Integrax signed a transhipment deal with Vale

Integrax signed a transhipment deal with Vale: "New Development

Yesterday, Integrax announced that Lekir Bulk Terminal Sdn Bhd ('Lekir'), its 80%-owned subsidiary had entered into a conditional Transhipment Services Agreement with Vale International SA ('Vale'). You may recall that Vale, the world’s second largest diversified metals and mining company, had acquired 165.5ha of land in Manjung, Perak, from property developer KYM Holdings Bhd. In addition, Vale had an option to acquire another 305.95ha in Manjung. Vale has plans to invest RM9bil in an iron ore pelletizing plant on the site.

The Transhipment Services Agreement stipulates that Lekir shall provide transhipment services for iron ore to Vale for a period of ten (10) years. Lekir shall make significant addition of handling equipment & systems as well as to expand its existing marine infrastructure at Lekir Bulk Terminal. The total value of the additional capex is estimated to be about RM200 million. The facilities must be ready within 24 months of the date of the agreement. For more, go here.

Recent Financial results

Integrax is a profitable concern, which incurred a loss in QE31/12/2008. This was attributable to provision for impairment of its investment of RM35.2 million in PGMC (its associate in the Philippines).


Table: Integra's 8 quarterly results

Valuation

Integrax (currently at RM0.88) is now trading at a PER of 7.3 times (based on annualized EPS of 12 sen). For a port operator, this multiple is deemed undemanding.

Technical Outlook

Integrax has just broken above its short-term downtrend line at RM0.83-85. The share price has been rising steadily in a medium-term uptrend line, with support at RM0.75-77.


Chart 2: Integra's daily chart as at Dec 31, 2009_11.10am (Source: Quickcharts)

Conclusion

Based on good financial performance, attractive valuation & bullish technical breakout, Integrax is a good stock for trading & investment purposes.

"

MSC to ride on tin price recovery

MSC to ride on tin price recovery: "Background

Malaysia Smelting Corp Bhd (‘MSC’) is one of the largest, fully-integrated producers of tin metal in the world. It diversified into gold, coal, nickel and base metal mining activities in early 2008. This was an error & the company has since 'focused its efforts on cost rationalization and reduction as well as working on various alternatives to reduce its overall gearing including possible divestments of some of the Group’s non-tin assets'.

We are taking a fresh look at MSC since tin prices had recently achieved a bullish technical breakout, which may signal a new upleg for MSC. For my first posting on MSC, go here.

Recent Financial Results

MSC's financial performance has slowly improved after the huge loss suffered in QE31/12/2008. Of the pre-tax loss of RM80.3 million recorded in that quarter, RM57.0
million came form provision for impairment loss & write-off & another RM20.3 million due to loss in exchange in USD borrowings.


Table: MSC's 8 quarterly results


Chart 1: MSC's last 15 quarterly results

Valuation

MSC (closed at RM3.55 yesterday) is now trading at a PER of 8.5 times. This was arrived at by using the annualized EPS for QE30/9/2009 & QE30/6/2009 totaling 21 sen. This PER is expected to decline as MSC's earning improves in line with higher prices of tin.

Outlook for Tin

From Chart 2 below, we can see tin prices had just broken to the upside of its triangle formation last week. From Chart 3 below, we can the close correlation in the movement of MSC's share price & the price of tin. At the end of 2006, both MSC & tin has a technical breakout & rose sharply. The present technical breakout in tin may lead to a breakout in MSC (see Technical Outlook below).


Chart 2: Tin daily price chart as at Dec 29, 2009 (source: London Metal Exchange)


Chart 3: MSC's monthly chart & Tin weekly price chart as at Dec 29, 2009 (source: Tradesignum & London Metal Exchange)

Technical Outlook

From Chart 4 below, we can see that MSC will face stiff resistance at RM3.70. A break above this level could be the start of the upleg for this stock. The next resistance is at RM3.90-4.00 (see Chart 5 below).


Chart 4: MSC's weekly chart as at Dec 29, 2009 (Source: Tradesignum)


Chart 5: MSC's monthly chart as at Dec 29, 2009 (Source: Tradesignum)

Conclusion

Based on the above, MSC could be a good stock for medium & long-term investment. A break above RM3.70 could signal the start of the upleg for MSC.

"

Rubber Glove

Rubber Glove: "♦ Yoy growth in value. Last year, Malaysia’s export of rubber gloves reached an all-time high of RM6.8bn (+20% yoy) due to stronger US$ and sustained demand from US and Europe. As for 2009, for the period between Jan-Mar, Malaysia’s export for rubber gloves reached RM1.7bn (+12.4% yoy). The US continued to be the largest single buyer of Malaysian gloves, accounting for 39.3% of Malaysia’s total glove exports for the period between Jan-Mar.

