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Friday, September 19, 2014

MPHBCap: Poised for take-off

MPHBCap broke above its horizontal line at RM2.65 in late afternoon.With this breakout, MPHBCap may continue with its prior uptrend.

Based on technical breakout, MPHBCap is now a good trading BUY.


Chart: MPHBCap's daily chart as at Sep 19, 2014 (Source: Interachart)

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, MPHBCap.

AEONCR: Bottom-line dropped q-o-q

Result Update

For QE20/8/2014, AEONCR's net profit dropped 16% q-o-q but rose 10% y-o-y to RM47 million while revenue increased by 4% q-o-q or 29% y-o-y to RM209 million.

Bottom-line was lower compared to last year due to increased non-performing loans (NPL) ratio of 2.65% (compared to 1.64% last year); higher ratio of total operating expenses against revenue of 59.6% (compared to 55.9% in last year) and higher average funding cost (though no number was given). On the other hand, other incomes rose due to increase in bad debts recovered and AEON Big loyalty programme processing fee. AEONCR’s effective tax rate was higher than the statutory tax rate as certain expenses are not deductible for tax purpose.


Table: Aeoncr's last 8 quarterly results

The jump in operating expenses was fairly substantial, with the ratio of total operating expenses against revenue increased by 3.7 ppts. It caused a bottom-line to hook down in the first graph in the chart below. In the third graph, we can the rate of change for top-line has been declining over the past 3 quarters while the rate of change for profitability has been decreasing steadily for the past 3 years. We could be seeing the tip point for the out-performance in AEONCR, with the capitulation coming in the next few quarters.


Chart 1: Aeoncr's last 29 quarterly results

Valuation

AEONCR (closed at RM16.48 yesterday) is now trading at a PE of 12.2 times (based on last 4 quarters' EPS of 135 sen). At this PE, AEONCR is deemed fairly priced.

Technical Outlook

AEONCR is still in a long-term uptrend line. However, the MACD indicator has hooked down and this may signal a decline in share price in the near term.


Chart 2: Aeoncr's weekly chart as at Sep 19, 2014 (Source: Tradesignum)

 
Chart 3: Aeoncr's monthly chart as at Sep 19, 2014 (Source: Equities Tracker)

Conclusion

Based on good financial performance & attractive valuation, AEONCR is still a good stock for long-term investment. However, the technical outlook shows weakness 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, AEONCR.

KESM: Bottom-line jumped!

Results Update

For QE31/7/2014, KESM's pre-tax profit increased by 391% q-o-q or 61% y-o-y to RM6.7 million while revenue increased by 16% q-o-q or 7% y-o-y to RM69 million. Bottom-line increased due to higher revenue, which is in turn due to higher demand for burn-in and testing services.


Table: KESM's last 8 quarterly results


Chart 1: KESM's last 39 quarterly results 

Valuation

KESM(closed at RM2.85 yesterday) is now trading at a PE of 11.3 times (based on last 4 quarters' EPS of 25.3 sen). At this PE, KESM is deemed fairly valued.

Technical Outlook

KESM's share price is in an uptrend line, well supported by the 20-week EMA line at RM2.75-2.80 (see Chart 2). The sharp rise in KESM's share price in the past 8 months followed the breakout of the long-term downtrend line at RM2.00 in early 2014 (see Chart 3).


Chart 2: KESM's weekly chart as at Sept 19, 2014 (Source: Tradesignum)


Chart 2: KESM's monthly chart as at Sept 19, 2014 (Source: Equities Tracker)
 
Conclusion
Based on good financial performance, reasonable valuation & positive technical outlook, KESM remains 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, KESM.

Thursday, September 18, 2014

All Money Is Not The Same!

Once in a while, you would read the title of an article and you would just give the article a miss. That's what I did when I came across an article entitled Red Chips not putting much stock in their own cash? which appeared in the Edge newsletter last weekend. This is not the first time that the Edge discussed this subject and I dare say that it would not be the last time either. The article did serve an important function of informing investors to be cautious when investing in Red Chips by raising a very valid question: Why are the Red Chips treating their cash holding as if it is not there?


