CPO's Fantastic Rally

On October 24, CPO finally launched into an upswing after it broke above the horizontal line at RM2250. Today, after ten weeks of steady rise, CPO has cracked above the psychological RM3000 mark. It is now testing the downtrend line, RR at RM3050. This downtrend line stretches back all the way to March 2008!! Can the rally break above this formidable downtrend line?

Chart 1: CPO's weekly chart as at 30 Dec 2019_3.00pm (Source: Investing.com)

Chart 2: CPO's monthly chart as at 30 Dec 2019_3.00pm (Source: Investing.com)

Kenanga has rightly called this rally in early November. The research analyst picked 3 stocks to ride the CPO rally. They are HSPLANT, TAANN and KLK. The huge rally in these stocks can be clearly seen below. 

Chart 3: HSPLANT's daily chart as at 30 Dec 2019_3.00pm (Source: Malaysiastock.biz)

 Chart 4: KLK's daily chart as at 30 Dec 2019_3.00pm (Source: Malaysiastock.biz)

Chart 5; TAANN's daily chart as at 30 Dec 2019_3.00pm (Source: Malaysiastock.biz)

If CPO were to consolidate after testing the downtrend line at RM3050, the lofty prices of many of the plantation stocks will likely to retrace. I believe that some profit-taking now may be a good idea.

Merry Xmas & Happy New Year

I like to wish all my readers a Merry X'mas and a Happy New Year.

KBUNAI: Last Opportunity To Exit A Delisted Stock

Karambunai Corp Bhd (Short name: KBUNAI or stock code: 3115) has been taken private and was delisted on November 21 this year (here).

Minority shareholders, who have not accepted the offer and are now stuck with the shares, can still sell off the stock by accepting the offer to buy from the major shareholder. The deadline is February 5, 2020. (here)

Follow the guidelines laid down here. In brief, you need to do the following:

1. Accept the offer as per the Shareholder's Notice

2. Transfer the shares to the offeror by submitting a transfer request at your stockbroker.



3. Mail the duly completed Shareholder's Notice and a copy of the processed transfer request to the registrar, BINA MANAGEMENT (M) SDN BHD before February 5, 2020.



KBUNAI was the second company that Dr. Chen has taken private. The first company was PTGTIN. Dr. Chen, who made his fortune from his casino venture in Cambodia, is reported to have a substantial stake in another listed company, FACBIND. Will this be the next target to be privatized? We will wait and see. Go here to read more about this interesting businessman who is in "the springtime of his business career".

Scientx: Earnings Dipped Sequentially

Result Update

For QE31/10/2019, Scientx's net profit rose 51% y-o-y to RM81 million on the back of a 23%-increase in revenue to RM877 million. When compared to the immediate preceding quarter, QE31/7/2019, net profit dropped 39% while revenue was down 7%.  The q-o-q decrease in revenue was mainly due to lower progress billings recognized for the property division. In line with the lower revenue recognized in current financial quarter, profit before taxation for the current financial quarter was RM116 million compared to the preceding financial quarter of RM177 million.


Table: Scientex's last 8 quarterly results


Graph: Scientex's last 57 quarterly results

Financial Position

As at 31/10/2019, Scientex's financial position is deemed satisfactory with current ratio at 1.2 times and gearing ratio at 0.7 time.

Valuation

Scientex (closed at RM9.53 today) is now trading at a trailing PE of 13.4 times (based on last 4 quarters' EPS of 70.99 sen). At this PER, Scientex is deemed fairly attractive.

Technical Outlook

Scientx is in an uptrend which has been capped by the horizontal line at RM9.40-9.50. If Scientx cannot charge above this resistance, its uptrend will continue.


Chart: Scientex's monthly chart as at Dec 17, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on good financial performance, strong financial position, fairly attractive valuation and 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.

BAUTO: Revenue & Earnings Fell Sharply

Results Update

For QE31/10/2019, BAuto's net profit dropped 60% q-o-q or 72% y-o-y to RM20.4 million while revenue dropped 15% q-o-q or 34% y-o-y to RM457 million.

