Petronm: Earnings remained strong!

Results Update

For QE30/9/2015, PetronM's net profit rose 1% q-o-q to RM74 million on the back of a 4.6%-drop in revenue to RM2.16 billion. Revenue dropped 27% y-o-y due to the drop in selling prices (as a result of the drop in oil prices) notwithstanding 5%-increase in sales volume (8 million compared to 7 million barrels previously). Profits increased due to better operating efficiency, stable margins & robust growth in sales volume.


Table: PetronM's last 11 quarterly results


Chart 1: PetronM's last 13 quarterly results

Valuation

PetronM (closed at RM3.55 as at 10.15am this morning) is now trading at a PER of 4.2 times (based on annualized EPS of 85 sen). The exceptionally high earning may reverse once the crude oil prices recover and the crack spreads narrow. Until then, the strong earnings could propel the share price higher.

Technical Outlook

PetronM broke above its horizontal line at RM3.20 two weeks.


Chart 2: PetronM's weekly chart as at Nov 30, 2015_10.15am (Source: ShareInvestor,com)

As noted in an earlier post, Petronm is in an irregular upward channel. In the right environment, a test and rally off the lower boundary could be very powerful. We saw that in 2009-2011. Will the same happen today?


Chart 3: PetronM's monthly chart as at Nov 30, 2015_10.15am (Source: ShareInvestor,com)

Conclusion

Based on turnaround in financial performance, attractive valuation  & positive technical outlook. PetronM 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, PetronM.

Market Outlook as at November 30, 2015

As at 9.30am, FBNKLCI was down 12 points to 1670. Looking through the various indices, it seems that our market is likely to drift lower. The weakness is fairly pronounced amongst the blue chip stocks as reflected in FBMKLCI breaking below its intermediate uptrend line. This uptrend line took the FBMKLCI from the lower boundary of an irregular downward channel to the upper boundary of that channel. With the breakdown of the intermediate uptrend line, FBMKLCI is likely to drift lower.


Chart 1: FBMKLCI's weekly chart as at Nov 27, 2015 (Source: ShareInvestor.com)

2nd liner stocks (as represented by FBM70) is also in an irregular downward channel. It failed to surpass the upper line of the channel and it may be breaking the steep uptrend line. If so, FBM70 will drift lower.

 
Chart 2: FBM70's weekly chart as at Nov 27, 2015 (Source: ShareInvestor.com)
 
 FBMSCAP - representing the 3rd liner stocks - has tentatively broken below the intermediate uptrend line. As a result, this index may begin to trade sideways with a downward bias.


Chart 3: FBMSCAP's weekly chart as at Nov 27, 2015 (Source: ShareInvestor.com)

Meanwhile, FBMACE & FBMFLG are both hanging onto their respective intermediate uptrend lines. If these uptrend lines are also violated, the respective index will likely to drift down.


Chart 4: FBMFLG's weekly chart as at Nov 27, 2015 (Source: ShareInvestor.com)


Chart 5: FBMACE's weekly chart as at Nov 27, 2015 (Source: ShareInvestor.com)

Overall, we can see that our technical rebound may have ran its course. The two remaining areas of relative strength - ACE market & fledgling stocks - are now exhibiting tentative toppish sign. We have to be very careful in our trading as the risk-to-reward proposition has now tipped against us.

Panamy: Earnings soared

Results Update

For QE30/9/2015, Panamy's net profit increased by 27% q-o-q or 54% y-o-y to RM40 million while revenue increased by 5% q-o-q or 13% y-o-y to RM281 million. Revenue increased q-o-q mainly due to export market for Home Shower products have increased as compared to the preceding quarter as these products are seasonally higher in the current quarter. Profits increased q-o-q mainly attributed by higher share  of  profits  from  associated  company  amounting  to  RM6.2 million  in  this  quarter  as compared to RM2.6 million registered in the preceding quarter.


Table: Panamy's last 8 quarterly results


Chart 1: Panamy's last 35 quarterly results

Valuation

Panamy (at RM22.56 last Friday) is trading at a PE of 11 times (based on last 4 quarters' EPS of 202 sen). At this PER, Panamy is deemed attractively valued. In addition, Pananmy has announced dividend totaling 142 sen, which translates to an attractive DY of 6.3%.

Technical Outlook

Panamy is a long-term upward channel, with support at RM20.00. If Panamy can surpass its 2013 high of RM23.50, it may continue with its uptrend.


