Latitud: Earnings Continued to Rise

Result Update

In QE31/12/2018, Latitud's net profit rose 28% q-o-q or 120% y-o-y to RM17 million while revenue was mixed- down 5% q-o-q but rose 4% y-o-y to RM204 million. Revenue rose y-o-y mainly due to better orders received by furniture plants amounting to USD3.8 million offset with weakening of USD against RM. PBT rose y-o-y mainly due to increase in gross profit and foreign exchange gain of RM2.0 million in Q2FY2019 compared to foreign exchange loss of RM3.8 million in Q2FY2018.


Table: Latitud's 8 quarterly results


Graph: Latitud's P&L  for last 54 quarterly results

Financial Position

As at 31/12/2018, Latitud's financial position is deemed healthy with current ratio at 2.5x and gearing ratio at 0.4x.

Valuation

Latitud (closed at RM3.87 yesterday) is now trading at a trailing PER of 19 times (based on last 4 quarters' EPS of 20 sen). If the exceptionally poor result for QE30/6/2018 were excluded, Latitud's full-year EPS could be 33 sen, and its PER would be raised to 12 times. Based on this adjusted PER, Latitud is deemed fairly priced. 

Technical Outlook

Latitud has been in a s downtrend line, RR since 2015. It has just broken above the downtrend line. Its immediate resistance is at RM3.90-4.00.

Chart: Latitud's weekly chart as at Feb 27, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on good financial performance and position and fair valuation, Latitud is 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.

Padini: Steady Earnings is Enough!

Result Update

In QE31/12/2018, Padini's net profit rose 196% q-o-q or 6.5% y-o-y to RM53 million while revenue rose 40% q-o-q or 0.5% y-o-y to RM462 million. Revenues and profit before taxation for this quarter rose sharply due to Christmas season, year-end school holidays and the nationwide 5 days special sales promotion held during the current quarter under review.


Table: Padini's 8 quarterly results


Graph: Padini's P&L  for last 26 quarterly results

Financial Position

Padini's financial position is deemed healthy as at 31/12/2018 with current ratio at 2.9x and gearing ratio at 0.45x.

Valuation

Padini (closed at RM3.51 yesterday) is now trading at a trailing PER of 13.5x (based on last 4 quarters' EPS of 26 sen). At this PER, Padini is deemed fairly attractive.

Technical Outlook

Padini dropped sharply after its reported its poor result for QE30/9/2018. It has found support at the horizontal line at RM3.30. Its resistance levels are at RM3.70 and RM3.90.

Chart 1: Padini's weekly chart as at Feb 27, 2019 (Source: Malaysiastock.biz)


Chart 2: Padini's daily chart as at Feb 27, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on better financial performance, good financial position and fairly attractive valuation, Padini is still a good stock to buy 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.

Fitters: Earnings Rebounded

Result Update

In QE31/12/2018, Fitters's net profit rose 46% q-o-q to RM7.3 million on the back of a 2%-increase in revenue to RM100 million.Pre-tax profit rose 65% q-o-q due to:

• Fire Services division recorded a profit of RM1.9 million as compared to RM0.5 million in the third quarter of FYE 2018 due to recognition of project variation orders of certain projects.
• Property, Development & Construction division recorded a profit of RM7.8 million as compared to RM5.6 million in the previous quarter contributed from the work progress of a contract awarded in FYE2017.
• HYPRO® PVC-O Pipes Manufacturing & Distribution Division, recorded a profit of RM69K as compared to a loss of RM1.1 million in the third quarter due to increase in sales.

These improved segmental performance offset the weaker performance from Renewable & Waster-To-Energy Division which recorded a loss of RM1.3 million as compared to previous quarter profit of RM1.8 million due to lower crops produced and low demand of crude oil from the overall market. This is further aggravated by an impairment loss on an investment amounting to RM0.8 million.


Table: Fitters's 8 quarterly results


Graph: Fitters's P&L  for last 42 quarterly results

Financial Position

Fitters's financial position is deemed healthy as at Dec 31, 2018 with current ratio at 1.8x and gearing ratio at 0.4x.

Valuation
Fitters (closed at RM0.51 yesterday) is now trading at a trailing PER of 14.7x (based on last 4 quarters' EPS of 3.47 sen). Based on this PER, Fitters is deemed fully valued.

Technical Outlook

Fitters is in a long-term uptrend line, SS with support at RM0.38-0.40. The breakout above the psychological RM0.50 mark - coupled with the expansion in the Bollinger band - may signal the potential uptrend in the stock. This may be driven by positive news flow, such as its PVC-O pipes getting greater acceptance as replacement for the old leaking pipes in many states across the Peninsular Malaysia. For more, go here.

