Happy New Year

I will be on leave from today until January 4 & I won't be posting anything during that period. I wish everyone a very Happy New Year.


via freedesignfile.com

Studying Quarterly Result Announcement

Today I have posted my first instructional video on YouTube. This video deals with how I study quarterly result announcements on Bursa Malaysia. The quick study of quarterly results is one of the most time-consuming works that I carry out in order to filter out stocks that have outstanding performance or very poor performance. This way I would be able to make a BUY call or a SELL call as soon as possible.

The link to the video is here. I hope you would find it useful. As always, I appreciate any suggestion you may have for future improvement.

VS: Earnings Rebounded Somewhat

Result Update

For QE31/10/2016, VS's net profit rose by 206% q-o-q but dropped 44% y-o-y to RM34 million while revenue rose 22% q-o-q & 11%  y-o-y to RM680 million.  


Table 1: VS's last 8 quarterly results

Q-o-Q Comparison

The Group's profits rose q-o-q mainly due to higher sales contributed by the Malaysia operations and the absence of impairment loss.

Y-o-Y Comparison 

The Group's profits dropped y-o-y due to:

1. Malaysian operation recorded a lower profit before tax mainly owing to high initial start-up cost incurred in preparation for the upcoming substantial box built order anticipated from a key customer.

2. China operation recorded a higher due to lower sales and higher raw materials incurred arising from a weaker RMB against USD during the period under review.

Table 2: VS's segmental results


Graph: VS's last 47 quarterly results

Valuation

VS (closed at RM1.38  last Friday) is trading at a trailing PE of 18 times (based on last 4 quarters' EPS of 7.83 sen). At this PER, VS is deemed fully valued.

Technical Outlook

VS had a strong rally from a low of RM0.25 in late 2013 to a high of RM1.60 in late 2015. Since then, it has been consolidating at around RM1.40.


Chart 1: VS's monthly chart as at Dec 23, 2016 (Source: ShareInvestor.com)

The question is whether VS has peaked in 2015 like it did in early 2000 & late 2007 (see Chart 2). Unlike the past 2 instances, VS seems to be climbing back up after the peak. Is this due to better earnings as a result of favorable forex movement or is it due to new orders in the pipeline. 

Chart 2: VS's weekly chart as at Dec 23, 2016 (Source: ShareInvestor.com)

Conclusion

Based on weaker financial performance (albeit a slight recovery), demanding valuation and prior sharp price run-up, I would maintain VS as a SELL INTO STRENGTH. However, if its earnings continue to grow- from the new large orders- I may revise my rating accordingly. 

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Merry Xmas

I like to wish all my readers a joyous and Merry X'mas.


via freedesignfile.com

SKPetro: A Ticket To Ride The O&G Recovery (UPDATED)

  As at 3:10 EST, WTIC was traded at around USD53.70.


Chart 1: WTIC's intraday chart as at Dec 21, 2016_3.10EST (Source: Bloomberg)

It looks like crude oil prices are poised to pull away from its breakout of its 6-month horizontal resistance of USD52.


Chart 2: WTIC's daily chart as at Dec 20, 2016  (Source: Stockcharts)

One of the best bets for a recovery in O&G is SKPetro. That stock has just broken above the downtrend line, RR at RM1.60. It is poised to break above the resistance from its horizontal line at RM1.68. If it managed to do so, its next resistance will be at the psychological RM2.00 mark and beyond that, the horizontal line at RM2.20.


Chart 3: SKPetro's weekly chart as at Dec 21, 2016_4.00pm (Source:Shareinvestor.com)

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

CIMB: Going Everywhere!!

A few years ago, I was pleasantly surprised to see an Oldtown Cafe in CIMB BU8 branch; Nothing like a cuppa java while you're doing your banking! 


 via Maro^gal Food Paradise

Today I'm more surprised to read the story of CIMB Thailand opening a branch in a 7-Eleven store in Bangkok! What a change!


 From The Edge Financial Daily

While you're there, don't forget your Frappuccino! 

 
Via Harga.runtuh.com

There you are... Four companies that go to where the customers are: CIMB, OLDTOWN, SEM & BJFOOD.

