M+ Online Research Articles

Author: MalaccaSecurities   |   Latest post: Thu, 24 Sep 2020, 10:14 AM


Mplus Market Pulse - 21 Feb 2019

Author:   |    Publish date:

Still Gaining, But Already Toppish

  • The FBM KLCI powered higher again, following optimism from the possible reinstatement of the East Coast Rail Link (ECRL) project with China. All the lower liners - FBM Small Cap (+1.8%), FBM Fledgling (+0.8%) and FBM Ace (+0.8%) rallied, while the Construction (+3.9%) and the Energy (+3.3%) sectors outperformed the rest of the broader market constituents.
  • Market breadth was bullish as advancers dominated the decliners on a ratio of 724-to-252 stocks, while traded volumes also jumped 36.2% to 3.82 bln amid hopes of a recovery in the construction sector.
  • Key-index charttoppers were Nestle (+RM1.50), PPB Group (+60.0 sen), Genting (+31.0 sen), Kuala Lumpur Kepong (+30.0 sen) and Petronas Dagangan (+30.0 sen). Meanwhile, notable winners include sin stocks like BAT (+88.0 sen), Carlsberg (+60.0 sen) and Heineken Malaysia (+26.0 sen), followed by Fraser & Neave (+90.0 sen) and Hengyuan Refining (+29.0 sen).
  • On the opposite side of the trade, Dutch Lady (-36.0 sen), Genting Plantations (- 10.0 sen), Rapid Synergy (-10.0 sen), Bintulu Port (-7.0 sen) and Formosa Prosonic Industries (-7.0 sen) were the big losers. The only loser on Bursa Malaysia, meanwhile, was Hartalega (-2.0 sen) as it faces rising costs and increasing competition.
  • Asian equities traded higher on Wednesday – led by renewed expectations of a short-term tariff delay as the U.S. and China irons out a longerterm trade agreement. The Nikkei pushed forward after notching 0.6% gains, despite weaker-than-expected export data. The Shanghai Composite also ekedout 0.2% gain after swinging in and out of the negative territory, together with the Hang Seng index (+1.0%), while ASEAN stocks closed mostly higher.
  • Major U.S. indexes – The Dow (+0.2%), the S&P 500 (+0.2%) and the Nasdaq moved incrementally higher as investors digested the latest round of earnings reports and the minutes from the Federal Reserve’s last meeting.
  • London markets rallied on Wednesday as news of major share buybacks by Lloyds and Glencore softened the blow from weak earnings performance. The FTSE added 0.7%, although the run-up was limited by losses in Sainsbury after U.K.’s regulators hinted at the possibility of blocking its merger with its competitor Asda Group. The proposed merger could create the largest supermarket group in Britain and thus, poses significant anticompetition risks. The DAX and the CAC also added 0.8% and 0.7% respectively amid stronger commodity prices.

The Day Ahead

  • Stocks on Bursa Malaysia continues to head higher amid the sustained buying of index linked stocks as they play catch up to the regional equities gains. However, the past two session’s gains have left the key index overbought. At the same time, valuations are also inching closer above its long term average that could place it in the expensive zone.
  • With few negative market and economic developments, we see further near term upsides albeit the gains could be limited amid the already toppish market environment. This could set the stage for some mild profit taking actions that will limit the upsides to the 1,730-1,733 levels. On the downside, there is support at the 1,720 level, followed by the 1,711 level.  The lower liners and broader market shares are also lingering in the oversold region with a pullback already due. However, the current market strength could extend their upsides for longer, albeit we think that the gains could be capped as profit taking activities are likely to pick up pace.

Company Update

  • Teo Seng Capital Bhd’s 4Q2018 net profit added 19.3% Y.o.Y to RM17.3 mln, mainly boosted by the sharp increase in the average selling prices (ASP) of chicken eggs, coupled with the lower feed cost. Revenue for the quarter gained 26.3% Y.o.Y to RM147.2 mln. For 2018, cumulative net profit skyrocketed 777.5% Y.o.Y RM30.4 mln. Revenue for the period climbed 16.0% Y.o.Y to RM490.3 mln.
  • The reported results came above expectations, making up to 160.7% of our previous estimated net profit estimate of RM18.9 mln. The reported revenue also came above our expectations, amounting to 107.9% of our full-year forecast of RM454.2 mln. The variance in the bottom line was mainly due to the surge in average selling prices of chicken eggs which led to the higher margins.


