading at a PE of 5.9 times (based on last 4 quarters' EPS of 8.8 sen) or at a P/BV of 0.5x. Dividend yield is at a decent 3.4%. At these PE & P/BV multiples, LBAlum is fairly attractive.
Technical Outlook
LBAlum broke above its downtrend line at RM0.38-0.40 in May this year. Its immediate resistance is at the recent high of RM0.55-0.57 and, beyond that, it may encounter resistance from the 2010 high of RM0.60-0.63. Its immediate support is at psychological level at RM0.50 and the horizontal line at RM0.47.
Chart 2: LBAlum's weekly chart as at Dec 11, 2013 (Source: Tradesignum)
Conclusion
Based on good financial performance & attractive valuation, LBAlum could be a good stock for a medium-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, LBAlum.
Monday, December 09, 2013
Maybank- poised for the next upleg
Maybank has been in an intermediate downtrend, RR for the past 4 months. Recently it broke above this downtrend line at RM9.80. As Maybank's MACD is still in the negative territory, the stock is still not in advancing mode. However, with the market sentiment improving steadily, Maybank's participation is crucial and I believe it will join in soon.
With the bullish breakout and improving overall sentiment, I believe that Maybank shall begin its upleg soon.
Chart: Maybank's daily chart as at Dec 6, 2013 (Source: Tradesignum)
Based on technical consideration & reasonable valuation, Maybank could be a potentially trading BUY.
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, Maybank.
With the bullish breakout and improving overall sentiment, I believe that Maybank shall begin its upleg soon.
Chart: Maybank's daily chart as at Dec 6, 2013 (Source: Tradesignum)
Based on technical consideration & reasonable valuation, Maybank could be a potentially trading BUY.
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, Maybank.
Bstead may have a bullish breakout
Bstead gained 12 sen to close at RM5.51 at the end of the morning session. A this level, Bstead has broken above its intermediate downtrend line, RR at RM5.45. If it can stay above this level, Bstead may continue its prior uptrend.
Chart: Bstead's weekly chart as at Dec 6, 2013 (Source: Tradesignum)
Based on technical consideration & reasonable valuation, Bstead could be a potentially trading BUY.
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,Bstead.
Brem may have a bullish breakout
Brem is involved in property development & investment, civil engineering & construction and water supply & services. In 1H2014, Grem reported a net profit of RM18.8 million on revenue of RM92.2 million. Compared to 1H2013, the top-line and bottom-line improved substantially due to mainly to better performance from the property development segment.
As at 10.00am, Brem was trading at RM1.35 (a gain of 7 sen). At this price, it is trading at a PE of 6 times- a fair price for a small cap stock.
Chartwise, it has just broken above its horizontal line at RM1.32. With this breakout, the stock could potentially rise to RM1.50-1.55.
Chart: Brem's weekly chart as at Dec 6, 2013 (Source: Tradesignum)
Based on technical consideration & reasonable valuation, Brem could be a good trading BUY.
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, Brem.
Bitcoin- a fine bubble in a messy financial world
On December 5, David Woo of Bank America Merrill Lynch issued a research report entitled "Bitcoin: a first assessment". Woo identifies the three things that need to happen for Bitcoin to be worth what
it currently is:
That report came one day after former Fed Chairman Alan Greenspan was quoted as saying that "Bitcoin is a bubble with no intrinsic value." (here) Yesterday, Bill Fleckenstein was quoted as saying that "Everyone betting on Bitcoin with lose all their money". (here)
Such diverse opinion can only drive the market into a roller coaster, with the price above USD1200 on December 5 and plunged down to USD600 on December 7.
Bitcoin - and the other virtual or digital or crypto currencies out there - came into existence due to fear that existing fiat currencies would continue to be debased due to the unconventional monetary policies undertaken by central banks worldwide. I believe Bitcoin rally is a bubble that will end like all the other manias in the past, such as the Tulip mania in the Netherlands in the 17th century. Until the bubble busts, we will have a very exciting ride.
(Source: Bitcoincharts.com)
Our fair value analysis suggests that to justify the current Bitcoin valuation, it will need to (1) account for at least 10% of all global e-commerce B2C transactions, (2) become one of the top three players in the money transfer industry, and (3) acquire a store of value reputation close to silver.
"Is Bitcoin a bubble?" asked Woo. "Assuming
Bitcoin becomes (1) a major player in both e- commerce and money transfer and
(2) a significant store of value with a reputation close to silver, our fair
value analysis implies a maximum market capitalization of Bitcoin of $15bn
(1BTC = 1300 USD). This suggests that the 100 fold increase in Bitcoin prices
this year is at risk of running ahead of its fundamentals." (via, Business Insider).
