Unisem: Earnings inched higher

Result Update

For QE30/6/2014, Unisem's NP rose 17% q-o-q to RM10.8 million while revenue rose 10.3% to RM252 million. Unisem returned to profitability compared to last year when it incurred a net loss of RM4.2 million on a revenue of RM247 million. The company attributed the higher net profit for the current quarter to the improved gross profit margin as a result of product mix change.


Table: Unisem's last 8 quarterly results


Chart 1: Unisem's last 39 quarterly results

Valuation

Unisem (closed at RM1.69 yesterday) is now trading at a PE of 28 times (based on annualized FY14E EPS of 5.96 sen). While the PE multiple is high, this multiple should ease off as the earning continue to improve.

Technical Outlook

From Chart 2, we can see that Unisem has swung up nicely. Its immediate resistance is at RM1.80 while the immediate support is at RM1.60.


Chart 2: Unisem's weekly chart as at July 24, 2014 (Source: Tradesignum)

Conclusion

Based on improving financial performance & bullish technical outlook, Unisem remains a good stock for long-term investment. Its valuation should improve with better earnings going forward.

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, Unisem.

UOADEV: Uptrend Intact

UOADev rebounded off its long-term uptrend line support at RM1.90-2.00. This rebound could carry the stock to the horizontal resistance at RM2.20 & then at RM2.40.

Based on potential recovery, UOADev could be a good stock for a trading BUY


Chart: UOADev's weekly chart as at July 23, 2014 (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, UOADev.

DRBHCOM & MMCCORP: Good Entry Point!

The Nathan's Hot Dog Eating Contest is an annual American competitive eating competition held each year on July 4 at Nathan's Famous Corporation's restaurant in Coney Island, New York. (Source: Wikipedia)

In the past few years, Corporate Malaysia has its own version of the Hot Dog Eating Contest and we all know who has been the runaway winner every year. Lately, some of the companies under that group has not been doing too well.  

I listed here 2 such stocks that have declined to a level that you may consider buying. The first stock is DRBHCOM which is resting at the uptrend line support at RM2.15-2.20.


Chart 1: DRBHCOM's weekly chart as at July 21, 2014 (Source: Tradesignum)

The second stock is MMCCORP which is testing at the horizontal line support at RM2.30.


Chart 2: MMCCorp's weekly chart as at July 21, 2014 (Source: Tradesignum)

I believe that both DRBHCOM & MMCCORP should be able to rebound from their respective support level.

Conclusion
If  you share my technical take on DRBHCOM & MMCCORP, you can buy into these stocks. Hopefully your investment will perform like a champion!

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, DRBHCOM & MMCCORP.

AAX: The real deal?

In May, I posted that AAX's rally would fail if it could not surpass the downtrend line resistance. Today, we can see that AAX is again testing its downtrend line. This time, it looks like it has surpassed the downtrend line resistance at RM0.78-0.80. At the time of writing, AAX was at RM0.81.


Chart: AAX's daily chart as at July 21, 2014 (Source: Interachart)

Conclusion

Based on bullish technical breakout, AAX could be a good stock for a trading BUY. However, it is recommended that you calibrate your entry as AAX is still a loss-making concern.

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, AAX.

Cresbld: Bullish breakout!

Cresbld has just broken above its horizontal resistance at RM1.58-1.60. With this breakout, the stock is expected to continue with its prior uptrend.

The bullish outlook for the stock is shared by Cresbld-WB, which broke above its downtrend line at RM0.65. At the time of writing, Cresbld & Cresbld-WB were trading at RM1.63 & RM0.695, respectively.


  Chart 1: Cresbld's weekly chart as at July 17, 2014 (Source: Tradesignum)


Chart 2: Cresbld-WB's weekly chart as at July 17, 2014 (Source: Tradesignum)

A look at the 10-year financial performance shows that Cresbld is a profitable company. It suffered a sharp drop in revenue in FY2013 due to the completion of certain projects that carried high material cost. With EPS of 32.6 sen for FY13, Cresbld (at RM1.63 now) has a trailing PE of 4.5 times. At this PER, the stock is deemed inexpensive.

