MFlour reported a loss!

Results Update

MFlour has just announced its results for QE31/3/2012. It incurred a net loss of RM598k as compared to a net profit of RM20.4 million for QE31/12/2011 or RM29.8 million for QE31/3/2011. Its revenue dropped due to lower feed sales & lower prices for all products while its bottom-line dropped due to lower margin for poultry integration as well as feeds & trading in fee ingredients.


Table: MFlour's last 8 quarterly results


Chart 1: MFlour's last 25 quarterly results

Valuation

MFlour (closed at RM1.59 yesterday) is now trading at a trailing PE of 6.9 times (based on last 74 quarters' EPS of 23 sen). I did not compute its forward PE because we cannot be sure how the company will fare in the next quarter.

Technical Outlook

MFlour is still in an uptrend line. However, it has just violated its 10-month SMA line. The last 2 occasions when it did that (in 2000 & 2008), the stock continue to slide. In 2000, the stock entered into a long bear market while in 2008, it dropped to the 50-month EMA line. How low will it go this time?


Chart 2: MFlour's monthly chart as at May 17, 2012 (Source: Tradesignum)

Conclusion

Based on the above, MFlour is rated a SELL.

JCY- top-line & bottom-line maintained

Results Update

JCY has announced its results for QE31/3/2012. Its net profit increased 12 folds to RM163 million from a year ago but was unchanged when compared to its immediate preceding quarter (QE31/12/2011). Revenue was similarly up 45% y-o-y or 3% q-o-q to RM577 million. JCY is still benefiting from strong demand from HDD as it is one of the few manufacturers which was not hit by the flood in Thailand in late 2011. However, the stagnant top-line, bottom-line & profit margin are all signs that an equilibrium has been achieved where JCY could not increase its production output further and/or the market demand is beginning to be fulfilled. If so, the super profit of the past two quarters should start to ease back in the quarters ahead.


Table: JCY's last 8 quarterly results


Chart 1: JCY's last 14 quarterly results

Valuation

JCY (closed at RM1.57 yesterday) is trading at a PE of 10 times (based on last 4 quarters' EPS of 15.65 sen). However, if we assumed that JCY's earning has peaked and will ease back in the near future, then JCY's forward PE would likely to be higher than this. As such, I believe JCY is now fully valued.


Technical Outlook

JCY is in an intermediate uptrend line. Its immediate resistance & support is at the horizontal line at RM1.60 & RM1.40, respectively.


Chart 2: JCY's daily chart as at May 17, 2012 (Source: Quickcharts)

Conclusion

Based on the above, I would rate JCY as a SELL INTO STRENGTH.

MISC continued to bleed

Results Update

MISC has just announced its results for QE31/3/2012. Its net loss dropped 73% q-o-q but increased by 51% y-o-y to RM465 million. The q-o-q decline in net loss was attributable to a much higher net loss incurred in QE31/12/2011 as MISC provided for its exit from the Liner business. On the other hand, net loss rose y-o-y due to increased operating loss from the still-operational Liner business (to RM308 million from RM RM114 million previously) and lower operating profit in the Energy Related Shipping (to RM245 million from RM338 million previously). The latter was due to lower profit from the LNG sub-segment while the Petroleum & Chemical sub-segments incurred lower losses).

MISC's revenue declined by 16% q-o-q or 18% y-o-y to RM2.404 billion. All segments reported a drop in revenue but the bulk of the decline can be traced to the Other Energy business & the Integrated Liner Logistics.


Table 1: MISC's last 8 quarterly results


Table 2: MISC's segmental results for last 8 quarterly results


Chart 1: MISC's last 24 quarterly results

Valuation

After taking a big hit in QE31/12/2011 & continued to bleed in QE31/3/2012, MISC's earning going forward is highly uncertain. With an EPS of -44 sen for the last 4 quarters & poor visibility, MISC's PE would be a wild guess. The only thing that we can fallback on Price to Book which is 0.9 times (based on its closing price of RM4.09 at the end of the morning session & NTA per share of RM4.78 as at 31/3/2012). Due to heavy losses, it is a sensible move that MISC chose not to declare any dividend for FY2011.

