POS: FY14 Bottom-line improved due to courier business

Results Update

For QE31/3/2014, POS's net profit increased by 129% q-o-q or 61% y-o-y to RM52 million while revenue increased by 29% q-o-q or 23% y-o-y to RM424 million. This being the results for 4QFY14, we can get a glimpse of the full-year performance. Immediately, we can see that POS's bottom-line has benefited from strong growth in its courier division while maintaining its performance for the mailing division. For FY2014, the pre-tax profit from courier division rose from RM55.2 million to RM82.7 million while the mail division's PBT inched up from RM137.9 million to RM144.3 million. In addition, the others division also showed improvement - from RM10.1 million to RM17.1 million, due to higher contributions from printing and insertion services and new logistics business. The improvement in the courier division reflects the increased business from e-commerce. The same thing that drove the business of GDEX.


Table: POS's last 8 quarterly results


Chart 1: POS's last 34 quarterly results

Valuation

POS (closed at RM4.45 yesterday) is now trading at RM4.68 (as at 10.20am). At the current price, POS has a PE of 15.8 times (based on last 4 quarters' EPS of 29.6 sen). At this PE, POS is deemed fairly priced. When compared to GDEX (closed at RM1.71 yesterday) which is trading at a PE of 66 times, POS might even look attractively.


Technical Outlook

POS broke its accelerated uptrend line, S2-S2 at RM5.50 in late 2013. It even broke its next uptrend line, S1-S1 at RM4.70 in April. It then tested its horizontal support at RM4.32 & rebounded. If it can climb back above the S1-S1 uptrend line, it can reclaim that uptrend line and rise again in its path. If it fails to do so, it may slide again to retest the horizontal line at RM4.32 or even the next horizontal line at RM3.70.


Chart 3: POS's weekly chart as at May 22, 2014 (Source: Tradesignum)

Conclusion

Based on improved financial performance (driven by steady growth in the courier busisness) and decent valuation, POS could be a good stock for long-term investment. Its negative point would be the bearish technical outlook which might change after the latest result. Let's wait & see.

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, POS.

Petdag: Uptrend line broken!

Finally, it happened. Petdag broke its uptrend line. With this breakdown, Petdag's downside could continue. See my earlier report (here).


Chart 2: Petdag's weekly chart as at Feb 6, 2014 (Source: Tradesignum)

Based on high valuation, poorer financial performance & bearish technical outlook, Petdag's rating is now revised from SELL INTO STRENGTH to just SELL.

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, Petdag.

AAX: Net losses declined q-o-q

Background

AirAsia X Berhad ('AAX') is a long-haul, low-cost airline that is part of the AirAsia Group. AAX offers flights on routes beyond 4 hours flight duration across Asia Pacific and the Middle East.

Results Update

For QE31/3/2014, AAX continued to incur losses due to weak yields and high operational cost after it doubled its capacity in Australia. Its LBT dropped by RM122 million from RM170 million to RM48 million due to the strengthening of MYR. In QE31/3/2014, AAX recognized unrealized forex gain of RM10 million while in QE31/12/2013, it recognized unrealized forex loss of RM112 million. Excluding the impact of forex gain/loss, AAX's LBT would be unchanged at RM58 million.


Table: AAX's last 8 quarterly results


Chart 1: AAX's last 8 quarterly results
 
Technical Outlook

AAX has been in a downtrend line since its listing in July 2013. Today, it broke above its horizontal line at RM0.80. Its next resistance will be the downtrend line at RM0.87. An upside breakout of that downtrend line would be bullish for AAX.


Chart 3: AAX's daily chart as at May 19, 2014 (Source: Interachart)

Conclusion

Despite the strong rally today, AAX is still in a downtrend line and incurring losses due to the overcapacity in the Australian sector. Based on poor result and bearish technical outlook, AAX remains a stock to AVOID for now.

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, AAX.