Group revenue dropped 14.5% q-o-q mainly attributed to lower sales volume recorded from the domestic operations, partially offset by higher revenue recorded from the Philippine operations. Lower sales volume from the domestic operations mainly due to the resolution of certain pricing issues, which delayed the sale of CX-8 vehicles during the quarter. Higher sales volume from the Philippine operations mainly due to the favourable response on the all new Mazda3 that was launched during the quarter under review. The Group pre-tax profit for the current quarter under review has reduced by RM35.8 million or 55.1% mainly due to lower profit contribution from the domestic operations as a result of lower sales volume and lower margin arising from absorption of higher costs on the new facelift Mazda CX-5 model compelled by the current market sentiments.


Table: BAuto's last 8 quarters' financial performance

Graph: BAuto's last 30 quarters' financial performance  

Financial position

As at 31/10/2019, BAuto's financial position has deteriorated with current ratio at 1.90 times and total liabilities to total equity at 1.17 times.

Valuation

BAuto (closed at RM2.15 yesterday) has a fair PER of 11.8 times (based on last 4 quarters' EPS of 18.28sen). BAuto paid quarterly dividends which totaled 21 sen over the past 4 quarters. This translates to a dividend yield of 9.8%. Based on the above, BAuto is an attractive stock.

Technical Outlook

BAuto peaked at RM2.75 in July this year. Since then, it has been declining steadily. Its immediate support is at RM2.00.


Chart: BAuto's weekly chart as at Dec 10, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on weaker financial performance, I revised my rating for BAUTO to a HOLD. BAuto is still a good stock for long-term investment based on attractive 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.

SCGM: Earnings Increased Sharply

Results Update

In QE31/10/2019, SCGM's net profit rose 83% q-o-q or 144% y-o-y to RM4.0 million while revenue declined 4% q-o-q or 7% y-o-y to RM54 million. The q-o-q decline in revenue was attributed to lower sales contribution from non-customized F&B packaging i.e. lunch boxes, cups and plates. The Group recorded a profit before tax of RM4.2 million in 2Q20, compared to profit before tax of RM2.2 million in 1Q20, in line with lower raw material prices, lower interest expense, higher gain on foreign exchange and higher amount of doubtful debts recovered in 2Q20.

 
Table: SCGM's last 8 quarterly results

 
Graph: SCGM's last 39 quarterly results

Financial Position

SCGM's financial position is deemed adequate with current ratio at 1.26 times while gearing ratio is elevated at 0.87 time.

Valuation

SCGM (closed at RM1.56 yesterday) is now trading at a PE of 26X (assuming the last 2 quarters' EPS can be maintained for a full year).  At this PE, SCGM is deemed fully valued.

Technical Outlook

SCGM broke above its downtrend line at RM0.80 in September. After the breakout, SCGM began a steep uptrend which nearly doubled in price. Its immediate resistance will be from the horizontal line at RM1.60.


Chart 1: SCGM's weekly chart as at Dec 9, 2019 (Source: Malaysiastock.biz)


Chart 2: SCGM's daily chart as at Dec 9, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on improved financial performance & bullish technical outlook, SCGM 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.

QL: Quarterly Revenue Crossed the Billion Mark!

Results Update

For QE30/9/2019, QL's net profit increased by 38% q-o-q or 15% y-o-y to RM69 million while revenue increased by 8% q-o-q and 17% y-o-y to RM1.073 billion. The result was announced on November 29.


Table: QL's last 8 quarterly results

From the graph below, we can see that QL's quarterly revenue has surpasssed the RM1 billion mark though quarterly profits are shy of its recent new high!!


Graph: QL's last 46 quarterly results

Financial Position

As at 30/9/2019, QL's financial position is deemed satisfactory, with current ratio at 1.58 times and gearing ratio at 0.92 time.

Valuation

QL (closed at RM7.45 last Friday) is now trading at a PE of 52 times (based on last 4 quarters' EPS of 14.33 sen). At this PER, QL is more than fully valued.

Technical Outlook

QL is steady uptrend, and is poised to test its all-time high of RM7.58 which was recorded in November 2018.


Chart: QL's weekly chart as at Dec 6, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on satisfactory financial performance, QL can be a good stock for long-term investment. Its demanding valuation makes it very difficult to call a BUY on the stock. For now, it deserves a HOLD rating because of its promising technical set-up for an upside breakout of its all-time high.

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.