♦ Demand to stay resilient. We expect demand for gloves to remain strong as the possibility of more H1N1- type flu outbreaks in the future is another catalyst for demand. Given that gloves are the most basic and affordable form of protection against viruses in the healthcare industry and coupled with the rising awareness in healthcare standard for the populated countries (e.g. China and India), should translate into a further boost in demand for medical gloves moving forward.

♦ … but not without some headwinds. While demand prospects remain favourable, some headwinds appear to
be developing. Latex prices are currently trending upwards (YTD=+69.6%). However, given that most of the glove manufacturers practice an efficient costing/pricing mechanism, using the average latex price for the previous month to set the current month’s selling price. This enables the glove manufacturers to pass on the higher latex cost to customers, albeit with a slight time lag. As for the volatility of the US$ against RM, past trends suggest that glove manufacturers have the ability to adjust their prices, for currency effect normally 1-2 months later. Any time lag in passing on the cost increase, however, would be mildly negative but
not significant.

♦ Risks. The risks include: 1) sharp surge in raw material (latex) and/or energy (natural gas) prices, which may result in margin squeeze; 2) an appreciating RM against the US$; and 3) execution risk from capacity expansion.

♦ No change to our net profit forecasts. No change to our earnings forecasts for now.

Valuations and Recommendation
♦ Top Glove – maintaining its position as world’s largest glove producer. We continue to like Top Glove (Outperform, FV=RM11.60) for its position as world’s largest glove producer. Top Glove’s annual production capacity is expected to reach 35.3bn pieces by end-FY10, from 31.5bn pieces currently following the completion of its two new factories as well as additional eight new lines at F18. The extra capacity is to support the strong orders that are coming from Latin America and Europe following the possibility of more H1N1-type flu outbreaks in the future. With its healthy cash pile of RM222.0m (14.5 sen/share) as at end-Nov, Top Glove remains on the lookout for potential acquisitions. Given its healthy cash pile of RM237.1m as at end-Nov, we believe the company would not have too much problems with financing its future acquisitions internally. Our fair value is based on CY10 target PER of 15x.

♦ Kossan – laggard amongst its peers. We believe Kossan’s (Outperform, FV=RM8.65) lagging performance vs. peers for the YTD was due to its poor performance in its TRP segment earlier this year, unfavourable hedging
policies and two fire incidents. Operation-wise, it remains business as usual for Kossan. Kossan plans to increase its current annual production capacity of 11.1bn pieces to 14.5bn pieces by end-2010 and further to 18bn pieces by end-2011. Kossan is currently trading at CY10 PER of 6.5x, which, in our view is undemanding given FY08-11 net profit CAGR of 37.1%. Coupled with the recovery in the demand for its TRP products on the back of recovering economy in 2010 and resilient demand for medical gloves, should bode well for Kossan. Our fair value is based on CY10 target PER of 11x.

♦ Adventa – largest surgical glove producer in Malaysia. We continue to favour Adventa (Outperform, FV=RM3.48) for its niche position as the largest surgical glove producer in Malaysia. The management is looking to aggressively expand its surgical gloves production from 250m pairs currently to 350m pairs by early 2010 and 450m pairs by end-2011. In addition, the company plans to ramp up its dental and examination gloves by building a new factory in Kluang, Johor, which will house 7 double former lines (+1.5 bn pieces). The commercial production for the new factory is expected to start by 2Q-2010, which will increase the current annual production capacity of 3bn pieces to 4.5bn pieces by end-2010. In 2011, the management plans to add another 5 double former line (+1.0 bn pieces), which will increase Adventa’s annual capacity production for dental and examination gloves to 5.5bn pieces by end-2011. These aggressive capacity expansion plans are steps for the company to take advantage of the rising awareness in hygiene standards following the H1N1 pandemic as well as to further its foothold in Latin America as the company recently gotten the approval to export its gloves to Brazil. We recently upgraded our fair value after revising our target CY10 PER for Adventa to 10x (from 8x).

