Merry Christmas

I like to wish everyone Merry Christmas and Happy New Year. I will be on leave for the next few days, and I won't be posting anything for the rest of the week.


via 123rf.com

D&O: Bullish Breakout

Background

D&O Green Technologies Bhd ("D&O") is involved in the semiconductor industry in various capacity such as provision of full trunkey contract manufacturing, manufacturing of semiconductor components and machinery, investing in semiconductor business in China and merchandising of semiconductors components.

Historical Financial Performance

D&O's profits have been rising steadily for the past 3 years.


Graph 1: D&O's last 10 yearly results

Recent Financial Results

In QE30/9/2017, net profit rose 81% q-o-q or 167% y-o-y to RM6.7 million while revenue rose 8% q-o-q or 7% y-o-y to RM111 million.


Graph 2: D&O's last 10 quarterly results

Latest Financial Position

As at 30/9/2017, Financial position is deemed satisfactory with current ratio at 1.77 times and gearing ratio at 0.81 times.

Valuattion

D&O (closed at RM0.745 as at Dec 22) is now trading at a trailing PER of 38 ttimes (based on last 4 quarters' EPS of 1.94 sen). At this PER, D&O is deemed fully valued.

Technical Outlook

 D&O broke above its ascending triangle at RM0.71 as well as its recent high of RM0.73. With this double breakout today, the stock is expected to continue with its prior uptrend.


Chart 1: D&O's daily chart as at Dec 22, 2017 (Source: Malaysiastock.biz)


Chart 2: D&O's weekly chart as at Dec 22, 2017 (Source: Malaysiastock.biz)

Conclusion

Despite fully valued, D&O is a good stock to long-term investment. In the short to medium-term, the stock may benefit from the strong global demand for semi-conductor. I believe the technical outlook is bullish and it is now a good trading BUY.

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.

Topglov: Revenue & Profits soared

Results Update

For QE30/11/2017, Topglov's net profit rose 7% q-o-q or 44% y-o-y to RM105 million while revenue rose 4% q-o-q or 19% y-o-y to RM938 million. Topglov attributed its outstanding performance to a 8%-growth in Sales Volume (due to strong demand growth); improvements in production efficiency & quality, and the coming on-stream of new capacity. It is a very exciting time for Topglov as its revenue closes in on the RM1 billion mark for quarterly revenue just as it surpasses the RM100 million mark for quarterly net profit.

 
Table: Topglov's last 8 quarterly results


Graph: Topglov's last 46 quarterly results

Valuation

Topglov (closed at RM7.48 yesterday) is now trading at a trailing PE of 26X (based on last 4 quarters' EPS of 29 sen). At this PER, Topglov is deemed fairly valued.

Technical Outlook

Yesterday, Topglov rallied past its recent high of RM7.05 and rose to RM7.48. The breakout of the RM7.05 level is also significant in another level because that level was close to the all-time high recorded in late 2016. Thus, Topglov is now entering blue-sky territory. It is possible to go to RM9.00.


Chart 1: Topglov's daily chart as at Dec 19, 2017 (Source: Malaysiastock.biz)


Chart 2: Topglov's weekly chart as at Dec 19, 2017 (Source: Malaysiastock.biz)

Conclusion

Based on improved financial performance and positive technical outlook, I think Topglov is poised to go higher. 

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.

NTPM: Earnings Dropped Sharply

Result Update

For QE31/10/2017, NTPM's net profit dropped by 48% q-o-q or 60% y-o-y to RM6.4 million while revenue was mixed - dropped by 4%  q-o-q but rose 3% y-o-y - to RM169 million. Revenue increased y-o-y mainly due to the increase in sales of Tissue and Personal Care Products, especially Tissue segment. The Group’s profit before taxation dropped 54% y-o-y mainly due to the higher raw material cost and labor cost.

