PRKCORP- an interesting property & infrastructure stock

PRKCORP is a profitable medium-size developer based in Perak. It is involved in the development of a township called Bandar Meru Raya (here). In addition, PRKCORP is involved in the development of an industrial park measuring 1000 acres known as Lumut Port Industrial Park as well as having stake in the Lumut Maritime Terminal & Lekir Bulk Terminal. For more on the infrastructure development, go here.

For FYE31/12/2012, it reported a net profit of RM38 million on a revenue of RM155 million. This is an improvement from a net profit of RM30 million on a revenue of RM129 million recorded in FYE31/12/2011. For 1Q2013, it chalked up a net profit of RM6.8 million on a revenue of RM32 million. Based on its EPS of 6.8 sen for 1Q2013, PRKCORP's full-year EPS for FY2013 is estimated to be about 27.2 sen. At the current price of RM2.58, PRKCORP is trading at a PE of 9.5 times.

From the chart below, we can see that PRKCORP has broken above the line connecting the peaks for the past 10 years. With this breakout, the share price may rally to a high of RM4.00-5.00.

Based on technical consideration, PRKCORP could be a good medium-term investment or even a good trading BUY.


Chart: PRKCORP's monthly chart as at May 7, 2013 (Source: Tradesignum)

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, PRKCORP.

LPI- Uptrend may accelerate

We have looked at LPI a few times before this. The stock's gradual uptrend may accelerate after the share price broke above the line connecting its previous peaks at RM15.00. Its likely target for a medium-term rally could be RM17.50-18.00. For more on LPI, go here.


Chart: LPI's weekly chart as at May 10, 2013_12.00pm (Source: Quickcharts)
 
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, LPI.

Market Outlook as at June 6, 2013

A quick look at the charts for FBMKLCI, FBM70 & FBMScap reveals that our stock market is likely to consolidate for the near term. We can see that FBMKLCI  has start to correct earlier while FBMScap shows little sign of weakening. This apparent strength in second & third-liner stocks can be deceiving as its indicators - like those of FBMKLCI & FBM70 - have all turned down.


Chart 1: FBMKLCI's daily chart as at june 6, 2013_4.45pm (Source: Quickcharts)


Chart 2: FBM70's daily chart as at june 6, 2013_4.45pm (Source: Quickcharts)


Chart 2: FBMScap's daily chart as at june 6, 2013_4.45pm (Source: Quickcharts)

US stock markets- a short breather or a long pause?

US stock markets have been rather volatile of late. You can see that DJIA hae just broken below its intermediate uptrend line while S&P500 is resting on its intermediate uptrend line. Unless a strong rebound kicks in, US stock markets look set to consolidate for the next few weeks.


Chart 1: DJIA's daily chart as at June 5, 2013 (Source: Stockcharts)


Chart 2: S&P500's daily chart as at June 5, 2013 (Source: Stockcharts)

Meanwhile, Nikkei broke its intermediate uptrend line at 13500 three days ago. If the US stock markets cannot stage a strong rebound soon, I expect global equity markets to take a breather for the next few weeks. The same scenario will pan out in our local market.


Chart 3: Nikkei's daily chart as at June 5, 2013 (Source: Stockcharts)

Based on the above, we should avoid taking large long position in the market for the short term.

Scomies or Scomien or Scomi?

In the past few days, Scomies [in full, Scomi Energy Services Bhd (formerly known as Scomi Marine Bhd)] has been rallying. It broke above its horizontal resistance at RM0.42 and it soared nearly 80% to close at RM0.755 this morning.


Chart 1: Scomies's weekly chart as at June 6, 2013_12.30pm (Source: Quickcharts)

Would this play spill over to its sister company, Scomien which is involved in the provision of solutions for the transportation industry, ranging from monorail systems, buses and special purpose vehicles. With the government considering another 2 MRT lines (in addition to the maiden Sungai Buloh-Kajang MRT project), Scomien may get involved in a domestic project where the margin may be more attractive. Scomien may be breaking above its long-term downtrend line at RM0.50.

Chart 2: Scomien's weekly chart as at June 6, 2013_12.30pm (Source: Quickcharts)

Finally... what about the parent company, Scomi? IJM has bought into this company with the hope of getting into the Oil & Gas business and possibly the transport engineering business. If Scomi can surpass the recent high at RM0.44, we may see a decent rally to RM0.56 & then to RM0.71.