♦ Market Perform for Hartalega. We like Hartalega for its position as the second largest nitrile glove manufacturer in Malaysia and the second largest in the world. Management has mentioned the construction of
Plant 5 is almost completed and that the commercial production for two new lines at Plant 5 (+0.6 bn pieces) is set to start in Feb ’10. This will increase Hartalega’s annual production capacity to 6.8bn pieces by end-FY10 from 6.2bn pieces currently. Following that, management intends to put in another ten new lines at this plant and decommissioning ten of its old lines in Plant 1 and replacing them with six high-capacity new lines. This would effectively raise Hartalega’s annual production capacity further to 10bn pieces by end-FY12. Management also plans to increase its natural rubber gloves production to 30% of sales vs. 20% currently to take advantage on the growing demand from developing countries (i.e. China and India). However, given the limited potential upside to our fair value, which is based on our expected market returns, we have downgraded our Outperform call to Market Perform while maintaining our fair value of RM6.23 based on unchanged CY10 target PER of 11x.

By RHBInvest
Analyst: David Chong, CFA

"

BJCORP ... Dec09

BJCORP ... Dec09: "BCorp released its 2Q FY10 results.
Overall results were within expectations. The group has been recently
undertaking a few major corporate exercises. We have upgraded our fair value of BCorp to RM2.24

Results.
Revenue for the quarter increased over both preceding and corresponding quarters by 0.4% and 0.6% respectively. Net profit was substantially stronger as well and was 29.2% higher than the preceding quarter while increasing 400% against the corresponding year quarter.

Review.
Revenue was marginally higher attributable to higher revenue contribution from the consumer marketing segment especially from Cosway both locally and abroad.
The stock-broking segment had also registered higher revenue. This in turn attributed to higher PBT and net profit.

Cosway.
BCorp has sold its 90% stake in Cosway (M) Sdn Bhd to Berjaya Holdings (HK) Limited (BHK) for a consideration of RM900mil. This would be settled by a combination of cash, exchange of shares and issuance of ICULS. As a result of the exercise, BHK has changed its name to Cosway Corporation Limited (CCL) and will continue to be listed in Hong Kong. The effective stake of BCorp on CCL would be slightly under 75% after the exercise. CCL had also purchased the remaining 10% stake in Cosway (M) Sdn Bhd from Madison Country LLC. Under the exercise, CCL had also purchased and acquired
eCosway. The exercise will provide BCorp with stronger cash positions and cash flows while providing a channel to realize greater valuations in Cosway. Cosway is currently performing very strongly internationally especially in Hong Kong and Taiwan. We are positive with the longer term developments.

Berjaya Retail Bhd. To recap, the group has planned to list Singer and 7-Eleven through Berjaya Retail Bhd. BCorp has also proposed to distribute a dividend-inspecie
on the basis of 1 Berjaya Retail share for every 10 existing shares of BCorp of RM1.00 each. It is proposed that a minimum of 71.9mil up to 101.9mil shares of
Berjaya Retail together with 5mil Berjaya Retail ICPS be offered for sale. The offer price is RM0.50 for both.

7-Eleven.
7-Eleven is geared to grow strongly. It plans to open 2,000 stores nationwide in 3
to 5 years. This large push will be made possible by its new franchise scheme which would free capital for 7-Eleven to push for supernormal growth over these few years. Initial stores which were franchised recorded a 20% growth in sales in a matter of days. It is expected that even higher efficiencies will be achieved over a longer period of time. With the large store growth, 7-Eleven will be able to achieve even greater economies of scale in terms of distribution
networks, marketing and purchases.

Berjaya Land.
Bland has been recently launching its projects in Vietnam in Thach Ban, Hanoi
and Bien Hoa, Dong Nai. The recent launch in Bien Hoa has been fully sold while the Thach Ban launch has almost sold out within a short period of time. The developments indicates promising future launches moving forward. Locally Bland has launched several projects as well and has been well received as well.

Berjaya Media.
The group had previously proposed dividend-in-specie of ordinary shares of RM0.80 each in Berjaya Media Bhd to the shareholders of BCorp. The exercise has been approved while the group has submitted the application to Bursa Malaysia Depository Sdn Bhd. We expect the exercise to be completed at the end of December or January.

Outlook.
The group is set to perform better with the H1N1 scare being over. The hotel and
resorts business will be the key sectors benefiting from this. Meanwhile the overall property market has been stronger industry wide. Moreover the group’s property divisions had reportedly done very well over the past few months. We expect the consumer marketing segment to continue to grow moving forward.

Risk.
Risks to the performance of BCorp would be a reversal of the recovery of the economy.
However, parts of the group are relatively resilient to such downturns.

Recommendation. SJ Security maintain our buy recommendation on BJCorp with a fair value of RM2.24. This is based on a discount of 35% on the fully diluted RNAV per share of RM3.45.

"

KLCI Buy Signal

KLCI Buy Signal: "

KLCI Daily Chart

Looks like KLCI has given a buy signal with a possible challenge of 1290.