Prlexus: A Sharper-than-normal Drop In Revenue

Results Update

For QE31/10/2016, Prlexus's net profit dropped 35% q-o-q or 17% y-o-y to RM6.4 million on the back of lower revenue which dropped 30% q-o-q or 16% y-o-y to RM88 million. Overall revenue dropped q-o-q due to 31.7% q-o-q drop in revenue from the apparel division from RM123.3 million achieved in QE31/7/2016 to RM84.2 million in QE31/10/2016. Normally Prlexus's revenue from apparel division dropped in QE October 30. However, the drop for this financial year is worse than last financial year when revenue from apparel dropped by 13.8% from RM117.9 million to RM101.6 million. Nevertheless, the company expects its performance for the forthcoming quarters to remain stable. In fact, it had a Rights Issue to raise RM56 million in October where the bulk of the proceed will be used to build a fabric mill in Vietnam costing RM55.3 million. This mill is expected to be ready by June 2018.

  
Table: Prlexus's last 8 quarterly results


Graph: Prlexus's last 27 quarterly results

Valuation

Prlexus (closed at RM1.50 last Friday) is now trading at a PE of 9.2 times (based on last 4 quarters' EPS of 16.25 sen). At this PER, Prlexus is deemed fairly valued. [Note: Prlexus was trading at RM1.41 as at 9.15am.]

Technical Outlook

Prlexus was in a long-term uptrend, which peaked at RM1.90 in 2015. Now it is a consolidation phase.


Chart 1: Prlexus's monthly chart as at Dec 16, 2016 (Source: ShareInvestor)

In the consolidation phase, Prlexus pulled back to the support from the horizontal line at RM1.40 and momentarily tested the horizontal line at RM1.30. IPrlexus may trade within a band between the support at RM1.30/1.40 & the resistance at RM1.55/1.65 for the next few weeks/months until the revenue & profits swing back in the next upcycle.
  

Chart 2: Prlexus's weekly chart as at Dec 16, 2016 (Source: ShareInvestor)

Conclusion

Based on good financial performance (albeit poorer 1Q17 result) and fair valuation, Prlexus is rated a HOLD.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

MYR Outlook as at Dec 16, 2016

We have been having a tough time for quite a while now. However, I believe that things are beginning to turnaround. CPO, which has risen above RM3000 per ton, looks set to stay there for a while.


Chart 1: CPO's weekly chart as at Dec 16, 2016  (Source: ifs.marketcenter.com) 

On Saudi's initiative, OPEC and non-OPEC oil producers have agreed to minor production cut in crude oil output. This should sustain crude oil prices above USD50 in 2017.


Chart 2: WTIC's weekly chart as at Dec 16, 2016 (Source: Stockchart.com) 

We have yet to see MYR recovering against USD; not because we are not improving but because USD is gaining strength. USD index, which I thought would fall back below 100.5, has in fact charged above 103 yesterday. It may touch 110 before any consolidation may set in.


Chart 3: USD index's daily chart as at Dec 16, 2016 (Source: Stockchart.com) 

However we can see MYR is strengthening against SGD (see below). With this, I believe SGD-MYR may test the horizontal support at 3.05 next week.


Chart 4: SGD-MYR's weekly chart as at Dec 16, 2016 (Source: Investing.com)

If the above scenario of a recovery in MYR panned out, we may see improved sentiment in the stock market. Hopefully this would lead to a CNY rally. All of us - retailers, institutions and remisiers - need our ang pow after the dry spell in the last few months! Good luck to us!

Hapseng: Uptrend To Continue

Technical Outlook

Hapseng is one of the great performers for the past 4 years. It zoomed up from RM1.60-1.70 in 2013 to about RM8.00 in the past few days. I was lucky enough to call a BUY when it was at RM2.00 in 2013 but I also called a TAKE PROFIT when it was at RM6.00 in 2015.


Chart 1: Hapseng's monthly chart as at Dec 16, 2016_12.00pm (Source: ShareInvestor.com)
 
Hapseng continued to climb higher in 2015 and then it moved sideways in a range between RM7.85 & RM7.50 for few months. It finally broke above the RM7.85 in late November but its progress was check by the psychological RM8.00. It broke above RM8.00 on Dec 13. With this breakout and its MACD crossing above the MACD signal line, Hapseng is set to continue with its uptrend.


