MalaysiaStock.Biz Charting Feature

As you know, I am a believer in technical analysis for both short-term trading and long-term investing. I don’t rely solely on technical analysis to make my calls. I normally support my long-term calls with fundamental analysis and occasionally I would make trading calls based on market observations.

I subscribe to the classical school of technical analysis which doesn't digress too far from Dow’s basic tenets on technical analysis. I support my technical analysis with a few technical indicators, such as moving average, MACD, ADX, Stochastic and RSI.

I believe that traders and investors can survive on simple charting tools- like what you can get from many free online charts. When I first started publishing my articles in nexttrade in 2006, I used Quickcharts because it came together with Kenanga’s trading platform that was provided by N2N. After Kenanga switched the trading platform provider to Excel Force, I migrated to a free online charting website, Tradesignum.

Two years ago, I started using charting tools from ShareInvestor which is a subscription-based financial data provider. Lately I has starting using the free online charting features of MalaysiaStock.Biz.

As a subscription-based service, ShareInvestor provides financial and market data, including charts for all the stocks & indices on Bursa Malaysia, Bursa Derivatives and 8 global stock markets. Its most basic package, ShareInvestor Webpro costs about RM288 per annum (here) and it gives you access to financial data and charts for all Malaysia stocks. The data stretches back to 1977 for FBMKLCI or 1987 for stocks.

As a free online chart program, MalaysiaStock.Biz’s charting has 10-year data which is sufficient for most technical analysis. However, its list of indices is rather short, with only one index: FBMKLCI. What I like most about MalaysiaStock.Biz’s charting feature is that it allows me to save up my study on a particular chart in a link, which I can then embed into my post so that my readers will see my study. 

MalaysiaStock.Biz has placed an advertisement on nexttrade (just below the header). Some of the features of MalaysiaStock.Biz charting feature which I may find useful are:

1) Intra-day stock price update

2) A broad range of  technical indicators (60 all in)

3) 10 years market data

4) Share prices are adjusted for all the dividend and other entitlement news such as issue bonus, share split and etc.

I would recommend that you try out MalaysiaStock.Biz chart. You can do so by go to this link:  http://www.malaysiastock.biz/Stock-Chart.aspx?securitycode=FBMKLCI

If you like to find out some of the useful tips. http://www.malaysiastock.biz/Forum/Topic.aspx?tid=1270&page=1

Kawan: Uptrend Likely to Continue

Background

Kawan Food Berhad ('Kawan') is involved in the manufacturing & sales of frozen Asian food delicacies. It's the largest frozen flour floor food producer in the country as well as the largest manufacturer of roti paratha in the world. Its roti paratha is exported to many countries, including its largest export market, the US. Until end of last year, Kawan operated from its Shah Alam factory. Its new factory in Pulau Indah has been completed end of 2016, which increases its warehouse capacity by 4-5 times.


From Company's website

Recent Financial Results

Kawan's latest financial result is for QE30/9/2016. Its next quarterly result for QE31/12/2016 will be out in 2 weeks time. For QE30/9/2016, its revenue was mixed, down 15% q-o-q but up 10% y-o-y to RM47 million while net profit was the reverse - up 33% q-o-q but practically unchanged y-o-y at RM12 million. Revenue dropped q-o-q due to decrease turnover from all regions except Oceania. Profits rose due to lower advertisement and promotion expenses and favorable RM/USD exchange rate in the current quarter.


Table: Kawan's 8 quarterly results


Graph 1: Kawan's P&L  for last 14 quarterly results

Historical Financial Performance

In the past 11 years, Kawan's revenue & profits has been on a steady uptrend. Its net profit margin as been kept at around 15% but enjoyed a slight bump to 20% last year (probably due to favorable USD/MYR exchange rate).


Graph 2: Kawan's P&L  for last 11 yearly results

Latest Financial Position

Based on its accounts for QE30/9/2016, Kawan's financial position is deemed satisfactory. Current ratio is at 4.3x and gearing ratio at 0.2x. The high current ratio is due to Cash & Bank Balances of RM92 million which included cash reserved for the construction of its new factory in Pulau Indah. As at 30/9/2016, the contracted commitment for Property, Plant & equipment was RM49 million.

Valuation

Kawan (closed at RM4.09 yesterday) is now trading at a trailing PER of 28x (based on last 4 quarters' EPS of 14.4 sen). The high PER reflects the expectation of a jump in earning in the current year due to the increased capacity from the new factory. The question is whether Kawan can utilize the increased capacity fast enough to meet investors' expectation.