"

Haio chalked up a mixed q-o-q performance

Haio chalked up a mixed q-o-q performance: "Results Update

Haio has announced its results for 2Q2010 ended 31/10/2009. Its net profit increased by 85% y-o-y or 9.3% q-o-q to RM20.2 million while turnover increased by 52% y-o-y to RM132 million but declined by 10.9% when compared to the immediate preceding quarter (QE31/7/2009). The decline in the sale on a q-o-q basis could be a warning sign. Nevertheless, its profitability increased due to higher sales of high margin products by both the wholesale & retail divisions.


Table: Haio's 8 quarterly results


Chart 1: Haio's last 19 quarterly results

Valuation

Based on its closing price as at Dec 24 of RM7.97, Haio is now trading at a PE of 10 times (based on last 4 quarters' EPS of 79 sen). With its track record of steady growth, Haio may deserve a higher PE multiple (say, 12 times). As such, it may hit RM9.50-10.00.

Technical Outlook

Haio is now testing its recent high of RM8.05. That will be a strong resistance and a failure to surpass that level could set the stage for a correction in the stock. The 20-week SMA line may provide support for this stock at RM7.35-40 & thereafter the medium-term uptrend line may also provide support at RM6.50.


Chart 2: Haio's weekly chart as at Dec 28, 2009_10.15am (Source: Quickcharts)

Conclusion

Based on its improving financial performance, Haio's share price may continue to rise. However, the drop in the sale may be a warning sign, which we should not ignore. It will also encounter some resistance at the RM8.00 level, which was the recent high for this stock.

"

Regional Share Market Move High Without FBM KLCI

Regional Share Market Move High Without FBM KLCI: "






















Yesterday Asia regional share market move high due to positive news roll out from US economic data and the rally for windows dressing may start, however FBM KLCI sill facing sale down by foreign investor.

Base on the chart FBM KLCI may facing high possibility to move lower in coming next month. Early of the month I think FBM KLCI may move high along with regional market but look like it did not happen. If foreign investor continues to sale down Malaysia share market sure the index will never hits 1,300 at 1Q2010 and we may miss a opportunity to make profit in share market before any major correction likely to happen in March 2010.

If you look outside of FBM KLCI thing is not that bad, it look like foreign investor sale down only top 10 FBM KLCI share to make sure FBM KLCI index is drop. Other share no in FBM KLCI is still look good and share below RM1.00 is highly 'goreng' up by investor. For me I will think this have something done on political issue.

"

Market Review 21/12/2009: All signs are coming nicely together. Market looks like its on the verge to explode

Market Review 21/12/2009: All signs are coming nicely together. Market looks like its on the verge to explode: "

KLCI




Source: Nextview



On KLCI, apart from Bollinger Bands, it is also on the verge of breaking its narrowing triangle. Although there were some last minute market down just now (I suspect it has something to do with what happened on Hang Seng. Indonesia too was very Bearish today as they lost 3.1%), it was still within the triangle. Bollinger Bands is very tight at this point and awaiting a MAJOR Breakout. From such tightening formation, I would not be surprise if KLCI reacted as much as 100 points in short space of time. In fact, such formation and tightening of Bollinger Bands almost always result in violent movement.



Bollinger Bands would tell whether there is a violent movement coming up, and technical formations are rather Bearish, so the intellectual guess would be down. Technically, it is preferable to wait until it is confirmed. But you know the drill; once it is confirmed it is very difficult to get out.



I know most of us are on holiday and I mentioned that if anything drastically negative were to happen it would be next year, but next year is less than 2 weeks away. Lets not get too obsessed on when it will happen. To me, once market has triggered the critical levels, we have to react. Remember that if market goes down this time around, chances are it would be changing market uptrend, meaning that we have to change the strategy from buy on weaknesses to sell on strength.

"

PBBANK Silence Accumulate Share In Process

PBBANK Silence Accumulate Share In Process: "






















PBBANK share price have cap between RM10.90 to RM11.00 since November and in December the price like did not move at all by keeping the price at cap between RM10.94 To RM11.00. Ever time a buy up will come with a sale down by seeing the chart the share have been accumulate in low price. Sure some news will going to roll out soon at early of next year and I think it is not the financial report that going to roll out by around 20 Jan 2010.

Buy and sale have keep in balance for some time and the accumulate chart has start to move into positive zone however, to get the sign of PBBANK share price will rally up to RM11.30 still need the RSI to turn. If this few day RSI turn down it mean they is high possibility this if silence sale out share without pull down the share price and it may have bad news so if the RSI turn positive thing will go another ways.