That report came one day after former Fed Chairman Alan Greenspan was quoted as saying that "Bitcoin is a bubble with no intrinsic value." (here) Yesterday, Bill Fleckenstein was quoted as saying that "Everyone betting on Bitcoin with lose all their money". (here)
Such diverse opinion can only drive the market into a roller coaster, with the price above USD1200 on December 5 and plunged down to USD600 on December 7.
Bitcoin - and the other virtual or digital or crypto currencies out there - came into existence due to fear that existing fiat currencies would continue to be debased due to the unconventional monetary policies undertaken by central banks worldwide. I believe Bitcoin rally is a bubble that will end like all the other manias in the past, such as the Tulip mania in the Netherlands in the 17th century. Until the bubble busts, we will have a very exciting ride.
(Source: Bitcoincharts.com)
Friday, December 06, 2013
Hibiscus may have a bullish breakout
Hibiscus has just broken above its 'horizontal' line at RM2.14-2.15. At the same time, Hibiscus-WA broke above to the upside of its triangle at RM1.57. With these twin breakouts, this stock could be entering into an upleg. (As at 3:00pm, Hibiscus & Hibiscus-WA are trading at RM2.18 & RM1.64.)
Based on technical breakout, Hibiscus & its warrant could be a trading BUY.
Chart 1: Hibiscus's daily chart as at Dec 5, 2013 (Source: Tradesignum)
Chart 2: Hibiscus-WA's daily chart as at Dec 5, 2013 (Source: Tradesignum)
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, Hibiscus.
Thursday, December 05, 2013
Latitud- deja vu again?
Results Update
For QE30/9/2013, Latitud's net profit rose 145% q-o-q or 62% y-o-y to RM14.6 million while revenue rose 42% q-o-q or 27% y-o-y to RM177 million. Top-line grew because of increase capacity for the Vietnamese plant of about USD1 mil per month; more order received; and, higher USD exchange rate. Bottom-line improved due to better gross profit margin coupled with the decrease in finance costs and increase in unrealized forex gain (with USD strengthening against MYR).
The improved performance is due substantially to the strong recovery in the US housing market. I have mentioned this before as Latitud exports a significant portion of its output to the US (here).
Table 1: Latitud's last 8 quarterly results
Chart 1: Latitud's last 33 quarterly results
Valuation
Latitud (closed at RM1.74 yesterday) is now trading at a PE of 4.5 times (based on last 4 quarters' EPS of 30.8 sen). At this PE, Latitud is deemed fairly attractive.
Technical Outlook
Latitud had a sharp rally to test its February-March 2010 high of RM1.75. A break above this level would be a positive for the stock but chances are good that the first attempt would not succeed. If we look back into its earning record, we would see that at end of February 2010, Latitud reported a second outstanding quarterly net profit in QE31/12/2009. The EPS of 17 sen for that quarter equaled the EPS for QE30/9/2009. In fact, Latitud's EPS for the 4-quarter ended 31/12/2009 was 49 sen! I wonder whether we are witnessing a repeat of another too-good-to-be-true quarterly earning. (Note: This is the reason why I hesitated posting on this stock for one week!)
Chart 2: Latitud's weekly chart as at Dec 4, 2013 (Source: Interachart)
Conclusion
Based on better financial performance & attractive valuation, Latitud is a good stock for long-term investment. However, we should be a bit careful as the stock had a sharp run-up and is now pressing against its 2010 high. I believe this could be a trading SELL opportunity.
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, Latitud.
MMC- has a bullish breakout
MMC broke above its gradual downtrend line, RR at RM2.85 in mid-November. After hit intra-day high of late November of RM3.00, the stock pulled back to rest at the downtrend line (R-R1). If the price does not do below the downtrend line, the breakout is still valid and the stock may launch into an upleg. This upleg could be very significant since MMC has been in this downtrend for 3 years.
There have been reports that MMC, together with Mudajya, is likely to be appointed as PDP for MRT Line 2. In addition, MMC is also reported to be the frontrunner for the spine road project from Kota Baru to Simpang Pelangi (in Bentong, Pahang) valued at RM8 billion. Finally, the Tanjong Bin power plant's maintenance program is nearing its completion (expected in February 2014). The completion of the maintenance program will give a boost to the earning of Malakoff and by extension MMC. It may also restart the listing exercise for Malakoff which was shelved due to the unplanned power outages at the Tanjong Bin. For more, go here. With the plethora of good news to come, the stock has found a new leaf of life.
Based on technical breakout, MMC could be a good stock for trading BUY. It could even be a good stock for a medium-term investment if it can land the two big jobs mentioned earlier.
Chart: MMC's weekly chart as at Dec 4, 2013 (Source: Interachart.com)
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, MMC.