Technical Outlook

MISC has tested its horizontal line at RM3.90-4.00 yesterday. If this support can hold, the stock may attempt to form a bottom here. If this level is also violated, then the stock may test its next support at the horizontal line at RM3.00.


Chart 2: MISC's monthly chart as at May 16, 2012 (Source: Tradesignum)

Conclusion

In my previous report, I opined that MISC could turnaround after it has exited the loss-making Liner business. While MISC has made provision for the exit, MISC has yet to discontinue the Liner business for QE31/3/2012. The logic behind the earlier call remain. One would have to be a contrarian & see the value & potential in this stock at the current depressed prices. While I do not advocate aggressive buying at the present time, I think that you can nibble slowly at prices between RM3.00 & RM4.00.

TWSPLNT's bottom-line plummeted!

Results Update

TWSPLNT has just announced its results for QE31/2/2012. Its net profit dropped 96% q-o-q or 91% y-o-y to RM4 million while its turnover dropped 24% q-o-q but rose 165% y-o-y to RM608 million. The company explained that the drop in bottom-line was due to lower FFB output; share of losses of JV entity; and, pre-tax loss for the Manufacturing & Trading segment.


Table 1: TWSPLNT's last 8 quarterly results

I have tabulated the segmental reports below. The drop in pre-tax profit was due mainly to a sharp drop in plantation results & revenue. The explanation that the Plantation segment performed poorly due to a decline in FFB output [because of the seasonal factor] & lower CPO prices is not satisfactory. CPO prices have been very good in QE31/3/2012 and the revenue for QE31/12/2012 is even lower than QE31/3/2011. The drop in profit could be due to the share of losses from the JV entity but why should the revenue be lower. Something is not quite right!


Table 2: TWSPLNT's results on q-o-q & y-o-y comparison


Chart 1: TWSPLNT's last 16 quarterly results

Valuation

TWSPLNT (at RM4.82 at 10.30am) is trading at a trailing PE of 10.5 times (based on last 4 quarterly EPS of 46 sen). However, I feel that we should use the last 4 quarterly EPS to compute the PE multiple of this stock because we are sure whether TWSPLNT's earning going forward would resemble its past 4 quarterly results.

Technical Outlook

TWSPLNT has been rising in an uptrend since the middle of 2010. The stock could test its 200-day SMA line at RM4.40 and then its strong horizontal line at RM4.00.


Chart 2: TWSPLNT's daily chart as at May 17, 2012_9.45am (Source: quickchrts)

Conclusion

Based on serious concern raised on the company's financila performance, I believe the prudent approach to TWSPLNT is to SELL or REDUCE. We should wait until a clearer picture has emerged or when the stock has retraced to the RM4.00-4.40 level.

Global Market Outlook as at May 14, 2012

After two months of decline, the major market indices (DJIA, Nasdaq, DAX, FTSE and CAC) are at their intermediate uptrend line. Two Asian markets stand out- HSI is below the uptrend line while STI is still comfortably above the uptrend line. Almost all these indices are below the 50 & 100-day SMA lines. FTSE & CAC are below their 200-day SMA line while HSI is at the 200-day SMA line. The other indices are comfortably above the 200-day SMA line. As such, the global equity market is now at a crossroad. What could determine the direction of these markets would be the development in the Eurozone, the possible slowdown in the creeping recovery in the US and the possible pick-up in the Chinese economy.