Technical Outlook

Kawan is in a long-term uptrend line, with support at RM3.80. On Feb 15, it broke above the horizontal line at RM4.00, turning a strong resistance to a support.


Chart 1: Kawan's weekly chart as at Feb 16, 2017 (Source: MalaysiaStock.Biz)

We can see below that Kawan's uptrend continues after upside breakout of the resistance from horizontal lines. If the current breakout can sustain, this target for this upleg is RM5.00.


Chart 2: Kawan's monthly chart as at Feb 16, 2017 (Source: MalaysiaStock.Biz)

Conclusion

Based on technical breakout and expected increased earnings from its increased capacity, Kawan could be a good long-term investment. However, we may regard it as a good trading BUY for now as we await the results for the next 2-3 quarters to confirm the uptake for its huge expansion.

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.

BAT: Earnings Rebounded On One-Off Gain

Result Update

For QE31/12/2016, BAT's net profit rose 41% q-o-q or 53% y-o-y to RM299 million while revenue dropped by 10% q-o-q or 21% y-o-y to RM841 million. Revenue declined 10% q-o-q and Gross Profit declined 17.1% q-o-q due to 33.3%-reduction in contract manufacturing volumes and 4.3%-drop in domestic and duty-free volume.

Operating Expenses rose 10.5% q-o-q largely driven by higher marketing expenditure due to timing of spend, which was partially offset by lower recharges. During the same period, the Group recorded a restructuring income of RM132 million which consists of a gain from the disposal of the land and building which the factory operation is located (RM159 million) which was partially offset by provision for employee redundancy related costs (RM8 million), impairment of asset (RM3 million), provision for obsolete raw materials (RM4 million) and leaseback rental (RM13 million).

As a result, Profit from Operations increased by 27.7% (RM69 million) when compared to the previous quarter. If the impact of one-off restructuring expenses and income is excluded, Profit from Operations would actually decline by 25.7% (RM64 million).


Table 1: BAT's last 8 quarterly results


Chart 1: BAT's last 40 quarterly results
  
Valuation

BAT (closed at RM48.78 yesterday) is now trading at an adjusted PER of 19.4 times (based on the last 4 quarters' adjusted EPS of 252 sen). BAT has paid out quarterly dividend payment totaling of 232 sen; thus giving a Dividend Yield of 4.8%.

When compared to HEIM & Carlbg, BAT's PER & DY are less attractive. HEIM & Carlsbg have higher DY of 5.7% & 5.1% and lower PER of 18.3x & 18.6x respectively.

Technical Outlook

BAT has recently tested its long-term uptrend line, SS support at RM40.00-41.00 and then rebounded.


Chart 1: BAT's monthly chart as at Feb 16, 2017 (Source: MalaysiaStock.Biz)

BAT's upside is capped by the intermediate downtrend line, RR at RM49.00-50.00.


Chart 2: BAT's weekly chart as at Feb 16, 2017 (Source: MalaysiaStock.Biz)

Conclusion

Based on the poorer financial performance and unattractive valuation, BAT's current rating as a SELL is maintained.However if BAT were to slide to RM49.00-50.0039.00-40.00, it could be a Trading BUY for a rebound play.

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.

GASMSIA: Strong Earnings Growth Sustained

Results Update

For QE31/12/2016, Gasmsia's profit after zakat and taxation rose 19% q-o-q or 402% y-o-y to RM51.6 million while revenue dropped 2% q-o-q or 10% y-o-y to RM1.05 billion. Profits rose q-o-q mainly due to higher gross profit in line with the increase in volume of gas sold and tolling fees.
   

Table: Gasmsia's last 14 quarterly results


Graph: Gasmsia's P&L  for last 20 quarterly results

Valuation

Gasmsia (closed at RM2.76 yesterday) is now trading at a PE of 21.5 times (based on lats 4 quarters' EPS of 12.86 sen). Its dividend yield is decent at 2.9%. At this PER & DY, Gasmsia is deemed fairly valued.

Technical Outlook

Gasmsia broke above its downtrend line at RM2.40 in August last year. It is now hoovering around the horizontal support of RM2.75-2.80. Its next resistance will come from the horizontal line at RM3.10.


Chart: Gasmsia's weekly chart as at Feb 15, 2017 (Source: MalaysiaStock.Biz)

Conclusion

Based on improved financial performance and positive technical outlook, Gasmsia 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.

