VS: Earning Recovery Has Not Begun

Result Update

For QE31/7/2018, VS's profit before tax rose 83% q-o-q or 4% y-o-y to RM38 million while revenue rose 15% q-o-q or 3%  y-o-y to RM1.01 billion. Meanwhile, profit before tax decreased 48% y-o-y or RM22.8 million to RM25.0 million due to RM16.9 million loss on disposal of a subsidiary, net forex loss of RM5.3 million (as compared to gain of RM2.5 million previously) impairment loss on properties of RM3.0 million and share of loss of associates of RM7.0 million.


Table 1: VS's last 8 quarterly results


Table 2: VS's quarterly results contribution by geographical segments

From the graph below, we can see that VS's revenue rebounded after the lull in calendar 1st quarter. However profits still remained soft.


Graph: VS's last 54 quarterly results

Financial Position

As at 31/7/2018, VS's financial position has improved slightly with current ratio at 1.5 times and gearing ratio at 0.9 time.

Valuation

VS (closed at RM1.62 yesterday) is trading at a trailing PE of 15 times (based on last 4 quarters' EPS of 10.92 sen). At this PER, VS is deemed fairly valued.

Technical Outlook

From its peak of RM2.50 in early 2018, VS has declined to a recent low of RM1.26. It is trying to form a base of around RM1.50-1.60, which is below the long-term uptrend line.


Chart: VS's weekly chart as at Sep 25, 2018 (Source: Malaysiastock.biz)

Conclusion

Based on satisfactory financial performance & financial position and reasonable valuation, VS is still a good stock for long-term investment. I maintain my rating for VA as a HOLD.

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.

DUFU: Earning Soared

Result Update

For QE30/6/2018, Dufu's net profit rose 105% q-o-q or 72% y-o-y to RM12 million while revenue rose 11% q-o-q or 43% y-o-y to RM59 million. Revenue rose strongly q-o-q due to the strong demand in the HDD segment and together with the favorable USD exchange rates against MYR also attributed to the increase in profit before tax.


Table: Dufu's last 8 quarterly result


Graph: Dufu's last 20 quarterly result

Financial Position

Dufu's financial position as at 30/6/2018 is deemed healthy. Its current ratio and gearing ratio stood at 3.6 times and 0.3 times respectively.

Valuation

Dufu (closed at RM1.62 yesterday) is now trading at a trailing PER of 8.8x (based on last 4 quarters' EPS of 18.4 sen). At this PER, Dufu is deemed fairly attractive.

Technical Outlook

Dufu broke above its downtrend line, RR at RM1.05 in mid-July. The stock has been rallying higher ever since the bullish breakout. It may soon test the May 2017 high of RM1.65. To go higher, Dufu must break above this level. We will have to wait and see whether it can do so.


Chart 1: Dufu's weekly chart as at Aug 7, 2018 (Source: ShareInvestor)


Chart 2: Dufu's monthly chart as at Aug 7, 2018 (Source: ShareInvestor)

Conclusion

Based on good financial performance, healthy financial position and fairly attractive valuation, Dufu is a good stock for long-term investment. However the share price may be due for some correction after its recent sharp rally. It will be safer to buy on weakness than to charge in right now.

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.

Success: Earnings Plummeted

Results Update

For QE31/3/2018, Success's net profit plummeted 83% q-o-q or 88% y-o-y to RM1.1 million while revenue dropped 18% q-o-q or 17% y-o-y to RM76 million. PBT dropped sharply mainly due to decrease in sales from transformer and lighting segment and losses under process equipment segment due to its lower margin contribution from certain projects as compared to immediate preceding quarter ended 31 December 2017.


Table: Success's last 8 quarterly results


Graph: Success's last 44 quarterly results

Valuation

Success (closed at RM1.00 on 28/5/2018) is now trading at a PE of 10 times (based on past 4 quarters' EPS of 10.1 sen). At this PER, Success is deemed fairly valued.

Technical Outlook

Success has been in a steady decline after it peaked at RM2.15 in May 2017.


Chart 1: Success's weekly chart as at May 28, 2018 (Source: ShareInvestor.com)

Success is in a long-term uptrend line with support at RM0.80.


Chart 2: Success's monthly chart as at May 28, 2018 (Source: ShareInvestor.com)

Conclusion

Based on poor financial performance, I downgrade Success's rating to HOLD. Nevertheless Success would be fairly attractive if the share price dropped back to RM0.80.

