Apr 11, 2017

Accumulate SEAL (Technical Analysis)



seal technical analysis

buy seal

Despite recent consolidation, SEAL has been able to hold on above its critical supports of 60-day & 200-day EMA lines as well as the “Ichimoku Cloud”. Banking on improving momentum,
we expect SEAL to form another up-leg in the near-term. Upper resistance is pegged at MYR0.54 and MYR0.635.

source: Maybank IB Research – 10/04/2017

The principal activities of the Company are property investment and contractor of buildings and project manager for property development. The principal activities of the subsidiaries are the extraction of timber trading of log and sawmilling and letting of properties.

Apr 6, 2017

Turn Of The Month Effect: Analysis Of Top 5 Picks For Mar/Apr 2017 Cycle

Turn of the Month effect. Referring to our report dated 28 March 2017, we have duly analysed the performance of our top 5 picks based on the Turn of the Month Effect for March/April 2017 cycle. Our findings show that 2 out of the 5 top picks experienced an increase in their respective stock price on absolute basis during the turn of the month strategic days. The gainers, both on absolute and relative basis, were Public Bank and Hong Leong Bank. On the other hand, Westports, IOI and Astro lagged.

Top 5 picks. We list below our top 5 stocks recommendation together with the review analysis for the March/April 2017 cycle of the turn of the month strategic days:

• Westports (BUY; TP: RM5.00; EPR: 23.5%)

On absolute basis, Westport’s stock price decreased by -0.7% from RM4.08 at the beginning to RM4.05 at the end of the March/April 2017 cycle of the turn of the month strategic days. The share price of Westports reached its monthly high of RM4.08 on 28 March 2016, the first day of the cycle. This was accompanied by a higher than average trading volume of 2.7m of the strategic days. The average trading volume for the cycle was 2.3m. The share price of Westports then declined thereafter to RM4.05 until the end of the cycle.

• Astro (BUY; TP: RM3.78; EPR: 37.0%)


On absolute basis, Astro’s stock price decreased by -3.8% from RM2.87 at the start to RM2.76 at the end of the March/April 2017 cycle of the turn of the month strategic days. Astro’s share price peaked at RM2.87 on cycle’s first day (28 March 2017), the same day the fourth quarter ended 31 January 2017 financial results were released. Based on the Astro’s results, the Average Revenue Per User (ARPU) increased from RM1.10 to RM100.4 despite the drop in subscription revenue. In addition, Astro will give priority to its pay customers by not over investing in subsidies for (set-top) boxes in a soft consumer year as there is no point seeing new customers if Astro cannot sustain the subscription. On relative basis, Astro underperformed the FBM KLCI from the start until the end of cycle.

• Public Bank (BUY; TP: RM22.60; EPR: 13.2%)

public bank

On absolute basis, Public Bank’s stock price increased by merely 0.2% from the beginning to the end of the March/April 2017 cycle of the turn of the month strategic days. Aside from that, Public Bank’s stock price outperformed the FBM KLCI during the whole cycle. Observing the trend in trading volume and share price, we reckon that the turn of the month effect may have
kicked off way earlier prior to the cycle for Public Bank. This is evident through high stock prices accompanied with higher than average trading volumes which occurred before the cycle began. For instance, on 17 March 2017 which was 11 days before the cycle started, volumes surged to 16.4 million while stock prices reached its monthly high of RM20.18 for the month of March.

• IOI Corp (BUY; RM5.30; EPR: 14.7%)


On absolute basis, IOI Corp’s stock price decreased by -1.9% from the start to the end of the March/April 2017 cycle. On relative basis, IOI Corp underperformed the FBM KLCI from the start until the end of the cycle

• Hong Leong Bank (BUY; RM15.50; EPR: 12.6%)

hong leong bank

Hong Leong Bank’s stock price experienced an increase of 0.7% on an absolute basis during the turn of the month cycle and also outperformed the FBM KLCI throughout the cycle. The share price of Hong Leong Bank peaked at RM13.76 during the fourth day of the cycle (31 March 2017), coinciding with a higher than average volume of RM0.8m.