GCB: Bottom-line improved q-o-q

Results Update

For QE31/3/2014, GCB reported a net profit of RM5.3 million as compared to a net loss of RM8.5 million for QE31/12/2013. When compared to the corresponding quarter last year, net profit is down 68% from RM16.5 million. Bottom-line recovered due to the increased sales volume and selling price of cocoa butter, while sales volume of cocoa cake and powder picked up. The higher net gain on forward currency contract also contributed to the increase of profit before tax for current quarter (QE31/3/2014).


Table: GCB's last 8 quarterly results


Chart 1: GCB's last 38 quarterly results

Valuation

GCB made a net loss of RM7.6 million for the past 4 quarters. GCB is trading at a PB of 2x. As a cyclical stock, the PE multiple will not be relevant at this stage. The PB can only be indicative in term of value. In early 2010 - before the huge rally of 2010-2011 - GCB was trading at a PB of 1.1x (with share price at RM0.30 & NTA at RM0.28 per share). At the peak in mid-2012, it was trading at a PB of 1.2x (with share price at RM2.10 & NTA at RM1.70 per share). Thus, GCB is not cheap in term of PB.

Technical Outlook

GCB is now in a sideways move with the support at the horizontal line RM1.40.


Chart 3: GCB's weekly chart as at May 19, 2014 (Source: Tradesignum)

Conclusion

Despite high valuation, GCB's rating is now revised from SELL to HOLD based on improving financial performance. In addition, it is worth noting that the stock is well-support at the present price of RM1.40.

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, GCB.

TChong: Top-line & bottom-line dropped

Result Update

For QE31/3/2014, TChong's net profit dropped 39% q-o-q or 51% y-o-y to RM41 million while revenue  was up 7% q-o-q or 12% y-o-y to RM1.26 billion. Due to increased competition, TChong invested more on "marketing and promotional campaigns have generally sustained Nissan’s market share and carry over of Q4 2013 year end festivities sales momentum into Q1 2014. The promotional campaigns’ costs coupled with the impact of unfavourable foreign exchange on imported CKD kits has put a drag on the Group’s bottom-line in Q1 2014."


Table: TChong's last 8 quarterly results


Chart 1: TChong's last 30 quarterly results

Valuation

TChong (closed at RM5.59 yesterday) is now trading at a PE of 17 times (based on last 4 quarters' EPS of 32 sen). At this PE multiple, TChong is deemed fully valued.

Technical Outlook

TChong is in an uptrend line, with support at RM5.40-5.50. A break of this support could send the stock to the trough experienced in 2012 (at RM4.50).


Chart 2: TChong's weekly chart as at May 14, 2014 (Source: Tradesignum)

Conclusion


Based on demanding valuation & poorer financial performance, TChong's rating is revised to REDUCE. However, the stock has one positive on its side: it is now resting on its uptrend line support at RM5.40-5.50 which could be the staging area for a mild rebound if market sentiment improves.

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, TChong.

Benalec: Further upside likely!

Benalec broke above its ascending triangle formation ('ABC') at RM0.95 last week. This morning, it convincingly broke above the psychological RM1.00 mark. With these double bullish breakouts, I believe Benalec is on a recovery mode which could send the stock to RM1.20 or possibly RM1.40.

Based on technical breakout, Benalec could be a good trading BUY.


Chart: Benalec's weekly chart as at May 12, 2014 (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, Benalec.

Daiboci: Time to take profit

Result Update

For QE31/3/2014, Daiboci's net profit dropped 10% q-o-q or 8% y-o-y to RM6.6 million while revenue rose 12% q-o-q or 23% y-o-y to RM90 million. The q-o-q increase in revenue was attributed to 13%-increase in the packaging segment revenue which is due to the expansion in export revenue, particularly from a MNC customer in South East Asia.