The only concern is its high receivable figure of RM191 million as at 31/3/2014. Based on a revenue of RM223 million,  Cresbld's debtors' collection period stood at 312 days.


Chart 3: Cresbld's last 10 years' result  (Source: Equities Tracker)

Based on technical breakout alone, Cresbld could be a trading BUY.

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, Cresbld.

Huayang: An unexplained q-o-q earning decline

Results Update

For QE30/6/2013, Huayang's net profit dropped by 37% q-o-q but rose 94% y-o-y to RM24 million while revenue dropped by 31% q-o-q but rose by 70% y-o-y to RM136 million. The y-o-y improvement was attributed to steady construction progress of all on-going projects. The q-o-q deterioration should be explained but it was not. I appended the company's explanation of its drop in this quarter as well as its rise in the immediate preceding quarter.


Table: Huayang's last 8 quarterly results


Chart 1: Huayang's last 24 quarterly results 

Valuation

Huayang (at RM2.36 yesterday) is trading at a PE of 6.7 times (based on last 4 quarters' EPS of 35 sen). At this PE, Huayang is still deemed fairly valued.

Technical Outlook

Huayang may have broken above its downward channel. However, for the stock to rise further, it needs to surpass the high of RM2.55 recorded in 2013. Failure to do so would set the stage for a double top reversal.


Chart 2: Huayang's weekly chart as at Jul 17, 2014 (Source: Tradesignum)

Conclusion

Despite the drop in financial performance, Huayang is still a good stock for long-term investment based on attractive valuation. Technical outlook is mildly positive but tricky as it needs to surpass its 2013 high of RM2.55 to avoid the dreaded double top reversal. For now, it is rated 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, Huayang.

Zhulian: Earning dropped again!

Result Update

For QE30/5/2014, Zhulian's net profit dropped by 52% q-o-q or 78% y-o-y to RM8.3 million while revenue also dropped by 1% q-o-q or 38% y-o-y to RM66 million. Net profit dropped q-o-q mainly due to drop in revenue and higher expenses incurred, offset by slight increase in share of profit of equity accounted investee. Revenue dropped q-o-q mainly due to decrease in local market demand, offset by higher demand from Thailand market.


Table: Zhulian's last 8 quarterly results

 
Chart 1: Zhulian's last 31 quarterly results 

Valuation

Zhulian (closed at RM2.69 today) is now trading a PE of 16 times (based on last 4 quarters' EPS of 17 sen). With quarterly EPS sliding afresh, forward earning is likely to be around 10 sen. At that earning level, the stock is now trading at a PE of 27 times.

Technical Outlook

Zhulian is now testing its long-term uptrend line at RM2.50. This is also a strong horizontal support for the stock. From here, the stock should find some support and hopefully form a base. However, if this support is taken out, then Zhulian can drop to RM2.00-2.20.


Chart 2: Zhulian's weekly chart as at July 17, 2014 (Source: Tradesignum)

Conclusion

Despite the poor financial performance & expensive valuation, Zhulian is still rated a HOLD for now. If it breaks the RM2.50 mark, then Zhulian is traded a TRADING 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, Zhulian.

Hovid: Bullish breakout

Hovid-WB broke above its rising 'horizontal' resistance at RM0.20 three days ago. The share also broke above its horizontal resistance at RM0.38 at the same time.



Chart 1: Hovid-WB's daily chart as at July 9, 2014 (Source: Tradesignum) 


Chart 2: Hovid's daily chart as at July 9, 2014 (Source: Tradesignum) 

Based on technical breakout, Hovid & Hovid-WB could be a good trading BUY.

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, Hovid & Hovid-WB.

