Merry Christmas & Happy New Year 2021

 I like to wish everyone a Merry Christmas and a Happy New Year 2021.

POHUAT: Earnings Stayed Firm

Results Update

For QE31/10/2020, Pohuat's net profit rose 91% q-o-q or 49% y-o-y to RM22 million while revenue rose 63% q-o-q or 13% y-o-y to RM217 million. The Group’s turnover increased 63% q-o-q to RM217 million due to the recovery of demand and planned inventory building by US importers for the year end festive seasons, shipment to our US customers from both our Malaysian and Vietnamese operations increased substantially. In Malaysia, turnover grew by more than 40% whereas Vietnam’s turnover grew by a whopping 80%.

Correspondingly, profit before tax grew more than doubled to RM28 million as absolute gross profit grew 82.7% to RM47 million. Gross profit margin improved from 19.2% to 21.5% on the backdrop of stable raw material prices and better overhead absorption from the higher plant utilisation rate. In line with the higher turnover, selling, distribution and administrative expenses were broadly higher but were consistent as a percentage of sales with those in the preceding reporting period under review. The higher gross profit, coupled with the stable operating expenses, the Group’s profit before tax rose more than double from RM13.74 million.

Table: Pohuat's last 8 quarterly results


Graph: Pohuat's last 52 quarterly results

Financial Position

As at 31/10/2020, Pohuat's financial position is very healthy with current ratio at 2.9 times while total liabilities to total equity was at 0.3 time. Net cash in hand was equivalent to 83 sen per share.

Valuation

Pohuat (closed at RM1.78 yesterday) is now trading at a trailing gross PER of 9.3 times (based on last 4 quarters' EPS of 19.14 sen). At this PER, the stock is fairly attractive. In addition, the stock pays dividend totaling 8 sen in last 4 quarter, which translates to an attractive Dividend Yield of 4.5%.

Technical Outlook

Pohuat has recovered from the low of RM0.68 in Mar to a recent high of RM2.06. An intermediate uptrend line, SS will provide support if the share price were to retreat in the near future.

Chart 1: Pohuat's daily chart as at Dec 23, 2020 (Source: Malaysiastock.biz)

Looking at the weekly chart, we can see a line connecting the recent peaks for the stock. This line, denoted as RR, will provide resistance for any near term rally. However, if the share price can surpass this resistance, the ensuing rally can be expected to be strong.

Chart 2: Pohuat's weekly chart as at Dec 23, 2020 (Source: Malaysiastock.biz)

Conclusion

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

SCGM: Earnings Continue to Rise

Results Update

In QE31/10/2020 (2Q21), SCGM's net profit rose 16% q-o-q or 138% y-o-y to RM9.6 million while revenue increased 7% q-o-q or 14% y-o-y to RM61 million. The group revenue increased 7% q-o-q resulting from higher sales contribution from local market on higher deliveries of F&B packaging. The Group recorded 24% higher profit before tax of RM10.7 million in 2Q21 compared to profit before tax of RM8.7 million in 1Q21, which is in line with higher local sales recorded in 2Q21. In line with the increased revenue, the Group noted 16% higher net profit of RM9.6 million in 2Q21 versus RM8.3 million in the preceding quarter

 
Table: SCGM's last 8 quarterly results

 
Graph: SCGM's last 47 quarterly results

Financial Position

SCGM's financial position is deemed healthy with current ratio at 1.49 times while gearing ratio is elevated at 0.67 time.

Valuation

SCGM (closed at RM2.48 yesterday) is now trading at a PE of 16.6X (based on the last 4 quarters' EPS of 14.92 sen).  At this PE, SCGM is deemed fairly attractive.

Technical Outlook

SCGM peaked at RM3.95 in early August. It has dropped back to around the RM2.50 level in the past few days. Its 200-day SMA line support is not far away at RM2.32.


Chart 1: SCGM's daily chart as at Dec 21, 2020 (Source: Malaysiastock.biz)


Chart 2: SCGM's weekly chart as at Dec 21, 2020 (Source: Malaysiastock.biz)

Conclusion

Based on improved financial performance, healthy financial position & fairly attractive valuation, SCGM is a good stock for long-term investment. The current price downtrend is likely to continue until a reversal is achieved, which may come once the share prices have surpassed the RM3.00 mark.