HEIM: Earnings Soared

Results Update

In QE31/12/2016, HEIM's net profit increased by 84% q-o-q or 15% y-o-y to RM105 million while turnover rose 50% q-o-q or 10% q-o-q to RM578 million. Revenue rose sharply q-o-q principally driven by higher volumes from festive demand, improved brand portfolio performance and the stabilization of the market following lower volumes observed in the immediate preceding quarter. PBT rose 63.4% q-o-q on the back of increased revenue and timing of commercial spend. PAT rose more than PBT due to lower tax rate as a result of RM13.4 million deferred tax used to reduce tax charge.


Table: HEIM's last 8 quarterly results

 
Graph: HEIM's last 45 quarterly results

Valuation

HEIM (closed at RM15.92 yesterday) is now trading at a trailing PER of 17.6 times (based on last 4 quarters' EPS of 90.47 sen). Its dividend yield is very attractive at 6.0%. Based on PER & DY, HEIM is deemed fairly attractive.

Technical Outlook

HEIM is in an long-term uptrend line. Its immediate support comes from the horizontal line at RM15.90-16.00.


Chart: HEIM's weekly chart as at Feb 15, 2017 (Source: MalaysiaStock.Biz)


Conclusion

Based on good financial performance, fairly attractive valuation & positive technical outlook, HEIM could be a good stock for your investment 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.

Market Outlook as at Feb 15, 2017

Over the past 7 weeks, FBMKLCI has broken above its downtrend line at 1660 as well as surpassing the horizontal line at 1695 & psychological 1700 mark. It's poised to test the strong resistance from the horizontal line at 1725.


Chart 1: FBMKLCI's weekly chart as at Feb 15, 2017_3.50 (Source: MalaysiaStock.Biz)

I believe that our market is on track for a slow recovery from this point onward. This is based on two more charts- FBMEmas and FBM70.

As you know, FBM70 is made up of 70 second liner stocks. FBM70 has just broken above its downtrend line. It is now testing its October 2016 high at 13900.


Chart 2: FBM70's monthly chart as at Feb 15, 2017_4.00 (Source: ShareInvestor.com)  

If you add in the third liner stocks (or small-cap) stocks to the second liner stocks (represented by FBM70) and blue chip stocks (represented by FBMKLCI), you will get FBMEmas. Below you can see FBMEmas has broken above its downtrend line as well as the horizontal line at 12000.


Chart 3: FBMEmas's monthly chart as at Feb 15, 2017_4.00 (Source: ShareInvestor.com)

Based on the above observations, I believe that our market is likely to continue its slow uptrend.

Hupseng: Earnings Didn't Disappoint In Seasonally Strong 4Q

Result Update

For QE31/12/2016, Hupseng's net profit rose by 55% q-o-q to RM15.4 million while revenue increased by 28% q-o-q to RM83 million. Profit before tax rose q-o-q due to significant sales volume recorded in the domestic market. Compared to the corresponding quarter last year, net profit was practically unchanged while revenue rose 3%.

  
Table: Hupseng's last 8 quarters result


Graph: Hupseng's last 38 quarters' P&L  

Valuation

Hupseng (closed at RM1.18 yesterday) is now trading at a PER of 19 times (based on last 4 quarters' EPS of 6.17 sen). Hupseng has cash balances of RM105.7 million as at 31/12/2016. This translates to cash per share of RM0.13. If the cash in hand is deducted from the share price, the PER would be lowered to 17 times. At this PER, Hupseng is deemed fairly valued.

Technical Outlook

Hupseng nearly tested its long-term uptrend line support at RM1.15.
 

Chart: Hupseng's weekly chart as at Feb 14, 2017 (Source: MalaysiaStock.Biz)

Conclusion

Based on good financial performance, healthy financial position & positive technical outlook, Hupseng is a good stock for long-term investment.

Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

Harta: Improved Operating Performance Masked By Forex Losses

Result Update

For QE31/12/2016, Harta's net profit dropped by 7% q-o-q or 9% y-o-y to RM66 million while revenue rose 4% q-o-q or 15% y-o-y to RM456 million. Revenue rose q-o-q due to increase in demand and the strengthening of the USD. The operating profit margin increased from 20.1% to 23.6% basically due to the reduction of operation overhead, improved operation efficiency and strengthening of USD. Despite higher revenue & better operating profit margin, Harta's profit before tax dropped q-o-q due to the recognition of unrealized foreign exchange loss and fair value loss of foreign exchange contracts.