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.

VS: Earnings Stayed Strong

Result Update

For QE31/1/2018, VS's profit before tax rose 26% q-o-q or 13% y-o-y to RM69 million while revenue rose 3% q-o-q or 46%  y-o-y to RM1.113 billion.


Table 1: VS's last 8 quarterly results

The Group recorded higher revenue y-o-y from its Malaysia & Indonesia segments which more than offset the decline in the China segment. Revenue for Malaysia segment rose due to higher orders from key customers while Indonesia segment benefited from a change in an existing customer's purchasing arrangement (from consignment to turnkey manufacturing). The China segment's revenue dropped due to change in sales mix and contribution from new customers.

Meanwhile, profit before tax increased to RM68.5 million from RM60.6 million in the previous quarter. The higher-than-proportionate improvement in profit before tax was mainly due to profit contribution from China as a result of better sales mix. Despite Malaysia segment's profit before tax was comparable to previous quarter due


Table 2: VS's quarterly results contribution by geographical segments

From the graph below, we can see that VS's earning growth lagged behind its revenue growth, due to lower profit margin. If profit margin suffered in the past few quarters when USD-MYR exchange rate was favorable, how will VS perform when USD-MYR exchange rate turned unfavorable?


Graph: VS's last 52 quarterly results

Valuation

VS (closed at RM2.52 yesterday) is trading at a trailing PE of 17.5 times (based on last 4 quarters' EPS of 14.38 sen). At this PER, VS is deemed fairly valued.

Technical Outlook

VS had a strong rally after it broke above the horizontal line at 14 sen in 2014. However the monthly MACD is poised to do a negative crossover, which could lead to a period of price consolidation between the 20 & 30-month EMA lines at RM2.40-2.50.


Chart: VS's monthly chart as at Mar 28, 2018 (Source: Shareinvestor.com)

Conclusion

Based on satisfactory financial performance, reasonable valuation & still-positive technical outlook, VS is still 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.

Wellcal: Earnings Approaching Recent Peaks

Results Update

For QE30/9/2017, Wellcal's net profit increased by 22% q-o-q & 26% y-o-y to RM9.9 million while revenue rose 12% q-o-q & 35% y-o-y to RM44 million. Revenue rose q-o-q due to improved global demand for industrial rubber hoses. Profits rose q-o-q mainly due to continuous improvement in sales.


Table: Wellcal's last 8 quarterly results


Graph: Wellcal's last 41 quarterly results

Financial Position

As at 30/9/2017, Wellcal's financial position is deemed satisfactory with current ratio at 4.45x and gearing ratio at 0.25x.

Technical Outlook

Wellcal is in a long-term uptrend line with support at RM1.30. However its upside is capped by an intermediate downtrend line at RM1.45-1.47. As the share price has been pressing against this downtrend line, we await a convincing breakout that may lead to the continuation of the long-term uptrend.


Chart: Wellcal's weekly chart as at Nov 28, 2017 (Source: Malaysiastock.biz)

Valuation

Wellcal (closed at RM1.46 yesterday) is trading at a PE of 19 times (based on last 4 quarters' EPS of 7.6 sen). The stock is trading near its fully value.

Conclusion

Based on good financial performance and position, Wellcal is considered a good stock for long-term investment. However its upside is limited due to high valuation and technical resistance.

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.

MBL: Earnings Continued to Rise

Results Update

In QE30/9/2017, MBL's net profit increased by 17.8% q-o-q or 34.0% y-o-y to RM3.3 million while revenue increased by 8.6% q-o-q but declined by 7.6% y-o-y to RM50 million. Revenue increased 8.6% q-o-q due to increased revenue from both the Oil Milling and Trading & Services divisions which more than offset the lower revenue achieved by the Manufacturing division. Similarly, the lower PBT of the Manufacturing division was more than offset by higher PBT achieved by both the Oil Milling and Trading & Services divisions. The performance of the Manufacturing division was affected by lower project sales. Better performance for the Oil Milling division was attributed to higher average selling price and higher production output of CPKO, while better performance for the Trading & Services division was due to the income recognized to the extent of the completed project works.