Table: Cash Balance held by Malaysia-listed China stocks (Source: The Edge)

If you look at their accounts, these companies have fair substantial cash holding (see the table above). Now, we cannot blame the investors for choosing to completely ignore this 'fact'. The simple truth of the matter is the bosses also chose to ignore this fact. These companies would apply to carry out Rights Issues in order to raise fund to finance their expansion despite having a few hundred of million RMB in their bank accounts. The bosses could easily privatize their companies via selective capital repayment (by tapping on the cash alone) and end up owning their entire companies or the businesses for 'free' and yet they would choose not to do so.

The Cantonese have a saying that goes like this: Where can you find a frog hopping on the street (and everyone ignores it)? There could only be one answer to that riddle: the frog may not be a frog. Stories of the disappearing cash hordes, such as this one, do not instill confidence in investors.

So, instead of lamenting and complaining about the Malaysian market or investors not knowing how to value their companies, the bosses should use the money in their bank accounts and carrying out aggressive share buyback. As the saying goes, the proof is in the pudding! 

Until then, investors will be wise to treat all Red Chips like the former Soviet Union: A riddle wrapped up in an enigma.

Monday, September 15, 2014

SCGM: Bottom-line rose due to lower material cost

Result Update

For QE31/7/2014, SCGM's net profit increased 41% q-o-q or 13% y-o-y to RM3.5 million while revenue increased by 15% q-o-q or 6% y-o-y to RM27 million. Its revenue increased q-o-q  due to higher demand from Asian & Australian markets. Bottom-line improved due to higher sales & lower raw material costs.


Table: SCGM's last 8 quarterly results


Chart 1: SCGM's last 22 quarterly results

Valuation

SCGM (closed at RM2.38 last Friday) is now trading at a PE of 16 times (based on last 4 quarters' EPS of 15.0 sen). Based on 2-year CAGR for NP for past 2 years of 35%, PEG ratio is still reasonable at 0.5 times.

Technical Outlook

SCGM is clearly in a long-term uptrend. However it could be due for price consolidation after its large price gain of RM1.50 over the past 8 months. If that happens, I believe the RM2.00 psychological support should kick in.


Chart 2: SCGM's weekly chart as at September 12, 2014 (Source: Tradesignum)

Conclusion

Despite good financial performance and fair valuation, SCGM is a good stock for long-term investment. However, its sharp price gain in the past few months could lead to near-term weakness which could present a good opportunity to buy at lower price 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, SCGM.

IOIPG: Poised to move higher

IOIPG broke above its intermediate downtrend line at RM2.45 in August 26. Last Friday, it broke above the horizontal line RM2.55-2.57 with good volume. With the latest breakout, IOIPG could commence its upleg.

Based on bullish technical outlook, IOIPG could be a trading BUY.


Chart: IOIPG's daily chart as at Sep 12, 2014 (Source: Chartnexus)

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, IOIPG.

Tuesday, September 09, 2014

BJAUTO: It can only get better!

Background

Berjaya Auto Bhd ("BJAuto") is the official distributor of Mazda cars and spare parts in Malaysia and the Philippines. It is involved in the assembly of Mazda CKD vehicles via 30%-owned associate company, Mazda Malaysia Sdn Bhd; distribution of Mazda CKD vehicles via 100%-owned subsidiary, Bermaz and the exportation of locally-assembled Mazda to Thailand.

Mazda vehicles have gained widespread acceptance due to its design language as well as efficient engines.

Recent Financial Results

BJAuto's top-line and bottom-line have been rising steadily over the past 8 quarters. The improved earnings is driven by increased sale volume as well as higher profit margin.


Chart 1: BJAuto's last 9 quarterly results

For QE31/7/2014, BJAuto's net profit increased by 17% q-o-q or 115% y-o-y to RM56 million while revenue increased by 29% q-o-q or 19% y-o-y to RM508 million.


Table: BJAuto's last 8 quarterly results

Valuation

BJAuto (closed at RM2.90 yesterday) is now trading  at a PE of 14.5 times (based on last 4 quarters' EPS of 20 sen). Based on 20% earning growth, the PEG ratio is at attractive 0.73 times.

