Astino: Earnings Improved Sequentially

Result Update

In QE30/4/2019, Astino's net profit rose 35% q-o-q but dropped 2% y-o-y to RM8.6 million while its revenue dropped 6% q-o-q but rose 4% y-o-y to RM141 million. Revenue dropped q-o-q primarily due to decrease in local demand from RM130.1 million in preceding quarter to this quarter RM120.8 million. The Group’s profit before taxation rose to RM10.9million from RM9.6 million recorded in the preceding quarter- mainly due to decrease of allowance for diminution in value of inventories.


Table: Astino's last 8 quarters' results


Graph: Astino's last 48 quarters' results

Financial Position

Astino's financial position as at 30/4/2019 is deemed healthy with current ratio at 2.3x and gearing ratio at 0.4x.

Valuation

Astino (closed at RM0.685 last Friday) is now trading at a trailing PER of 9.1x (based on last 4 quarters' EPS of 7.55 sen). At this PER, Astino is deemed fairly valued.

Technical Outlook

Astino is still in a long-term uptrend (see Chart 1). It peaked at RM1.26 in July 2017 and thereafter the share prices have been in a slow decline due to poorer financial performance. An upswing can only begin if Astino can surpass its intermediate downtrend line, RR at RM0.70 (see Chart 2).


Chart 1: Astino's weekly chart as at Jun 28, 2018 (Source: Malaysiastock.biz)


Chart 2: Astino's daily chart as at Jun 28, 2018 (Source: Malaysiastock.biz)

Conclusion

Based on improved financial performance, satisfactory financial position, fair valuation and mildly bullish technical outlook, Astino could 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.

Market Outlook as at July 1, 2019

Following the "successful G20 meeting" where Trump behaved rationally, global stock markets will likely put in a strong rally next week. As for our market, we will likely to participate in this rally as FBMKLCI has consolidated for the whole of last week after it broke above its downtrend line, RR at 1665 on June 20. Good luck to your trading or investing next week!!   

Chart: FBMKLCI's daily chart as at Jun 28, 2019 (Source: Malaysiastock.biz)

Scientx: Earnings Grew Due to Contribution from Newly-Acquired Daibochi

Result Update

For QE30/4/2019, Scientx's net profit dropped 1% q-o-q but rose 19% y-o-y to RM73 million while revenue was rose 8% q-o-q or 38% y-o-y to RM828 million. The Group’s revenue rose q-o-q mainly due to contribution from the newly acquired subsidiary, Daibochi. Profit before tax for the current financial quarter was RM101.4 million, a marginal increase of 1.4% compared to RM100.0 million recorded in the preceding financial quarter.


Table: Scientex's last 8 quarterly results


Graph: Scientex's last 53 quarterly results

Financial Position

As at 30/4/2019, Scientex's financial position is deemed satisfactory with current ratio at 1.2 times and gearing ratio at 0.72 time.

Valuation

Scientex (closed at RM8.56 yesterday) is now trading at a trailing PE of 14.7 times (based on last 4 quarters' EPS of 58.43 sen). At this PER, Scientex is deemed fairly attractive.

Technical Outlook

Scientx was in an uptrend line, SS which accelerated in a steep uptrend lien, S1-S1 in 2016 & 2017. The share price then broke this steep uptrend line, S1-S1 and tentatively established a more gradual uptrend line, S1-test the uptrend line, S1-S2 at RM7.50.


Chart 1: Scientex's weekly chart as at Jun 26, 2019 (Source: Malaysiastock.biz)


Chart 2: Scientex's monthly chart as at Jun 26, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on good financial performance, strong financial position, fairly attractive valuation and mildly positive technical outlook, Scientex remains a good stock for medium to 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.

Redtone: Revenue and PBT Continued to Rise

Result Update

For QE310/4/2019, Redtone's net profit dropped 11% q-o-q but rose 53% y-o-y to RM4.8 million while revenue rose 62% q-o-q or 132% y-o-y to RM73 million. Revenue rose q-o-q mainly due to higher revenue from Managed Telecommunication Network Services ("MTNS") segment.


Table: Redtone's last 8 quarterly results


Graph: Redtone's last 33 quarterly results

Financial Position

As at 30/4/2019, Redtone's financial position is healthy with current ratio at 2.5 times and gearing ratio at 0.5 time.

Valuation

Redtone (closed at RM0.305 yesterday) is now trading at a trailing PE of 15 times (based on last 4 quarters' EPS of 2.01 sen).  At this PE, Redtone is still deemed attractive for a turnaround stock with room for further growth.

Technical Outlook

Redtone is trying to stay above its long-term downtrend line, RR as well as its intermediate uptrend line, RR- both at RM0.29.


Chart 1: Redtone's weekly chart as at Jun 25, 2019 (Source: Malaysiastock.biz)


Chart 2: Redtone's daily chart as at Jun 25, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on improved financial performance, healthy financial position and mildly bullish technical outlook, Redtone could 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.