 Table: Harta's last 8 quarterly results


Graph: Harta's last 37 quarterly results

Valuation

Harta (closed at RM4.75 yesterday) is trading at a trailing PER of 31 times (based on last 4 quarters' EPS of 15.55 sen). Harta is still trading at very demanding multiple.

Technical Outlook

Harta is in a long-term uptrend line, with support at RM4.40-4.50.


Chart: Harta's weekly chart as at Feb 14, 2017 (Source: MalaysiaStock.Biz)

Conclusion

Based on improved operating performance, strong leadership in the rubber glove sector & capable management team, Harta is considered a good stock for long-term investment. Its rating is kept at HOLD due to demanding valuation.

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.

CSCStel: Profit Plunged Due To Weaker MYR & Higher Input Costs

Results Update

CSCStel's net profit dropped by 74% q-o-q or 78% y-o-y to RM6.2 million on the back of higher revenue -which rose 11% q-o-q or 18% y-o-y to RM287 million. The increase in revenue is due to significant increase in the sales volume albeit at marginally lower selling prices of all steel products. Profit before tax dropped from RM24.8 million to RM7.9 million due mainly to substantially higher cost of production due to higher raw materials cost exacerbated by rapidly weakening Ringgit vis-à-vis US Dollar during the quarter under review.


Table: CSCStel's last 8 quarterly results


Graph: CSCStel's P&L for last 37 quarterly results

Valuation

CSCStel (closed at RM2.11 yesterday) has a PER of 11.3 times (based the last 4 quarters' EPS of 18.63 sen). At this PER multiple, CSCStel is deemed fully valued.

Technical Outlook

CSCStel is now testing the line connecting its recent trough at RM2.00. This support is fairly strong support. If the support is violated, the next support is at RM1.90.


Chart 1: CSCStel's daily chart as at Feb 13, 2017 (Source: MalaysiaStock.Biz)


Chart 2: CSCStel's weekly chart as at Feb 13, 2017 (Source: MalaysiaStock.Biz)

Conclusion

Despite on the weaker financial performance and full valuation, I am revising my rating for CSCStel from a TAKE PROFIT to a HOLD as I expect the technical support at RM1.90-2.00 to hold up the stock.

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.

BIMB Getting Ready For The Race?

Technical Outlook

BIMB has just broken above its 2013 high of RM4.29 and traded at a high of RM4.43 around 10:45am. If this upside breakout can sustain, BIMB could continue its prior uptrend. Based on a 1-to-1 extension, the potential target for a successful rally is RM5.00.


Chart 1: BIMB's weekly chart as at Feb 10, 2017_10.56 (Source: MalaysiaStock.Biz)

Its warrant, BIMB-WA has however showed no sign of any impending upside move. Trading at a premium of 17%, BIMB-WA has an exercise price of RM4.72 & expiry date of Dec 4, 2023. If BIMB can continue its prior uptrend, BIMB-WA would be a very good bet.


Chart 2: BIMB-WA's daily chart as at Feb 10, 2017_10.48 (Source: MalaysiaStock.Biz)

Recent News Flow

Today, the Sundaily published an extract bullish report on BIMB from HLIB Research (here). HLIB initiated a BUY call for BIMB with a target price of RM5.00. HLIB highlighted the strength of BIMB as follows:

• It consistently delivers top-tier ROE in the industry with an average of 11%, post-Bank Islam stake acquisition. In comparison, only two other banks – Public Bank Bhd and Alliance Financial Group – managed to maintain a double-digit ROE.
• It has high current accounts and saving accounts (CASA) ratios of 37% to 47%, higher than the industry average of 25%, which benefit mainly government bodies and agencies and religious associations.
• It has good asset quality, with gross impaired financing improved from a high of 22% in FY05 to FY06 to 1.1% in FY15.
• It is the only syariah-compliant full-fledged bank listed on Bursa Malaysia, riding on the under-served and rising Islamic finance awareness in Malaysia.

Recent Financial Results

In the last quarter (QE30/9/2016), BIMB's net profit dropped 2% q-o-q but rose 17% y-o-y to RM141 million while revenue rose 5% q-o-q or 10% y-o-y to RM881 million.


Table: BIMB's last 8 quarters' P&L


Graph: BIMB's last 18 quarters' P&L

Valuation

BIMB (closed at RM4.28 on Feb 8) is now trading at a PER of 11.6x (based on last 4 quarters' EPS of 37 sen). I believe this is a fair PER.

Conclusion

Based on tentative technical breakout, satisfactory financial performance and fair valuation, I reiterate my BUY call for BIMB. The alternative is to get into its warrant, BIMB-WA, which may present a better reward-to-risk proposition. Good luck!