 
 Table: Major indices as at May 14, 2012

 
 Chart 1: STI's daily chart as at May 14, 2012 (Source: Stockcharts)

 
 Chart 2: HSI's daily chart as at May 14, 2012 (Source: Stockcharts)

 
Chart 3: CAC's daily chart as at May 14, 2012 (Source: Stockcharts)

Chart 4: FTSE's daily chart as at May 14, 2012 (Source: Stockcharts)


Chart 5: DAX's daily chart as at May 14, 2012 (Source: Stockcharts)


Chart 6: NASDAQ's daily chart as at May 14, 2012 (Source: Stockcharts)


Chart 7: DJIA's daily chart as at May 14, 2012 (Source: Stockcharts)

Market Outlook as at May 15, 2012

FBMKLCI went below the low of 1567 recorded on April 27. Other negative indications are the 20-day SMA line cutting below the 40-day SMA line and the MACD re-entering the negative territory. The last time the 20-day SMA cut below the 40-day SMA line was on August 5, 2011; just before the sharp selldown of August & September. The MACD entering into the negative territory could herald an acceleration in the short-term downtrend. ADX has also hooked up while -DMI is rising against a sliding +DMI. As such, the market outlook is bearish.


Chart 1: FBMKLCI's daily chart as at May 14, 2012 (Source: Quickcharts)

Despite the poor sentiment, FBMKLCI is still in a long-term uptrend line, SS. However, further decline- in line with the decline in global equity markets- could push the market to test the uptrend line at 1420. While the long-term uptrend may remain intact, a fall from here could still be damaging to anyone's portfolio. At this moment, both weekly MACD & RSI are weak and trending lower while the -DMI is sliding & +DMI is rising.


Chart 2: FBMKLCI's weekly chart as at May 14, 2012 (Source: Quickcharts)

Based the above, we should be very cautious in the market in view of the bearish outlook for the short-term. However, it is not necessary to sell aggressively or substantially as the long-term trend is still up.

Shang may have bullish breakout

Shangri-la Hotels (M) Bhd ('Shang') broke above its strong resistance at RM3.00 yesterday. Its next resistance is at RM3.60. Based on this technical breakout, Shang could be a good trading BUY.


Chart: Shang's monthly chart as at May 10, 2012 (Source: Tradesignum)

Shang reported a net profit of RM61 million on revenue of RM430 for FYE31/12/2011. This gives the company a full-year EPS of 13.76 sen. At the current price of RM3.07, Shang is trading a ta PE of  22 times. For more, go here.

Tienwah- an attractive stock

Results update

Tienwah announced its results for QE31/3/2012. Its net profit dropped 34% q-o-q but rose 26% y-o-y to RM4 million while its revenue was unchanged q-o-q but rose 7% y-o-y to RM97 million. If you were to exclude the exceptional items, such as forex gain, provision for impairment loss on property owned & provision for retirement benefit to its CEO, Tienwah's pre-tax profit is quite steady at RM10-11 million.


Table: Tienwah's last 8 quarterly results


Chart 1: Tienwah's last 21 quarterly results

Valuation

Tienwah (closed at RM2.13 yesterday) is now at a PE of 7.9 times (based on last 4 quarters' EPS of 27 sen). At this PE, Tienwah is deemed quite attractive. It could trade up to a PE of 10 times.

Technical Outlook

Tienwah has broken above the psychological RM2.00 level since February. Its next resistance is at RM2.70 & then at RM3.20.


Chart 2: Tienwah's weekly chart as at May 10, 2012 (Source: Tradesignum)

Conclusion

Based on attractive valuation & positive technical outlook, I believe Tienwah is a good stock for long-term investment.

AJI may continue with its prior uptrend

 Technical Outlook

AJI may have finally broken out of its long consolidation. The stock made a high of RM4.53 in April 2010 and then consolidated between RM3.50 & RM4.25 for the next 24 months. Today it broke above the RM4.25 resistance for the first time. What a day for a breakout!

Chart 1; AJI's weekly chart as at May 10, 2012_9.15am (Source: quickcharts)

Recent Results Update

AJI's latest quarterly results is QE31/12/2011. It should be issuing its results for QE31/3/2012 soon. We can see that the company's revenue has been rising steadily while its profit has remained constant. The company is either unable to pass on the higher cost to the consumer or is adopting a strategy of expanding market share at the expense of its profit margin. The stagnant bottom-line left investors unimpressive and they were not willing to chase the stock higher. Will the upcoming results  for QE31/3/2012 signal a change? We will have to wait & see.