Chart 2: Panamy's monthly chart as at Nov 27, 2015 (Source: ShareInvestor)

Conclusion

Based on good financial performance, attractive valuation and positive technical outlook, Panamy 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, Panamy.

APB: Earnings soared on forex gain!

 One of the gainers this morning is APB. It is up 18 sen to RM1.48 as at 11.00am.

The reason for this sharp rise could well be the "good results" announced (see the diagram below). There is no doubt that APB did well in the last quarter as well as the full financial year. However a cursory glance will reveal two concerns:

• Full-year revenue dropped by 21%. Why?
• While full-year PBT jumped by RM8.7 million, half the amount was recorded in QE30/9/2015. Why the sharp rise in QE30/9/2015?

Diagram 1: Results announcement from Kentrade

I have extracted & tabulated the results for the past 10 quarters from ShareInvestor.com. I added in the latest results for QE30/9/2015, as this has not yet been updated by ShareInvestor.com. We can see that, APB's net profit rose 159% q-o-q or 182% y-o-y to RM9.1 million while its revenue rose 14% q-o-q or 40% y-o-y to RM42 million in QE30/9/2015.

From a reading of the Notes to the latest results, we know the reason for the jump in profits. It is due to forex gain of RM8.0 million. As this is unlikely to recur, we should exclude the amount from the accounts. If we do that, we can see that APB's profits are pretty ordinary.


Table: APB's last 11 quarterly results

 
Chart 1: APB's last 11 quarterly results

Next, we address the question of the drop in revenue. If the company could benefit from favorable forex movement, then surely the revenue would have benefited from the same movement. How would you explain the drop in revenue? If you studied the Notes to the accounts for QE30/6/2014, you will see this comment on the drop in revenue for that quarter.


Diagram 2: Notes to the Account for QE30/6/2014

With that, we can come to a conclusion regarding APB's financial performance: APB's revenue & profit did improve in the past 5 quarters (since QE30/6/2014). However, the improvement is not spectacular. If the forex gain of RM8.0 million is excluded from the results for QE30/9/2015, the adjusted net profit for FY2015 would be RM10 million. That's a drop from RM12 million for FY2014.

With that, I believe that APB's recent price run-up should prompt you to TAKE PROFIT on the stock. This is especially so if you look at the chart below where you would see a horizontal resistance just ahead at RM1.60.


Chart 2: APB's monthly chart as at Nov 27, 2015_10.30am (Source: ShareInvestor)

Conclusion

The second message of this post is that you need to study the accounts of the stock that you wish to invest in. There is no substitute for simple analysis to back up your conviction to invest in a stock. Investing requires commitment and that can only come from conviction in a stock after we have done our homework. 

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, APB.

Annjoo: Another mistake?!

Annjoo made me happy for 5 minutes this morning. It wrongly reported a return to profitability! Companies should be more careful making their announcement.


Via Bursa Financial Results announcement  


Via attached AFS in pdf

The tabulated results for last 8 quarters are:


Table: Annjoo's last 8 quarterly results (as amended)

GOB: Good news or bad news?

This morning, GOB dropped 12.5 sen to a low of RM0.50 before recovering. A client called up and asked Why? Why is the stock down when it announced that its 1H net profit is up 307.56%. See the first screenshot below.


Diagram 1: GOB's announcement headlines on Kentrade

When I clicked on the announcement, this is what I got! GOB's latest quarterly results for QE30/9/2015 shows a net loss of RM12.8 million but its 1H net profit of RM66.3 million is 307.56% higher than the net profit for 1H last year.


Diagram 2: GOB's announcement in detail on Kentrade

GOB had since rebounded off the low to RM0.59 as at 10.22am. This could be a happy accident if one bought into GOB on the "good" news when the share price was lower. It could also have been a bad experience if you bought into the stock at a higher price only to discover the exact results of the company.

When you read any announcement in the newspaper or news feed on the internet, you have to read it completely. If you read only the headline, you only get partial news, or worse still, you get a misleading news or impression.

PWRoot: Earnings powered by forex gain

Results Update

For QE30/9/2015, PWRoot's net profit dropped 4% q-o-q to RM14 million on the back of a 22%-decline in revenue to RM84 million. Compared to the same quarter last year, net profit was 185% higher despite a 16%-drop in revenue. Revenue dropped q-o-q due to lower local & overseas sales from FMCG segment. Profit after tax rose q-o-q due to forex gain of RM7.1 million.


