Feb 20, 2018

KRONO Stock Code: 0176

• KRONO rose 7.0 sen (10.0%) to close at RM0.770.
• Yesterday’s move resulted in a downtrend breakout with MACD in bullish divergence, to signal that the share price has bottomed out and now poised for a recovery.
• Key indicators are in supportive of a move higher, with the RSI now venturing close to cross above 50-point mark while MACD has hooked upwards above signal line.
• From here, expect KRONO to punch through its immediate resistance level of RM0.785 (R1) at ease. Should this level be taken out, next resistance levels to target are RM0.880 (R2) and RM0.960 (R3).
• Downside risk, on the other hand, is protected by an immediate support at RM 0.710 (S1) and RM0.630 (S2) next.
krono technical analysis
source: Kenanga Research - 20/02/2018

The Group are principally provides value-added solutions and professional services to install configure and implement EDM infrastructure technology solution that is integrated into their end-user customers’ IT environment to provide backup storage and recovery services of the end-user customers’ digital data.

Feb 14, 2018

Technical Highlights: ANNJOO


anjoo analysis

• Yesterday, ANNJOO gained an impressive 22 sen (6.4%) to close at intraday high of RM3.63.
• Yesterday’s move marked a first breakthrough from a two-month period of consolidation.
• Uptick in MACD to crossover its Signal-line, coupled with the share price closing above its 20-day SMA for the first time in two months could signal a bullish turn in its technical picture.
• From here, watch out for an immediate overhead resistance at RM3.98 (R1), the all-time high, with a higher resistance at RM4.41 (R2).
• Downside supports can be found at RM3.29 (S1) and RM3.08 (S2).

source: Kenanga Research – 14/02/2018

The principal activity of the Company is investment holding. The principal activities of its subsidiaries are property management and management services Trading retailing importing exporting and supplying of all kinds of metal products manufacturing sales and distribution of steel and iron products and steel service centre.

Feb 7, 2018

Malaysia: Technical, Currency and Feng Shui Outlook for 2018F

■ We hosted three speakers at our 2018 Technical, Currency and Feng Shui Day.
■ Our technical chartist indicate that the KLCI uptrend remains intact and could test the
1,900-1,950 level.
■ Our treasury team recently upgraded its end-2018 ringgit forecast to 3.85/US$.
■ Fengshui master said the 3 rd and 10 th lunar months are good for the stock market
■ We maintain our end-2018 KLCI target of 1,880 pts (based on 15.9x P/E).

Technical, currency and feng shui outlook for 2018F
We hosted a half-day conference today, featuring (1) Ray Choy, Head Treasury Strategist, CIMB; (2) Master Bo Xu, a feng shui consultant; and (3) Nigel Foo, our very own regional technical chartist. Their views on technical, currency and fengshui outlook point to a volatile equity and currency markets in 2018F.

Technical: KLCI uptrend still intact
Nigel Foo, our technical chartist, is of the view that the KLCI is currently on an uptrend and could test the 1,900-1,950 level over the next few months. He sees the recent decline in the KLCI as just a correction and that once the local bourse stabilises, the KLCI index should continue its uptrend. Smallcap index could outperform the KLCI index in 2018F. After trading sideways over the past two years, the Bloomberg Dollar Index could bottom soon from a technical chart point of view, Nigel predicts.

FX: Fundamentals intact but brace for near-term volatility

Ray Choy, Head Treasury Strategist at CIMB, believes the fundamental outlook for EM Asia FX remains constructive for 2018F. CIMB Treasury Research recently upgraded its end-2018 ringgit forecast to 3.85/US$, citing macro improvements and spillovers from increased trade and investment inflows. However, Choy warns that the recent market volatility and excessive short positioning in the US$ may precipitate a short-term technical correction in the ringgit, given the extended rally last year.