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.

HAIO: Earnings Remained Strong

Result Update

For QE31/10/2020, Haio's net profit was relatively unchanged q-o-q but rose 41% y-o-y to RM10.4 million while revenue dropped 7.2% q-o-q or 3.3% y-o-y to RM66 million. Overall revenue dropped q-o-q mainly attributable to lower revenue generated from the MLM division as members recruitment and renewals have normalized and business activities and delivery service in East Malaysia were impacted by the third wave of COVID-19 pandemic outbreak. Wholesale revenue was maintained while retail revenue rose 4.2%. Profits was maintained partly due to one-off gain from the disposal of vintage tea amounting to RM 0.8 million.


Table: Haio's last 8 quarterly results 


Graph: Haio's last 62 quarterly results

Financial Position 

Haio's financial position as at 31/10/2020 is deemed healthy with current ratio at 4.1 times and total liabilities to total equity at 0.19 time.

Valuation

Haio (closed at RM2.32 last Friday) is trading at a trailing PE of 17.8 times (based on last 4 quarters' EPS of 13 sen). Haio paid out dividend totaling 8 sen in the past 4 quarters- giving the stock a decent dividend yield of 3.4%. Based on these, Haio is deemed fairly valued.

Technical Outlook

Haio seems to have on a recovery path, after its share prices exhibit higher "peaks" and "higher troughs" since Mar this year. Weakly MACD is now above the zero line, which indicates the share prices are likely to go into an uptrend.


Chart 1: Haio's weekly chart as at Dec 18, 2020 (Source: Malaysiastock.biz)


Chart 2: Haio's monthly chart as at Dec 18, 2020 (Source: Malaysiastock.biz)

Conclusion

Based on steadier financial performance, healthy financial position and mildly positive technical outlook, Haio 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 4 December 2020

We had a few days of good market last week. FBMKLCI is now pushing against the horizontal line at 1620. If FBMKLCI can surpass this level, the uptrend in the broader market will begin inearsest.

Chart 1: FBMKLCI's weekly chart as at Dec 4, 2020 (Source: Malaysiastock.biz)

Meanwhile, the small cap & fledgling stocks are racing up. FBMFLEDG has surpassed its immediate downtrend line, RR at 16000. It might revisit its 2017 high of 20100.

Chart 2: FBMSCAP's weekly chart as at Dec 4, 2020 (Source: Malaysiastock.biz)

Similarly, FBMSCAP has gone above the line connecting the recent high, R2-R2 at 14000. It is likely to test the long term downtrend line, RR at 16200.

Chart 2: FBMFLEDG's weekly chart as at Dec 4, 2020 (Source: Malaysiastock.biz)

Based on the above charts, the market is well-suited for trading in small cap & fledging stocks. If FBMKLCI were to break above 1620 convincingly, we will see a broad-based rally in the market. 

Market Outlook as at 1 December 2020

Yesterday, the index plunged in the last minutes of trading- adding 24 points to the earlier 20-point drop. This caused the FBMKLCI to plunge a head-spinning 44 points to end the day at 1563.

Chart 1: FBMKLCI's 15-min intra-day chart as at 30 November 2020 (Source: Malaysiastock.Biz)

The daily chart shows that the index is now resting on the horizontal line at or near 1560.

Chart 2: FBMKLCI's daily chart as at 30 November 2020 (Source: Malaysiastock.Biz)

Everyone with some investment in the stock market would be sitting at the edge of the seat and woul be wondering "what happened?" It does not help if you were to look at The Edge CEO Morning Brief this morning. The headline below is suggesting that there is a reason for the selldown. If that's true, then the selldown might continue. 

That's not the case. Even if MSCI review is taking place- and this happens on a regular basis- no fund manager would selloff his shareholding indiscriminately, like what happened yesterday from 4:45-4:50 pm. The last minutes selldown yesterday- like sudden huge rallies at the last 5 minutes of trading at the month-end- is very likely driven by fund managers to show a different view of their books. It is also possible that it may be carried out to affect the index in order to give a different settlement value to the expiring futures contracts.

At the opening bell this morning, FBMKLCI has rebounded with a 25-point gain. Now, it seems the chase for bargains is on. To everyone who was worried sick last night, I can only wish you a happy hunting today!!