Table: AJI's last 8 quarterly results


Chart 2: AJI's last 26 quarterly results

Valuation

AJI (closed at RM4.23 yesterday) is trading at a PE of 10.3 times (based on last 4 quarters' EPS of 41 sen). At this PE multiple, AJI is deemed undemanding and could potential trade up to a PE of 14-15 times.

Conclusion

Based on technical consideration, AJI is deemed a trading BUY. However, being a consumer stock that produces a unique product & experiencing good growth as well as trading at a PE of only 10.4 times, AJI is rated a good stock for long-term investment.

Harta maintained its profit margin

Results Update

Harta has just announced its results for QE31/3/2012, where its net profit dropped marginally by 1% q-o-q or 5% y-o-y to RM50 million. Revenue dropped 1% q-o-q but rose 25% y-o-y to RM240 million. Due to stiff competition, Harta was barely able to maintain its profit margin in the face of high prices of nitrile latex as well as increased fuel cost.


Table: Harta's last 8 quarterly results


Chart 1: Harta's last 18 quarterly results

Further expansion planned

Harta had started the construction of its sixth plant, which would boost output by 30% (or an additional 3.5 billion pieces per year). This plant will have ten production lines, with the first production line targeted to start operation in August this year. All ten lines will be fully operational by June 2013.

Valuation

Harta (closed at RM7.84 yesterday) is now trading a at a PE of 14 times (based on last 4 quarters' EPS of 55.4 sen). At this PE multiple, Harta is deemed fully valued.

Technical Outlook

After an upside breakout above the psychological RM6.00 level, Harta quickly raced above the RM8.00 mark. It has been trading around the RM8.00 level for the past 2 months. Of late, it has struggled to stay above the RM8.00 level and had dipped to a low of RM7.70 at times. I expect the stock to trade between RM7.50 & RM8.00 until ta change in its financial results kicks in.


Chart 2: Harta's weekly chart as at May 8, 2012 (Source: Tradesignum)

Conclusion

Based on satisfactory financial performance & strong management, Harta is a good stock for long-term investment. However, the stock is now trading at a PE of 14 times, which means that its upside potential is limited. As such, I would rate it a HOLD.

PRESBHD testing its horizontal resistance at RM1.05

Prestaring Bhd ('PRESBHD') is one of OSK's top five Smallcap picks. It was featured in the Star's Analyst Report a few days ago (here). OSK valued this stock at RM1.48 based on a PE of 8 times.

From the chart below, we can see that PRESBHD has been pressing against its horizontal resistance at RM1.05 for the past few days. If it can break above this resistance, the stock may go to a technical target of RM1.30 (arrived at by adding the distance between the recent reaction low & the breakout level [of RM0.25] to the breakout level [of RM1.05]). Based on this, PRESBHD could be a stock worth close tracking.


Chart: PRESBHD's daily chart as at May 8, 2012_3.15pm (Source: Quickcharts)

F&N may have seen its toughest quarter

 Results Update

For QE31/3/2012, F&N's pre-tax profit declined by 64% y-o-y but increased by 8% q-o-q to RM57.7 million while turnover  was down 28% y-o-y or 2% q-o-q to RM730 million. The decline in turnover on a y-o-y basis was attributable to the cessation of the Coca-Cola distribution business, the lower sales from the Thailand dairies division (due to the flood) and the drying-up of sales from the property division. This had caused the operating profit of the Soft drink division (where Coca-Cola business was parked) to dropped from RM69 million to RM26 million and the Thailand dairies division to report a loss of RM18 million as compared to RM19 million previously. Meanwhile, the Malaysia dairies division was impacted by higher raw material cost which saw its operating profit dropping by 53% y-o-y to RM7 million.

F&N was able to report a respectable pre-tax profit due to the capital gain from the divestment of a 50%-interest in a development land in Section 13, Petaling Jaya. F&N's net profit jumped 156% q-o-q but still dropped by 19% y-o-y to RM107 million due to the recognition of a deferred tax asset of RM55  million in relation to the halal hub tax incentive.