Chart: Fitters's monthly chart as at Feb 27, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on improved financial performance & healthy financial position, Fitters may be 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.

IHH: Earnings Rebounds Back

Result Update 

In QE31/12/2018, IHH reported a net profit of RM509 million as compared to a net loss of RM104 million in the immediate preceding quarter, QE30/9/2018. Revenue rose 11% q-o-q to RM3.165 billion. As compared to the corresponding quarter last year, net profit rose 4-fold while revenue increased by 10%. The company announced:

Revenue and EBITDA improved on the sustained organic growth at existing operations and contribution from Gleneagles Hong Kong Hospital and Acibadem Altunizade Hospital, both of which opened in March 2017. Amanjaya Specialist Centre and Fortis Healthcare (“Fortis”), acquired in October 2018 and November 2018 respectively, also contributed to the higher revenue and EBITDA. This was despite the offsetting translational effect from a stronger Malaysian Ringgit against the currencies of other countries in which IHH operates. On a constant currency basis, revenue and EBITDA grew strongly by 28% and 33% respectively.


Table: IHH's last 8 quarterly results


Graph: IHH's last 31 quarterly results

Financial Position

As at 31/12/2018, IHH's financial position is deemed healthy with current ratio at 1.9 times while gearing ratio at 0.6 time.

Valuation

IHH (closed at RM5.66 yesterday) is now trading at a PE of 88 times (based on last 4 quarters' EPS of 6.44 sen). Assuming it can maintain its last quarter's earning of 5.8 sen, IHH's full-year earning would be 23.2 sen, and its PER would be lowered to 24 times. As it is, KPJ is fully valued.

Technical Outlook

IHH is in a gradual downtrend line, RR with resisatnce at RM6.10. Its immediate resistance is the recent high at RM5.80 while its immediate support is at RM5.50.


Chart: IHH's weekly chart as at Feb 27, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on strong financial performance, healthy financial position and commanding position in the healthcare sector, IHH is a good stock for long-term investment. However its upside is capped by its demanding valuation.

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.

IFCAMSC: Earnings Soared

Result Update

In QE31/12/2018, IFCAMSC's net profit rose 571% q-o-q or 142% y-o-y to RM9.0 million while revenue increased by 49% q-o-q or 27% y-o-y to RM33 million. Higher revenue was primarily contributed in the segment of Software & Software Related Service (SSRS). With this, the Group recorded profit before tax of RM10.4 million for the current quarter which represents an increase of RM8.2 million as compared to profit before tax of RM2.2 million in the preceding quarter.


Table: IFCAMSC's last 8 quarters P&L

Graph: IFCAMSC's last 25 quarters P&L

Financial Position

IFCAMSC's financial position as at 31/12/2018 is deemed healthy with current ratio at 4.9x and total liability to equity at 0.2x. Its cash reserve stood at RM75 million or RM0.12 per share.

Valuation

IFCAMSC (closed at RM0.255 yesterday) is now trading at a PER of 13x (based on last 4 quarters' EPS of 1.98 sen). If cash in hand is excluded, IFCAMSC's PER is further reduced to 6.8x. At any one of these PERs, IFCAMSC is deemed very attractive.

Technical Outlook

IFCAMSC is in a 2 years old downtrend line with resistance at RM0.275. A tentative short-term uptrend line with support at RM0.22.


Chart : IFCAMSC's daily chart as at Feb 27, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on strong financial performance, healthy position and attractive valuation, IFCAMSC is 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.

CSCSTEL: Reported a Net Loss!

Results Update

For QE31/12/2018, CSCStel reported a net loss of RM2.1 million on a turnover of RM356 million. Its revenue increased by 5.6% q-o-q mainly due to increase in sales for CRC and GI, but partly offset by lower sales for PPGI and lower key products average selling price by 3.6%.

However, the Group registered a loss before tax of RM4.5 million in this quarter compared with profit before tax of RM3.1 million in preceding quarter due to lower selling price coupled with higher raw material cost in persist keener competition situation.


Table: CSCStel's last 8 quarterly results


Graph: CSCStel's P&L for last 45 quarterly results

Financial Position

As at 31/12/2018, CSCStel's financial position is deemed very healthy with current ratio at 7.8 times and gearing ratio at 0.12 time. It has net cash of RM193 million which is equivalent to RM0.51 per share.