PBBANK is a solid share with high dividend payout so keep an eye on it, this may be a opportunity to make profit for Chinese News Year.

"

Tenaga -Tariff review to dominate power sector focus, says RHB Research

Tenaga -Tariff review to dominate power sector focus, says RHB Research: "

Written by Surin Murugiah

Wednesday, 23 December 2009 12:17

KUALA LUMPUR: RHB Research Institute Sdn Bhd has maintained its overweight recommendation on the power sector and said the key near-term focus for the sector and TENAGA NASIONAL BHD [] (TNB) would be on the upcoming tariff review.

While the tariff review would likely dominate Tenaga's (Fair Value = RM9.50) near-term share price performance, fundamentally, Tenaga was an excellent proxy to a recovering economy, it said.

'As for the IPPs, between Tanjong Plc (FV=RM19.10) and YTL POWER INTERNATIONAL BHD [] (FV=RM2.10), we prefer the former as valuations are cheaper.

It said a base tariff review was past due for Tenaga and all the more important this time round as TNB would need to meet rising capacity payments for Jimah Power.

'A tariff hike would also help ensure a minimum return to shareholders. We have not factored in any tariff revisions in our earnings model and project FY10 ROA of 4%, below Tenaga's weighted average cost of debt of 5.2%.

'In order for ROA to be raised by one percentage point, we estimate that a 4% hike in the base tariff would be required, which would also raise our FY11 earnings projection by around 26%,' it said.

The research house said a tariff increase would also help Tenaga cover rising fuel costs.

'We think gas prices should not be an issue for Tenaga as tariffs would be adjusted accordingly to accommodate the higher or lower gas prices. For every 10% change in gas price, we estimate tariffs would need to be adjusted by just 2.6% to neutralise the impact.

'As for coal, our sensitivity analysis suggests a US$10 per tonne change in our average coal cost assumptions of US$88 per tonne for FY10-12 would impact Tenaga's earnings by around 12%. In order to cover this increase, we estimate a tariff revision of 1.9%. A strengthening ringgit (against the US dollar) would also help cushion some of the impact,' it said.

RHB Research said the long-awaited National Energy Plan could be unveiled next year

"

Foreign Fund Sale Down Local Fund Buy Up

Foreign Fund Sale Down Local Fund Buy Up: "






















This few day we had see FBM KLCI close strangely at last few minute before closing. They can buy up the share or sale down the share just using a vary low vol, this really send us a be-caution sign. As we know foreign fund is exiting from Malaysia market since begining of September till now and with some new implementation in budget 2010 have make foreign investor unsatisfied especially 5% tax on property.
























As local fund push up the share they will be a sale down by foreign fund so I think FBM KLCI will keep in between 1250 to 1270 for some time the situation may change if regional market rally or drop into correction. But base on regional share market like Shanghai's SSEC Index and Hong Kong's Hang Seng Index there are about to drop into sharp correction so in short term the share market in Malaysia may likely to enter into a sharp correction. Due to Dubai debt and western economic situation may unstable yet the situation is more likely to happen.
























Market have rally since mid of March till now so it is better push out your money in share market before any big correction begin and most of the time this correction happen in the time that most of us think it may no happen like year end of before Chinese News Year. Year end windows dressing already not happen in this year so I think we better did not hope Chinese News Year really may happen.

"

Adventa 22.12.2009

Adventa 22.12.2009: "Adventa Quarterly Results
http://spreadsheets.google.com/pub?key=tuKwXFcx7Ulr8SIM0SKas3Q&output=html

Comment: Trading at rather high trailing PE for its fundamentals.

"

Hai-O 2Q net profit surges 85% to RM20.18m

Hai-O 2Q net profit surges 85% to RM20.18m: "Hai-O 2Q net profit surges 85% to RM20.18m
Written by Joseph Chin
Tuesday, 22 December 2009 19:51

KUALA LUMPUR: HAI-O ENTERPRISE BHD [] reported net profit of RM20.18 million in its second quarter ended Oct 31, 2009, a jump of 85% from RM10.89 million a year ago as more consumers bought its health and wellness products.

It said on Tuesday, Dec 22 revenue rose 51% to RM132.37 million from RM87.29 million. Earnings per share were 24.23 sen compared with 13.38 sen. It declared dividend of 10 sen per share.

'The increase in profit after taxation was mainly due to higher contributions from all main divisions. The recovery of the domestic market had increased in consumer spending which had boosted the sales of the group's health and wellness products in the second quarter,' it said.