Feng shui: A more volatile year for the stock market
2018 is the year of the “Earth Dog”. Fengshui consultant Master Bo Xu predicts that the economy will stagnant or slowdown in 2018 and that the stock market would be more volatile vs. 2017. He believes the Malaysian economy will do better if it enters into alliances with other countries. He thinks the good months for the market are the 3rd (16 Apr-14 May 2018) and 10 th (8 Nov-6 Dec 2018) lunar months while negative months are the 1 st (16 Feb-16 Mar 2018) and 7 th (11 Aug-9 Sep 2018) lunar months.

Feng shui: Prospects of various sectors in 2018
From a fengshui perspective, Master Bo Xu revealed that gold element businesses such as banks, insurance and finance industry will do well. However, wood (furniture, timber, and education), earth (real estate, mining and direct selling) and water (hotel, hospital and shipping) element businesses will not do so well. Businesses in the fire element (palm oil, oil & gas, chemical and shopping mall) will see a lot more activities, he predicts.

Technical KLCI view more positive than fundamental analysis
Our technical view that the KLCI could potentially touch 1,900 to 1,950 is more bullish than our fundamental view that the market would end the year at 1,880 points. Our treasury team is more positive on the long-term ringgit outlook compared to our technical chartist. We have identified auto, airlines and F&B players as the biggest winners should the ringgit continue to strengthen, due to their lower operating costs. Our top picks for the stronger ringgit theme are AirAsia, Berjaya Food and DRB Hicom.

fbm klci weekly

Recap of last year’s event
How our expert speakers’ predictions fared in 2017?
Technical charts view for 2017
In our 2017 Technical, Currency and Fengshui event in Feb 2017, Nigel Foo presented his view that the KLCI was then on a rebound rather than in a bullish phase. He expected the market to weaken and potentially bottom sometime in 3Q before rebounding in late- 2017. He predicted that the ringgit will appreciate against the US$ in 2H17 and that this could help kickstart a sustainable medium-term uptrend for the local bourse in the later part of the year.
Nigel also mentioned that since the KLCI's inception, there appeared to be a 10.5-year or
126-month cycle for the local bourse, with the KLCI finding a significant low close to the
end of each of this major cycle (+/– 3 months). Basically, in the first half of the cycle, the
wind seems to be behind the bull’s sail while the second half tends to favour the bears.
The 1,896 high for the KLCI in Jun 2014 was four months after the mid-point of the
current 126-month cycle. If this cycle continues to play out, then the next major low for the
KLCI can be expected in mid-2019F, he had said.

Feng shui master’s view in 2017
Feng shui consultant Master Bo Xu said 2017, being the year of the “Fire Rooster”, should be good for long-term investors with a 3- to 5-year investment horizon. Wood element businesses such as furniture, pulp and paper, textile, timber and education should flourish while fire element businesses (oil & gas, and restaurant) will not do so well, he said. Stock market wise, the good months for the market would be in 4 th (26 Apr- 25 May), 10 th and 11 th (18 Nov 2017-16 Jan 2018) lunar months.

KLCI’s performance in 2017
The market has panned out broadly in line with Nigel’s expectation for 2017 as the market corrected towards the end of 3Q17 before rebounding in late-2017. The ringgit also appreciated against the US$ in 2H17. Our cycle prediction has yet to play out. Master Boxu’s predictions on the good months for the market were broadly in line with KLCI’s performances as well.

source: CMB Research 05/02/2018

Jan 25, 2018

Technical Highlights - ORNA

ORNA - Stock Code: 5065 
• ORNA climbed 5.0 sen (3.62%) yesterday to hit RM 1.43. 
• Share appears to have broken out from a 2-month consolidation after few failed attempts to break past the RM1.40 resistance level. 
• Overall technical outlook is turning positive with the 20-day SMA had just crossed above the 50-day SMA and the MACD line being above the Signal Line 
• Continuous positive momentum will push the share price towards the RM1.50 (R1) and RM1.65 (R2) resistance levels. 
• Conversely, near term dips may be viewed as a buying opportunity with support levels at RM1.40 (S1) and RM1.33 (S2).