Valuation

CSCStel (RM1.09 as at 11:50 am this morning) has a PER of 18 times (based the last 4 quarters' EPS of 5.9  sen). If the cash balance of RM0.52 per share is deducted from the share price, CSCStel's PER will be reduced to 9.7 times. At this PER multiple, CSCStel is deemed quite attractive. Due to the loss incurred, CSCstel reduced its dividend of 10 sen to 4 sen. As a result, its dividend yield plunged to 3.7%.

Technical Outlook

CSCStel has just broken above its downtrend line at RM1.10 (highlighted in my earlier post). I hope that the share price can stay at or above this level so that the prior downtrend will not continue.


Chart: CSCStel's daily chart as at Feb 26, 2019 (Source: MalaysiaStock.Biz)

Conclusion

Despite poorer financial performance, CSCStel is a good stock for long-term investment based on strong financial position, attractive valuation and mildly bullish technical outlook.

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.

Johotin: Earnings Stayed Strong

Results Update

For QE31/12/2018, Johotin's net profit rose 21% q-o-q or 40-fold y-o-y to RM15 million while revenue rose 26% q-o-q or 35% y-o-y to RM157 million. Johotin's revenue and PBT rose y-o-y due to better performance by both tin manufacturing and F&B segments:

1) Revenue for tin manufacturing segment increased by RM6.04 million from RM27.26 million to RM33.30 million mainly due to higher sales in the edible oil industry and the printing of tinplates services. This led to a return to profitability, with report profit before tax of RM3.13 million as compared to a loss before tax of RM0.34 million in the preceding year corresponding quarter.
2) Revenue for F&B segment increased by RM34.52 million from RM89.33 million to RM123.85 million mainly due to higher sales from dairy products. The profit before tax increased by RM12.18 million from RM3.96 million to RM16.14 million, mainly due to higher sales and lower marketing and distribution expenses.

Table: Johotin's last 8 quarterly results


Graph: Johotin's last 36 quarterly results 

Financial Position

As at 31/12/2018, Johotin's financial position is deemed satisfactory with current ratio at 2.5 times and gearing ratio at 0.4 time.

Valuation

Johotin (closed at RM1.36 yesterday) is now trading at a trailing PE of 10.8 times (based on last 4 quarters' EPS of 12.58 sen). At this PER, Johotin is deemed fairly attractive.

Technical Outlook

Johotin continues with its long-term uptrend after it broke above the intermediate downtrend line at RM0.95 in November last year. Its sharp rally may send the share price to the next resistance at RM1.50 soon.


Chart: Johotin's weekly chart as at Feb 27, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on improved financial performance and healthy financial position, fairly attractive valuation and positive technical outlook, Johotin is 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.

AJI: New High for Quarterly Recurring Pre-tax Profit!

Result Update

In QE31/12/2018, Aji's net profit rose 16% q-o-q or 5% y-o-y to RM18.1 million while revenue was mixed- down 2% q-o-q but up 5% y-o-y to RM115 million. Revenue dropped q-o-q due to higher sale volume in the preceding quarter as a result of the tax holiday prior to the implementation of Sales
and Service Tax on 1 September 2018. However, the operating profit in the current quarter increased to RM20.1 million from RM17.5 million in the immediate preceding quarter mainly contributed by lower purchase cost of a key raw material and advertising and sales promotion expenses in the current quarter.


Table: AJI's last 8 quarterly results

Below, I tabulated the financial performance & dividend payment as reported as well as adjusted for extraordinary gain & special dividend, as the case maybe. In QE31/12/2018, AJI's recurring PBT made an all-time high! (Note: AJI reported a pre-tax profit of RM161 million in QE31/3/2017 which includes an extraordinary gain of RM145 million from the disposal of a piece of land.)

Graph: AJI's last 53 quarterly results

Valuation

AJI (closed at RM18.62 yesterday) is trading at a trailing PER of 19x (based on adjusted 4 quarters' EPS of 98 sen). At this PE, AJI is deemed fairly attractive.

Technical Outlook

AJI has been hovering at the horizontal line at RM18.00 for the past 6 months. Its immediate resistance is at the psychological RM20.00 mark and thereafter at the line connecting its high for the past 18 months (AB) at RM22.30.


Chart: AJI's weekly chart as at Feb 27, 2018 (Source: Malaysiastock.biz)

Conclusion

Based on satisfactory financial performance and attractive valuation, AJI is 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.