Table: MBL's last 8 quarterly results


Graph: MBL's last 28 quarterly results

Note:

The company's plan to dispose of its oil palm plantation company, Sokor Gemilang Ladang Sdn Bhd for RM35 million was not successful as the MOU expired and lapsed in September 2017. Currently the main business operations of MBL is Oil Milling and Manufacturing of Oil Seed Crushing machines.

Financial Position

As at 30/9/2017, MBL's financial position is deemed strong with current ratio at 3.4x and gearing ratio at 0.4x.

Valuation

MBL (closed at RM1.33 yesterday) is now trading at a trailing PE of 10 times (based on last 4 quarters' EPS of 13.65 sen). At this multiple, MBL is deemed fairly attractive.

Technical Outlook

MBL appears to have broken above the line connecting the recent peaks, AB at RM1.15. This upside breakout may lead to the next upleg for the stock.


Chart: MBL's weekly chart as at Nov 28, 2017 (Source: Malaysiastock.biz)

Conclusion

Based on good financial performance and position, fair valuation & mildly bullish technical outlook, MBL 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.

SKPRES: Next Upleg Beckons?

Result Update

In QE30/6/2017, SKPRES's net profit rose marginally by 1% q-o-q or 83% y-o-y to RM33 million while revenue was mixed, down 11% q-o-q but up 64% y-o-y to RM525 million. Revenue dropped q-o-q mainly due to lower sales recorded in June 2017 as a result of Hari Raya festive holidays. Despite the sharp drop in revenue, PBT dropped only marginally by 1.4% as a result of improved margin due to operational efficiency. (Note: SKPRES's result was announced on August 25.)


Table: SKPRES's last 8 quarterly results


Graph: SKPRES's last 37 quarterly results

Financial Position

As at 30/6/2017, SKPRES's financial position is deemed fairly satisfactory with good current ratio at 1.76x but slightly elevated gearing ratio at 0.92x. (Note: SKPRES's gearing ratio is no worse off when compared to VS's gearing ratio of 1.27x as at 31/7/2017. These EMS groups are doing a roaring business which is very taxing on its capital.)

Valuation

SKPRES (closed at RM1.58 yesterday) is now trading at a PER of 15 times (based on last 4 quarters' EPS of 10.01 sen). Its PEG ratio is 0.4x (based on last 2 years' earning CAGR of 35%). As such, SKPRES is deemed fairly attractive for a growth stock.

Technical Outlook

SKPRES is now testing its recent high of RM1.58. If it can break above level, SKPRES can commence on its next upleg.


Chart 1: SKPRES's weekly chart as at Oct 6, 2017 (Source: ShareInvestor.com)


Chart 2: SKPRES's monthly chart as at Oct 6, 2017 (Source: ShareInvestor.com)

Conclusion

Based on good financial performance, attractive valuation for a growth stock & potentially bullish technical outlook, SKPRES could be a good stock to consider for 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.

VS: Earnings Dropped q-o-q

Result Update

For QE31/7/2017, VS's net profit dropped 27% q-o-q but rose 236% y-o-y to RM37 million while revenue rose 15% q-o-q or 77%  y-o-y to RM983 million. VS's profits dropped q-o-q mainly attributable to lower gross profit margin resulting from weakening of US Dollar against Ringgit Malaysia. In addition, profits decline was aggravated by impairment loss on property & other investment of RM12.0 million and RM4.0 million respectively.


Table: VS's last 8 quarterly results


Graph: VS's last 50 quarterly results

Valuation

VS (closed at RM2.53 yesterday) is trading at a trailing PE of 19.1 times (based on last 4 quarters' EPS of 13.22 sen). At this PER, VS is deemed fairly valued.

Technical Outlook

VS had a strong rally after it broke above the horizontal line at 14 sen in 2014. It consolidated for a year in 2016 and broke above the horizontal line at RM1.60 in late January this year and then rallied to a recent high of RM2.68. All indications are this rally may continue.


Chart 1: VS's weekly chart as at Sep 27, 2017 (Source: MalaysiaStock.Biz)

VS is very well supported by either the 10 or 20-day SMA lines. You may use these lines to gain entry into the stock. That levels will be around RM2.40 mark in the next few weeks.

 
Chart 2: VS's daily chart as at Sep 27, 2017 (Source: MalaysiaStock.Biz)

Conclusion

Despite the drop in earning last quarter, VS is a good stock for long-term investment based on steady financial performance & positive technical outlook, Even though earning lagged the sharp rise in revenue, I believe earning may soon catch up. Thus, I revise my rating from SELL INTO STRENGTH to BUY ON WEAKNESS.