SUMMARY OF TOP PICKS PERFORMANCE:bursa malaysia top five

FBM KLCI year-end target. We reiterate our FBM KLCI 2017 year-end target at 1,830 points

source: MIDF Research – 04/04/2017

Apr 3, 2017

Alpha Picks: Slimmer Pickings

While only four of our alpha picks outperformed the market in Mar 17, the picks collectively still delivered a respectable simple average return of 4.6% for the month (FBMKLCI: 2.7%). We shorten the line-up for Apr 17 as many of the picks have outperformed. We retain Ann Joo, Ekovest, VS Industry and YTL Power, while we add Kerjaya Prospek and RHB Bank (SELL).

malaysia stocks recomendation
 Review of March picks. Our alpha picks delivered a respectable 4.6% simple average return in March, although only four stocks outperformed the FBMKLCI’s 2.7% mom return (see RHS table). The outperformers continue to come from mainly our promoted infra-related and E&E investment themes, with the exception of Axiata.
 China FDI, infrastructure and E&E investment themes will continue to deliver positive momentum. In particular, we look forward to Chinese President Xi Jinping’s planned visit to Malaysia in 2Q17, which could raise interest in the China FDI theme. Implicit in our stock-picking strategy is our expectations for market returns to moderate, having risen 6.0% ytd, driven initially both domestic flows, and recently amplified by foreign investment inflows.

 Our alpha list for April. BUYs are Ann Joo, Ekovest, Kerjaya Prospek, VS Industry, YTL Power, while RHB Bank is a SELL.
 New conviction picks. We add Kerjaya Prospek into our list. Kerjaya should clinch at least RM800m worth of new construction jobs in 2017, allowing valuations to catch up with its comparable peers. We also included RHB Bank as a conviction SELL, as NPL provisions have yet to peak. Meanwhile, we retain Ekovest in the alpha list, and its present deep 29% discount to our RNAV of RM2.02/share should allow valuation to stretch as the China FDI theme fully unfolds.
 Out of the list are outperformers Axiata (14.2%) and Inari (7.8%). Also off the list are stocks which have less compelling near-term investment theses – BIMB (no near-term catalyst anticipated post the 4Q16 results season), Top Glove (earnings momentum priced in), and Yinson (some contract termination risks counter-balance potential of securing a new sizeable FPSO contract).

bursa malaysia alpha stock picks

Ann Joo Resources (Abdul Hadi)
 Following its return to profitability in 2016, Ann Joo is set to see another year of earnings recovery in 2017 with steel prices on a rising trend, coupled with favourable raw material prices. We reckon Ann Joo's share price will continue to trend up ahead of its 1Q17 results as steel prices and sales volume rise qoq, and raw material costs peak.

Share Price Catalyst
 Improved steel ASP on the back of rising local demand from infra projects.
 Industry consolidation in China will curtail cheap steel imports.
 Prudent capital management with dividend policy of 60%; subject to capital requirement.

Ekovest (Ridhwan Effendy)
 All-time high construction orderbook of RM13b would sustain its earnings delivery for the
next 5-6 years. Also, the potential IPO of DUKE 1 & 2 (which could be as soon as 2018) could re-rate the stock, given the significant value (RM1.9b) vs to its market cap of RM3.1b.

Share Price Catalyst
 Planned visit by China President Xi Jinping should elevate interest in China FDI beneficiaries.
 Signing of the concession agreement for DUKE2A, its third highway concession.
 Further contract wins.

Kerjaya Prospek (Ridhwan Effendy)
 Kerjaya expects to clinch at least about RM800m worth of new construction jobs in 2017, which we think is easily achievable given its historical orderbook win track record. Presently, its tenderbook stands at RM1.4b, which comprise of mainly high-rise residential buildings and commercial property jobs.

Share Price Catalyst
 New contract wins, expected from end-2Q17 onwards.
 Valuation laggard to comparable peers like Suncon.

RHB Bank (Keith Wee)
 The group has the lowest loans-loss coverage ratio inclusive of regulatory reserve in the industry at 75% (industry: 129%). This coupled with: a) relatively low loans-loss coverage ratio of 30% for its O&G gross impaired loans portfolio, and b) RM2.6b in O&G loans under the watch list category (46% of total O&G loans portfolio) does place a significant upside risk to management’s rather benign net credit cost guidance of 25-30bp for FY17.
As such, we see significant downside risk to management’s targeted ROE of 9% to 10% and in turn consensus earnings.

Share Price Catalyst
 Significant upside risk to management’s guided net credit cost of 25-30bp for FY17. Note
that Maybank and CIMB, with similar O&G exposure and higher provision coverage ratios, are guiding for net credit cost of 50-60bp and 60-70bp respectively.
 O&G provisions and impairment may have yet to bottom out
 Asset quality woes will place pressure on overall loans growth.

VS Industry (Fong Kah Yan)

 In addition to the three assembly lines for the vacuum cleaner box-built contract which are slated to commence in FY17, we expect VS Industry to secure more contracts from their key customers in FY18 on increasing demand for existing products as well as new product launches notably in the beauty care segment.