Technical Outlook

BJAuto broke above the upward channel at RM2.80 yesterday. With this breakout, BJAuto's uptrend is likely to accelerate.


Chart 2: BJAuto's daily chart as at Sep 8, 2014 (Source: Chartnexus)

Conclusion

Based on good financial performance, attractive valuation & bullish technical outlook, BJAuto is rated a 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, BJAuto.

Monday, September 08, 2014

NTPM: Bottom-line dropped further

Result Update

For QE31/7/2014, NTPM's net profit dropped by 40% q-o-q or 42% y-o-y to RM7 million while revenue was mixed- dropped 3% q-o-q but inched up 0.4% y-o-y to RM132 million.  The poorer bottom-line was due to decrease in sales during the financial quarter and gain on foreign exchange recorded in the preceding quarter.


Table: NTPM's last 8 quarterly results

For QE31/7/2014, NTPM's NP margin dropped below 8%!


Chart 1: NTPM's last 36 quarterly results

Valuation

NTPM (closed at RM0.80 last Friday) is now trading  at a PE of 18.6 times (based on last 4 quarters' EPS of 4.3 sen). At this PE multiple, NTPM is deemed fairly valued.

Technical Outlook

NTPM has broken below its long-term uptrend line, SS at RM0.88 in June (see Chart 2). In the last big rally in 2008, NTPM went into a long slumber after it broke below the 12 & 24-w average line. NTPM has done so again a few weeks ago. Thus, the technical outlook for the stock is bearish.


Chart 2: NTPM's weekly chart as at Sep 5, 2014 (Source: Tradesignum)


Chart 2: NTPM's monthly chart as at Sep 5, 2014 (Source: Chartnexus)

Conclusion

Based on poorer financial performance, high valuation & bearish technical outlook, NTPM is rated a REDUCED.

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, NTPM.

Efficen: It broke through the 2006 high!

Result Update

For QE30/6/2014, Efficen's net profit dropped by 7% q-o-q but increased by 17% y-o-y to RM1.5 million while revenue was higher- up 3% q-o-q or 11% y-o-y to RM12 million. For QE30/6/2014, Efficen's PBT increased 12% q-o-q due to increased revenue & continuous cost optimization effort. The higher PBT was despite a building cost written off of RM0.5 mil during the quarter.


Table 1: Efficen's last 8 quarterly results

Efficen's top-line, bottom-line and profit margins are all turning up. This could signal a secular bottom for the stock.


Chart 1: Efficen's last 31 quarterly results 

Valuation

Efficen (closed at RM0.305 on Friday) is trading at a PE of 40 times (based on last 4 quarters' EPS of 0.75 sen). At this PE, Efficen is deemed fully valued. However, if the earnings can pick significantly, the PE will drop back to a more reasonable level.

Technical Outlook

Efficen broke above its triangle formation, ABC at RM0.22 on August 27 (see Chart 2). Earlier, Efficen had already surpassed its long-term downtrend line at RM0.20 (see Chart 3). Efficen rallied passed the 2006 high of RM0.30 before correcting. The big question is whether Efficen will stay above the RM0.30 and rallied again after a period of consolidation or it will falter and slide back below RM0.30. Only time will tell.

  
 Chart 2: Efficen's weekly chart as at Sep 5, 2014 (Source: Tradesignum)


Chart 3: Efficen's monthly chart as at Sep 5, 2014(Source: Chartnexus)

Conclusion

Despite the improved financial performance & bullish technical outlook, it is not easy to call a BUY on Efficen as it is trading at demanding multiple.Since the stock's top-line, bottom-line & profit margins are all turning up, there is a good chance that PE multiple will ease back to a more comfortable level. To be on the safe side, you may want to wait for the earnings to roll in before adding or getting into the 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, Efficen.

Friday, September 05, 2014

MYEG: A missed opportunity!

The cost of a wrong call - examples here & here - is not only the losses incurred in those trades. There is an additional cost in the form of extra wariness, which leads you to avoid making call and missing out on profitable opportunity.