 
Table: NTPM's last 8 quarterly results


Graph: NTPM's last 49 quarterly results

Valuation

NTPM (closed at RM0.675 yesterday) is now trading  at a PE of 17 times (based on last 4 quarters' EPS of 3.9 sen). At this PER, NTPM is deemed fully valued.

Technical Outlook

NTPM is in a long-term uptrend line, with support at RM0.68.


Chart 1: NTPM's weekly chart as at Dec 14, 2017 (Source: Malaysiastock.biz)

NTPM is however in an intermediate downtrend line with resistance at RM0.77.


Chart 2: NTPM's chart as at Dec 14, 2017 (Source: Malaysiastock.biz)

Conclusion

Based on poor financial performance & full valuation, I rate NTPM as a HOLD. It is important that the share price remains above the long-term uptrend line at RM0.68.

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.

Market Outlook as at December 14, 2017

At the end of the morning session, FBMKLCI rose 15.67 points to close at 1753.33. Gainers outnumbered losers by 352 to 245. The reason for the market rally was the positive revision of our growth by World bank from 5.2% set in October to 5.8% now (here).

We can see from the daily chart below that FBMKLCI has broken above the intermediate downtrend line yesterday. The sharp rally has managed to overcome even the strong resistance from the horizontal line at 1750, which is also the 200-day SMA line. If it can stay above this level _ a resistance-turned-support - the market can draw in buyers for the other sectors that are still lagging today.


Chart 1: FBMKLCI's daily chart as at Dec 14, 2017_2.30pm (Source: Malaysiastock.Biz)

When I looked thru the charts last night, the only sectoral index that had an upside breakout was the Finance index. The 4-year daily chart is shown below.


Chart 2: Finance's daily chart as at Dec 13, 2017 (Source: Shareinvestor.com)

The indices of second liner stocks (FBM70), third liner stocks (FBMSCAP) and FBMACE did not give any positive sign of an impending recovery or reversal.


Chart 3: FBM70's daily chart as at Dec 13, 2017 (Source: Shareinvestor.com)


Chart 4; FBMSCAP's daily chart as at Dec 13, 2017 (Source: Shareinvestor.com)


Chart 5: FBMACEs daily chart as at Dec 13, 2017 (Source: Shareinvestor.com)

The sharp rally this morning may continue to draw in more buying and if this can broaden up to the other sectors, not just the finance sector, then we may see a broad-based market recovery. Talks of a CNY rally is exciting but a bit premature. I will adopt a wait-and-see attitude towards the developing market rally. Buying of laggards may not be a bad idea but you should still exercise restraint. Good luck!

Magni: Profits Stabilize While Revenue Still Sliding

Results Update

In QE31/10/2017, Magni's net profit dropped 28% y-o-y to RM20.5 million while revenue dropped 10% y-o-y to RM252 million. However, net profit rose 5% q-o-q though revenue still dropped 14% q-o-q.

Group revenue dropped y-o-y due to 8.7%-decline in Garment revenue due to lower sale orders received and 18.9%-drop in Packaging revenue due to the cessation of offset printing packaging business in Q4-FYR 2017.

Group PBT dropped 28.0% y-o-y due to 26.3%-drop in Garment PBT which mainly due to lower revenue, higher operating expenses and foreign exchange loss. Packaging PBT decreased by 59.1% y-o-y mainly due to higher raw material costs and operating expenses, and lower revenue

As a result of lower profits, Magni cut its dividend to 4.5 sen from 5 sen paid out in the same quarter last year.

Table: Magni's last 8 quarterly results


Graph: Magni's last 43 quarterly results

Valuation

Magni (closed at RM6.01 yesterday) has a trailing PE of 9 times (based on last 4 quarters' EPS of 66.46 sen). Albeit the dividend cut, Magni still pays quarterly dividend which totaled 21 sen in the past 4 quarters; giving the stock a DY of 3.5%. Overall, Magni is still fairly valued.