Ornapaper Bhd  Daily Chart:
orna analysis

source: Kenanga Research 25/01/2018

 The Company is an investment holding company which is involved in the manufacturing and trading of corrugated boards and carton boxes activities

Jan 16, 2018

HUAYANG - Technical Analysis

HUAYANG – Stock Code 5062

• HUAYANG jumped an impressive 6.5 sen (10.4% to RM0.69) yesterday, accompanied by exceptional trading volumes.
• Share is now potentially showing signs of bottoming-out after hitting a “double-bottom” in December last year.
• Over the past 1-2 months, MACD has been creeping upwards despite sideways movement of the share price – thus signalling an underlying build-up in momentum.
• Expect follow-through buying from here, with resistances at RM0.74 (R1) and RM0.83 (R2). Conversely, firm downside support can be identified at low of RM0.595 (S1).

huang yang analysis

source: Kenanga Research – 16/01/2018

Jan 10, 2018

Alpha Stock Picks 2018: A Smashing Start

Although our alpha picks’ return of +1.86% trailed the FBMKLCI’s +4.9% in Dec 17 amid hefty year-end window dressing, these picks have started the year with smashing month-to-date returns of 0.7-11.8%. Some have technically broken out. Good domestic liquidity and positive newsflow for these stocks should ensure continuing positive momentum. We maintain our alpha picks for January, namely Ann Joo, Bumi Armada, Gabungan AQRS, Globetronics, Serba Dinamik, VS Industry, and Yong Tai.

 Review of Dec 17’s picks. Only one alpha pick outperformed the market’s incomparable +4.9% return in Dec 17. Some index stocks were pushed up amid the year-end window dressing. Coming in at +5.2%, Ann Joo’s respectable performance rose in tandem with the mom (+8.1%) rise in the average steel bar price (Dec 17: RM2,633/MT).
 Key event catalysts during 1Q18 are: a) strong reporting season and hopefully good capital management for the steel (benefitting Ann Joo) and E&E (VS Industry, Globetronics) sectors, b) indicative of strong demand for Yong Tai’s Impression performance, c) mega construction contract awards (Gabungan AQRS), and d) Bumi Armada hoping to receive full charter rate for FPSO Kraken.

 Our January picks continue to be Ann Joo, Bumi Armada, Gabungan AQRS,
Globetronics, Serba Dinamik, VS Industry, and Yong Tai.

ANALYSTS’ TOP ALPHA* PICKSalpha stock picks 2018

Ann Joo Resources (Abdul Hadi Manaf)
A blowout 4Q17 reporting season is expected, benefitting from steel bar prices that are at ulti-year high. In Dec 17, local steel bar price increased further to RM2,633/MT (+8.1% qoq) mainly due to sharper-than-expected production cut in China during heating season.

Share Price Catalyst
 4Q17 earnings could potentially a blowout quarter.
 Significant improvement in local steel demand.
 Rise of local steel ASP to a multi-year high.

Bumi Armada (Kong Ho Meng)
2017 is set to be a turnaround year for the group, with earnings set to pick up by 1Q18 when Bumi Armada potentially receives almost the full charter rate recognition from both Olombendo and Kraken. The offloadings of Kraken onto three tankers (at implied 15k bpd) is positive as it shows Kraken production is ongoing. It needs a higher frequency of offloads to imply a real recovery in production. We also see the possibility of TGT1 extension.

Share Price Catalyst

 Conclusion of final acceptance of Kraken and Olombendo by early-18.
 Recovery of OMS utilisation and rates.

Gabungan AQRS (Ridhwan Effendy)
The group is armed with an outstanding orderbook of RM2.8b. In 1H18, we are expecting positive newsflow from potential contract wins that the group is gunning for. This includes high-profile construction jobs in the likes of East Coast Rail Line (ECRL) and the Sabah portion of the Pan Borneo Highway (PBH). Also, the group’s precast manufacturing division is poised to benefit from the Sabah PBH, as it owns one of the largest precast manufacturing facilities in Sabah together with the Sabah Economic Development Corporation.