The packaging segment recorded an increase of 5% in pre-tax profit as compared to the preceding quarter. However, there is a slight compression in profit margin for the current quarter mainly due to the further increase of raw material prices, especially in polyethylene and polypropylene resins and films in the current quarter. In addition, the profit margin has been affected by the product mix and the increase in operating expenses mainly due to the hike in electricity tariff as well as wages in early 2014.

Table: Daiboci's last 8 quarterly results


Chart 1: Daiboci's last 26 quarterly results

Valuation

Daiboci (closed at RM4.50 yesterday) is now trading at a PE of 18.8 times (based on last 4 quarters' EPS of 24 sen). At this PE, Daiboci is deemed over-valued.

Technical Outlook

Daiboci is in a steady uptrend line. You may use the 40-week EMA line as the proxy for an uptrend line. A break below the 40-week EMA line would then be a bearish event, as evidenced in 2010.


Chart 3: Daiboci's weekly chart as at May 12, 2013 (Source: Tradesignum)

Conclusion

Despite positive technical outlook, Daiboci is now trading at a demanding PE multiple. As such, its rating should be revised to SELL INTO STRENGTH.

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, Daiboci.

Tienwah: Bottom-line rebounded

Result Update

For QE31/3/2014, net profit increased by 185% q-o-q but dropped by 43% y-o-y to RM4.3 million on the back of lower revenue of RM83 million  (down 6% q-o-q or 12% y-o-y). The company attributed the drop in revenue to lower demand for cigarettes packaging. Bottom-line rebounded q-o-q as QE31/12/2013 was impact by a one-off provision for redundancy expense of RM2.8 million.


Table: Tienwah's last 8 quarterly results


Chart 1: Tienwah's last 29 quarterly results

Valuation

Tienwah (closed at RM2.52 on Monday) is trading at a PE of 11.5 times (based on last 4 quarters' EPS of 22 sen). At this PE, Tienwah is deemed fairly valued.

Technical Outlook

Tienwah is in a gradual uptrend, SS which accelerated into S1-S1. The S1-S1 support is at RM2.40.

 Chart 2: Tienwah's weekly chart as at May 12, 2014 (Source: Tradesignum)

Conclusion

Based on improved financial performance & still positive technical outlook, Tienwah is still 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, Tienwah.

Maybulk: Uptrend line violated

Ever since POSH (or, PACC Offshore Services Holdings Ltd) an offshore support vessels ('OSV') operator owned by Robert Kuok announced its planned listing on SGX, the share price of Maybulk has been heading South. RHB & CIMB feel positive about the listing of POSH as they valued Maybulk's stake in POSH at RM1.02 billion and RM1.1 billion respectively (go here).

On the other hand, Kenanga in a March report entitled "Riding the Wave" opined that POSH might command a PE of only 11x. If so, Maybulk's 21.23%-stake in POSH will be worth about RM554 million. Thus the listing of POSH would lead to a paper loss of RM238 million since the stake was acquired for USD221 million (or, RM792 million). Who is right?


Table: The Possible Return on POSH (Source: Kenanga)

Last Thursday, Maybulk broke below its uptrend line at RM1.90 and closed at a low of RM1.80. Right now, Maybulk is staging a small rebound to RM1.85. Unless it managed to climb back above the RM1.90 level, the stock's uptrend has ended and it will either trade sideways or enter into a downtrend. It looks like the investors in Maybulk are taking a negative view on the listing of POSH.

 
Chart: Maybulk's weekly chart as at may 9, 2014 (Source: Tradesignum)

Given the technical breakdown, you are advised to reduce your position in Maybulk as the share price rebounds up to the RM1.90.  

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, Maybulk.

MISC: recovery still intact.

Result Update

In QE31/3/2014, MISC's net profit dropped from RM1.09 billion to RM528 million as preceding quarter's net profit was boosted by a bigger share of profit from joint ventures especially Gumusut-Kakap Semi-Floating Production System (L) Ltd. Despite lower net profit, it is good to note that MISC's operating profit increased 24.8% from RM404 million to RM504 million due to higher overall revenue which is the result of higher revenue from the Petroleum business (the result of higher freight rates) and higher progress billings on certain projects in Heavy Engineering.