Chart 3: Scomi's weekly chart as at June 6, 2013_12.30pm (Source: Quickcharts)

Between these three stocks, my preference is for Scomi.

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, Scomi, Scomies & Scomien.

CCM- top-line & bottom-line continued to slide

Result Update

For QE31/3/2013, CCM's net profit dropped 76% q-o-q or 35% y-o-y to RM4.4 million while revenue dropped 24% q-o-q or 19% y-o-y to RM288 million. Revenue dropped q-o-q due to lower revenue contribution from the Chemicals and Fertilizers Divisions. Pre-tax profit decreased by 41% q-o-q due to lower profit contribution from all the Divisions. In addition, the preceding quarter’s profit before tax included an amount of RM7.4 million as fair value change on investment properties.


Table: CCM's last 8 quarterly results


Chart 1: CCM's last 29 quarterly results

Valuation

CCM (closed at RM1.22 last Friday) is now trading at a PE of 15 times (based on last 4 quarters' EPS of 8.2 sen). For a company with continuous deterioration in its earning, CCM does not deserve a PE of 15 times.

Technical Outlook

CCM is still in a downtrend line, with resistance at RM1.20-1.25. Its immediate support is at the horizontal line at RM1.10.


Chart 2: CCM's weekly chart as at May 31, 2013 (Source: Quickcharts)

Conclusion

Based on challenging operating environment, unexciting financial performance, demanding valuation & negative technical outlook, CCM is rated at 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, CCM.

Aji- bottom-line still sliding

Result Update

For QE31/3/2013, Aji's net profit rose 47% q-o-q but dropped 24% y-o-y to RM4.4 million while revenue rose 5% q-o-q or 2% y-o-y to RM85 million. Bottom-line improved q-o-q due to higher sales of Industrial Seasoning products as well as lower factory overhead costs incurred.


Table: Aji's last 8 quarterly results


Chart 1: Aji's last 31 quarterly results

Valuation

Aji (closed at RM4.45 today) is now trading at a PE of 14 times (based on last 4 quarters' EPS of 32 sen). At this multiple, Aji is deemed fairly valued. However, the declining bottom-line could lead to PE contraction which would depress the share price.

Technical Outlook

Aji is in an uptrend line with support at RM4.25-4.30. If this uptrend line is violated, the share price may drop to the psychological RM4.00 mark. The next support would be the horizontal line at RM3.50.


Chart 2: Aji's weekly chart as at May 29, 2013_12.30pm (Source: Quickcharts)

Conclusion

Based on declining profit & profit margin, AJI is a stock to be avoided. For those holding the stock, you may choose to SELL INTO STRENGTH for now.

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, AJI.

DLady- Top-line and bottom-line slipped

Result Update

For QE31/3/2013, DLady's net profit dropped 14% q-o-q but rose 6% y-o-y to RM29 million while its revenue dropped by 9% q-o-q or 4% y-o-y to RM206 million. The decline in revenue was contributed by lower sales of powder and liquid products. This in turn led to lower bottom-line when compared to the immediate preceding quarter.


Table: DLady's last 8 quarterly results


Chart 1: DLady's last 20 quarterly results

Valuation

DLady (closed at RM48.50 yesterday) is now trading at a PE of 25 times (based on last 4 quarters' EPS of 195 sen). With the earning growth rate slowing from 50% a year ago to 16%, DLady's PEG ratio is now well over 1 times. Thus, the valuation for this stock is deemed expensive.

Technical Outlook

DLady is still in an uptrend line with support at RM45.00-45.50. If the share price were to break below this uptrend line, DLady will then move sideway, with support at RM40.00.


Chart 2: DLady's weekly chart as at May 29, 2013_12.30pm (Source: Quickcharts)

Conclusion

Based on demanding valuation, DLady is to be avoided. Since the stock is still in an uptrend line, those holding the stock may choose to SELL INTO STRENGTH for now.

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, DLady.

Fitters- depends on property development

Result Update

For QE31/3/2013, Fitters's net profit dropped 18% q-o-q but rose 92% y-o-y to RM8.5 million while revenue dropped 39% q-o-q or 21% y-o-y to RM70 million. See Table 1.