Share Price Catalyst
 Positive contract newsflow by 1H18.
 Concrete premix production associate securing a substantial contract

Globetronics (Yeoh Bit Kun)
We remain upbeat on Globetronics’ prospects and expect 4Q17 to be the strongest quarter for the year, driven by higher production volume for sensor products as well as margin improvement due to better economies of scale. There could be earnings upside to our 2018/19 forecasts due to: a) commercialisation of developing products (particularly 3D imaging sensors), and b) strong demand for gesture sensors (due to end-client’s bundling strategy).

Share Price Catalyst
 Commercialising one or two new sensors in 2018-19, which are currently under co- development with the client, could significantly lift our earnings forecasts.

Serba Dinamik (Kong Ho Meng)
Earnings growth to trump expectations due to a combination of yearly new contract wins (RM2b) and the high renewal rate (>80%) of its existing orderbook. We expect Serba to announce more contracts as it embarks on its asset ownership strategies. Our earnings forecasts are above consensus.

Share Price Catalyst
 Higher-than-expected new orderbook wins.
 Lower-than-expected costs, especially on tax (Serba is expected to pay IRB tax claims from 3Q17 to early-19).

VS Industry (Fong Kah Yan)
In addition to several assembly lines for box-build products that have commenced production since Nov 16, VS Industry began building three additional assembly lines in 4Q17. Key catalyst in the medium term will be the gradual capacity fill-up at its new plant (which can accommodate up to 12 assembly lines) upon completion in mid-18 on the back of potential contracts from new customers.

Share Price Catalyst
 Securing new contracts from existing or new customers.
 Securing new contracts for its China ops via 43.5%-owned VS International Group (VSIG).

Yong Tai (Ridhwan Effendy)
Tourism-related developer Yong Tai will soon open the critically-acclaimed Impression Series theatre in Melaka, the first outside China, which could generate net profit of >RM60m p.a. in a full year of operations. To further tap on the success of the Impression Melaka show, Yong Tai will develop the land around the theatre. It will also undertake niche developments to diversify earnings growth drivers. We are also optimistic on the viewership of the performance, given the success that it has had in China.

Share Price Catalyst
 Positive construction progress of the Impression Melaka theatre.

souce: UOBKayHian – 08/01/2018

Jan 4, 2018

Malaysia 1H18 Outlook - Regaining Some Lustre In 1Q18


Malaysian equities should trend higher in 1Q18, fulfilling the historically good correlation between ringgit deposit growth and market performance. However, we continue to expect a duller performance post GE14, which is widely expected in Mar-Apr 18. We advocate a trading-oriented, mid- to large-cap-biased investment strategy for 1Q18, with a focus on mega infrastructure, E&E, tourism-related and selective GE14 plays.

Sparkles to broaden in 1Q18. We continue to expect the broader Malaysian equities to market to trend up in 1Q18 (although there could be a temporary trend reversal in the FBMKLCI following the last few trading days’ hefty 3.0% window-dressing gains), amid the anticipation of GE14, firm domestic economic indicators, and ample global/domestic trading liquidity. Improved domestic liquidity is well proxied by the growth in ringgit- deposit growth since Sep 17 (+4.5% vs +0.5% for 2016).
End-18 FBMKLCI at 1,860. While we continue to peg the market at an above-historical mean PE multiple, we assume the premium will ease in 2018 (+0.6SD vs 2017’s expected +0.7SD). Our bottom-up FBMKLCI target is 1,860.
Strategy and investment themes. We advocate focusing on beta stocks in 1Q18 before turning defensive thereafter. Market conditions still generally favour mid-caps, which continue to sustain superior earnings growth. Multi-year investment themes include: a) mega infrastructure (benefitting the construction and building material sectors; large-cap construction companies clawing back 2017’s losses), and b) electronics and electrical (E&E), followed by the situational GE14 and tourism-related picks.