Additional increase in other income earned which included realisation of exchange fluctuation reserve on disposal of foreign associates amounting to RM624,799 had contributed to the increase in profit.

For the first half, Hai-O said revenue rose 40% to RM280.95 million from RM200.20 million a year ago, mainly due to higher sales generated by its principal subsidiaries, the multi-level marketing and retail divisions, and higher rental income generated during the financial period.

Net profit increased by about 58% from RM24.73 million to RM38.97 million due to higher revenue achieved as mentioned above. Despite lower revenue achieved by the wholesale division, it had registered higher profit by focusing on higher margin product sales.

'The MLM division had contributed over 80% of group revenue, due to its effective A&P strategies coupled with attractive overseas incentive trips and strong newly recruited distributors' force.

'Additional contribution from the retail division due to higher revenue achieved coupled with the success in its house brand products had also contributed to the increase in profit,' it added.

http://www.theedgemalaysia.com/business-news/156170-hai-o-2q-net-profit-surges-85-to-rm2018m.html


Last 4 quarters results of HaiO
http://spreadsheets.google.com/pub?key=tyxw8H8-rMbZwslu4WAXkog&output=html

"

Scientex

Scientex: "Recommendation: BUY
Price: MYR1.42 12-Month
Target Price: MYR1.70

• Scientex turned in encouraging 1QFY10 (Jul) results, with net profit rising 69% YoY to MYR12.7 mln. The net profit exceeded our expectations, reaching 30% of our previous FY10 projection.

• Both the manufacturing and property development divisions recorded healthy sales and profit growth. Revenue and operating profit of the manufacturing business grew 4% YoY and 60% YoY respectively, while the property arm saw sales and operating profit expand by 28% YoY and 44% YoY respectively.

• The manufacturing division, which produces industrial packaging products such as stretch films, strapping bands and raffia tapes, is benefiting from the recovery in global industrial activity with demand increasing steadily. Management had anticipated this earlier, adding several production lines in FY09. Contributions from the new capacity will be seen in FY10 results.

• Meanwhile, despite the continued soft property market in Johor, we understand sales of Scientex’s properties have been brisk, mainly due to its successful strategy of selling lower-priced houses to young
professionals who are starting a family. The group has been averaging sales of above 100 units per month in the last three months.

• Given the robust results and positive outlook, we raise our FY10 and FY11 net profit projections by 16% and 10% to MYR48.4 mln and MYR53.5 mln respectively.

• We maintain our Buy recommendation on Scientex but raise our 12- month target price to MYR1.70 (from MYR1.50) on the back of our earnings upgrade.

• We derive our target price by ascribing a target PER multiple of 7x (unchanged) against its CY10 earnings, inclusive of a projected dividend. The target PER multiple is benchmarked against its manufacturing peers and is also within the 5x-8x PER valuation range for property companies under our coverage.

• Scientex continues to demonstrate resilience in its earnings delivery. We continue to like the group for its experienced leadership and bright prospects, underpinned by the rising demand for its industrial packaging products and residential houses. We also note that its balance sheet is lean and healthy, backed by a NTA/share of MYR1.80 and a net gearing of 0.1x as at October 2009.

• On Oct. 19, 2009, Scientex proposed to acquire Johline Realty Sdn Bhd (JRSB) for a cash consideration of MYR65.3 mln. JRSB owns two parcels of land totaling 156 acres in Mukim Pulai and Mulim Plentong, Johor. Scientex intends to replicate its success in its Pasir Gudang andKulai projects on this new acquisition, although incremental contributions are only expected in FY11 or FY12.

• Risks to our recommendation and target price include a reversal in the demand uptrend for its manufacturing division and softer-thanexpected take-up rates for its property launches.

52-week Share Price Range (MYR) 0.82 - 1.42

Major Shareholders:
Scientex Holdings Sdn Bhd 17%
Scientex Leasing Sdn Bhd 10%
Lim Teck Meng Sdn Bhd 7%

By Standard & Poors
Analyst: Alexander Chia, ACA

"

Tongher- a safe stock for long-term investment

Tongher- a safe stock for long-term investment: "Results Update

The past 4 quarters has not been good for Tongher. When compared to the preceding 4 quarters, Tongher's turnover has declined by 37% to RM253 million while net profit has plummeted by 99% to RM0.3 million. In term of net profit, Tongher's past 4 quarters was the worst that it recorded in the past 5 years (see Chart 1). The drop in top-line in the last 2 quarters has effectively put the company back to QE30/9/2005 or QE31/3/2006. The drop in turnover was attributed to competitive market.