Technical Outlook

Magni is still in a long-term uptrend. That uptrend has accelerated twice fom SS to S1-S1 to S2-S2. The support of S2-S2 is at RM6.00. The next support will be at the uptrend line, S1-S1 at RM5.00. The indicator readings are not encouraging; the MACD line is poised to cross below the MACD signal line, the +DMI is dropping against a rising -DMI, and, lastly, Slow Stochastic has broken its uptrend line. All these indicator readings are warning signs that the RM6.00 support may not hold out for long.


Chart: Magni's monthly chart as at Dec 12, 2017 (Source: ShareInvestor.com)

Conclusion

Despite the poorer earnings and dividend cut, Magni is still a good stock for long-term investment. The good entry level may be between RM5.00 and RM5.50.

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.

GENM: Poised for Next Upleg?

Technical Outlook

GENM has broken above its downtrend line, RR at RM5.10 in late November. This was followed by a sideways movement with the upside capped by the horizontal line at RM5.30. Yesterday GENM went above the RM5.30 to reach an intra-day high of RM5.33 before it closed at RM5.29. Today it is again trading above RM5.30. Current prices are RM5.34-5.35.


Chart 1: GENM's daily chart as at Dec 12 2017_9.30 (Source: Malaysiastock.biz)

From the weekly chart below, we can see that GENM is in along-term uptrend line, RR with support at RM4.30-4.40. While still below the zero line, the MACD has hooked up and crossed above the MACD signal line. +DMI has also crossed above -DMI. These two signs point to a possible bottom for GENM.


Chart 2: GENM's weekly chart as at Dec 12 2017_9.30 (Source: Malaysiastock.biz)

Recent Financial Result

GENM's profits in the past 3 quarters have normalized after the exceptional profits from forex gains and disposal of investment & properties for the period from QE30/6/2016 to QE31/12/2016.


Table: GENM's last 8 quarterly results


Graph: GENM's last 46 quarterly results

Valuation

GENM (closed at RM5.29 yesterday) is now trading at a PER of 38 times (based on annualized EPS of 14 sen). At this PER, GENM is deemed fully valued.

For those who are keen to following the progress of the construction work on the 20th Century Fox theme park, you can go here.

Conclusion

Based on poorer financial performance and demanding valuation, I rate GENM as a HOLD after the recent correction. The stock could be a trading BUY given the bullish technical outlook. If you choose to trade the stock, please exercise careful discretion.

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: Revenue & Profits Recovered

Results Update

For QE31/10/2017, BAuto's net profit increased 10% q-o-q to RM22 million while revenue rose 21% q-o-q to RM472 million. Compared to the same quarter last year, net profit dropped 46% on a 4%-decline in revenue.  Group  revenue rose q-o-q mainly due to higher sales volume arising from the newly launched CX-5 model in both domestic and the Philippines market since the beginning of October 2017. Profits rose q-o-q primarily due to improvement in unit sales from the new CX-5 at full margin in both domestic and the Philippines operations.


Table: BAuto's last 8 quarters' financial performance

From the graph below, we can see that BAuto is sacrificing margin in order to grow its sales volume. Hopefully this strategy can be slowly withdrawn with the introduction of new models as well as improvement in consumers' sentiment.

Graph: BAuto's last 22 quarters' financial performance (with profits changes capped at 100% on the left [A] and profit uncapped on the right [B])

Valuation

BAuto (closed at RM2.15 last Friday) has a fair PER of 127 27 times (based on last 4 quarters' EPS of 7.8 sen). At this PER, BAuto is deemed fully valued. However BAuto paid good dividend, with a fair attractive dividend yield of  4.2%.

Technical Outlook

BAuto has broken to the upside of its large triangle at RM2.05 in early September. Thereafter it has been trading sideways between RM2.00 & RM2.13. Last Friday, it broke above that trading range (or, above the line connecting the peaks for past 2 months, AB). This could be the signal for the next upleg in the share price.