Table: PWRoot's last 8 quarterly results

We must note that PWRoot had benefited from forex gain in the past 2 quarters as well as exceptional gain on disposal of property in QE31/3/2015. These exceptional gain amount to RM25 million helped to boost the company's earnings but they may not recur in the future. As such, we must be watchful of a rollback of earning for PWRoot in the next few quarters.


Chart 1: PWRoot's last 34 quarterly results

Valuation

PWRoot (closed at RM2.81 yesterday) is now trading at a trailing PER of 14 times (based on last 4 quarters' EPS of  19.2 sen). If the exceptional gains noted above are excluded, its last 4 quarters' EPS would drop to 10.9 sen & its trailing PER would rise to 26 times. As such, PWRoot is no longer an attractive stock.

Technical outlook

PWRoot is in a long-term uptrend with support at the horizontal line of RM2.40.


Chart 2: PWRoot's monthly chart as at Nov 25, 2015 (Source: Shareinvestor.com)

 Conclusion

Based on satisfactory financial performance & positive technical outlook, PWRoot is rated a HOLD. As PWRoot is trading at full valuation - with limited upside - you should consider TAKING PROFIT if it rises to the RM3.00 mark.

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, PWRoot.

Aji: Earning smells good!

Result Update

For QE30/9/2015, Aji's net profit rose 20% q-o-q or 62% y-o-y to RM12.4 million while revenue was mixed- down 2% q-o-q but up 6% y-o-y to RM94 million. Revenue dipped by 2% q-o-q due to lower sales achieved by the Umami segment as a result of slight dip in “AJI-NO-MOTO” consumer sales in domestic market. Revenue from the other segment, i.e. Food & Seasoning segment decreased by 2.5% due mainly to reduced industrial product sales delivery. Nonetheless, profits increased q-o-q due to better profitability by export sales. 


Table: Aji's last 8 quarterly results


Chart 1: Aji's last 41 quarterly results

Valuation

Aji (closed at RM6.40 yesterday) is now trading at a PE of 10.7 times (based on last 4 quarters' EPS of 60 sen). At this multiple, Aji is deemed fairly attractive. In addition, Aji pays a decent dividend yield of 3.1%.

Technical Outlook

Aji is in an uptrend line with support at about RM5.80. Overhead resistance is at RM6.60.


Chart 2: Aji's weekly chart as at Nov 25, 2015 (Source: ShareInvestor.com)


Chart 3: Aji's monthly chart as at Nov 25, 2015 (Source: ShareInvestor.com)

Conclusion

Based on improved profit & profit margin, attractive valuation & positive technical outlook, AJI 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, AJI.

GCB-WA: What's Happening?!

I posted on GCB this morning. While I am fairly positive on this stock, the rise of its only warrant, GCB-WA is simply astounding. Bear in mind that this warrant has only 83 days to expiry (end date is 16/2/2016) and exercise price is at RM1.34. This means that the warrant (at RM0.185) has a premium of 31.7%. GCB closed at limit-up price of RM1.15.

I can only say that we have to be very careful with any warrant with short tenor.


Chart: GCB-WA's intraday chart as at Nov 25, 2015 (Source: ShareInvestor)

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 or GCB-WA.

Tomypak: Top-line finally rose...

Results Update

For QE30/9/2015, Tomypak's NP improved by 3.6% q-o-q or 171% y-o-y to RM6 million while revenue increased  by 12% q-o-q or 8% yo-y to RM56 million. Profits increased due to the better sales mix, gain on foreign exchange and continuous improvement in production efficiency.


Table 1: Tomypak's last 8 quarterly results


Chart 1: Tomypak's last 32 quarterly results

Valuation

Tomypak (closed at RM2.76 at the end of the morning session) is now trading at a fairly attractive PER of 14.5 times (based on last 4 quarters' EPS of 19.1 sen). At this PER, Tomypak is deemed fairly valued.

Technical Outlook

This morning, Tomypak made an intraday low of RM2.65 before closing at RM2.76. This means it is still above its intermediate uptrend line, with support at RM2.75.