There have been reports that MMC, together with Mudajya, is likely to be appointed as PDP for MRT Line 2. In addition, MMC is also reported to be the frontrunner for the spine road project from Kota Baru to Simpang Pelangi (in Bentong, Pahang) valued at RM8 billion. Finally, the Tanjong Bin power plant's maintenance program is nearing its completion (expected in February 2014). The completion of the maintenance program will give a boost to the earning of Malakoff and by extension MMC. It may also restart the listing exercise for Malakoff which was shelved due to the unplanned power outages at the Tanjong Bin. For more, go here. With the plethora of good news to come, the stock has found a new leaf of life.
Based on technical breakout, MMC could be a good stock for trading BUY. It could even be a good stock for a medium-term investment if it can land the two big jobs mentioned earlier.
Chart: MMC's weekly chart as at Dec 4, 2013 (Source: Interachart.com)
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, MMC.
Wednesday, December 04, 2013
UEMS- found support at RM2.25-2.30
UEMS had dropped quite substantially from its recent high of RM3.66 in late May to a recent low of RM2.21 two weeks ago. It may have found its support at the uptrend line, S-S1 as well as the horizontal support at RM2.30.
With the recent fiscal measures to control residential property 'bubble', property stocks would remain weak for a while. However, I feel that UEMS's sharp drop of 40% is overdone. With technical support to fall back on, I say that the stock may warrant a slow BUY for those with longer term investment time horizon.
Chart: UEMS's weekly chart as at Dec 4, 2013 (Source: Interachart.com)
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, UEMS.
With the recent fiscal measures to control residential property 'bubble', property stocks would remain weak for a while. However, I feel that UEMS's sharp drop of 40% is overdone. With technical support to fall back on, I say that the stock may warrant a slow BUY for those with longer term investment time horizon.
Chart: UEMS's weekly chart as at Dec 4, 2013 (Source: Interachart.com)
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, UEMS.
Monday, December 02, 2013
Syariah compliance shake-up
The securities Commission's Shariah Advisory Council (SAC) has revised its screening methodology by adopting a 2-tier quantitative approach that applies to business activity and financial ratio benchmarks. Under the financial ratio benchmarks, a company's cash in conventional account & all forms of conventional borrowings must be less than 33% of the company's financial position.
As a result of this revision, 158 stocks were removed from the Syariah-compliant list of 653 stocks. A notable names that were dropped from this exercise are Armada, SPSetia, Airasia, DLady & YTLPowr, Parkson, TChong & MRCB. New stocks added to the list are Oldtown, Brahmin's, CMSB & Suria.
Chart 1: Oldtown's daily chart as at Nov 29, 2013 (Source: Tradesignum)
Chart 2: Brahmins's daily chart as at Nov 29, 2013 (Source: Tradesignum)
Chart 3: CMSB's weekly chart as at Nov 29, 2013 (Source: Tradesignum)
Chart 4: Suria's weekly chart as at Nov 29, 2013 (Source: Tradesignum)
All these stocks had achieved bullish breakout recently. The most recent breakout was Oldtown at RM2.50 and this makes the stock very suitable for trading BUY. Brahmins is trapped within a triangle, awaiting breakout at RM1.53-1.55. Since CMSB & Suria had a good run over the past 2-3 weeks, I can only recommend a BUY on weakness.
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, Armada, SPSetia, Airasia, DLady & YTLPowr, Parkson, TChong, MRCB, Oldtown, Brahmin's, CMSB & Suria.
As a result of this revision, 158 stocks were removed from the Syariah-compliant list of 653 stocks. A notable names that were dropped from this exercise are Armada, SPSetia, Airasia, DLady & YTLPowr, Parkson, TChong & MRCB. New stocks added to the list are Oldtown, Brahmin's, CMSB & Suria.
Chart 1: Oldtown's daily chart as at Nov 29, 2013 (Source: Tradesignum)
Chart 2: Brahmins's daily chart as at Nov 29, 2013 (Source: Tradesignum)
Chart 3: CMSB's weekly chart as at Nov 29, 2013 (Source: Tradesignum)
Chart 4: Suria's weekly chart as at Nov 29, 2013 (Source: Tradesignum)
All these stocks had achieved bullish breakout recently. The most recent breakout was Oldtown at RM2.50 and this makes the stock very suitable for trading BUY. Brahmins is trapped within a triangle, awaiting breakout at RM1.53-1.55. Since CMSB & Suria had a good run over the past 2-3 weeks, I can only recommend a BUY on weakness.
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, Armada, SPSetia, Airasia, DLady & YTLPowr, Parkson, TChong, MRCB, Oldtown, Brahmin's, CMSB & Suria.
Thursday, November 28, 2013
KSL- an attractive property stock
Result Update
For QE30/9/2013, KSL's net profit increased by 3% q-o-q or 61% y-o-y to RM68 million while revenue increased by 1% q-o-q or 83% y-o-y to RM217 million.The group's property development projects in Johor Bahru & Klang are doing fairly well.