Table: Tongher's 8 quarterly results


Chart 1: Tongher's last 27 quarterly results

Financial Position

Despite the poor performance in the past one year, Tongher's financial position is still very healthy. As at 30/9/2009, its current ratio is at 6.7 times while Bank Borrowings to Shareholders' Funds stood at 0.1 times. More importantly, its cash balance stood at RM157 million or RM1.24 per share.

Other Development

In August 2009, Tongher had advised that the European Communities ('EC') had initiated an anti-dumping and anti-subsidy proceeding concerning imports of certain stainless steel fasteners and parts thereof originating in India and Malaysia. This proceeding may affect Tongher's financial performance in the next few quarters.

Valuation

Tongher (closed at RM1.69 as at Dec 21) is now trading at a PE of 15.4 times (based on annualized EPS of 11 sen). Price to Book is at 0.8 times (based on NTA per share of RM2.16 as at 30/9/2009). At this multiples, Tongher is deemed fairly valued.

Technical Outlook

Tongher has been dropping after making a high of RM4.50 in 2007. It hit a recent low of just under RM1.50 in October 2008 before rebounding. Since the announcement of the anti-dumping & anti-subsidy proceeding by the EC in August, Tongher's share price has been drifting lower. Presently, it is sitting on its long-term uptrend line support at RM1.65. It has strong horizontal support at RM1.50.


Chart 2:Tongher's weekly chart as at Dec 21, 2009 (Source: Tradesignum)

Conclusion

Despite the recent poor financial performance & the uncertainty regarding the anti-dumping & anti-subsidy proceeding by the EC, Tongher may be a good stock for very long-term investment. Its financial position is very healthy and its downside is limited as it has good support at RM1.50-65.

"

Tanjong ... Dec09

Tanjong ... Dec09: "Results Review & Earnings Outlook

 Tanjong’s 3QFY10 (Jan.) net profit rose 83.0% YoY to MYR177.8 mln,
driven by improved contribution from its overseas power plants, lower
business and development costs, the absence of windfall levy for
Powertek, and a turnaround at Tropical Island (TI) (EBIT of MYR0.9
mln). This was despite a slightly higher effective tax rate of 21.4% vs
18.6% in 3QFY09, as well as lower contribution from the gaming
division due to higher operating expenses, though prize payout was
maintained at 65%.

 Overall, the results were at the high-end of our expectations. This took
YTD net profit to MYR550.7 mln, accounting for 80.7% of our FY10
forecast of MYR682.2 mln.

 Note that contribution from its overseas power plants would have been
better if not for the gas curtailment affecting the Sidi Krir power plant in
Egypt. For TI, agreements have been entered with third parties for the
construction and provision of vacation homes to capture the growing
European market and to improve its average revenue per visitor.
Nevertheless, the impact may only be reflected in FY12 results.

 We maintain our profit forecasts with a two-year recurring net profit
CAGR of 7%, driven by steady growth in gaming and power earnings.
Tanjong has declared a 3rd interim dividend of 17.5 sen (less 25% tax)
(unchanged from the preceding year) payable on January 15, 2010.
We maintain our FY10 gross DPS forecast of 95 sen/share.

Recommendation & Investment Risks
 We downgrade Tanjong to Buy (from Strong Buy) following the rise in
the share price. Tanjong is well-managed and offers relatively
defensive earnings and a decent gross dividend yield of about 5.8%.

 The stock has underperformed the broad market with a YTD gain of
23.6% vs 43.7% for the FBM KLCI. At current levels the stock is
trading at FY11 PER of 9.3x, which is below the market and its peer
group. Potential share price catalysts include (1) earnings accretive
acquisitions, (ii) spinning off its gaming arm, (iii) approval for new
games, and (4) a sustainable turnaround for TI.

 We have raised our 12-month target price to MYR19.00 (from
MYR18.00) after rolling over our valuation period to FY11. Our
valuation continues to be based on a 10% discount to our estimated
sum-of-parts (SOP) value. The main components of our SOP valuation
are the power and NFO businesses, which we have valued on a DCF
basis. NFO cashflow is discounted using a cost of equity of 12% to
13%, and assumes terminal growth of 3%. Valuation for the power
division is based on a combination of DCF and PER.

 Risks to our recommendation and target price include: (i) changes in
gaming and power regulations, (ii) inefficient utilization of its excess
funds, (iii) stronger-than-expected forex fluctuations and (iv) lowerthan-
expected results from TI.

