Freight: Earnings Stagnated

Results Update

For QE31/12/2017, Freight's net profit dropped marginally by 1% q-o-q but rose 16% y-o-y to RM5.9 million while revenue rose 3.4% q-o-q & 14.4% y-o-y to RM132 million. Revenue increased q-o-q mainly due to higher activities in Seafreight, 3PL & Warehousing and Landfreight services. PBT decreased slightly by 5% due to higher freight cost and higher share of loss from associates.


Table: Freight's last 8 quarterly results


Graph: Freight's last 39 quarterly results

Financial Position

As at 31/122017, Freight's financial position is deemed satisfactory with current ratio at 2.4x and gearing ratio at 0.6x.

Valuation

Freight (closed at RM1.21 yesterday) is trading at a PE of 9.9 times (based on last 4 quarters' EPS of 12.25 sen). The stock is deemed fairly valued.

Technical Outlook

Freight is struggling to hang onto its long-term uptrend line, SS.

Chart 1: Freight's monthly chart as at Feb 21, 2018 (Source: Malaysiastock.biz)


Chart 2: Freight's weekly chart as at Feb 21, 2018 (Source: Malaysiastock.biz)

Conclusion

Based on good financial performance and position, Freight is considered 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.

TNLOGIS: Weaker Earnings, Lower Prices

Background

Tiong Nam Logistics Holdings Bhd ('TNLOGIS') is involved in logistics & warehousing and property development. For FY2018, TNLOGIS plans to spend about RM100 million on its expansion plan for its logistics and warehousing network across South-East Asia. This is in addition to RM287 million spent in FY2017 & FY2016 which raised its warehousing capacity to 4.8 million and 5.3 million sq ft. In FY2018, this capacity will again be raised to 5.9 million sq ft. The company is targeting to have a warehousing capacity of 7.1 million sq ft by FY2020. This massive expansion is part of the group's thrust into the e-commerce & cross-border transportation services. For more on the expansion pla, go here.



Recent Financial Performance

We can see that TNLOGIC's revenue has been rising steadily over the past 6 quarters but its earnings were sharply lower in the last 2 quarters due to start-up cost for its instant e-commerce & cross-border transportation services which have not reached the breakeven mark.


Table 1: TNLOGIS's last 11 quarterly results

Graph 1: TNLOGIS's last 11 quarterly results

Historical Financial Performance

TNLOGIS's financial performance has been commendable in the past 5 years. While revenue is still fairly stable, earnings declined due to lower earnings from the logistics and warehousing segment.

Table 2: TNLOGIS's last 10-year results

Graph 2: TNLOGIS's last 10-year results

Financial Position

As at 30/9/2017, TNLOGIS's financial position is deemed adequate with current ratio at 1.36x while gearing ratio is elevated at 1.46x. TNLOGIS will have to raised capital to address the high gearing or to inject its warehouses into a REIT to bring down the borrowings of the group.

Valuation

TNLOGIS (closed at RM1.33 yesterday) is now trading at a trailing PER of 8.2x (based on last 4 quarters' EPS of 16.2 sen). at this PER, TNLOGIS is deemed fairly valued,

Technical Outlook

TNLOGIS has been sliding steadily since it peaked at RM1.87 in April (see Chart 1). In August, TNLOGIS broke below its 200-day EMA line at RM1.60. It has just broken below the long-term uptrend line at RM1.35 on Nov 24.


Chart 21 TNLOGIS's daily chart as at Dec 5, 2017_12.00  (Source: Malaysiastock.biz)

The previous price correction in 2014-2015 saw the share price finding support at the 180-week EMA line. TNLOGIS is now at the 180-week EMA line and we will see whether this level will serve as a support for the share price for the next few weeks.


 Chart 2: TNLOGIS's weekly chart as at Dec 5, 2017_12.00  (Source: Malaysiastock.biz)

Conclusion

Based satisfactory financial performance - albeit current weaker result - TNLOGIS is a good stock to considered for long-term investment due to its exposure to the growing e-commerce logistics business. Current valuation is fairly reasonable after a sharp price correction. The downside is slower uptick of its expanded logistics network which may lead to weak earnings and further weakness in share price ahead. In view of this, you should exercise careful discretion if you choose to add thiss stock in your portfolio.

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.

Freight: Earning Maintained

Results Update

For QE30/9/2017, Freight's net profit increased by 1.8% q-o-q & 12.5% y-o-y to RM5.9 million while revenue rose 2.9% q-o-q & 21.9% y-o-y to RM128 million. Revenue increased q-o-q mainly due to higher activities in Airfreight, 3PL & Warehousing, Landfreight and other Supporting services.
PBT decreased by 1.7% due to higher losses in Tug & Barge service despite better performance from other divisions such as Seafreight and Airfreight. NP however rose q-o-q due to lower tax expense as a result of higher deferred tax recognized.