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.

SKPetro: The Next Upleg In Sight

Technical Outlook

SKPetro broke above its intermediate downtrend line, RR at RM1.60 in late December 2016.


Chart 1: SKPetro's daily chart as at Feb 6, 2017 (Source: MalaysiaStock.Biz)

The upside breakout could be the start of the next upleg for SKPetro. Its upcoming resistance will be from the psychological RM2.00 mark and then the horizontal line at RM2.20.


Chart 2: SKPetro's weekly chart as at Feb 6, 2017 (Source: MalaysiaStock.Biz)

Recent Financial Performance

The results for the last 4 quarters show the poor performance of the company due to the slowdown in the O&G sector. However I believe that the worst could be over and what's ahead for SKPetro is a slow but steady recovery.


Table: SKPetro's last 8 quarters' P&L


Graph: SKPetro's last 22 quarters' P&L

Latest Financial Position

As at 31/10/2016, SKPetro's financial position is deemed tight. Current ratio stood at 1 time and gearing ratio was at 1.8x.

Valuation

SKPetro (closed at RM1.80 yesterday) si now trading at a PER of 20x (annualized EPS of 9 sen based on last 2 quarters' EPS). I believe this is a fair PER given that the company is coming off its trough earnings.

Conclusion

Based on improving financial performance and position, fair valuation & mildly positive technical outlook, I rate SKPetro a good stock to consider for long-term investment.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

SAM: Earnings Improved

Result Update

For QE31/12/2016, SAM's net profit was mixed- rose 92% q-o-q but declined 4% y-o-y - to RM15.2 million. Revenue was similarly mixed- rose 9% q-o-q but declined 15% y-o-y - to RM132 million. 


Table 1: SAM's last 16 quarters' P&L

Revenue dropped y-o-y mainly due to the decrease in revenue from the Equipment Manufacturing and Aerospace segments. Revenue from the Equipment Manufacturing segment was lower by RM16.4 million as a result of weaker demand from customers. Revenue from the Aerospace segment decreased by RM9.2 million due to the lower demand for air cargo and business jets. On the other hand, revenue for the Precision Engineering segment increased by RM3.1 million during the quarter.

The Group profit before tax dropped mainly due to lower Group revenue and new projects start-up cost. This was partially mitigated by the favorable change in the product mix in the Equipment Manufacturing segment resulting in higher profit margin and lower expenses in the aerospace segment.


Table 2: SAM's segmental results for QE31/12/2016


Graph 1: SAM's segmental results for last 7 quarters' P&L

With the improved top-line and bottom-line for QE31/12/2016, the graph below shows a hook-up. The Board of Directors anticipates that the longer term future demand for both semiconductor and equipment industries to be still intact as both industries will continue to grow, they will face the short-term uncertainty. And, despite the increased revenue in the Equipment Manufacturing segment this quarter, this segment (plus Precision Engineering business) will remain challenging.

Graph 2: SAM's last 24 quarters' P&L
 
Valuation

SAM (closed at RM5.57 yesterday) is now trading at a PER of 16.5x (based on last 4 quarters' EPS of 33.8 sen). At this PER, SAM is deemed fully-valued.  

Technical Outlook

SAM staged a rebound in the past 6 weeks which brought the share price nearly back to its downtrend line. Since then,  SAM has slid back to the support of RM5.50-5.60. If it can hang onto that support, it may trade sideways while it awaits its "huge" aerospace contracts to bear fruits. If it cannot hold onto the support of RM5.50-5.60, then it may revisit the recent low of RM5.00. The amount of aerospace contracts backlog is estimated to be about RM3.5 billion as per its August 2016 Shareholders' Presentation (here).
 

Chart: SAM's weekly chart as at Jan 6, 2017 (Source: ShareInvestor)
 
Conclusion

Despite its full valuation and negative technical outlook, I'm maintaining my rating for SAM as a HOLD in view of the "huge"contract backlog.

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.

DIGI: Uptrend Poised To Continue (UPDATE)

Last Thursday, DIGI’s broke above its intermediate downtrend line (rr) at RM4.95. The following day, it broke above the psychological RM5.00 mark. This morning, it tested its Sep 13, 2016 high of RM5.11. I rate the RM5.11 as a resistance event where the stock may correct and pullback toward the support from its psychological RM5.00 mark.  

(Note: The chart below is adjusted for dividend payment. As a result, the September 2016 high is not reflected as RM5.11 but as RM5.06. I believe the RM5.11 will still pose some resistance for the current breakout.) 