Table: F&N's last 8 quarterly results


Chart 1: F&N's last 24 quarterly results


Prospects Going Forward

For the 2nd half of the financial year, F&N's financial performance is expected to improve only marginally. Its Thailand dairies division is expected to be back in production but the Malaysia dairies division is expected to suffer hiccups as the production will be moved to the newly-completed plant in Palau Indah.


Valuation

Based on the following assumptions:
1. The Malaysia & Thailand dairies division can swing back to the level of operating profit last saw in QE31/3/2011 (of RM15 million & RM19 million, respectively),
2. The Soft drink division merely maintained its current level of profit as recorded in QE31/3/2012 (of RM26 million),
3. The pre-tax profit is about the same as its operating profit (as per past results), and
4. The tax rate is at 25% while the Property division remained non-contributory.

We can arrive at a quarterly net profit of RM60 million for F&N. Dividing that by 361 million outstanding share, we would arrive at a quarterly EPS of 12.5 sen (or a full-year EPS of 50 sen).

As such, F&N (closed at RM19.00 yesterday) is now trading at a current PE of 38 times. At this PE, F&N is deemed overvalued.

Technical Outlook

F&N is looking rather toppish now. Its MACD indicator has already crossed down, which is a bearish signal. F&N has good support from the 15-month EMA line & the 20-month SMA line at around RM17.50. The last time, it broke below these two lines was in early 2009, when the stock dropped to the 40-month SMA line.


Chart 2: F&N's monthly chart as at May 7, 2012 (Source: Tradesignum)

Conclusion

Based on the above, the previous rating for F&N of a trading SELL is maintained. The stock is overvalued & the technical signals is mildly bearish.

Market Outlook as at May 7, 2012

Politics dominated the news over the weekend. With incumbency losing power or influence in France & Greece (here & here), the Eurozone sovereign debts problem is again back in the forefront. The rhetoric across Europe speaks more & more for the need to generate growth instead of the austerity measures championed by the German. In addition, we have to contain with the poorer-than-expected employment report in US (here & here). These two factors are likely to have negative impact all equity markets, including ours.

From the daily chart below, we can see that FBMKLCI is still in a medium-term line, with resistance at 1594-1595. Given the negative factors as mentioned above, the current rally will probably not attempt to test this downtrend line soon. The immediate support for the index will be the horizontal line at 1590 & then at 1565.


Chart: FBMKLCI's daily chart as at May 4, 2012 (Source: Quickcharts)

CPO & Plantation index may have peaked

Plantation index tested its all-time high at around 8950 on February 14. Since then, this index has been drifting lower.

Chart 1: Plantation's monthly chart as at May 4, 2012 (Source: Quickcharts)

From the CPO weekly chart below, we can see that the Parabolic SAR (short for 'stop-and-reversal' indicator) has moved above the CPO price. The immediate support for CPO is at the horizontal line at RM3200.


Chart 1: CPO's weekly chart as at June 24, 2011 (source: ifs.marketcenter.com)

My gut feeling is that CPO has put in a top for this year. The same goes for Plantation index & stocks. It could be a good time to take profit on your plantation portfolio.

BAT trading at an all-time high

Brief Introduction

British American Tobacco Bhd ('BAT') hardly needs any introduction. It is the market leader in the manufacture & sales of cigarettes & cigarette products.

Recent Financial results

BAT announced its latest quarterly results for QE31/3/2011 on April 23. Its net profit increased by 7.7% q-o-q or 8.9% y-o-y to RM195 million while its revenue increased by 5.6% q-o-q or 5.1% y-o-y to RM1.04 billion.


Table: BAT's last 8 quarterly results


Chart 1: BAT's last 21 quarterly results

Valuation

BAT (traded at RM55.70 as at 4.15pm) is trading at a PE of 21.6 times (based on last 4 quarters' EPS of 257.6 sen). At this PE multiple, BAT is fully valued. However, BAT pays handsome dividend of RM2.81 per share for the last 4 quarters which translates into a dividend yield of 5%. At this dividend yield, BAT makes a good income stock.