Table: KSL's last 8 quarterly results
Chart 1: KSL's last 36 quarterly results
Financial Position
As at 30/9/2013, KSL's financial position is deemed satisfactory, with current ratio at 2.1 times & gearing ratio at 0.16 time.
Valuation
KSL (closed at RM2.04 yesterday) is now trading at a PE of 3.6 times (based on last 4 quarters' EPS of 57 sen). At this PE multiple, KSL is deemed very attractive.
Technical Outlook
KSLis in an uptrend line, with support at RM1.68-1.70. Its immediate support level is the horizontal line at RM2.00.
Chart 2: KSL's weekly chart as at Nov 27, 2013 (Source: Quickcharts)
Conclusion
Based on good financial performance, attractive valuation & positive technical outlook, KSL 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, KSL.
Wednesday, November 27, 2013
Daiman- not trying hard enough!
Result Update
For QE30/9/2013, Daiman's net profit increased by 105% q-o-q or 219% y-o-y to RM32.6 million while revenue dropped by 40% q-o-q or 38% y-o-y to RM28 million. The improved performance q-o-q was "due mainly to gain arising from the accounting of the 12.3 acres of land to be jointly developed with Rainbow Crest Sdn Bhd. This has more than covered for the decline in profit from lower sales from the property development business". The amount of the exceptional gain was RM39.5 million. In QE31/3/2013, Daiman also recorded an exceptional gain from sale of investment property of RM28.9 million.
There were occasional reports about how cheap is this stock- including a report in the Edge this week- but all the analysts who tracked this stock would look askance when they see a quarterly result like this. The question in everyone's mind is this: Why is the management of Daiman so easily contented!!! FYI, I posted on its breakout in March (here).
Table: Daiman's last 8 quarterly results
Chart 1: Daiman's last 25 quarterly results
Valuation
Daiman (closed at RMRM3.35 today) is now trading at a PE of 8 times (based on last 4 quarters' EPS of 43 sen). It also traded at a Price to Book of 0.7 time (based on NTA of RM5.06 p.s. as at 30/9/2013). Its dividend yield is a decent 3.6%.
Note: If the exceptional gain totaling RM68.4 million in QE30/9/2013 & QE31/3/2013 are excluded, the net profit for the past 4 quarters would be adjusted to RM22.8 million. Without exceptional gain, Daiman's bottom-line would be much lower going forward.
Technical Breakout
Daiman broke above the line AB at RM2.15-2.20 in April. Since then, its share price has rallied strongly.
Chart 1: Daiman's weekly chart as at Nov 26, 2013 (Source: Quickcharts)
Conclusion
Based on cheap valuation (Price to Book) and technical breakout, Daiman could continue to rise. However, this stock has been a dull stock for many years and we can only hope that the Johore property play has legs to carry Daiman higher. If the Johore property play comes to a premature end, this stock would come down to earth again.
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, Daiman.
For QE30/9/2013, Daiman's net profit increased by 105% q-o-q or 219% y-o-y to RM32.6 million while revenue dropped by 40% q-o-q or 38% y-o-y to RM28 million. The improved performance q-o-q was "due mainly to gain arising from the accounting of the 12.3 acres of land to be jointly developed with Rainbow Crest Sdn Bhd. This has more than covered for the decline in profit from lower sales from the property development business". The amount of the exceptional gain was RM39.5 million. In QE31/3/2013, Daiman also recorded an exceptional gain from sale of investment property of RM28.9 million.
There were occasional reports about how cheap is this stock- including a report in the Edge this week- but all the analysts who tracked this stock would look askance when they see a quarterly result like this. The question in everyone's mind is this: Why is the management of Daiman so easily contented!!! FYI, I posted on its breakout in March (here).
Table: Daiman's last 8 quarterly results
Chart 1: Daiman's last 25 quarterly results
Valuation
Daiman (closed at RMRM3.35 today) is now trading at a PE of 8 times (based on last 4 quarters' EPS of 43 sen). It also traded at a Price to Book of 0.7 time (based on NTA of RM5.06 p.s. as at 30/9/2013). Its dividend yield is a decent 3.6%.
Note: If the exceptional gain totaling RM68.4 million in QE30/9/2013 & QE31/3/2013 are excluded, the net profit for the past 4 quarters would be adjusted to RM22.8 million. Without exceptional gain, Daiman's bottom-line would be much lower going forward.
Technical Breakout
Daiman broke above the line AB at RM2.15-2.20 in April. Since then, its share price has rallied strongly.
Chart 1: Daiman's weekly chart as at Nov 26, 2013 (Source: Quickcharts)
Conclusion
Based on cheap valuation (Price to Book) and technical breakout, Daiman could continue to rise. However, this stock has been a dull stock for many years and we can only hope that the Johore property play has legs to carry Daiman higher. If the Johore property play comes to a premature end, this stock would come down to earth again.
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, Daiman.