Table 1: Fitters's last 8 quarterly results

Looking at Table 2 and Chart 1, we can see that the Property Development & Construction and Fire Serives divisions are now the main division for the group. Renewable & Waste-to-Energy division suffered a sharp drop in revenue and continued to breed.Can the Property Development & Construction division repeat its sterling performance in QE31/3/2013 where it recorded a pre-tax profit of RM9.6 million from a revenue of RM42 million? I have my doubt as the group has very small land bank (see my previous post).


Table 2: Fitters's segmental results for Mar 2013 & Mar 2012



Chart 1: Fitters's last 19 quarterly results

Valuation

Fitters (closed at RM0.845 at the end of the morning session) is now trading at a PE of 6.2 times (based on last 4 quarters' EPS of 13.6 sen). While the PE multiple is low, a drop in its earning could easily push the PE to double digit.

Technical Outlook

Fitters has broken above its downtrend line at RM0.65. Its immedaite ressiatnce is at the horizontal line at RM0.83 (which it may have surpassed) and then at RM0.93.


Chart 2: Fitters's weekly chart as at May 28, 2013_12.30pm (Source: Quickcharts)

Conclusion

Based on reasonable valuation & positive technical outlook, Fitters could continue to rise. However, I have serious concern that the company may not repeat its profit level again as the bulk of the profit came form the Property Development & Construction division which does not much land bank. As such, I feel that Fitters should be rated SELL INTO STRENGTH.

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, Fitters.

RCECap- hit by impairment provision

Result Update

for QE31/3/2013, RCECap reported a net loss of RM28.5 million as compared to a net profit of RM9.4 million for QE31/12/2012 or RM16.5 million for QE31/3/2012. The net loss arose mainly due to the increase in loan impairment of RM38.6 million arising from the "refinement and enhancement in the classification of NPLs in its personal loan financing segment", in compliance with the requirements of individual assessment under MFRS 139, Financial Instruments: Recognition and Measurement (“MFRS 139”).

While the loan impairment is a one-off item, there is no denying that RCECap's top-line and bottom-line is in a steady & probably irreversible downtrend. What would it take to arrest this development?


Table: RCECap's last 8 quarterly results


Chart 1: RCECap's last 24 quarterly results

Valuation

RCECap (closed at RM0.28 at the end of the morning) is now trading at a PE of 70 times (based on last 4 quarters' EPS of 0.4 sen). However, if the one-off impairment provision of RM38.6 million is is excluded, the full-year EPS would bound back to 14.7 sen; thus giving a decent PE of 1.9 times. At the price of RM0.28, RCECap is also trading at a Price to Book of 0.5 time and has a dividend yield of 5.4%. All in all, RCECap is a cheap stock. If the wind blows at the right direction, it may begin to sail higher.

Technical Outlook

RCECap is in a downtrend line with resistance at RM0.30. Its immediate support is the line, AB wt RM0.24-0.25.


Chart 2: RCECap's weekly chart as at May 28, 2013_12.30pm (Source: Quickcharts)

Conclusion

Despite a net loss in the latest quarter, RCECap is a stock worth tracking. It is trading at very undemanding multiples and pays a decent dividend yield of 5.4%. It is owned by Azman Hashim, the founder of AMMB, a man with strong background in the world of finance. If your investment horizon is measured in years (like Azman), this stock may fit the bill. As such, I rate this stock 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, RCECap.

Kossan- top-line & bottom-line increased

Result Update

For QE31/3/2013, Kossan's net profit increased 12% q-o-q or 51% y-o-y to RM33 million while revenue increased 2% q-o-q or 13% y-o-y to RM327 million. Bottom-line increased q-o-q due to higher pre-tax profit contribution from the Gloves division (from RM33 million to RM40 million) which more than offset the drop in pre-tax profit contribution from the Technical Rubber Products division (from RM7 million to RM4 million). This improved performance for the Gloves division is partly contributed by the increased output capacity utilization achieved from its research and development on machines optimization and also slight decrease in the price of raw materials.


Table: Kossan's last 8 quarterly results

Kossan's steady improvement in top-line & bottom-line is indeed very encouraging. It as managed to bring its pre-tax profit margin back up to the high of 14% that was enjoyed in FY2010. This is a testimonial to its efficient production process.


Chart 1: Kossan's last 27 quarterly results

Valuation

Kossan (closed at RM4.06 yesterday) is now trading at a PE of 11.3 times (based on last 4 quarters' EPS of 36 sen). I believe Kossan should trade at the same PE multiple of 17 times enjoyed by the top two rubber gloves producers (Harta & Topglov). Thus, I believe Kossan may see an upside of 40-50% over the next 12 months due to PE expansion.