Market Outlook as at June 19, 2019

Yesterday FBMKLCI rose 13.78 points (or 0.83%) to close at 1666.54. Gainers out-numbered losers 474 to 330, with 405 counters traded unchanged.

FBMKLCI has gone marginally above the intermediate downtrend line, RR at 1665. Though unconvincing, this upside breakout could signal the end of the past 1 year downtrend. What comes next will either be a sideways market or an uptrend. With the Malaysian economy in doldrums and our political scene in a state of confusion, it is hard to believe a bullish market will emerge. 

Let's wait and see.

Chart: FBMKLCI's daily chart as at June 19, 2019 (Source: Malaysiastock,.biz)

Topglov: Bottom-line plunged

Results Update

For QE31/5/2019, Topglov's net profit dropped 29.4% q-o-q or 36.5% y-o-y to RM74.7 million while revenue rose 2.6% q-o-q or 8.1% y-o-y to RM1.190 billion. Revenue increased due to 2%-increase in Sales Volume plus increase in ASPs.

Meanwhile, Profit Before Tax and Profit After Tax eased by 34.5% and 29.5% respectively. This was attributed to a 22% surge in the price of natural rubber latex compared with QE28/2/2019, coupled with strong competition as well as the time lag in passing on cost to customers, which affected the natural rubber glove profit contribution. However, the situation has improved from May 2019 onwards due to the effect of selling price revision. The nitrile latex price decreased slightly by 3.1% to USD1.05/kg, which mitigated the impact from competition in nitrile glove segment.

 
Table: Topglov's last 8 quarterly results


Graph: Topglov's last 50 quarterly results

Valuation

Topglov (closed at RM4.87 yesterday) is now trading at a trailing PE of 32 times (based on last 4 quarters' EPS of 15.35 sen). At this PER, Topglov is deemed overvalued.

Technical Outlook

Topglov dropped sharply yesterday after the release of its poor result during the mid-day break. The price tested the medium-term uptrend line, S1-S1 at RM4.65 before it recovered to close at RM4.87. It is possible that Topglov may re-test the medium-term uptrend line again given the sharp decline in earnings last quarter. If the medium-term uptrend line, S1-S1 cannot hold, the next support will be the horizontal line at RM4.20.


Chart 1: Topglov's daily chart as at June 18, 2019 (Source: Malaysiastock.biz)


Chart 2: Topglov's weekly chart as at June 18, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on weaker financial performance and high valuation, I revise my rating for Topglov to a Trading Sell. A good sale would be closer to RM5.00 and a good re-entry price would be below RM4.50.

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.

Selamat Hari Raya Aidilfitri

I wish all my readers a joyous and blessed Hari Raya Aidilfitri.

via KuchingOnline.com

Market Outlook as at June 3, 2019

Our market had 4 good days last week. FBMKLCI rose ~50 points from 1601 on Tuesday to 1650 on Friday. The gain was brought on by selective buying of blue chip stocks, especially Tenaga, PBBank, Axiata and Digi. However, we saw limited participation by retail players, which explains why the scoreboard remained unimpressive.

Looking at the weekly chart, we can see FBMKLCI has yet to cross the 2 lines connecting the troughs/lows from 2010 till today. The lower line connects the extreme troughs/lows while the upper line connect closing index. 

Chart 1: FBMKLCI's weekly chart as at May 31, 2019 (Source: Malaysiastock.biz)

The immediate resistance for FBMKLCI will be the lower of the 2 lines connecting the last 9 years' troughs/lows, at 1665. The next resistance will be the upper line of the downward wedge, ABCD at 1675. For FBMKLCI to break above these 2 resistance levels, we need market participation to broaden out next week. Since it will be a short trading week - with Tuesday being a half-day and Wednesday & Thursday being holidays - I believe the market will be very quiet.

Chart 2: FBMKLCI's daily chart as at May 31, 2019 (Source: Malaysiastock.biz)

As noted in the previous market outlook, a correction in the U.S. markets could help to channel funds to emerging markets, such as ours. You may use the quiet market to do some bargain hunting. Good luck!

Crude Oil Prices Have Room to Fall

Brent crude oil prices broke below the 200-day SMA line at USD70 on May 24. The rebound on Monday & Tuesday failed to push the price above the 200-day SMA line. In the last 3 days, Brent dropped from ~USD68 to ~USD62.

Chart 1: Brent's daily chart as at May 31, 2019 (Source: Stockcharts.com)

Looking at the 2-year daily chart (below), we can see that Brent is poised to go lower. MACD has gone below the zero line and -DMI has crossed above +DMI (with ADX trending higher). 

Chart 2: Brent's daily chart as at May 31, 2019 (Source: Stockcharts.com)

While Brent may find support at horizontal lines at USD61.00 and USD58.00, the strong support will likely be at the line connecting the past 3 years low, AB at USD52.00.

 
Chart 3: Brent's weekly chart as at May 31, 2019 (Source: Stockcharts.com)

According to various report, the decline in crude oil was driven by surging U.S. stockpile and economic concerns which are brought on by the reckless behavior of the current U.S. administration (here).