Table: Freight's last 8 quarterly results


Graph: Freight's last 38 quarterly results

Financial Position

As at 30/9/2017, Freight's financial position is deemed satisfactory with current ratio at 2.3x and gearing ratio at 0.6x.

Technical Outlook

Freight is struggling to hang onto its long-term uptrend line, though it's not very convincing. Strictly speaking, it is below my preferred uptrend line, SS. However if we choose to be a bit lenient, we can fit the price trend into the next uptrend line, S-S1. The deciding factor will be whether the MACD can climb back above the zero line. the jury is out.

Chart: Freight's monthly chart as at Nov 29, 2017 (Source: Malaysiastock.biz)

Valuation

Freight (closed at RM1.25 yesterday) is trading at a PE of 10.7 times (based on last 4 quarters' EPS of 11.67 sen). The stock is trading near its fully value.

Conclusion

Based on good financial performance and position, Freight is considered a good stock for long-term investment. However its next upleg may not begin until it has sorted out the technical picture, which is mildly negative.

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.

Harbour: Earning Tumbled Badly

Result Update

For QE31/32017, Harbour's net profit dropped 93% q-o-q or 96% y-o-y to RM0.54 million while its revenue was mixed - up 22% q-o-q or down 17% y-o-y  - to RM151 million. Revenue rose q-o-q due to higher revenue from Shipping & Logistics divisions but partially offset by lower revenue from Engineering & Property divisions. Despite higher revenue, Shipping & Logistics divisions suffered a drop in PBT as did the Engineering & Property divisions. The Engineering division reported a loss before tax due to certain projects near completion and anticipated delay in new projects. (Harbour's latest result was announced on May 24.)


Table: Harbour's last 8 quarterly results


Graph: Harbour's last 39 quarterly results

Valuation

Harbour (closed at RM0.72 last Friday) is now trading at a PE of 8 times (based on last 4 quarters' EPS of 9 sen). At this PER, Harbour is deemed fairly valued. (Note: Harbour completed a 1-to-2 share split, 1-for-10 bonus share issue & 1-for-10 bonus warrant in March 2016.) 

Technical Outlook

Harbour broke below its recent low of RM0.76 after the announcement of its bad result.


Chart 1: Harbour's daily chart as at NJun 2, 2017 (Source: ShareInvestor)
 
With this breakdown, Harbour may drop to its long-term "uptrend curved line" with support at RM0.60.


Chart 2: Harbour's monthly chart as at NJun 2, 2017 (Source: ShareInvestor)

Conclusion

Despite the weak financial performance, I still have faith in Harbour. However, I am lowering my rating for Harbour from a BUY to a HOLD while I await a turnaround in the company's 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.

PRKCORP: Risk & Reward Go Together

All listed companies have 4 months to submit their Annual Reports ('ARs') to the exchange. If a company failed to do so, it will be given 5 market days to rectify its failure. The fifth day is known as the Suspension Deadline.

PRKCORP's FY2016 fell on Dec 31. It should have released its AR by 30 April 2017. The exchange has issued to PRKCORP a Suspension Deadline to submit the 2016 AR on or before 8 May 2017. Failure to do so would lead to the suspension of the trading in its shares with effect from 9.00 a.m., Tuesday, 9 May 2017 until further notice.

For the following reasons, you should not rush to sell your shares in PRKCORP.

1. PRKCORP is a profitable company, albeit reporting a loss in FY2016.

Diagram 1: PRKCORP's last 10 years' P&L (Source: Shareinvestor.com)

2. PRKCORP is financially healthy, with low borrowing & high liquidity position.

Diagram 2: PRKCORP's last 4 years' current & gearing ratios (Source: Shareinvestor.com)

3. For the above reasons, PRKCORP was subject to a privatization offer by its major shareholder, PKNP in 2014. The offer price was RM3.90! For more, read www.thesundaily.my/news/923309

4. This is not the first time the company exceeded its 4-month deadline for AR submission. It had happened 5 years in a row, in FY2010, FY2011, FY2012, FY2013 & FY2014.


via BursaMalaysia

In fact, you may consider buying the stock at the current price as the share price is not far from its long-term uptrend line. I think it is fairly a good buy at RM1.70-1.80.


Chart: PRKCORP monthly chart as at May 4, 2017 (Source: Shareinvestor.com)

Good luck!