Summary:
Incorporated in England in 1926, Tanjong is
listed on both Bursa Malaysia and the London Stock
Exchange. The group has three core businesses, namely
power generation, gaming and leisure. It is part of Tan Sri
Ananda Krishnan’s Usaha Tegas group. The stock is a
component of the FBM KLCI and FBM EMAS.

"

CIMB…Watching Market Leader for Market Signal

CIMB…Watching Market Leader for Market Signal: "Being a leader in this rally, CIMB’s next move is worth a watch in providing guide as to the market direction. FBM KLCI and CIMB have had very close price correlation in this rally.

So far, CIMB has successfully recovered its ground after fencing off the 2 previous attempts by the bear in a test to the 50-DMA support. Let’s see if this being the case this time…today’s close is crucial.

"

GCorp's top-line & bottom-line grew further

GCorp's top-line & bottom-line grew further: "Results Update

GCorp announced its results for 3Q2010 ended 31/10/2009. It reported a net profit of RM24.1 million- an increase of 62.2% when compared to the same quarter last year but a slight drop of 1.5% when compared to the immediate preceding quarter. Turnover was up 24.7% q-o-q or 224% y-o-y to RM521 million. GCorp continued to benefit from the development projects and overseas operations, via Low Keng Huat (Singapore) Limited.


Table: GCorp's 8 quarterly results


Chart 1: GCorp's last 11 quarterly results

Valuation

GCorp (closed at RM1.07 as at Dec 17) is now trading at a PE of 6.4 times (based on its last 4 quarters' EPS of 16.6 sen). I have stated previously that GCorp deserves to be valued at a higher PE multiple (say, 10-12 times) as it is a mid-size diversified group with a good growth track record. On second thought, I think GCorp - being mostly involved in property development & construction- should be valued at a PE of about 7-8 times. Based on a PE of 7.5 times, its fair value would be about RM1.25.

Technical Outlook

GCorp has surpassed its medium-term downtrend line at RM1.00 in June 2009. Nevertheless, the share price failed to charge higher. Its immediate resistance is at RM1.15-20 and thereafter at RM1.35-40.


Chart 2: GCorp's weekly chart as at Dec 21, 2009_3.35pm (Source: Quickcharts)

Conclusion

Based on continued strong financial performance & favorable technical outlook, GCorp could be a good stock for long-term investment. Its present upside may be limited if we pegged its fair value at RM1.25.

"

Topglove reaching for its all-time high

Topglove reaching for its all-time high: "Results Update

Topglove announced its results for 1Q2010 ended 30/11/2009. Its net profit increased by 14.7% q-o-q or 90.9% y-o-y to RM65.2 million while turnover increased by 10.5% q-o-q or 22.3% y-o-y to RM472 million. The company attributed to its strong profit growth to t adapting the challenging business environment through cost-saving measures, improved productivity & product quality, and aggressive marketing strategies to maintain its position as a market leader.


Table: Topglove's 8 quarterly results


Chart 1: Topglove's last 14 quarterly results

Industry Outlook & Concerns

Due to the spread of the H1N1 flu, the demand for rubber glove has surpassed the existing output. To cope with the demand, every player in this industry has been increasing its capacity. More new capacity is currently being planned. There is a danger that the continuous expansion may result in a state of overcapacity. We have seen how this had badly affected the players in the fibreboard & MDF industry in 2008.

Under the current state of imbalance, producers enjoy increased profit margin. Once the state of equilibrium is reached, growth in profit margin will cease. However, a state of overcapacity will result in competition & a decline in profit margin. This is especially so as the increased raw material costs such as rubber latexx will have to absorb by the producers. See Chart 2 below.


Chart 2: Rubber latexx's weekly chart as at Dec 17, 2009 (Source: Malaysian Rubber Exchange)

Valuation

Based on its last 4 quarters' EPS of 68 sen & its closing price of RM9.62 on Dec 17, Topglove is now trading at a PE of 14 times. With its track record of strong growth, one can justify Topglove's relatively high PE multiple. However, one can also argue that the strong growth in top-line & bottom-line in the past one year was due to very favorable conditions (imbalance in demand & supply as well as the onset of the H1N1 flu). If either one of both of these conditions were to change, the financial performance will be affected. As such, I believe the upside for Topglove will be limited going forward.

Technical Outlook

Topglove is approaching its December 2006 high of RM10.00 soon. This level could pose a strong resistance to the stock.


Chart 3: Topglove's weekly chart as at Dec 21, 2009_3.30pm (Source: Quickcharts)

Conclusion

Despite the strong results, I think that it is time for some profit-taking for Topglove. This is especially so as the stock approaches the strong technical resistance posed by its all-time high of RM10.00.

"