Market Outlook as at February 26, 2019

This is the 4th day after the big rally on February 20 (here). With each passing day, the market looks weaker, and our earlier excitement more misplaced. Let's re-examine the chart.

Chart: FBMKLCI's daily chart as at February 26, 2019_3.00pm (Source: Malaysiastock.biz)

As discussed on February 20, FBMKLCI broke above a pennant, ABCD at 1710. I expected the index to surge upward to test and break above the downtrend line, RR at 1732. Well, it did not happen. The market was not as bullish as I thought it should be. Now, FBMKLCI is pulling back towards the pennant, ABCD. If it can hold above the breakout level at 1710, it may stage another attempt to breach the downtrend line. We will have to wait and see. 

That's the state of play in the market now. Let's hope the index can stay at or above 1710. If it can do that, the current correction could be a good thing as new players can now gain entry into stocks at slightly lower prices. If players can make pocket money in each market rally, then more players will step forward. With greater numbers, the budding force will swell and eventually it may breach the downtrend line.   

TChong: Earnings Rebounded Strongly

Result Update

For QE31/12/2018, TChong's net profit rose 57% q-o-q to RM52 million while revenue dropped 26% q-o-q to RM1.17 billion. The group revenue dropped q-o-q due to lower revenue from the automotive division of RM1,140.7 million (-26.0% QoQ) which was due to lower sales in the absence of the “tax holiday” in Malaysia in the previous quarter. Nonetheless, the group EBITDA rose due to higher EBITDA from the automotive division of RM114.6 million (+29.3% QoQ) due to the favourable sales mix and improved margins.


Table: TChong's last 8 quarterly results

TChong's revenue, profits and profit margins appear to have turn the corner in the last few quarters.


Graph: TChong's last 49 quarterly results

Financial Position

As at 31/12/2018, TChong's financial position is deemed satisfactory with current ratio at 1.6 times and gearing ratio at 0.9 time.

Valuation

TChong (closed at RM1.48 yesterday) is now trading at a trailing PER of 9.5 times (based on last 4 quarters' EPS of 15.48 sen). At this PER, TChong is deemed fairly attractive for a turnaround stock.

Technical Outlook

TChong appears to be making a base at around RM1.40.


Chart: TChong's monthly chart as at Feb 25, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on improved financial performance and healthy financial position, TChong could be a good stock for 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.

JAKS: Bullish Breakout

JAKS had a long decline after it peaked at RM1.80 in February 2018. It dropped to a low of RM0.40 in December 2018. Last Friday it broke above its downtrend line at RM0.60-0.61. With this bullish breakout, JAKS could begin its recovery. A good level for entry is around RM0.60-0.61. 

Chart: JAKS's daily chart as at Feb 25, 2019_2.50pm (Source: Malaysiastock.biz)

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.

BOXPAK: Into the Red Again

Result Update

For QE31/12/2018, Boxpak slipped back into the red again. It reported a net loss of RM8.4 million as compared to a net profit of RM1.2 million in QE30/9/2018. Revenue rose 3% q-o-q or 20% y-o-y to RM173 million due mainly due to increased sales volume in Q4, 2018.

Boxpak recorded a loss before taxation of RM6.1 million, compared to a profit before taxation of RM1.0 million in Q3, 2018, due to a pre-operating loss of RM1.3 million for its Myanmar plant; higher unrealized foreign exchange losses in Q4, 2018; and, lower gross profit of RM12.7 million as compared to RM15.4 million (due to higher manufacturing expenses in Malaysia and Vietnam).


Table: Boxpak's last 8 quarterly results


Graph: Boxpak's last 55 quarterly results

Financial Position

Due to its rapid growth, Boxpak's financial position is a bit stretched. Liquidity is tight with current ratio at 1.0 time as at 31/12/2018 while gearing is elevated with total liabilities to total equity at 1.8 times.

Valuation

Boxpak (closed at RM1.27 last Friday) is now trading at a Price to Book of 0.6 time (based on NTA per share of RM2.08).

Technical Outlook

Boxpak has broken above its downtrend line at RM1.00 at the end of December last year. It should find support at this breakout level of RM1.00, which is also a psychological support level.


Chart 1: Boxpak's daily chart as at Feb 22, 2019 (Source: Malaysiastock.biz)


Chart 2: Boxpak's monthly chart as at Feb 22, 2019 (Source: Malaysiastock.biz)

Conclusion

As Boxpak has fallen back into a loss-making position, the case for buying this stock for a recovery play is negated. However, due to its deeply discounted share price, I would rate Boxpak as a HOLD while we await a more definite turnaround in its financial 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.