Harbour: Earnings Took A Heavy Knock

Result Update

For QE30/9/2016, Harbour's net profit dropped 53% q-o-q or 15% y-o-y to RM8.8 million while its revenue dropped 30% q-o-q or 3% y-o-y to RM112 million.


Table 1: Harbour's last 8 quarterly results

All 4 segments suffered q-o-q decline in revenue & profits.


Table 2: Harbour's segmental results for QE30/9/2016 & QE30/6/20165


Graph 1: Harbour's last 37 quarterly results

Valuation

Harbour (closed at RM0.80 in the morning session) is now trading at a PE of 5.5 times (based on last 4 quarters' EPS of 14.36 sen). At this PER, Harbour is deemed attractively valued. 

Technical Outlook

Harbour is in a long-term "uptrend line" with support at RM0.55.


Chart 2: Harbour's monthly chart as at Nov 24, 2016_3.30pm (Source: ShareInvestor)

Conclusion

Despite the weak financial performance, I am keeping my rating for Harbour as a BUY based on attractive valuation and mildly positive technical outlook.

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.

POS: Poised for Next Upleg

POS rose 14 sen to close at RM3.19 today. Today, it broke above the horizontal line RM3.10. See Chart 1 below.


Chart 1: POS's daily chart as at Aug 9, 2016 (Source: ShareInvestor.com)

POS broke below its long-term uptrend line, SS at RM3.50 in November 2015 - just before it announced that it would acquire two assets from its controlling shareholder, DRBHCOM, namely the entire stake in KL Airport Services Sdn Bhd ('KLAS') for RM766.16 million; and a piece of land measuring 9.9 acres in Pekan HICOM, Section 28, 40400 Shah Alam for RM69.0 million. The market does not view these related party transactions ('RPTs') favorably- leading to the sharp sell-down. For more on the RPTs, go here.


Chart 2: POS's monthly chart as at Aug 9, 2016_4.00pm (Source: ShareInvestor.com)

However, POS began to recover in March this year. The first rebound would not successful as it failed to break above the intermediate downtrend line, RR. In June, it managed to break above the intermediate downtrend line, RR at RM2.70. Today breakout of the horizontal line RM3.10 should signal the start of the uptrend for POS.


Chart 3: POS's weekly chart as at Aug 9, 2016_4.00pm (Source: ShareInvestor.com)

Notwithstanding my earlier stance on the RPTs, I believe that POS could be a good stock for long-term investment after today breakout of the horizontal line at RM3.10.

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.

Harbour: Earnings Stayed Healthy

Result Update

For QE31/3/2016, Harbour's net profit increased by 5% q-o-q or 24% y-o-y to RM15.3 million while its revenue increased by 33% q-o-q or 44% y-o-y to RM182 million. Revenue & profits increased q-o-q due mainly to higher revenue & profits from the property development segment.

The current property development project undertaken by Harbour is known as the Kidurong Gateway. It is being carried out by a 51%-owned subsidiary, Arcadia Properties Sdn Bhd. Kidurong Gateway will be developed in the commercial hub of the Bintulu industrial area. The development will be divided into 4 phases covering 125.5 acres. Todate only 2 phases (covering only 22.2 acres) had been launched. The response has been encouraging.


Table 1: Harbour's last 8 quarterly results


Diagram: Harbour's segmental results for 9-month ended 31/3/2016 & 31/3/2015


Chart 1: Harbour's last 35 quarterly results

Valuation

Harbour (closed at RM1.08 yesterday) is now trading at a PE of 4 times (based on last 4 quarters' EPS of 26.02 sen). At this PER, Harbour is deemed attractively  valued. 

Technical Outlook

Harbour has been in a gradual uptrend since 2007. That uptrend accelerated in 2014 after its quarterly net profit broke above the RM10 million mark for the first time in QE30/6/2014. Since then, it has two big moves (in early 2014 & early 2015) which were followed by a long period of consolidation. We are now in the 2nd consolidation. While the stock is now trading below the tentative uptrend line at RM1.20, the share price may be supported by the 20-month EMA line at RM1.07-1.08. f the 20-m EMA line is breached, the share price may slide to the RM1.00 psychological level. 


Chart 2: Harbour's monthly chart as at May 24, 2016 (Source: Share Investor)

Conclusion

Based on good financial performance and attractive valuation, I would maintain my rating for Harbour as a BUY. The only concern now is technical; the breakdown of the tentative uptrend line but that's offset by possible support from the 20-m EMA line.

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, Harbour.