NCB: Still Waters Runs Deep

Background

NCB has declined since it broke its uptrend line in July 2013. A retracement of nearly 100% of its gain from 2009 to 2013 means that this stock will a long time to recover. One can only hope that a bottoming phrase will kick in soon at RM2.80-3.00. Check out my last post (here).

 
 Chart 1: NCB's weekly chart as at July 9, 2014 (Source: Tradesignum)

Result Update

From Table 1, we can see that pre-tax profit improved q-o-q by RM6.5 million despite a drop in revenue of RM19.8 million. The improvement was due to lower losses in the Logistics operation of RM12.6 million which more than offset a decline of RM5.5 million in Port operation. Compared to previous year, pre-tax profit dropped by RM37.8 million while revenue dropped by RM25.3 million. The drop in profit was contributed by drop in pre-tax profit by both Port operation (of RM30.8 million) & Logistics operation (of RM7.4 million).


Table 1: NCB's segmental results


Table 2: NCB's last 8 quarterly results


Chart 1: NCBs last 27 quarterly results


Chart 2: NCBs last10 yearly results

Outlook

In addition to the losses in the Logistics operation, NCB faces challenges from WPRTS, such as the depth of its berths (generally shallower than WPRTS) and productivity of its berths & cranes (lower than WPRTS). The commencement of its new berth, CT4 in December 2013 could address the issue of maximum draft as CT4, which has a depth of 17m, can cater to ultra large vessels. CT4 has ready demand from existing customers, particularly Wan Hai (as per a report from Maybank IB Research). 


Table 3: NCB & WPRTS's Infrastructures compared (Source: Kenanga Research)


Chart 3: NCB & WPRTS's Terminal Utilization (Source: Kenanga Research)


Chart 3: NCB & WPRTS's Crane & Berth Productivity (Source: Kenanga Research)

Valuation

NCB (at RM2.95 yesterday) is now trading at a PB of 1 time and trailing PE of 59 times (based on last 4 quarters' EPS of 5 sen). On the other hand, the second port owner & operator in Port Klang, WPRTS (closed at RM2.74 yesterday) has a much higher PB of 6.1 times (based on NTA of RM0.45/share as at 31/3/2014) but a lower PE of 20 times (based on annualized EPS of RM0.139).

Conclusion

Despite the poor financial performance and bearish technical outlook, NCB may be worth considering for a long-term investment due to its substantial decline. The drop has brought out value in the stock as it trades at 1x its NTA per share.

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, NCB.

Insas: Uptrend to continue?

Insas has just broken above its intermediate downtrend line, RR at RM1.25-1.27. With this upside breakout, the stock could continue with its prior uptrend.


Chart: Insas's daily chart as at July 9, 2014 (Source: Tradesignum) 

Based on technical breakout, Insas could be a good trading BUY.

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, Insas.

Parkson: A stock for the contrarian

Background

Over the past 2 years, Parkson's share price has been declining (see Chart 1). It is now revisiting the 2009 low of RM2.30-2.50 (go here).


Chart 1: Parkson's weekly chart as at July 9, 2014 (Source: Tradesignum)

If you look at the last 8 quarterly results (in the table below) and the 29 quarterly results (in Chart 2), you will see that Parkson had a bad year in 2013. It bit the bullet in the end of CY2013 by terminating lease contracts of stores with potential closure which resulted in provision for penalty of RM46 million in QE31/12/2013. This has dragged down its earning for that quarter and hopefully will help in driving up its earnings in subsequent quarterly.


Table: Parkson's last 8 quarterly results


Chart 2: Parkson's last 29 quarterly results 


Chart 3: Parkson's last 10 years' results  (Source: Equities Tracker)


Valuation

Parkson (closed at RM2.50 yesterday) is now trading at a trailing PE of 19 times (based on last 4 quarters' EPS of 13.3 sen). If you expect Parkson's results to improve going forward, then the trailing PE is not very meaningful. It maybe more helpful to look at PB ratio and that ratio stood at an attractive 0.9 time.