Share Price Catalyst
 Securing new contracts from existing or new customers.
 Sharp appreciation of US dollar against the ringgit.

YTL Power (Chong Lee Len)

 YTLP provides a 6.5% sustainable dividend yield anchored by defensive cash flow from Wessex Water. Key re-rating catalysts include new power plant projects between 2020-2021, which are: a) 554MW Jordanian power plant, and b) 80% equity stake in 1,320MW coal-fired Indonesian power plant.

Share Price Catalyst
 Positive newsflow on: a) Jordanian power plant construction, and b) financial close achieved at PT Jati.

stocks valuation

source: UOBKayHian – 03/04/2017

Mar 29, 2017

TECHFAST – Bullish Flag Pattern


techfast analysis

TECFAST has been consolidating over the past week after a prior strong two-week rally. Yesterday, the share price surged 6.5 sen (19.4%) to close at RM0.40 to confirm a bullish ‘Flag’ chart pattern with a long white ‘ Marubozu’ candlestick. The MACD line is poised to form a higher high on the back of strong uptick in RSI and Stochastic, laying a hand on the bullish bias. In tandem with the strong trading volume observed, we view that follow-through buying interest could rally the stock further up towards RM0.40 (R1) and possibly RM0.50 (R2) in the near-to-mid term, based on the flagpole measurement objective. On a side note, we do not discount the possibility of the share price taking a breather soon before resuming its uptrend given the overbought condition displayed by the RSI and Stochastic. That said, we note key support levels are found at RM0.335 (S1) followed by RM0.295 (S2).

Source: Kenanga Research – 29/3/2017

The Company is a leading specialized manufacturer and distributor of High Precision Computer's Components (self-clinching fasteners)

Mar 14, 2017

JCY – Trading Buy


JCY Target Price RM0.71.

JCY Daily Chart (click to enlarge):jvc technical buy

JCY saw its share price climbing 2.5 sen (4.03%) to close at RM0.645 on strong trading volume. The bullish price action yesterday has led the share price to break out from its 1.5-month consolidation phase while settling above all its key SMA trend lines. MACD line is looking to stage a bullish crossover above its signal line to lend a hand on the bullish-bias outlook ahead, while positive uptick in daily RSI is indicating improved buying interest on the stock. From here, we reckon the immediate-term outlook to be biased to the upside, where a swift recapture of the immediate resistance level of RM0.655 (R1) would see the stock gear towards our target price objective of RM0.71 (3 bids below our measurement objective of RM0.725 (R2)). Key support levels to note are RM0.62 (S1)/RM0.58 (S2), where our conservative stop-loss level is placed at RM0.595 (3 bids below S1).

source: Kenanga Research – 14/3/2017

The company currently engaged in business of design and development of hard disk drive (HDD) and other technology-related activities.

Mar 6, 2017

MRCB – Technical Rebound


Stock Code 1651

MRB Daily Chart:mrcb technical analysis

MRCB has formed a breakout-pullback-continuation pattern above the EMA60 level with high volumes. The MACD Histogram has turned green, while the RSI has risen above 30. Price may rally further, targeting the RM1.55-RM1.68 levels. Support will be set around the RM1.39 level.

Source: Mplus Research – 6/3/2017

The Company is principally an investment holding company. The Company also engages in construction related activities environmental engineering property development property investment and provision of management services to its subsidiaries.

Feb 28, 2017

OKA - Stock Code 7140


Yesterday, OKA’s share price surged to an intraday high of RM1.39, before ending the day up by 3.0 sen (2.3%) at RM1.35. This came on the back of its 3Q17 earnings announcement on Friday, which showed a 32.0% YoY jump, spurred by higher margin products. Consequent to the bullish move, OKA’s share price has just broken out of a pattern resembling a “Cup & Handle” – indicative of a continuation of its longer term uptrend. In fact, the major SMAs have also completed a “Golden Crossover” (50-day/ 100-day SMA) while the MACD is showing signs of bullish convergence. From here, expect a retest of the RM1.38/1.39 (R1) highs. Once taken out, further gains would then be expected towards RM1.49 (R2) and finally the “Cup & Handle” measurement objective of RM1.57 (R3) next. Downside support levels include RM1.30/1.32 (S1) where investors may look to accumulate, although a break below RM1.28 (R2) would be highly negative for the stock

OKA Corporation Daily Chart:

OKA analysis

Source: Kenanga Research – 28/2/2017

The Company's principal activities are manufacture and trading of pre-cast concrete products trading of ready-mix concrete; as well as manufacture and trading of reinforced and pre-stressed concrete piles and the provision of transportation services.