Chart 1: BAuto's weekly chart as at Dec 8, 2017 (Source: Malaysiastock.biz)


Chart 2: BAuto's daily chart as at Dec 8, 2017 (Source: Malaysiastock.biz)

Conclusion

Based on improved financial performance and mildly bullish technical outlook, I revise the rating for BAuto from a REDUCE to a HOLD. If you wish to trade the technical breakout, you may do so but you may have to set a stop loss in case the breakout fails. 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.

Scientx: Quarterly PBT Hit a New High!

Result Update

For QE31/10/2017, Scientx's net profit remained unchanged q-o-q but rose 39% y-o-y to RM72 million while revenue was rose 2% q-o-q or 23% y-o-y to RM659 million. The increase in revenue was contributed by better sales performance from both the manufacturing and property segments. The increase in profits is consistent with the increase in revenue.


Table 1: Scientex's last 8 quarterly results

It is very encouraging that Scinetx's performance is fired by both the manufacturing & property development segments.


Table 2: Scientex's Segmental Results for QE30/10/2017

It is even more encouraging that Scientx achieved a new high in term of PBT in the last quarter. Prior to the last 4 quarters, the highest PBT was about RM80 million recorded in QE31/10/2015. The PBT in the past 4 quarters were all above RM80 million!


Graph: Scientex's last 49 quarterly results

Valuation

Scientex (closed at RM8.58 yesterday) is now trading at a trailing PE of 15 times (based on last 4 quarters' EPS of 58.42 sen). At this PER, Scientex is deemed fairly attractive.

Technical Outlook

Scientx is now trading just below its long-term uptrend line at RM8.80. While MACD has hooked down, the share prices did not drop much but were moving sideways. DMI is still "positive" which suggest that the uptrend may not be over. (Note: My gut feeling is that Scientx's share price is dragged down by the concern about the group's property development segment.


Chart: Scientex's weekly chart as at Dec 6, 2017 (Source: Malaysiastock.biz)

Conclusion

Based on good financial performance & attractive valuation, Scientex remains a good stock for medium to long-term investment. My only concern is the mildly negative technical outlook, which I hope will be resolved favorably after the latest quarter outstanding performance.

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.

Sime Beauty Contest: The Winner(s) are...

As at 12.30pm, SIMEPLT and SIMPROP closed higher at RM4.81 & RM1.17. These prices are also higher than the intra-day high recorded yesterday: RM4.79 for SIMEPLT and RM1.16 for SIMEPROP. On the other hand, SIME showed weakness by failing to rise above yesterday close. (Note: The strength of SIME on the first day of re-quotation was due to the availability of a 17-sen dividend which went ex on Dec 4.)

Table: SIME, SIMEPLT & SIMEPROP's prices for the past 3 & 1/2 days


Chart: SIME, SIMEPLT & SIMEPROP's 15-min chart (Source: Malaysiastock.biz)

Based on this price action today, I believe the sell-down for SIMEPLT and SIMPROP could be over. Those who like to get into a pure play stock - be it plantation or property stock - can consider SIMEPLT or SIMEPROP. The recent low - at RM4.58 for SIMEPLT and RM1.04 for SIMEPROP - may mark the low for the stocks for a while. The good entry for these stocks could be their intra-day high yesterday: RM4.79 for SIMEPLT and RM1.16 for SIMEPROP. 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.

TNLOGIS: Weaker Earnings, Lower Prices

Background

Tiong Nam Logistics Holdings Bhd ('TNLOGIS') is involved in logistics & warehousing and property development. For FY2018, TNLOGIS plans to spend about RM100 million on its expansion plan for its logistics and warehousing network across South-East Asia. This is in addition to RM287 million spent in FY2017 & FY2016 which raised its warehousing capacity to 4.8 million and 5.3 million sq ft. In FY2018, this capacity will again be raised to 5.9 million sq ft. The company is targeting to have a warehousing capacity of 7.1 million sq ft by FY2020. This massive expansion is part of the group's thrust into the e-commerce & cross-border transportation services. For more on the expansion pla, go here.