MISC: Weaker Earnings Ahead

Results Update

For QE31/3/2016, MISC's net profit dropped by 24% q-o-q but rose 17% y-o-y to RM571 million while revenue dropped by 28% q-o-q or 4% y-o-y to RM2.39 billion. Revenue dropped q-o-q mainly due to lower revenue in Heavy Engineering as most of its projects are nearing completion and recognition of construction revenue for a finance lease asset under construction in Offshore business in the preceding quarter. PBT also increased q-o-q mainly due to reversal of provision for a legal suit and higher compensation for early termination of LNG time charter contracts in the current quarter which had more than offf-set the impairment provisions for early termination of contracts for two MOPUs and additional liner exit provisions in the current quarter. NP dropped due to a jump in non-controlling interests of RM224 million (as compared to a small credit of RM331k in QE31/12/2015).


 Table: MISC's last 8 quarterly results


Chart 1: MISC's last 40 quarterly results

Valuation

MISC (RM8.34 last Friday) is now trading at a PE of 14.6.times (based on last 4 quarterly EPS of 57 sen). At this PE, MISC is deemed fully valued.

Note: As at 11.00am, MISC was trading at RM7.63 ( a drop of 71 sen from last Friday close of RM8.34)

Technical Outlook

MISC struggled to hang onto its uptrend line, SS at RM9.00 in February & March. It failed to do so and in April, it pulled away from the uptrend line. This effectively signaled the reversal of its past 3 years of uptrend.


Chart 2: MISC's monthly chart as at May 9, 2016_10.30am (Source: ShareInvestor.com)


Chart 3: MISC's monthly chart as at May 9, 2016_10.30am (Source: ShareInvestor.com)

Conclusion

Based on weaker financial performance & bearish technical outlook, MISC's rating is revised from a HOLD to a SELL.

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, MISC.

Maybulk: Massive kitchen-sinking!

Results Update

For QE31/12/2015, Maybulk reported a huge net loss of RM1.17 billion mainly due to the following reasons:

• segmental loss of RM465 million in the Shipping Bulkers division
• impairment loss on an associate of RM496 million. (The associate in question is POSH.)
• share of losses  of an associate of RM106 million. (Again, the associate is POSH.)

Table: Maybulk's last 8 quarterly results

Maybulk's losses for last quarter are off the chart!


Chart 1: Maybulk's 31 quarterly results

POSH No More!

POSH (or, PACC Offshore Services Holdings Ltd) is a 21%-owned associate of Maybulk. POSH is involved in the provision of offshore support vessels ('OSV')- a business that has been severely affected by the slowdown in the Oil & Gas sector. Since its listing on the SGX in May 2014, POSH's share price had slowly declined from S$1.15 to S$0.30 today.  

Chart 2: POSH's weekly chart as at Mar 1, 2016 (Source: ShareInvestor) 

Shipping Rate Outlook

The excitement of the rally in shipping rates in 2013 had long faded (here). Thanks to the fear of a slowdown in China, BDI plunged in the past 3-4 months to a new all-time low (here). It is so low that chartering "a 1,100-foot merchant vessel would set you back less than the price of renting a Ferrari for a day".

Chart 3: BDI's monthly chart as at Mar 2015 (Source: Investmenttools.com)

Financial Position

Maybulk's financial position is mixed as at 31/12/2015. Its liquidity position is weak as reflected by its current ratio stood at 0.73X. Its leverage position is slightly elevated (due to its huge losses in the past few quarters) as shown by its total liabilities to equity stood at 0.70X. While we can take comfort in the fact that Maybulk will likely to survive a severe downturn due to the support of its major shareholder, Robert Kuok, shareholders may have to support fund-raising exercise in the next 12 months.

Valuation

Maybulk (closed at RM0.54 yesterday) is now trading at a PBR of 0.46 time (based on NTA pf RM1.18 as at 31/12/2015). With negative earning, PER is not meaningful.

Technical Outlook

Maybulk is in a downward channel, with support at RM0.50. Unless this is a breakdown, the share price is likely to stay within the channel- possibly rebound back a bit.


Chart 4: Maybulk's monthy chart as at Mar 1, 2016 (Source: ShareInvestor)

I like make a small observation here! You may be a bit surprise that the stock lost only 2 sen yesterday after the result announcement of a loss of RM1.17 billion over the weekend!! Why is the drop so small?! The reason is the stock is now deeply oversold. In the past, such situation is a set-up for a decent rebound. 

 
Chart 5: Maybulk's weekly chart as at Mar 1, 2016 (Source: ShareInvestor)

Conclusion

Despite the huge loss and the uncertainty of Maybulk's two main businesses (shipping & O&G) and the marginal financial position, the share price has dropped so much that the stock could be a rewarding long-term buy. If you choose to do so, you must be mindful that the time horizon will be very long and the risk will be moderately high (notwithstanding Robert Kuok's support for the company)..