Chart 1: DIGI's daikly chart as at Feb 6, 2017_11.30 (Source: MalaysiaStock.Biz)

Quick Update

On Jan 23, DIGI announced its result for QE31/12/2016 where its net profit dropped 2% y-o-y to RM375 million while revenue dropped 3% y-o-y to RM1.67 billion. Compared to the results with the immediate preceding quarter (QE30/9/2016), its revenue increased marginally q-o-q due to solid postpaid growth momentum and stronger internet adoption which offset weaker prepaid business. However EBITDA & PBT dropped q-o-q after accounting for associated cost for the higher device sales; increased marketing cost in supporting subscriber acquisition; and progressive network expansion cost. Nevertheless EBITDA margin remained robust at 44% following strong operational efficiency discipline and well-managed cost structure. For more, check out my recent post.

Despite the relatively high valuation, I have kept DIGI’s rating as a HOLD based on improved performance over the past few quarters (albeit weaker one in QE31/12/2016), decent dividend yield and mildly positive technical outlook.


Chart 2: DIGI's weekly chart as at Feb 6, 2017_11.30 (Source: MalaysiaStock.Biz)

The last time, DIGI broke above its intermediate downtrend and followed up with an upside breakout of the ensuing sideways trading range was in early 2014. In that rally, DIGI rose from the breakout point of RM4.20 to a high of RM6.00- giving investors a return of 42% over a 1-year period. If the current breakout leads to a similar rally, we might see DIGI making a high of RM7.00.

Conclusion

Based on the current technical breakout, I believe that DIGI could be a good trading BUY.

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.

Gtronic: Next Upleg Coming? (Updated)

Gtronic is one of the most innovative chip-makers in Malaysia. Its products range includes sensors etc that are used in many devices, such as smartphones. This has led to a steady improvement in its net profit from around RM30 million in FY2007 to around RM70 million in FY2015. As a result, its share price rose from RM1.00 to RM6.00.

In QE31/3/2016, Gtronic’s net profit plunged 79% to RM3.7 million while revenue dropped 34% to RM59 million. Revenue and net profit dropped sharply due to lower volume loading from some of the Group's customers as a result of reduction in end customers' demand and forex loss of RM4.8 million. This led to a sharp drop in Gtronic share price to RM3.00.

In the past 2 quarters, both revenue and profit had recovered somewhat. Today, Gtronic share price broke above the line connecting the peaks for the past 10 months at RM4.20. On the daily chart, we can see that its lagging indicators have turned positive, with MACD in positive territory and ADX trending higher & above the 20 mark.


Chart 1: Gtronic's daily chart as at Feb 2, 2017_2.58 (Source: MalaysiaStock.Biz)

The weekly chart shows the overhead resistance from the horizontal lines at RM4.50 & RM5.00. Note that MACD has crossed above the zero line while ADX is likely to curve upward soon.


Chart 2: Gtronic's weekly chart as at Feb 2, 2017_3.03 (Source: MalaysiaStock.Biz)

If Gtronic can stay above the breakout level of RM4.20, it could be a good trading BUY. For more on this stock, please check out my previous result update when I rated it as a SELL. Don't be deterred by the negative rating as the recent result of MPI has shown us that the performance of the technology sector is still very promising. I will re-examine the earlier rating when Gtronic announces its financial result for QE31/12/2016 in 3 weeks time.

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.

Malton: Next Upleg Coming

Malton broke above its intermediate downtrend line, SS at RM0.63 in October last year. It then rallied to a high of RM0.78 before it pulled back to its 10-week SMA line at RM0.65 in early January this year. Now Malton is rising again. Indicators are fairly positive: MACD is now in positive territory; and ADX is poised to breach the 20 mark.

As Malton approaches its October 2016 high of RM0.78 (a resistance level), we should be looking out for either an upside breakout of that resistance (which may lead to a sharp rally) or a failed test and pullback. If the latter developed, Malton could provide a good entry at about RM0.75. Currently, Malton is at RM0.76.


Chart 1: Malton's weekly chart as at Feb 2, 2017_9.30 (Source: MalaysiaStock.Biz)

The chart of Malton-WB is consistent with that of the share. It could be a good proxy to ride this play. Currently, Malton-WB is at RM0.195. Good entry is at RM0.17.   


Chart 2: Malton-WB's weekly chart as at Feb 2, 2017_9.27 (Source: MalaysiaStock.Biz)

Note:
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