OVERWEIGHT building materials, construction, E&E, gaming, technology and utilities The construction and building material sectors will be supported by more contract awards and implementation of mega projects, with construction activities perhaps only reaching the peak in 2019. The defensive and high-yielding utilities should outperform post GE14. However, UNDERWEIGHT cyclical sectors like automobile and plantation.
Our top picks include large-caps Bumi Armada , CIMB Group , Gamuda , Genting Malaysia , and Tenaga Nasional , and small/mid-caps Ann Joo Resources , Choo Bee Metal Industries , Gabungan AQRS , Globetronics Technology , Hume Industries , Serba Dinamik, Tune Protect , VS Industry and Yong Tai . Other notable picks include Magnum and YTL Power , while potentially interesting election trading plays include FGV and MRCB. However, SELL the pricey Hartalega Holdings (unsustainably stretched valuations) and UMW Holdings.

malaysia 2018 top stock picks

Improving domestic liquidity to help lift equities. The growth recovery of the ringgit deposit growth (+5.8% in Nov 17 from 2016’s +0.5%), an important indicator of domestic liquidity, should eventually lift equities – historically the FBMKLCI is positively correlated to ringgit deposits (0.85 correlation in the past 10 years). Foreign equity fund flows have reversed in December (RM860.3m) from September’s year low of RM737.3m net outflow.
Near-term positives ahead of GE14: a) the FBMKLCI has generally yielded positive returns in the three-month periods up to the past election polling dates, b) robust headline economic indicators (refer to RHS table) which support the ringgit and investment sentiment, and c) minimal risk in a portfolio sell-down of Malaysian bonds in 2018, given the more moderate maturity schedule vs that in 2017.
However, investment sentiment may turn cautious after GE14, reflecting continuing political uncertainties (which could lead to policy vagaries that affect corporate profits), and lack of domestic consumption growth sparks despite firm headline economic growth indicators. Corporate earnings could be revisiting the downgrade phase, albeit at milder magnitudes compared to the 2013-16 period (where growth was almost non-existent). Finally, Malaysia’s regional appeal remains mediocre, based on the expected PE-to- corporate earnings growth valuation matrix (see RHS), and taking note of the World Bank’s projection for Malaysia’s GDP growth to ease by 0.2ppt to 4.8% in 2019, slightly weaker than that of Thailand (-0.1ppt) and in contrast to the sustained GDP growth of neighbouring Indonesia, the Philippines and Vietnam.

malaysia particpated event

Company& Catalyst
Ann Joo Resources
Substantially stronger 4Q17 earnings, coupled with the rise in the latest published domestic steel price. Significant rollout of mega projects by mid-18.

Gabungan AQRS
Potential contract wins in 1Q18 from ECRL and Sabah Pan Borneo Highway worth >RM1b.

Clinching a mega project subcontract award (ECRL, MRT3) will positively surprise amid market skepticism.

Hume Industries
Cement prices should firm up significantly in 2018 as mega projects reach high construction activity levels.

Earnings doubling in 2018; further upside on potential commercialization of sensors under development.

Inari Amertron Good visibility in doubling revenues in 3 years, driven by RF packaging segment and Broadcom’s clientele.

VS Industry High growth visibility and potential contract wins to fill up capacities at its new plant (commencing mid-18).

(C) GE-14
Improved earnings via cost rationalisation could be another positive.

Potential sale of EDL will significantly strengthen balance sheet and lift earnings outlook. Has historically traded up to +2SD during GE periods.

Genting Malaysia
Normalisation of luck factor post 3Q17, opening of 20th Century Fox theme park by end-18.

Tune Protect
Strong turnaround story with relatively attractive valuations.

Yong Tai
Opening of Impression theatre in Mar 18.

Monetisation via potential listing of 6.3%-owned U-Mobile allows restoration of generous dividend payout.

Potential monetisation of various properties which collectively account for >30% of market cap.

source UOBKayHian – 02/01/2018