LCTITAN: Earnings Soared

Background

Lotte Chemical Titan Holdings Bhd ("LCTitan") is a petrochemical producer. Its main products are polyolefins and olefins.Polyolefin products accounts for 18% & 9% of revenue & segmental results respectively while olefins & derivative products accounts for 82% & 91% of revenue & segmental results respectively.

Financial Performance

For QE31/3/2021, LCTitan's net profit rose 191% q-o-q to RM440 million on the back of a 23%-increase in revenue to RM2.367 billion. As compared to the results in the corresponding quarter last year, LCTitan has returned to the black due to increased sales volume & selling price. This, combined with higher plant utilization of 88%, helped to results of the group.

 

 Table: LCTitan's last 8 quarterly results

Looking at the graph below, we can see that LCTitan's profit has exceeded the high achieved in QE30/6/2016.

Graph: LCTitan's last 21 quarterly results

Financial Position

As at 31/3/2021, LCTitan's financial position is deemed healthy with current ratio at 7.03 times while gearing ratio was at only 0.14 time. 

Valuation

LCTitan (closed at RM2.99 last Wednesday) is now trading at a PE of 9 times (based on last 4 quarters' EPS of 33 sen). Based on this, LCTitan is deemed to be an attractive investment.

Technical Outlook

Looking at the weekly chart below, we can see that LCTitan broke above its downtrend line (in red) at RM1.80 in May 2020. Its uptrend since then has been capped just below RM3.00 (to be more precise at RM2.95). Last Wednesday's results announcement boosted the share price passed the resistance of RM2.95-3.00. This may mark the continuation of the uptrend in LCTitan's share price.

 

Chart: LCTitan's weekly chart as at April 28, 2021 (Source: Malaysiastock.biz)

Conclusion

Based on the good financial performance & position, attractive valuation & positive technical outlook, LCTitan 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.

SAMCHEM: Earnings Rose

Background

Samchem Holdings Bhd ('Samchem') is a leading industrial chemical distributor in Malaysia. Its operation covers most of the ASEAN countries, including Malaysia, Indonesia, Singapore, Vietnam & Cambodia



Recent Financial Performance

For QE30/9/2017, its net profit rose 22% q-o-q or 11% y-o-y to RM6.3 million while revenue rose 17% q-o-q or 12% y-o-y to RM243 million. The increased revenue was atributed to higher sales, which in turn was due to "the strategic market positioning of the Group in the ASEAN region."


Table: Samchem's last 11 quarterly results


Graph: Samchem's last 11 quarterly results

Financial Position

Samchem's financial position is deemed satisfactory with adequate liquidity (based on cyrrent ratio of 1.6x) while leverage is a bit elevated (based on total liabilities to total equity of 1.9x).

Valuation

Samchem (closed at RM1.04 yesterday) is now trading at a PER of 10x. Its dividend yield is decent at 3%. Based on recent strong growth (of at least 30%), Samchem has a PEG ratio of 0.3x. For a growth stock, this PEG ratio is deemed low and it makes the stock fairly attractive.

Technical Outlook

Samchem broke above its intermediate downtrend line, R1-R1 at RM0.60 in early September. It rallied to a high of around RM1.00 and then formed a rising wedge ('ABCD'). Today it broke to the upside of the wedge at RM1.03. If Samchem can stay above the breakout level, it may test the line connecting its recent peaks, XY at RM1.07. If it can also break above this line, it may go into its next upleg.


Chart: Samchem's daily chart as at Nov 13. 2017_10.00am(Source: Malaysiastock.biz)

Conclusion

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

PChem: Weaker Performance

Background

Petronas Chemicals Group Bhd (“PChem”) is an integrated petrochemicals producer, involved in the manufacturing, marketing and selling diversified petrochemical products, including olefins, polymers, fertilizers, methanol, glycols and other basic chemicals and derivative products.

Recent Financial Results

For QE31/3/2016, PChem's net profit dropped 16% q-o-q or 2% y-o-y to RM592 million while revenue slipped 9% q-o-q but remained relatively unchanged y-o-y at RM3.15 billion. Revenue dropped q-o-q due to lower average selling prices which had more than offset higher production & sales volume (with plant utilization rate at 92% as compared to 86% in QE31/12/2015). Despite 12%-increase in EBITDA - as a result of higher volumes & lower opex - PAT dropped by 15% q-o-q to RM671 million as preceding quarter result includes reversal of provision for decommissioning costs and higher interest income.


Table: PChem's last 8 quarterly results


Chart 1: PChem's last 23 quarterly results
 
Valuation

PChem (closed at RM6.41 yesterday) is now trading at a PER of 18.5 times (based on last 4 quarters' EPS of 34.6 sen). At this PER, PChem is fairly valued. It paid a dividend of 18 sen for FY2015 which translates to a DY of 2.8%.

Technical Outlook

PChem dropped back to its intermediate uptrend line, SS at  RM5.90-6.00 on May 10. That's just before the release of its latest quarterly result. While last quarter was weaker that the immediate preceding quarter, the result was not unexpected.


Chart 2: PChem's weekly chart as at May 11, 2016 (Source: ShareInvestor.com)


PChem should find support at RM6.00 from the uptrend line. However if it failed to stay above the RM6.00 mark, it may enter into a downtrend.


Chart 3: PChem's monthly chart as at May 11, 2016 (Source: ShareInvestor.com)

Conclusion

Based weaker financial performance and fairly valuation, PChem is rated as a HOLD. This rating is only valid if the share price remains above the RM6.00 mark.
 
Note: 
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, PChem.

Luxchem: Earnings rose on forex gain

Results Update

For QE30/9/2015, Luxchem's net profit increased by 33% q-o-q or 118% y-o-y to RM13.0 million while revenue rose 5% q-o-q or 6% y-o-y to RM169 million. Improved bottom-line was due to higher profit before tax from the trading and manufacturing segment and higher realized forex gain due to the strengthening of USD.


Table: Luxchem's last 11 quarterly results (Source: ShareInvestor.com)
 
 
Chart 1: Luxchem's last 11 quarterly results (Source: ShareInvestor.com)

Valuation

Luxchem (closed at RM1.58 last Friday) is now trading at a PER of 13.4 times (based on last 4 quarters' EPS of 11.76 sen).  At this PER, Luxchem is deemed fairly attractive.

Technical Outlook

Luxchem is in an upward channel, with support at RM1.20 & resistance at RM1.70. It tested the upper line at RM1.65 last few weeks and poised to drift back down.

Chart 2: Luxchem's weekly chart as at Oct30, 2015 (Source: ShareInvestor)

Conclusion

Luxchem could be a good stock for a long-term investment in view of its good financial performance. However, the good result could be rolled back if MYR strengthens in the near future. This plus the high valuation and overhead resistance should prompt some investors to take profit on this stock. I think that would be a good idea.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Luxchem.