Table: MISC's last 8 quarterly results


Chart 2: MISC's last 32 quarterly results 

Valuation

MISC (closed at RM6.41 last Friday) is now trading at a PE of 12.6x its FY2013 EPS of 51 sen. If exceptional gain, such as the one-off gain from the disposal of the Gumusut-Kakap Semi-Floating Production System of unknown quantum, is excluded, MISC's PE would be higher. The stock is likely to be fairly valued at the present moment.

Technical Outlook

From the weekly chart, we can see that MISC is in a gradual uptrend, which takes the shape of an irregular upward channel. On weakness, MISC may drop to the lower boundary of this channel at RM6.00. However, this should be a good level to get into this stock.


Chart 1: MISC's weekly chart as at May 9, 2014 (Source: Tradesignum)

Conclusion

Based on improved financial performance (albeit a q-o-q drop in net profit due to exceptional gain in the immediate preceding quarter) & mildly positive technical outlook (albeit short-term weakness now), MISC remains a good stock for a recovery play.

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, MISC.

Spritzr: Bottom-line improved due to festive season and water crisis

Result Update

For QE28/2/2014, Spritzr's net profit increased 82% q-o-q & 23% y-o-y to RM6.1 million while revenue increased 8% q-o-q or 4% y-o-y to RM60 million. Bottom-line improved q-o-q due to increase in sales during festive season and as a result of water crisis, the reduction in cost of packaging material and the higher sales of better-margin products.


Table: Spritzr's last 8 quarterly results


Chart 1: Spritzr's last 31 quarterly results

Valuation

Spritzr (closed at RM1.89 last Friday) is now trading at a PE of 12 times (based on last 4 quarters' EPS of 15.6 sen). At this PE multiple, Spritzr is still deemed attractive for a consumer stock.

Technical Outlook

Spritzr's uptrend is likely to continue after the stock broke above its flag formation at RM1.85 on April 7. However, after the breakout and a short rally, the stock dropped to its breakout level due to weak market sentiment. If this breakout level is not violated, the stock can continue its prior uptrend once the market sentiment has improved.


Chart 2: Spritzr's weekly chart as at May 9, 2014 (Source: Tradesignum)

Conclusion

Based on improved financial performance, attractive valuation and bullish technical outlook, Spritzr's rating is now revised from a HOLD to a 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, Spritzr.

Market Outlook as at May 7, 2014

Our market has witnessed rotational plays among the 2nd & 3rd liners for the past 1 year. Some of these stocks rose on better earning reports while many rose on news flow and much less. Their rise is well-reflected in the spectacular 70%-gain for FBMACE and no-less-impressive 50%-gain for FBMFLG & FBMSCAP. These outpaced FBMKLCI which only managed to gain of 15%.

Over the past 2 weeks, the 2nd & 3rd liners tumbled sharply. We can see that FBMACE is now testing its uptrend line while FBMFLG, FBMSCAP & FBMKLCI are in an uptrend line. This proves a point: The higher you go, the faster you will fall. If FBMACE can stay above its uptrend line support at 6400, then the market can take comfort in knowing that this is simply a small correction. A breakdown of the FBMACE uptrend line could signal further weakness ahead- most likely amongst the 2nd and 3rd liners.  Today, FBMACE rebounded 50 points to 6545. That's a positive sign, albeit a small rebound. It is still too early to jump whole-heartedly into the market. Let's wait & see how the market will perform over the next few days.

Chart 1: FBMACE's daily chart as at May 6, 2014 (Source: Chartnexus)













Chart 2: FBMSCAP's daily chart as at May 6, 2014 (Source: Chartnexus)













Chart 3: FBMFLG's daily chart as at May 6, 2014 (Source: Chartnexus)

Chart 4: FBMKLCI's daily chart as at May 6, 2014 (Source: Chartnexus)