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.