Technical Outlook

Kossan is in an uptrend line with support at RM3.30. It has just broken above its horizontal resisatnce at RM4.00. With this breakout, Kossan's uptrend may accelerate.


Chart 2: Kossan's weekly chart as at Mar 28, 2013_9.30am (Source: Quickcharts)

Conclusion

Based on improved financial performance, attractive valuation & positive technical outlook, Kossan is a good stock for long-term investment. It would now be my top pick for the rubber glove sector.

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, Kossan.

PIE- decline in both top-line & bottom-line

Result Update

For QE31/3/2013, PIE's net profit dropped 49% q-o-q or 6% y-o-y to RM5.5 million while revenue was mixed- dropped 12% q-o-q but rose 2% y-o-y to RM82 million. Top-line dropped q-o-q due to lower demand for electronics manufacturing products. Net profit has similarly dropped due to lower profit margin on product mix, lower forex gain & higher provision of slow moving inventories.


Table: PIE's last 8 quarterly results


Chart 1: PIE's last 20 quarterly results

Valuation

PIE (closed at RM4.55 at lunch time) is now trading at a PE of 9.3 times (based on last 4 quarters' EPS of 49 sen). At this  multiple, PIE is deemed fairly valued. Upside is limited due to poorer financial performance.

Technical Outlook

PIE has broken above its horizontal line at RM4.65 as investors chased after a dividend payout of 32 sen. This is the first day of trading after the entitlement date and the chart below has not been adjusted for this entitlement. The adjusted immediate horizontal support would be at RM4.33, instead of RM4.65. The stock is now trading at RM4.55.


Chart 2: PIE's weekly chart as at Mar 27, 2013_3.00pm (Source: Quickcharts)

Conclusion

Due to poorer financial performance, PIE is now rated as a HOLD in view of its mildly positive long-term technical outlook and fairly reasonable valuation. However, I believe the stock will face some selling pressure in the short-term due to the deteriorating financial performance.

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, PIE.

Bonia- benefiting from increased consumer spending

Result Update

For QE31/3/2013, Bonia's net profit increased by 73% q-o-q or 95% y-o-y to RM13 million while revenue was mixed - down 8% q-o-q but rose 12% y-o-y to RM154 million.

Despite the q-o-q drop in revenue, the bottom-line improved q-o-q due to lower promotional activities & reduced renovation & set-up costs incurred. The company opened 5 counters in Indonesia & 3 boutiques in Vietnam in QE31/3/2013. In QE31/12/2012, the company opened 5 boutiques in Vietnam and 1 in Indonesia.


Table: Bonia's last 8 quarterly results


Chart 1: Bonia's last 17 quarterly results

Valuation

Bonia (closed at RM1.99 on May 23) is now trading at a PE of 11 times (based on last 4 quarters' EPS of 18.4 sen). This compared favorably to Padini which trades at a PE of 17 times (based on share price of RM2.13 on May 23 and an EPS of 12.8 sen for the 4 quarters ended 31/12/2012.

Technical Outlook

As noted in my earlier post, Bonia is in an uptrend line, with support at RM1.75. Its immediate support is the 10-week SMA line at RM1.98. The intermediate downtrend line resistance at RM2.40 should cap the share price for a while.


Chart 2: MISC's weekly chart as at Mar 23, 2013 (Source: Quickcharts)

Conclusion

Based on improved financial performance, attractive valuation & positive technical outlook, Bonia could be a good stock for long-term investment.

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, Bonia.

Maybank- Where is the Captain?

Result Update

For QE31/3/2013, Maybank's net profit increased by 3% q-o-q or 12% y-o-y to RM1.506 billion while evenue increased by 17% q-o-q or 5% y-o-y to RM8.23 billion.

 
 Table: Maybank's last 8 quarterly results

 
 Chart 1: Maybank's last 27 quarterly results

Wahid is leaving...

Maybank's current CEO, Wahid will be leaving Maybank to take up a ministerial post soon. Who will be piloting the great ship, Maybank through the choppy water?

Valuation

Maybank (closed at RM10.08 on May 23) is now trading at a PE of 13.8 times (based on last 4 quarters' EPS of 73 sen). I believe Maybank should trade at a PE of 15 times.

Technical Outlook

Maybank is in an upward channel, with support at RM9.00 & resistance at RM11.00.