Chart 1: Hapseng's weekly chart as at Dec 16, 2016_12.00pm (Source: ShareInvestor.com)
  
Historical Financial Performance

Hapseng is a conglomerate with a strong earning track record for the past 7 years. I have tabulated its 18-year track record below, adjusted for exceptional gain from the IPO of its subsidiary, Hapseng Plantation Bhd in November 2007. Its average 5-year earnings growth rate is about 21.5% .



Graph: Hapseng's last 18 years net profit record

Valuation

Based on its present price of RM8.14, Hapseng is trading at a PER of 19.3x (based on last 4 quarters' EPS of 42.14 sen). PEG ratio is less than 1x (based on its average earning growth rate of 21.5%,). Thus Hapseng is still deemed attractive.

Conclusion

Based on good financial performance, fairly attractive valuation and bullish breakout, Hapseng is a good stock for a TRADING BUY. (Caution: In the event the share price falls back below RM8.00 (by setting your trigger at, say RM7.95), you are advised to close your long position. Good luck!!)

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Affin: A Cheap Banking Stock?

Background

Affin Holdings Berhad ('AFFIN') is a financial services conglomerate, involved in the provision of commercial, islamic and investment banking services, money broking, fund management, underwriting of general and life insurance business.

AFFIN is considered by many to be the weakest banking group in Malaysia. As an indication, I have computed the Return on Equity for the 3 banking stocks under my coverage (see the table below). You can see that the average ROE for AFFIN is 2 percentage points lower than AMBANK and CIMB.

 
Table 1: AFFIN's ROE compared with AMBANK & CIMB
 
Historical Financial Performance

From the graph below, we can see that AFFIN's earning grew steadily after the Global Financial Crisis ended in 2009. Like CIMB, AFFIN's earning peaked in 2013.


Graph 1: AFFIN's last 10 years' Financial Performance

The decline in earnings could have bottomed. The past 2 half-yearly results show sequential improvement which suggests the next profit cycle may be starting.


Graph 2: AFFIN's Financial Performance for the last 10 half-years

Recent Financial Result

Looking at the table below, we can see that the last 2 quarters' earnings (QE30/9/2016 & QE30/6/2016) are beginning to pull away from the RM100 million mark- a level that sustained AFFIN in the preceding 3 quarters (QE31/3/2016, QE31/12/2015 & QE30/9/2015). When will AFFIN's earning touch the RM200 million mark last seen in QE31/12/2014?


Table 2: AFFIN's last 8 quarterly result


Graph 3: AFFIN's last 8 quarterly result

Valuation

AFFIN (closed at RM2.33 yesterday) is now trading at a PER of 9.2x (based on last 4 quarters' EPS of 25.22 sen). Its Dividend Yield for FY2015 was fairly commendable at 3.4%.

In addition, AFFIN is the cheapest banking group in term of Price to Book Value. Its PB stood at only 0.5x (based NTA of RM4.53 per share as at 30/9/2016). I feel that the market has unfairly discounted this stock because of its poor ROE (see above).

Technical Outlook

AFFIN has dropped back to its "baseline" at RM2.00-2.10. Its indicators show a stock that's deeply oversold and due for a rebound/recovery. Its monthly MACD has crossed above its MACD signal line in 1-2 months. Its stochastic is oversold and has begun to swing back up. ADX has hooked down for the past 3-4 months - indicating weakening of downtrend momentum. Long-term trend reversal is not at hand yet as -DMI is still above +DMI.


Chart 1: AFFIN's monthly chart as at Dec 14, 2016 (Source: ShareInvestor)

The weekly chart shows AFFIN is now above the triple moving average lines (10-w SMA, 20-w EMA & 30-w EMA lines), which means that the stock should be moving higher. This is also confirmed by the MACD indicator, which has gone above the zero line. I feel that any dip toward the 10-w SMA line (around RM2.25) could be a good opportunity to buy into the stock.