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.

SCABLE: Here We Go Again?

Yesterday, SCABLE finally broke above the “horizontal line” at RM1.18 (see Chart 1). In the past 2 occasions when the stock had a similar upside breakout, we saw the share price rallied to the preceding high. If the current breakout can develop into a strong rally, SCABLE may repeat the feat of touching its preceding high of RM1.80 (see Chart 2).

As such, SCABLE (now trading at RM1.23) could be a good stock for a medium-term trade. If the anticipated rally does not pan out, we were not be too badly off as the stock is still trading not far from its bottom of RM1.10. The reward to risk proposition is attractive as the upside of about 60 sen while the downside is a bit over 10 sen. Good luck                       

 
 Chart 1: SCABLE's daily chart as at Jun 7, 2017 (Source: MalaysiaStock.biz)

 
Chart 2: SCABLE's weekly chart as at Jun 7, 2017 (Source: MalaysiaStock.biz)

By the way, I appended below the recent financial performance of SCABLE. It is underwhelming!

 
Graph: SCABLE's last 18 quarters' result

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.

DUFU: Poorer Earning Ahead?

Result Update

For QE31/3/2017, Dufu's net profit was mixed - dropped 58% q-o-q but rose 38% y-o-y - to RM6 million while revenue was mixed- down 3% q-o-q but up 13% y-o-y - to RM46 million.PBT dropped q-o-q due to the presence in the preceding quarter of gain on dissolution of subsidiary amounting to RM3.71 million; reversal of receivable and inventories amounting to RM1.16 million and RM1.22 million respectively; unrealized forex gain of RM0.5 as compared to unrealized forex loss of RM0.7 in current quarter. Excluding these favorable items, PBT for QE31/12/2016 would be RM12.17 million while for current quarter would be RM8.7 million. It is still a decline of 34% q-o-q. (Dufu's result for QE31/3/2017 was announced on May 24.)


Table: Dufu's last 8 quarterly result


Graph: Dufu's last 15 quarterly result
 
Valuation

Dufu (closed at RM1.47 last Friday) is now trading at a trailing PER of 8.6x (based on last 4 quarters' EPS of 17.02 sen). At this PER, Dufu is still attractive.

Technical Outlook

Dufu is in an uptrend, supported by the 30-day EMA line at RM1.40.


Chart 1: Dufu's daily chart as at 1un 2, 2017(Source: ShareInvestor)

Dufu's strong rally saw the share price pulling way ahead of its weekly moving average lines. With weaker financial performance, the share price may move sideways to consolidate for a while.


Chart 2: Dufu's weekly chart as at Jun 2, 2017(Source: ShareInvestor)

Conclusion

Despite the attractive valuation & positive technical outlook, I would recommend some profit-taking due to the recent sharp rally as well as some weakness 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.

Ulicorp: Earnings Remained Weak

Result Update

For QE31/3/2017, Ulicorp's net profit dropped 38% q-o-q or 50% y-o-y to RM3 million while revenue was mixed - down 7% q-o-q but up 4% y-o-y to RM46 million. Revenue dropped q-o-q for both the Cable Support Sytems & Electrical Lighting & Fittings segments. Profit before taxation dropped q-o-q mainly due to lower revenue generated, lower interest income arising from placement of fixed deposits, higher administration costs, higher repair and maintenance of plant and machinery, higher depreciation/amortization costs and lower profit margin achieved on goods sold during the quarter under review. (The latest quarterly result was announced on May 25.)


Table: Ulicorp's last 10 quarterly results


Graph: Ulicorp's last 15 quarterly results

Valuation

Ulicorp (closed at RM4.50 last Friday) is now trading at a trailing PER of 23x (based on last 4 quarters' EPS of 19.23 sen). At this PER, Ulicorp is deemed overvalued for a stock that's no longer a growth stock.

Technical Outlook 

Ulicorp suffered a sharp selldown in August 2015. The stock dropped form RM6.50 to its horizontal support of RM3.50. Its immediate support comes from the horizontal line at RM4.50 while the immediate resistance comes from the horizontal line at RM5.00.


Chart: Ulicorp's weekly chart as at Jun 2, 2017 (Source: Shareinvestor.com)

Conclusion

Based on weak financial performance and high valuation , I revised my rating for Ulicorp from a HOLD to SELL INTO STRENGTH.