 
Chart 2: Maybank's weekly chart as at Mar 23, 2013 (Source: Quickcharts) 

Conclusion

Based on steady growth in financial performance, attractive valuation & positive technical outlook, Maybank is a good stock to hold for long-term investment. However, the immediate concern will be the search for the right person to take over the helm in Maybank. Can the successor lead the bank as well as Wahid? In the interim, Maybank's share price should be capped at the present level.

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, Maybank.

MISC- normality returned?

Result Update

For QE31/3/2013, MISC's net profit increased by 3% q-o-q or 8% y-o-y to RM2.38 billion while net profit dropped 58% q-o-q to RM300 million (or from a net loss of RM470 million in QE31/3/2012). The q-o-q decline in the bottom-line was attributable to exceptional gains recorded in the preceding quarter, such as the recognition of a one-off gain from the lease commencement of two Floating Storage Units (FSUs) & realization of 50% intercompany profit on disposal of Gumusut-Kakap Semi Floating-Production System (L) Ltd.

Revenue increased y-o-y due to more projects completed by the Heavy Engineering division, comboned with the commencement of the lease of the 2 FSUs in August 2012. In addition, the freight rates in the Chemical business had improved. These have more than offset the decline in revenue from the Petroleum business due to smaller number of operating vessels. Pre-tax profit increased y-o-y from RM139 million to RM355 million due to higher operating profit - a result of  lower operating cost brought on by a smaller fleet of vessels- and decline in net unrealized forex losses from RM111 million to RM14 million & impairment of ships from RM116 million to RM22 million.


Table: MISC's last 8 quarterly results


Chart 1: MISC's last 27 quarterly results

Valuation

MISC (closed at RM4.39 last Thursday) is now trading at a PE of 13 times (based on last 4 quarters' EPS of 34 sen). At this PE multiple, MISC is deemed fully valued.

Technical Outlook

MISC has yet to break above its 2 years old downward channel, with resistance at RM5.40. However, the share price may have found a floor at RM410-4.20. This could be the result of buying support brought on by the conditional GO at RM5.50 by Petronas which lapsed in April (here). We will see whether this support can hold in the absence of the Petronas's GO.


Chart 2: MISC's weekly chart as at Mar 23, 2013 (Source: Quickcharts)

Conclusion

Based on improved financial performance, MISC could be a stock to watch for a recovery play. The catalyst for an upgrade would be improved freight rates or a price breakout (at RM5.40 mark). For now, this stock is rated 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.

JOBST- trading at demanding valuation

Result Update

For QE31/3/2013, JOBST's net profit increased by 3% q-o-q or 48% y-o-y to RM15.4 million while revenue increased by 19% q-o-q or 14% y-o-y to RM43.2 million.  Revenue increased q-o-q due to higher sales from online recruitment services due to seasonality factors. Pre-tax profit rose by 21.5% q-o-q mainly due to the impact of higher sales from online  recruitment services, offset by the significant one-off item in the immediate preceding quarter (QE31/12/2012) such as the reversal of impairment loss on investment in an associate.


Table: JOBST's last 8 quarterly results

 
 Chart 1: JOBST's last 28 quarterly results

Valuation

JOBST (closed at RM3.65 on May 23) is now trading at a PE of 18.3 times (based on last 4 quarters' EPS of 19.9 sen). At this multiple, JOBST is deemed fully valued.

Technical Outlook

JOBST had a sharp rally over the past 5 months. I expect the share price to consolidate at RM3.50-3.60 for a while.

 
Chart 2: JOBST's weekly chart as at Mar 23, 2013 (Source: Quickcharts)

Conclusion

Based on improved financial performance & positive technical outlook, JOBST is a good stock to hold for long-term investment. However, its valuation is a bit stretched and this may lead to price consolidation for the weeks ahead.

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, JOBST.

YeeLee- a very attractive consumer stock

Result Update

For QE31/3/2013, YeeLee's net profit increased by 5% q-o-q or 137% y-o-y to RM8.4 million while revenue dropped 2% q-o-q or 8% y-o-y to RM160 million. The decline in revenue was attributable to the discontinuance of distributorship of Procter and Gamble products in September 2012. The silver lining to this negative development is that the company's profit margin rebounded.