Technical Outlook

BAT has broken above its triangle ('ABC') at RM50 in middle of February as well as its all-time high of RM52. The last time BAT broke above its triangle ('abc') & its then all-time high of RM38 was in early 2003. After that bullish breakout, BAT rallied to a high of RM52 in middle of 2004. Can BAT repeat its 2003-2004 performance again?


Chart 2: BAT's monthly chart as at April 30, 2012 (Source: Tradesignum)

Conclusion

Based on bullish technical breakout, BAT could be a trading BUY.

Global Market Outlook as at May 3, 2012

On April 23, 2012, I have posted on the outlook of the global equity markets (here). While the equity markets everywhere had declined quite substantially (especially in Europe), the main market barometers were & are still in an uptrend. It was encouraging to note that many of these indices were able to hold above their intermediate uptrend line (denoted as 'SS').

What is even more encouraging is that these indices have rebounded & tested their medium-term downtrend (denoted as 'RR') over the past few days. Two indices have broken above the downtrend lines- DJIA & Hang Seng indices. DJIA had even surpassed its high for this year.

While the Eurozone problem will continue to brew, the US & Asian markets could continue with their prior uptrend in the weeks & months ahead. Of course, the big question is where would that leave us. I believe that we would join the other Asian markets & slowly recover. However, this may be reflected in the FBMKLCI as that index and, by extension, some blue chips, may need to undergo further consolidation. In the meantime, 2nd & 3rd liners would likely dominate the market play for the next few weeks.

 
Chart 1: DAX's daily chart as at May 2, 2012 (Source: Stockcharts)

 
Chart 2: FTSE's daily chart as at May 2, 2012 (Source: Stockcharts)

 
Chart 3: NASDAQ's daily chart as at May 2, 2012 (Source: Stockcharts)


Chart 4: DJIA's daily chart as at May 2, 2012 (Source: Stockcharts)


Chart 5: STI's daily chart as at May 2, 2012 (Source: Stockcharts)


Chart 6: HSI's daily chart as at May 2, 2012 (Source: Stockcharts)

Airasia flying high again?

I have posted about the negative impact of the MAS-Airasia tie-up on Airasia (here). For the past few weeks, there were strong rumors that the deal would unravel due to strong opposition from the staff of MAS. Today, we have the official announcement that this deal is in fact dead (here).

Since the tie-up is deemed a negative for Airasia, the termination of the tie-up would have the opposite effect of propelling the price higher for Airasia. This is exactly what has happened to Airasia share price for the first hour of trading this morning.

If you look at the chart below, you will see that Airasia is in an intermediate downtrend line, with resistance at RM3.60. If it can break above that level, the stock could rise further. However, the market & the insiders would have positioned themselves for today's official announcement & they could be selling to the latecomers.

Based on technical consideration, I think we should avoid being overly aggressive in buying Airasia at the current price of RM2.60. This could be a good level to reduce position or take profit.


Chart: Airasia's daily chart as at May 3, 2012_10.15am (Source: Quickcharts)

BIMB broke above the psychological RM2.50 mark

On March 27, I've posted on the possible impact of Takaful's strong rally on its parent company, BIMB (here). BIMB's most recent rally was in June 2011 and that rally was preceded by a rally in Takaful in April. I opined that BIMB could repeat the same performance if it can break above its immediate resistance at the horizontal line at RM2.40. For the past one month, BIMB was trading above RM2.40 but below the RN2.50 level. On Monday, BIMB surged past the RM2.50 level. This could herald the beginning of the anticipated rally in BIMB. If BIMB can repeat the same percentage gain (of 50%) in June 2011, then the target for this rally could be RM3.75 (50% increase over the breakout level of RM2.50).


Chart: BIMB & Takaful's daily chart as at May 2, 2012_9.30am (Source: Quickcharts)