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.

VS: Earnings Continued To Grow

Result Update

For QE31/1/2017, VS's net profit rose 6% q-o-q or 29% y-o-y to RM35.5 million while revenue rose 12% q-o-q or 52%  y-o-y to RM764 million. VS's profits rose q-o-q mainly attributable to higher sales contributed by the Malaysia and China operations and forex gain of RM7.2 million which more than offset the impairment loss of RM2.9 million.


Table: VS's last 8 quarterly results


Graph: VS's last 48 quarterly results

Valuation

VS (closed at RM1.74 yesterday) is trading at a trailing PE of 20.5 times (based on last 4 quarters' EPS of 8.48 sen). At this PER, VS is deemed fully valued.

Technical Outlook

VS had a strong rally from a low of 13-14 sen in 2014 to a high of RM1.60 in late 2015. After a consolidation of 14 months, VS broke above the RM1.60 mark and continues with its prior uptrend. See Chart 1 & 2 below.


Chart 1: VS's monthly chart as at Mar 28, 2017 (Source: MalaysiaStock.Biz)

 
Chart 2: VS's daily chart as at Mar 28, 2017 (Source: MalaysiaStock.Biz)

The rally in VS is quite troubling because of two things; firstly, the share price is at a new high while quarterly earnings has yet to surpass the high of  Oct 2015, and secondly, warrant price is not rallying as strongly as the share price rally. At some point, these dichotomies must be resolved: Earnings must rise & warrant price too; or share price must pullback! We will have to wait & see.
(Note: The profile of VS-wa is exercise price of RM1.65 and expiry date of Jan 6, 2018; giving you a premium of 16%.) 

 
Chart 1: VS-wa's daily chart as at Mar 28, 2017 (Source: MalaysiaStock.Biz)

Conclusion

Based on good financial performance & positive technical outlook, VS can bea good stock for long-term investment. However the share price maybe running ahead of the fundamentals as noted above. As such, I still maintain my rating of SELL INTO STRENGTH or switch from share to the warrant.

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.

DUFU: Earnings Soared

Background

Dufu Technology Corp. Berhad (“Dufu”) is an advanced one-stop manufacturing facility offering superior quality manufacturing, engineering capabilities and services. Its services also include finished components, modular or sub-modular fabrications and assemblies.

Historical Financial Performance

Dufu's improved financial performance over the past 3 years started out with "new product mix development with the HDD customers" coupled with "continuous growth from the Non-HDD sector such as Sensor and Control". Going forward, it expects "to sustain [its] HDD businesses which will to a certain extent mitigate the expected contraction".

Graph 1: Dufu's last 10 yearly result

Recent Financial Result

For QE31/12/2016, Dufu's net profit rose 166% q-o-q or 379% y-o-y to RM15 million while revenue was mixed- up 10% q-o-q but down 11% y-o-y to RM48 million. The improved profits were attributed to:

• Depreciation of Ringgit Malaysia against USD.
• Gain on dissolution of subsidiary amounting to RM3.71 million.
• Reversal of receivable and inventories amounting to RM1.16 million and RM1.22 million respectively.
• Continued improvement of production efficiency and effectiveness.
• Improve in interest income in the quarter under review

If the one-off gain and reversals were excluded, the net profit would drop to RM9.1 million.
 


Table: Dufu's last 8 quarterly result


Graph 2: Dufu's last 14 quarterly result
 
Latest Financial Position

As at 31/12/2016, Dufu'd financial position is deemed satisfactory with current ratio at 3x and gearing ratio at 0.4x. It has net cash of RM38 million or 21.6 sen per share.

Valuation

Dufu (closed at RM0.87 yesterday) is now trading at a trailing PER of 5.5x (based on last 4 quarters' EPS of 15.82 sen). Excluding the one-off gain & reversals, the last 4 quarters' EPS would be 12.3 sen and the trailing PER would be 7.1x. At either PERs, Dufu looks attractive.

Technical Outlook

Dufu is in a strong uptrend line, S1-S1 with support at RM0.70. 


Chart: Dufu's monthly chart as at Feb 28, 2017(Source: ShareInvestor)

Conclusion

Based on good financial performance & position, attractive valuation & positive technical outlook, Dufu is a goios tock to consider 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.