The performance of the two main divisions are:
1. The manufacturing division registered an increase in profit before tax by 53.8% y-o-y from RM4.00 million to RM6.16 million . This was achieved on the back of 1.2% drop in revenue. The better performance was mainly contributed from palm oil refinery and mill division as both divisions continued to achieve profitability arising from higher oil extraction rate ("OER") and better FOB olein margin over crude palm oil ("CPO") price.
2. The trading division managed to achieve higher profit before tax of RM3.38 million as compared to a loss of RM0.40 million in the same quarter of last year. This was contributed from higher sales of products portfolio with better profit margin coupled with lower advertisement and promotion expenses in this quarter.
Finally, the Share of profit from an associate, Spritzer increased from RM841k to RM1.33 million. 


Table: YeeLee's last 8 quarterly results


Chart 1: YeeLee's last 27 quarterly results

Valuation

YeeLee (closed at RM1.10 yesterday) is now trading at a PE of 6 times (based on annualized EPS of 18.6 sen, calculated using the average EPS of last 2 quarters of 4.65 sen). That's very cheap for a consumer stock.

Technical Outlook

YeeLee has broken above a large descending triangle (ABC) at RM0.85-0.90. It should test the horizontal line at RM1.25 soon. An upside breakout of this resistance could send the stock to RM1.70. 


Chart 2: YeeLee's monthly chart as at Mar 22, 2013 (Source: Quickcharts)

Conclusion

Based on improved financial performance, attractive valuation & positive technical outlook, YeeLee is a good stock to hold for long-term investment.

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, YeeLee.

Timecom- you have come a long way

Timecom broke above the horizontal line at RM4.70 earlier today. In the afternoon, it tested its long-term downtrend line at RM4.75-4.80- even hitting a high of RM4.85. It will be interesting to see whether Timecom can surpass the downtrend line - be it today or tomorrow. The indicators have turned upward and the chance of a successful breakout is good. Timecom's next resistance would be at the horizontal line at RM5.60 & then at RM7.00.


Chart 2: Timecom's weekly chart as at May 22, 2013_4.00pm (Source: quickcharts)

Conclusion

Based on potential bullish technical outlook, Timecom coudl be a good stock for trading BUY or for long-term investment.

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, Timecom.

Kianjoo- look out for the Bonus Issue

Result Update

For QE31/3/2013, Kianjoo's net profit dropped 32% q-o-q but increased by 12% y-o-y to RM30 million while revenue has similarly dropped by 3% q-o-q but rose by 13% y-o-y to RM301 million. When compared to the immediate preceding quarter (QE31/12/2012), revenue from Cans & Cartons division dropped due to higher orders from customers in QE31/12/2012 to meet festive season demand. Pre-tax profit for Cans division dropped 19% q-o-q to RM34.9 million (due mainly to derivative losses of RM1.8 million cf. gain of RM4.2 million previously). Cartons division's pre-tax profit dropped 21% q-o-q to RM3.8 million due to lower sales & higher operating overhead & cost. Contract Packaging Services division reported lower revenue of  RM12.8 million (from RM14.7 million ) and a pre-tax loss of RM2.1 million cf. to a profit of RM0.3 million previously


Table: Kianjoo's last 8 quarterly results


Chart 1: Kianjoo's last 26 quarterly results

Valuation

Kianjoo (closed at RM2.66 yesterday) is now trading at a PE of 10 times (based on last 4 quarters' EPS of 27.3 sen). At this multiple, Kianjoo is deemed fairly attractive.

Outstanding Corporate Exercise

Kianjoo has proposed a Bonus Issue of 1-for-2 and a Rights Issue of warrant on the basis of 1-for-4 shares held after the Bonus Issue at a price of only RM0.01 each. This corporate exercise attracted opposition from Canone, the present majority shareholder earlier went it was not a registered owner of the shares which it successfully bid in an auction. With the ownership of Kianjoo registered in its name, Canone- like all Minority shareholders- should welcome the proposed Bonus Issue.

Technical outlook

Kianjoo is in an uptrend line with support at RM2.20. Presently it is resting on the horizontal line at RM2.65. From here, Kianjoo may slowly rise again, especially when the date of entitlement of the Bonus Issue has been finalized.


Chart 2: KIanjoo's weekly chart as at Mar 22, 2013_11.00am (Source: Quickcharts)

Conclusion

Based on improved financial performance, attractive valuation & positive technical outlook, Kianjoo is a good stock to hold for long-term investment.

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, Kianjoo.