Chart 2: AFFIN's weekly chart as at Dec 14, 2016 (Source: ShareInvestor)

How far would a decent rebound/recovery in share price go? If we can use the 1999 recovery as a guide, we can see the earlier rebound retraced 50% of the lost ground in 1998. If the same retracement were to take place in the developing rebound, AFFIN may touch a high of RM3.00. See the twin charts below.


Chart 3: AFFIN's monthly chart (x2) as at Dec 14, 2016 (Source: ShareInvestor)
  
Conclusion

Based on possible recovery in earning, undemanding valuation and tentative technical signs of a bottom, AFFIN could be a good stock to consider for a recovery play.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Magni: Another Outstanding Quarter!

Results Update

For QE31/10/2016, Magni's net profit rose 21% q-o-q or 32% y-o-y to RM28.5 million while revenue rose 3% q-o-q or 42% y-o-y to RM280 million. Revenue increased q-o-q due to higher garment and packaging revenue of 3.4% and 0.6% respectively mainly due to higher orders received. PBT increased q-o-q due to higher PBT for  garment of 23.3% due to higher revenue and lower operating expenses resulting from vigilant cost control but was partially weighed down by lower foreign exchange gain and lower dividend income, which offset lower PBT for packaging PBT mainly due to higher operating expenses.

Table: Magni's last 8 quarterly results


Graph: Magni's last 31 quarterly results

Valuation

Magni (trading at RM4.11 yesterday) has a trailing PE of 6.9 times (based on last 4 quarters' EPS of 59.6 sen). Its last 2 years' earning CAGR was at 53%; giving the stock a PEG ratio of less than 0.2x. At this PEG ratio, Magni's valuation is still very attractive. 

Technical Outlook

Magni is in a long-term uptrend. There are negative technical reading; MACD has just crossed below its MACD signal line and ADX has hooked down. This is reflected in the intermediate downward channel, which has support at RM3.60-3.70 & resistance at RM4.30-4.40.


Chart 1: Magni's monthly chart as at Dec 13, 2016 (Source: ShareInvestor.com)


Chart 2: Magni's weekly chart as at Dec 13, 2016 (Source: ShareInvestor.com)

Conclusion

Based on good financial performance and attractive valuation, Magni remains a very good stock for long-term investment. Its short-term technical weakness warrants close attention but 

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Tunepro: Earning Dropped Sequentially

Results Update

For QE30/9/2016, Tunepro's net profit dropped by 46% q-o-q but rose 11% y-o-y to RM14 million while revenue rose less than 1% q-o-q or 4% y-o-y to RM126 million. Revenue rose by RM0.6 million q-o-q due to increase of RM3.1 million in GEP offset by decrease in investment income of RM2.5 million. PBT declined by RM18.5 million q-o-q due to a drop in pre-tax profits in general insurance of RM16.9 million; RM1.1 million in investment holding segment; and RM0.5 million in share of profits of associates. The drop in pre-tax profits in general insurance was in turn due to reduced share of results from Malaysian Motor Insurance Pool (MMIP) of RM15.6 million and increase in management expenses of RM1.3 million. [Note: Tunepro's result for QE30/9/2016 was released on November 25.]

Table: Tunepro's last 8 quarterly results


Graph 1: Tunepro's last 20 quarterly results

Tunepro's revenue continued to track the revenue of Airasia. Thus, its performance will continue to be healthy as Airasia expands its wings across Asia.


Graph 2: Tunepro & Airasia's last 20 quarterly revenue
 
Valuation

Tunepro (closed at RM1.37 yesterday) is now trading at a PER of 11.9 times (based on last 4 quarters' EPS of 11.56 sen). At this PER, Tunepro is deemed attractively valued.

Technical Outlook

Tunepro broke below the uptrend line, SS at RM1.60 about 4 weeks ago. Last Froday, it broke below the support from the horizontal line at RM1.45. Its next support will come from the hroizonatl line at RM1.20.


Chart: Tunepro's weekly chart as at Dec 13, 2016_3.30pm (Source: Chartnexus) 

Conclusion

Despite weaker financial performance and negative technical outlook, Tunepro remains a good stock for long-term investment.  

Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

BAuto: Earnings Slid Further

Results Update

For QE31/10/2016, BAuto's net profit dropped 25% q-o-q or 42% y-o-y to RM31 million while revenue decreased by 4% q-o-q or 13% y-o-y to RM473 million. Group revenue dropped q-o-q by RM20.4 million or 4.1% to RM473.2 million largely due to lower sales volume recorded by the Malaysian operations as domestic sale was impacted by weak consumer sentiment and competitors' heavy discounting promotion. However, this was mitigated by better sales performance from the Philippine operations. In line with lower revenue, compressed profit margin and lower profit contribution from associated, the Group pre-tax profit dropped q-o-q by RM12.2 million or 20.8% to RM58.6 million.


Table: BAuto's last 8 quarters' financial performance


Graph: BAuto's last 18 quarters' financial performance

Valuation

BAuto (closed at RM2.06 at end of the morning session) has a fair PER of 14 times (based on last 4 quarters' EPS of 14.4 sen). BAuto paid good dividend, with an attractive dividend yield of  8.7%. This means that BAuto is fully valued but it may still hold some appeal due to its high dividend yield.

[Note: Berjaya Auto Bhd (BJAuto) has been renamed Bermaz Auto Bhd (BAuto).]

Technical Outlook

Since it peaked in June 2015, BAuto has been searching for a new and more sustainable uptrend line. Its current uptrend line, S-S3 has just been violated. It will soon be testing the horizontal line at RM2.00. We will see whether this support will last for long. If not, the stock may go to the next support at the horizontal line at RM1.80.


Chart: BAuto's weekly chart as at Dec 9, 2016_3.30 (Source: Share Investors)

Conclusion

Based on weaker financial performance, poor consumer sentiment and mildly negative technical outlook, I revise the rating for BAuto from a HOLD to a REDUCE. 

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

AMBANK: Waiting For The Tide To Turn

Background

AMMB Holdings Berhad or also known as AMBANK is a financial services group in Malaysia whose core businesses are retail banking, wholesale banking, islamic banking, and life and general insurance.

Historical Financial Performance

From the graph below, we can see that AMBANK enjoyed strong growth after the Global Financial Crisis ended in 2009. Its earning peaked in 2015.


Graph 1: AMBANK's last 10 years' Financial Performance

The decline in earnings could have bottomed. The past 6 months' results shows a slight uptick!


Graph 2: AMBANK's Financial Performance for the last 10 half-years

Recent Financial Result

Looking at the table below, we can see that the last 2 quarters' earnings (QE30/9/2016 & QE30/6/2016) are better than the earnings from the immediate preceding quarters (QE31/3/2016 & QE31/12/2015). There is a good chance that the earnings would continue to improve going forward.


Table: AMBANK's last 8 quarterly result


Graph 3: AMBANK's last 12 quarterly result

Valuation

AMBANK (closed at RM4.18 yesterday) is now trading at a PER of 10x (based on last 4 quarters' EPS of 41.72 sen). At this PER, AMBANK is deemed fairly valued.

Technical Outlook

AMBANK has lost about 50% of its 2013 high of RM8.00 to its recent low of RM4.00. It is now trading not very far from the support of its long-term uptrend line at RM3.50. In fact, the stock has strong support from the cluster of horizontal lines between RM4.00-4.50.


Chart 1: AMBANK's monthly chart as at Dec 8, 2016_10.30 (Source: ShareInvestor)

The weekly chart shows AMBANK had been hoovering around the RM4.20 level for more than a year. Due to poor sentiment, it broke thru that support and tested the support at the horizontal line at RM4.00. It even broke the RM4.00 mark briefly in late October before recovery. The pattern (ABCD) we see is similar to a falling wedge where a breakout to the upside at RM4.30 could signal the end of its 3 years' bear run. Watch out for that!


Chart 2: AMBANK's weekly chart as at Dec 8, 2016_10.30 (Source: ShareInvestor)
 
Conclusion

Based on possible recovery in earning and fair valuation, AMBANK could be a good stock to consider for a recovery play. However it must be noted that the stock is still in a downtrend and recovery would only begin if it can convincingly break above the RM4.30 mark.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.