Chart 2: Tomypak's daily chart as at Nov 25, 2015_12.30pm (Source: ShareInvestor.com)

Tomypak, which had surpassed its all-time high of RM2.05, had touched what I would regard as its target price of RM3.00 (on November 18). Having gone do far, investors must be asking the perennial question: Is there more to come?!

 
Chart 3: Tomypak's monthly chart as at Nov 25, 2015_12.30pm (Source: ShareInvestor.com)

Conclusion

Based on improved financial performance and positive technical outlook, I would rate Tomypak a HOLD. However, since its scorching run in the past 3 months, some profit-taking is not a bad idea.

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, Tomypak.

Masteel: Losses increased

Results Update

Masteel has released its quarterly results for QE30/9/2015. Its  revenue rose 24% q-o-q but dropped 17% y-o-y to RM301 million mainly mainly due to lower selling price and sales volume as a result  of  the importation of low price Chinese made steel bars. Its losses increased due to lower margin and unrealized foreign exchange loss in the current quarter.


Diagram 1: Masteel's 13 quarters' PL & CF (Source: ShareInvestor.com)


Chart 1: Masteel's 13 quarters' PL (Source: ShareInvestor.com)

Financial Position as at 31/3/2015

Masteel's financial position is deemed acceptable with current ratio at 1 time & gearing ratio at 1.1 times. Looking at its current assets, we can see a swing in trade debtors & inventory, with debtors turnover period dropping from 86 days to 50 days while inventory holding period rose from 43 days to 112 days. This sharp swing could be due to new accounting treatment to address issue related to the qualification of its AFS for FY2014. For more, go to previous post.

Technical Outlook

Masteel's share prices had dropped in a step fashion. The last low at RM0.33 will serve as the support for the stock for now.

Chart 2: Masteel's weekly chart as at Nov 25, 2015_12.30pm (Source: ShareInvestor.com)


Chart 3: Masteel's monthly chart as at Nov 25, 2015_12.30pm (Source: ShareInvestor.com)

Conclusion

Due to the poor financial performance & industrial outlook for steel sector plus uncertainty surrounding this stock, Masteel is best to be avoided 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, Masteel.

MYR: Poised for bullish reversal

MYR is on the verge of a bullish reversal. I will analyze the charts of USD-MYR & SGD-MYR to arrive at this conclusion instead of MYR-USD or MYR-SGD charts as I'm more used to the former charts.

From the USD-MYR daily chart (Chart 1), you can see that the uptrend has just been violated. Unless there is a strong recovery, this could signal a top for USD-MYR. In addition, we can see that MACD signal line has crossed below the MACD line. The ADX looks set to breach the 20-mark which means that momentum for a down slide can pick up pace.


Chart 1: USD-MYR's daily cahrt as at November 25, 2015_10.00am (Source: Investing.com)

The same technical set-up can also be seen for SGD-MYR. See Chart 2 below.


Chart 2: SGD-MYR's daily cahrt as at November 25, 2015_10.00am (Source: Investing.com)

Both charts show tentative bearish reversals for USD-MYR & SGD-MYR- which would translate to a tentative bullish reversal for MYR. If this reversal becomes full blown, all stocks that had benefited from the weakening of MYR would have to give back their gain. Thus, we may see a sharp reversal for exporters, such as rubber glove producers. On the opposite side of the coin, we may see a rebound for stocks that were adversely knocked down by the weakening of MYR, such as importers of cars. This could be the right time to take some profit for the gainers in the weak MYR play and take a position in the opposite play- the MYR recovery play.

WTHorse: Bottom-line took a hit

Result Update

For QE30/9/2015, WTHorse reported a net loss of RM21 million- it's first quarterly loss in the past 11 years. Revenue was down 3.5% q-o-q or 6.5% y-o-y to RM178 million.

The loss arose due to the unrealized foreign exchange loss of RM18.494 million resulting from the weakening of Ringgit  Malaysia, Vietnamese Dong and Indonesian Rupiah against the United State Dollar denominated borrowings/payables. This forex loss, which increased from RM9.070 million in QE30/6/2015 & RM4.753 million in QE31/3/2015, is a reflection of the substantial strengthening of USD against many Asian currencies.


Table: WTHorse's last 8 quarterly results


 Chart 1: WTHorse's last 41 quarterly results

Valuation

WTHorse (closed at RM2.39 yesterday) is trading at a PE of 22 times (based on last 4 quarters' EPS of 11 sen). While this PER looks high, the earning could recover easily if MYR and other Asian currencies were to strengthen in the near future.