One good example is MYEG. This stock broke above its horizontal line at RM3.10 on September 3. After a short correction on September 4, it continues to rally today. As at 4.45pm, MYEG was trading at RM3.46. If it can travel the same distance as its retracement of RM0.50 in April, then its potential target is RM3.60.

Based on technical consideration only, MYEG could be a trading BUY. However, the upside will be fairly limited.


Chart: MYEG's weekly chart as at Sep 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, MYEG.

Thursday, September 04, 2014

Tongher: Poised to move higher

Result Update

For QE30/6/2014, Tongher's net profit increased by 15% q-o-q or 62% y-o-y to RM9.7 million while revenue was mixed- dropped 1% q-o-q but 6% y-o-y to RM132 million. For 1HFY14, Tongher's revenue increased due to the increase in sales demand from both fasteners and aluminium division. Higher sales demand has led to higher profit before tax, in conjunction with the improvement from the profit margin attained in current quarter-to-date.


Table 1: Tongher's last 8 quarterly results


Chart 1: Tongher's last 39 quarterly results 

Valuation

Tongher (closed at RM2.19 yesterday) is trading at a PE of 12 (based on last 4 quarters' EPS of 18.85 sen). At this PE, Tongher is deemed fairly valued.

Technical Outlook

Tongher has broken above the horizontal resistance at RM2.20 (See Chart 2). More importantly, Tongher has broken above its long-term downtrend line at RM2.10 (see Chart 3). With this breakout, the stock is poised to begin its next upleg. Its next resistance will be at RM2.50 & thereafter at RM2.85.

 
 Chart 2: Tongher's weekly chart as at Aug 29, 2014 (Source: Tradesignum)


Chart 3: Tongher's monthly chart as at Aug 29, 2014 (Source: Chartnexus)

Conclusion

Based on improved financial performance & bullish technical outlook, Tongher is rated a 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, Tongher.

GDEX: A fine rally indeed!

Background

GD Express Carrier Bhd ('GDEX') is involved in the provision of express delivery or courier services for both the domestic and international markets. In addition, it also provides logistics services (including customised logistics services).

Recent Financial Results

GDEX's top-line and bottom-line, which have been growing steadily in the past 9 years, picked up pace in the past 3 years (see Chart 1). The quickened pace of growth has been attributed to the growing demand in the e-commerce space.


Chart 1: GDEX's last 9 yearly results (Source: Equities Tracker)

Recent Financial Results

For QE30/6/2014,  GDEX's net profit increased by 15% q-o-q or 44% y-o-y to RM5.9 million while revenue grew by 5% q-o-q or 17% y-o-y to RM41.6 million.


Table 1: GDEX's last 8 quarterly results

Financial Position

GDEX's financial position is deemed healthy. As at 30/6/2014, its current & gearing ratios stood at 3.6 times and 0.4 times respectively. From the Chart 2, we can see that a rising CR and a decline GR; signs of a healthy financial position.


Chart 2: GDEX's current & gearing ratios for the last 9 yearly results (Source: Equities Tracker)
 
Valuation

GDEX (closed at RM1.98 yesterday) is trading at a PE of 69 times (based on last 4 quarters' EPS of 2.86 sen). At this PE, GDEX is very expensive.

Technical Outlook

GDEX has been in an uptrend since it broke above the RM0.40 horizontal line in July 2012 (see Chart 3). Since then, the stock has been charging up with intermittent correction that pushed through the 10-w SMA line but falling short of the 20-w EMA line. The current correction - the most severe to-date - has brought the share price to the 20-w EMA line as well as the psychological RM2.00 level. With MACD & RSI hooking down, this correction could be the tipping point for a fine rally for GDEX.


Chart 3: GDEX's monthly chart as at Aug 29, 2014 (Source: Chartnexus)


Chart 4: GDEX's weekly chart as at Aug 29, 2014 (Source: Tradesignum)

Conclusion

Despite the good financial performance & position, GDEX is a stock best to be avoided for now due to its demanding valuation. If the share price were to breached the RM2.00 psychological level, it could be 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, GDEX.