Conclusion

Despite the poor financial performance for the past 2-3 years & bearish technical outlook, Parkson is a stock worth watching because it has dropped so much. I believe that the RM2.50 level could be a strong support and the base for a bottoming phrase for this stock. If you are a contrarian, you might start to slowly accumulate this stock.

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, Parkson.

Market Outlook: Who is calling the shots?

Over the past 1 year, the market action was not centered on the blue chip stocks nor the near blue chip stocks. This is clearly shown by the sideways movement in FBMKLCI (representing the Top 30 stocks) and the FBMMID70 (representing the next tier).


Chart 1: FBMKLCI's weekly chart as at July 9, 2014 (Source: Kentrade)


Chart 2: FBMMID70's weekly chart as at July 9, 2014 (Source: Kentrade)

The play was all in the 2nd & 3rd liners (represented by FBMSCAP); the fledgling stocks (FBMFLG) and the ACE Market stocks (FBMACE).

Of these 3 indices, the weakest group of stocks appears to be the stocks from the ACE Market. FBMACE was in a sideways movement for 4 years up to July 2013, when it finally broke above the horizontal line at 4800. Thereafter, FBMACE has been rising in an uptrend line, with support at 6500-6600. It is testing that support now.

We can see that there is a bearish divergence between FBMACE index and its RSI indicator. In addition, the Williams %R has broken below its uptrend line. Will FBMACE be the canary in the coal mine? Let's watch closely the ongoing test of the uptrend line support by FBMACE. If it breaks below 6500-6600, it could lead to further & sharper correction in the 2nd & 3rd liners across the whole market.  


Chart 3: FBMACE's weekly chart as at July 9, 2014 (Source: Kentrade)


Chart 4: FBMFLG's weekly chart as at July 9, 2014 (Source: Kentrade)


Chart 5: FBMSCAP's weekly chart as at July 9, 2014 (Source: Kentrade)

Airport: Uptrend continuation beckons!

Airport, which broke above its intermediate downtrend line at RM7.80-7.85 in mid-June. Since then, it has been drifting higher on thin volume, Today, it is testing its strong horizontal resistance at RM8.20. Indicators are supportive of a potential upleg for the stock.

If Airport can break above the RM8.20 mark, the stock could be a good trading BUY. It may also be a good medium-term investment as it may revisit the December 2013 high of RM9.75.


Chart 1: Airports daily chart as at July 4 2014 (Source: Tradesignum) 


Chart 2: Airports weekly chart as at July 4 2014 (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, Airport.

Presbhd: Uptrend to Continue!

Presbhd tested the horizontal line at RM2.06 yesterday Today, it surpassed this resistance as well as climbing back on top of its uptrend line. This is a clear sign that the stock has regained the upward momentum.


Chart 1: Presbhd's daily cahrt as at July 3, 2014 (Source: Chartnexus)

The last time, Presbhd surpassed a strong horizontal resistance was in October 2013. Then it cleared the horizontal line at RM1.12 & rose to a high of RM2.06. If it can travel the same distance again, we can expect Presbhd to test the RM3.00 mark. 


Chart 2: Presbhd's weekly cahrt as at July 3, 2014 (Source: Chartnexus) 

Based on technical breakout, Presbhd could be a good trading BUY>

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, Presbhd.

Tenaga: Waiting for Bullish Breakout!

Tenaga has been in the news lately on possible approval to get a tariff hike. In fact, Tenaga is overdue for a tariff adjustment according to the Incentive-Based Regulation (IBR) which started on 1 January. This regulation provides for a Fuel Cost Pass-Through (FCPT) to be implemented by way of a 6-monthly Fuel Component Cost review.

The Fuel Components are Domestic gas (subsidized input from Petronas at a rising scale), LNG gas (at market price) and Coal (at market price). From the charts below, we can see that the price of Natural Gas & Thermal Coal has risen in the past 6 months. As such, we can expect a tariff increase for Tenaga to compensate it for the increased fuel cost.