Technical Outlook

WTHorse is in a long-term uptrend line, with support at RM2.20. If this support is violated, it may drop to the psychological RM2.00 mark. If there is no quick recovery - or if the construction sector remains weak - the company's earnings and share price may continue to weaken. If this negative scenario does not occur, then we should see a recovery back to the long-term uptrend line. Immediate resistance is at the recent high of RM2.40-2.45.


Chart 2: WTHorse's monthly chart as at Nov 24, 2015 (Source: ShareInvestor)

Conclusion

Based on weaker financial performance and uncertain technical outlook, I would rate WTHorse as a 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, WTHorse.

GCB: The recovery may begin

Results Update

For QE30/9/2015, GCB reported a net profit of RM22 million as compared to a net loss of RM13 million in the same quarter last year. Revenue soared 72% y-o-y. When compared to the immediate preceding quarter, its net profit increased 10-fold while revenue increased by 23%.

GCB returned to profitability due to the increased sales volume and selling price of cocoa cake and powder. The higher net gain on commodity future contract and lower inventory write-down also contributed to the increase in profit before tax for current quarter.


Table: GCB's last 8 quarterly results

As pointed out in the last post, GCB's profit & profit margin seems to have bottomed and are poised for recovery. This expectation panned out nicely and it could herald many quarters of better results ahead.


Chart 1: GCB's last 44 quarterly results

Financial Position

As at 30/9/2015, GCB's financial position is fairly tight with current ratio at 1.03 time and gearing ratio at 3.4 times. The high gearing is the result of high borrowings to finance its inventory & trade receivable. Inventory holding period had improved from 160 days in 31/3/2015 to 104 days while debtors' turnover period had deteriorated from 43 to 73 days over the same period. 

Valuation

GCB (closed at RM0.85 yesterday) is now trading at a trailing PER of 31 times (based on last 4 qaurters' EPS of 2.75 sen). If GCB can continue to chalk up results similar to QE30/9/2015, its PER would reduce to less than 5 times. This plus its PBR of 1.1 times its NTA (of 80 sen @30/9/2015) means that GCB is probably fairly valued today. 

Technical Outlook

GCB has finanlly broken above its downtrend in early September. However, the stock failed to rally given the uncertainty in the commodity sector in general.


Chart 2: GCB's weekly chart as at Nov 24, 2015 (Source: ShareInvestor)

From the next chart, we can see how far this stock has declined. Any recovery - however gradual - would be very rewarding.


Chart 3: GCB's monthly chart as at Nov 25, 2015 (Source: ShareInvestor)

Conclusion

Based on recovery in its financial performance and mildly positive technical outlook, GCB is now rated a BUY. However, it must noted that the commodity sector in general is still weak and the company's financial position is fairly tight. Thus, any exposure to the stock should be carried out cautiously.

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.

Sign: Earnings recovered on lower provision but revenue dropped

Results Update

For QE30/9/2015, Sign's net profit was mixed- up 26.6% q-o-q but down 26.7% y-o-y to RM4.9 million while revenue dropped by 18% q-o-q or 24% y-o-y to RM45 million. Revenue dropped q-o-q due to lower project revenue being recognized from both Kitchen & Wardrobe and Glass & Aluminium segments. Profit before tax has however increased due to lower provision for doubtful debts made, as compared to the immediate preceding quarter.

Table: Sign's last 8 quarterly results

 
Chart 1: Sign's last 31 quarterly results

Valuation

Sign (closed at RM2.12 at the end of the morning session today) is now trading at a trailing PE of 7.4 times (based on last 4 quarters' EPS of 28.7 sen). The low PER masked the fact that the last 2 quarters' EPS was significantly lower than the earlier 2 quarters' EPS. If the latest 2 quarters' EPS represents the new normal, then going forward, Sign's EPS would be about 14.6 sen and PER would be 14.5 times. At this PER, Sign is deemed fully valued.

Technical Outlook

Sign has a big drop in the morning session- losing 46 sen to close at RM 2.12. However, Sign is still in an uptrend line, with support at RM2.00. This level is also the horizontal support for the stock.


Chart 2: Sign's monthly chart as at Nov 24, 2015_12.30pm (Source: ShareInvestor.com)

Conclusion

Based on poorer financial performance and full valuation, Sign's rating is maintained as 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, Sign.