Gamuda & Litrak: Tolled Roads Takeover

Over the weekend, there were many reports that the Government is in talk to takeover some of the tolled roads and/or to reduce toll charges in the country. The tolled highways being highlighted as the first batch of concessions to be taken over are under Litrak (here). At this stage, there is no details on the takeover, such as pricing mechanism etc. The opposition parties are trying to paint the talk of tolled roads takeover as a political gimmick to win vote for the Semenyih by-election.

Right after GE14, the mere talk of a privatization of tolled roads had caused the share price of Litrak to plunge more than 30% from RM5.50 to RM3.70. I believe the negative sentiment has subsided, and the current round of rumor may have no impact on share price. Let's take a look at Litrak and Gamuda.

1) Litrak (RM4.60 @22/2/2019)

The share price is capped by a downtrend line, RR at RM4.70. Without any detail being disclosed, Litrak share price is likely to be capped by this downtrend line.


Chart 1: Litrak's weekly chart as at Feb 22, 2019 (Source: Malaysiastock.biz)

2) Gamuda (RM3.04 @22/2/2019)

This stock has rallied since the start of the year. It has gone above the downtrend line, RR at RM2.35. Its immediate resistance is at RM3.10. It will probably be driven higher by development in the negotiation on ECRL than takeover of Litrak's tolled road. If it can go above RM3.10, its next resistance will be at RM4.00 (with a short stop at RM3.50).


Chart 2: Gamuda's weekly chart as at Feb 22, 2019 (Source: Malaysiastock.biz)

I recommend a HOLD and a BUY ON WEAKNESS on both stocks.

Quick Update

As at 9:45 am, Litrak was down 32 sen to RM4.28 and Gamuda was down 29 sen to RM2.75. The sell-down is very strong- driven by fear and misconception. Even my fellow remisiers came to my room and told me, these 2 stocks are to crash. I reminded them that Malaysian economy is a free enterprise economy, with rules and laws. If the Government were to takeover these highways, the concession owners will be compensated. The question is only the quantum of the compensation. If the Government can simply takeover a private asset without compensation, we will be on the road to economic perdition. 

Liihen: Earnings Roared Back

Result Update

In QE31/12/2018, Liihen's net profit rose 41% q-o-q or 40% y-o-y to RM21.5 million while revenue rose 8% q-o-q or 17% y-o-y to RM217 million. Revenue in current period increased 8% compared to the immediate preceding quarter mainly due to the increase in export sales by 6.4% from USD 47 million to USD 50 million and slight appreciation of USD against RM by 2% (4th Qtr 2018 :4.16; 3 rd Qtr 2018: 4.08). With the operating cost maintained at relatively constant level and stronger USD compared to the immediate preceding quarter, the fourth quarter’s profit before tax increased 21%. The lower effective tax rate in the current quarter of 13% was due to certain export tax allowance claimed.


Table: Liihen's last 8 quarterly results


Graph: Liihen's last 25 quarterly results

Financial Position

As at 31/12/2018, Liihen's financial position is deemed healthy with current ratio at 2.4 times and total liabilities to total equity of 0.4 times. 

Valuation

Liihen (closed at RM2.83 yesterday) is now trading at a trailing PER of 8.8 times (based on last 4 quarters' EPS of 32 sen). Based on this, Liihen is deemed an attractive stock.

Technical Outlook

Liihen is hovering at the horizontal line at RM2.80 for the past 2 months. If it can surpass this resistance, it may go up to test the next horizontal line at RM3.30.


Chart: Liihen's weekly chart as at Feb 21, 2019 (Source: Malaysiastock.biz)

Conclusion

With improved financial performance, healthy financial position and attractive valuation, Liihen is 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.

OFI: Earnings Rebounded Strongly

Background

Oriental Food Industries Holdings Bhd ('OFI') is a manufacturer of confectionery and snack foods. It was founded in 1978 and listed on the Second Board of Bursa Malaysia in 2000. Later it transferred its listing onto the Main Board. For more, go to the company's website. If you like to read a detailed analyst report available online, read JF Apex's report in 2017 here.

OFI's products

Recent Financial Performance

In QE31/12/2018, OFI's net profit rose 92% q-o-q or 54% y-o-y to RM5.1 million while revenue rose 10% q-o-q or 8% y-o-y to RM81 million. The increase in revenue was attributed to increase in both local and export sales. Profit before tax for the current quarter is higher due to lower cost of sales and higher gross profit margin.