Chart 1: Thermal Coal price chart (Source: infomine.com)


Chart 2: Natural Gas price chart (Source: nasdaq.com)

The share price of Tenaga has been moving sideways because the market is nervously awaiting the first test of whether the Government will stick to the IBR by implementing the FCPT. 3 days into the month of July, we have yet to receive any news of a revision in Tenaga tariff rate. If the announcement is made now, one big uncertainty - which  has been a drag on the share price for Tenaga - will be removed.

From the chart below, we can see that Tenaga is pressing against its horizontal line at RM12.40. A convincingly upside breakout of the horizontal line (as well as the psychological RM12.50 mark) would signal the continuation of the uptrend for the stock.


Chart 3: Tenaga's weekly chart as at July 2, 2014 (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, Tenaga.

Sign: Poised to take off!

Sign may have broken to the upside of its symmetrical triangle at RM1.50. If it can surpass the recent high of RM1.59 recorded in October 2013, the stock could take off. Even if it failed to clear the RM1.59 resistance, the stock has clearly shown its intention of going higher. (as at 12.25pm, Sign was trading at RM1.60).

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


Chart: Sign's weekly chart as at Jun 30, 2014 (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, Sign.

TAGB: Bottom-line jumped!

Results Update

For QE30/4/2014, TAGB's net profit rose 34% q-o-q or 72% y-o-y to RM81.5 million while revenue was mixed- down 32% q-o-q & unchanged y-o-y at RM158 million. Bottom-line improved y-o-y due to sharp rise in pre-tax profit in two divisions:

• Investment holding division, which reported profit before tax of RM22.2 million in the current first quarter as compared to profit before tax of RM6.6 million previously, and 
• Finance & related services division, which reported profit before tax of RM35.4 million as compared to profit before tax of RM10.4 million in QE30/4/2013. 
  

Table: TAGB's last 8 quarterly results

Bottom-line soared as profit margin crossed the 40% mark!


Chart 1: TAGB's last 27 quarterly results

Valuation

TAGB (trading at RM0.355 yesterday) has a trailing PE of 12 times (based on last 4 quarters' EPS of 2.97 sen). At this PE, TAGB's valuation is deemed fairly valued.

Technical Outlook

TAGB broke above its long-term downtrend line, RR at RM0.30 in April. Only in early part of June did TAGB pulled away from the sticky downtrend line and tested its strong horizontal line at RM0.35. A convincing upside breakout of this horizontal resistance may send the stock to the next resistance at RM0.40 and beyond that to RM0.48.


Chart 2: TAGB's weekly chart as at Jun 30, 2014 (Source: Tradesignum)

Conclusion

Despite the improved financial performance & mildly bullish technical outlook, TAGB is a stock good for medium-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, TAGB.

Magni: Bottom-line dropped q-o-q due to lower sales!

Results Update

For QE30/4/2014, Magni's net profit dropped 43% q-o-q but rose 17% y-o-y to RM8.5 million while revenue dropped 13% q-o-q but rose 19% y-o-y to RM162 million. The q-o-q decline in revenue was attributable to lower sales orders received from garment business. This has caused a drop in the bottom-line for the company.

Table: Magni's last 8 quarterly results


Chart 1: Magni's last 21 quarterly results

Valuation

Magni (trading at RM3.16 as at 3.45pm) has a trailing PE of 8.2 times (based on last 4 quarters' EPS of 38.7 sen). At this PE, Magni's valuation is still undemanding. It may command a PE of 9-10 times.

Technical Outlook

Magni is in a gradual uptrend line. Its immediate support is at the 40-week EMA line at RM2.50. That would be a good entry level for the stock.


Chart 2: Magni's weekly chart as at Jun 27, 2014 (Source: Tradesignum)

Conclusion

Despite the weaker financial performance, Magni is still a good stock for long-term investment in view of its attractive valuation & good technical outlook.

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, Magni.