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, Maybulk.

MISC: Earnings rose due to early profit recognition

Results Update

For QE31/12/2015, MISC's net profit increased by 56% q-o-q but dropped 22% y-o-y to RM753 million while revenue rose 32% q-o-q or 45% y-o-y to RM3.3 billion. Revenue increased q-o-q due to recognition of EPC revenue for a finance lease asset under construction in Offshore business. Profits also increased q-o-q mainly due to recognition of compensation for early termination of term contracts for 2 vessels in LNG business. The latter - being a compensation for contracts terminated- means that future earning will be affected. The former which could lead to early recognition of earning may "borrow" against future earning. Both of these would suggest that earning in the future could be lower than what's reported now.


 Table: MISC's last 8 quarterly results


Chart 1: MISC's last 38 quarterly results

Valuation

MISC (RM8.48 last Friday) is now trading at a PE of 15.4.times (based on last 4 quarterly EPS of 55 sen). At this PE, MISC is deemed fully valued.

Technical Outlook

MISC is in an uptrend line with support at RM8.30-8.40. If this support is violated, MISC may drop to its strong horizontal support at RM7.50.


Chart 2: MISC's weekly chart as at Feb 5, 2016 (Source: ShareInvestor.com)


Chart 3: MISC's monthly chart as at Feb 5, 2016 (Source: ShareInvestor.com)

Conclusion

Based on challenging outlook ahead and full valuation, MISC is a good stock to be avoided for now. For those who have the stock, you can only hope that the uptrend line support at RM8.30-8.40 would remain intact. Thus, MISC's rating is maintained as a HOLD.

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, MISC.

POS: Poor timing!!

Recently, I posted on POS as a potential stock for long-term investment. Shortly after that post, POS announced that it has entered into a Related Party Transaction ('RPT') involving the purchase of two assets from its related companies, DRBHcom. The assets are:

1) 100%-stake in KL Airposrt Services Sdn Bhd ('KLAS') for RM766.16 million; and
2) a piece of land measuring 9.9 acres in Pekan HICOM, Section 28, 40400 Shah Alam for RM69.0 million.[This information was accidentally left out earlier.]

Any RPT is viewed suspiciously and these two acquisitions will be no exception. The main concern is the bigger transaction involving the acquisition of KLAS.

Firstly, the purchase price of RM766.16 million is very high relative to KLAS's most recent profits. For FY2015, KLAS made a pre-tax profit of RM7.2 million. This means POS is buying KLAS at a PER of more than 100x. Going forward, we can expect POS's PER to above the 20x.

Secondly, we do not have any idea about the financial position and financial commitment of KLAS. This missing information caused analysts to worry about the impact on POS's dividend payout. As such, the acquisition of KLAS is deemed a negative development for POS. 

Chartwise, we can see that the stock has broken below its long-term uptrend line, SS. Its immedaite support will be the horizontal line at RM2.50. If that support is violated, the stock may test the next horizontal line at RM2.00. For now, I would re-rate POS as a HOLD if you have bought into it. If you have not bought into it, you should wait until the stock has found its support - be that at RM2.50 or RM2.00- before getting in.


Chart: POS's monthly chart as at Dec 14, 2015_9.30am (Source: ShareInvestor.com)

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, POS.

POS: Share price dragged down by lower earnings

Results Update

For QE30/9/2015, POS's net profit plummeted by 85% q-o-q or 90% y-o-y to RM3.5 million while revenue increased by 2% q-o-q or 7% y-o-y to RM399 million.


Table: POS's last 8 quarterly results

From Chart 1, we can see that the lower profit for QE30/9/2015 was due to lower profits for all segments (especially, the Mail segment) and continued losses for the Retail segment.


Chart 1: POS's last 4 quarters' segmental revenue & profits


Chart 2: POS's last 40 quarterly results

Valuation

POS (closed at RM3.29 as at 3.45pm today) is now trading at PE of 13.9 times (based on last 4 quarters' EPS of 23.7 sen). At this PER, POS is deemed fairly valued, provided its earnings recover from in the following quarters.

Technical Outlook

POS may soon test its long-term uptrend line, with support at RM3.30-3.20. Those who had sold off in May based on my earlier recommendation, can look to buyback into the stock. See earlier post (here).


Chart 3: POS's monthly chart as at Dec 7, 2015_3.00pm (Source: ShareInvestor.com)

Conclusion

Despite poorer financial performance, I would rate POS a BUY ON WEAKNESS as it approaches the long-term uptrend line support at RM3.00-3.20.

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, POS.