Table: OFI's's last 8 quarterly results


Graph: OFI's last 22 quarterly results

Financial Position

As at 31/12/2018, OFI's financial position is deemed very hea;thy with current ratio at 2.3 times and gearing ratio at 0.4 time only.

Valuation

OFI (closed at RM0.72 yesterday) is now trading at a PE of 15 times (based on last 4 quarters' EPS of 4.7 sen). Based on this, OFI is deemed fairly valued.

Technical Outlook

OFI dropped from a high of RM2.50 in August 2016 to a recent low of RM0.65. The stock is still trying to form a base for the recovery.


Chart: OFI's weekly chart as at Feb 21, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on improved financial performance, OFI is a good stock for long-term investment in view of its healthy financial position and fair valuation.

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 February 20, 2019

Our market had a big rally today. FBMKLCI rose 19.62 points to close at 1726.18. The rally was fairly broad-based with 724 gainers and 252 losers.

From Chart 1, we can see that FBMKLCI broke above the pennant formation, ABCD at 1706 as well as the horizontal line at 1710. Tomorrow, we may see FBMKLCI rising to meet the downtrend line, RR (at 1729) which dates back to April 2018. The next resistance will be the 200-day SMA line at 1740. That will have to wait for another day.    

Chart 1: FBMKLCI's daily chart as at Feb 20, 2019 (Source: Malaysiastock.biz)

The target for this breakout rally above the pennant formation is 1775-1780. Check out this article from Stockcharts.com.

Chart 2: FBMKLCI's daily chart as at Feb 20, 2019 [zoomed in] (Source: Malaysiastock.biz)

Recently I came across an article by Malaysia Finance which opined that 2019 may be a good year for emerging market ('EM'), such as Malaysia. This is based on the historical record that EM tends to post a double digit gain after a double digit loss in the preceding year. I have reproduced a more complete table from another source, Novel Investor.


Annual Asset Class Returns from 2004 to 2018

Based on the above, I believe that you should accumulate stocks which have not gone up too much and add more to your position if the index can break above the downtrend line at 1729-1730. Good luck.

KPJ: Profits Continued to Rise

Result Update 

For QE31/122018, KPJ's net profit rose 29% q-o-q but dropped 12% y-o-y to RM53 million while revenue rose 5% q-o-q or 4% y-o-y to RM863 million. Group revenue rose 4% y-o-y mainly contributed by the increase in number of patient visits, number of beds and surgeries particularly for KPJ Rawang, KPJ Pasir Gudang and KPJ Bandar Maharani. A total of 14 new consultants from various disciplines joined the Group which contributed to an increase of 7% for its inpatient and outpatient treated at our hospitals. Extended promotions to the neighbouring countries and online promotions and marketing strategies were also factors to the increase in revenue.

Profit before zakat and tax increased 5.4% y-o-y due to lower negative EBITDA reported by the Indonesian operation (RM1.5 million vs RM7.2 million previously) which offset the drop in profit before zakat and tax in the Malaysian operation from RM90.2 million to RM86.1 million as well as higher negative EBITDA reported by the discontinued Australian operation (RM4.7 million vs RM0.5 million previously).


Table: KPJ's last 8 quarterly results

KPJ's quarterly revenue has been on a steady uptrend for the past 10 years. Its earning has been flattish in the past 5-6 years due to expansion program which led to lower profit margin as higher administrative expenses were not fully absorbed by revenue from the newly hospitals opened. However profits & profit margins seem to be curving upward. If these trends persist, we may see a breakout in profits next few quarters.


Graph: KPJ's last 48 quarterly results

Financial Position

As at 31/12/2018, KPJ's financial position is deemed satisfactory with current ratio at 1.2 times while gearing ratio was elevated at 1.2 times. IHH has much stronger financial position as at 30/9/2018 with current ratio at 2.5 times while gearing ratio was only 0.5 times.

Valuation

KPJ (closed at RM1.08 yesterday) is now trading at a PE of 26 times (based on last 4 quarters' EPS of 4.16 sen). At this PER, KPJ is fully valued.

Technical Outlook

KPJ has been moving sideways for the past 5-6 years. If it can break above the high achieved during the past 5-6 years at RM1.15-1.20, KPJ's uptrend can begin.


Chart: KPJ's monthly chart as at Feb 19, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on improving financial performance and exposure to a growing consumer service sector, KPJ could be a good stock for long-term investment. However, its high valuation and neutral technical outlook mean that the stock is likely to trade sideways around RM1.00-1.10 for a while longer.

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.