Recent Financial Performance

We can see that TNLOGIC's revenue has been rising steadily over the past 6 quarters but its earnings were sharply lower in the last 2 quarters due to start-up cost for its instant e-commerce & cross-border transportation services which have not reached the breakeven mark.


Table 1: TNLOGIS's last 11 quarterly results

Graph 1: TNLOGIS's last 11 quarterly results

Historical Financial Performance

TNLOGIS's financial performance has been commendable in the past 5 years. While revenue is still fairly stable, earnings declined due to lower earnings from the logistics and warehousing segment.

Table 2: TNLOGIS's last 10-year results

Graph 2: TNLOGIS's last 10-year results

Financial Position

As at 30/9/2017, TNLOGIS's financial position is deemed adequate with current ratio at 1.36x while gearing ratio is elevated at 1.46x. TNLOGIS will have to raised capital to address the high gearing or to inject its warehouses into a REIT to bring down the borrowings of the group.

Valuation

TNLOGIS (closed at RM1.33 yesterday) is now trading at a trailing PER of 8.2x (based on last 4 quarters' EPS of 16.2 sen). at this PER, TNLOGIS is deemed fairly valued,

Technical Outlook

TNLOGIS has been sliding steadily since it peaked at RM1.87 in April (see Chart 1). In August, TNLOGIS broke below its 200-day EMA line at RM1.60. It has just broken below the long-term uptrend line at RM1.35 on Nov 24.


Chart 21 TNLOGIS's daily chart as at Dec 5, 2017_12.00  (Source: Malaysiastock.biz)

The previous price correction in 2014-2015 saw the share price finding support at the 180-week EMA line. TNLOGIS is now at the 180-week EMA line and we will see whether this level will serve as a support for the share price for the next few weeks.


 Chart 2: TNLOGIS's weekly chart as at Dec 5, 2017_12.00  (Source: Malaysiastock.biz)

Conclusion

Based satisfactory financial performance - albeit current weaker result - TNLOGIS is a good stock to considered for long-term investment due to its exposure to the growing e-commerce logistics business. Current valuation is fairly reasonable after a sharp price correction. The downside is slower uptick of its expanded logistics network which may lead to weak earnings and further weakness in share price ahead. In view of this, you should exercise careful discretion if you choose to add thiss stock in your portfolio.

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.

Hevea: Earning Dropped Due to Scheduled Maintenance

Results Update

For QE30/9/2017, Hevea's net profit dropped 56% q-o-q or 58% y-o-y to RM7 million while revenue dropped 13% q-o-q or 7% y-o-y to RM118 million. PBT dropped 55% q-o-q or 58% y-o-y to RM8 million due mainly to the planned annual preventive maintenance at the particleboard sector, shortage of foreign workers faced by RTA sector and a lower USD exchange rate during the reporting quarter. In the comment on its future prospect, it noted that the problem of shortage of foreign workers is likely to persist and the company will increase automation & move to higher value products to overcome this challenge.

Table: Hevea's last 8 quarterly results


Graph 1: Hevea's last 40 quarterly results


Graph 2: Hevea's last 10 years' financial position

Valuation

Hevea (closed at RM1.28 last Thursday) is now trading at a PE of 8.5 times (based on last 4 quarters' EPS of 15.14 sen. At this PER, Hevea is still deemed fairly valued. In addition, Hevea pays a decent dividend, with yield of 4.1%.

Technical Outlook

Hevea has broken below its long-term uptrend line at RM1.48-1.50. It may continue to slide to its next support at the horizontal line at RM1.25.


 Chart: Hevea's weekly chart as at Dec 4, 2017  (Source: Malaysiastock.biz)

Conclusion

Despite the weaker financial performance & the negative technical outlook, Hevea is deemed to be a good stock for long-term investment based on its strong financial position and relatively attractive valuation. I rate the stock a HOLD as the stock may find support at the immediate support at RM1.25.

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.