  • With the reported earnings coming above our expectations, we raised our net profit forecast by 23.1% and 19.4% to RM34.3 mln and RM37.7 mln for 2019 and 2020 respectively, reflecting the sharp increase in the ASP of chicken eggs. However, we downgrade Teo Seng to HOLD (from BUY), but with a higher target price of RM1.45 (from RM1.05) as we reckon that current valuations, trading at PERs of 11.5x and 10.5x for 2019 and 2020 respectively, are already close to fair after its share price rallied 36.8% year-todate.
  • We arrive our target price by ascribing a target PER of 12.5x (unchanged) to its revised 2019 EPS of 11.4 sen. The ascribed target PER is at a 25.0% discount to its peer average of 16.5x, due to its smaller market capitalisation.


  • Matrix Concepts Holdings Bhd’s 3QFY19 net profit slipped 31.1% Y.o.Y to RM48.6 mln, dragged down by product mix that yielded a lower margin. Revenue for the quarter, however, rose 7.3% Y.o.Y to RM285.7 mln.
  • For 9MFY19, cumulative net profit fell 9.7% Y.o.Y to RM151.7 mln. Revenue for the period, however, grew 19.8% Y.o.Y to RM769.0 mln. (The Star Online)
  • Ahmad Zaki Resources Bhd has bagged a RM150.5 mln contract from Rantau Properties Sdn Bhd. The contract is for refurbishment and upgrading works to the existing Petronas office complex (Block A) and Kompleks Operasi Petronas 1 (Block B) and construction and completion of new annex building (Block C), infrastructure and landscaping works on part of Lot 52271 and 52272 in Kemaman, Terengganu. The contract works shall be completed within 26 months from the date for possession of site on 1st March 2019. (The Star Online)
  • Ranhill Holdings Bhd has announced that it intends to partner with Thai-based Treasure Specialty Co Ltd (TS Co) to export electricity from Kedah to Thailand. The two companies are working out a proposal for a 1,150 MW combined cycle gas turbine (CCGT) power plant in Kedah. TS Co is currently the advisor to Ranhill’s water businesses in Thailand and will be its joint developer and co-investor in Ranhill’s new water concessions in Thailand. (The Edge Daily)
  • Public Bank Bhd's 4Q2018 net profit fell 5.4% Y.o.Y to RM1.41 bln, as the group incurred higher other operating expenses and higher non-operational foreign exchange loss during the period. Revenue for the quarter gained 5.2% Y.o.Y to RM5.63 bln.
  • For 2018, cumulative net profit added 2.2% Y.o.Y to RM5.59 bln. Revenue for the year climbed 5.7% Y.o.Y to RM22.04 bln. (The Edge Daily)
  • Heineken Malaysia Bhd's 4Q2018 net profit grew 6.8% Y.o.Y to RM100.0 mln, boosted by to higher revenue and efficient and effective management of commercial spend and overheads. Revenue for the quarter added 12.3% Y.o.Y to RM662.3 mln.
  • For 2018, cumulative net profit gained 4.6% Y.o.Y to RM282.5 mln. Revenue for the year increased 8.3% Y.o.Y to RM2.03 bln. (The Edge Daily)
  • MSM Malaysia Holdings Bhd’s 4Q2018 net loss stood at RM10.4 mln vs. a net profit of RM9.3 mln recorded in the previous corresponding quarter on lower average selling price and higher finance cost. Revenue for the quarter contracted 16.4% Y.o.Y to RM531.1 mln.
  • For 2018, cumulative net profit stood at RM35.6 mln vs. a net loss of RM36.3 mln in the previous year. Revenue for the year, however, fell 16.1% Y.o.Y RM2.22 bln. (The Edge Daily)
  • IOI Corp Bhd's 2QFY19 net profit sank 67.2% Y.o.Y to RM195.5 mln, dragged down by lower contribution from the plantation segment, coupled with net foreign currency translation loss on its foreign-currency denominated borrowings and deposits. Revenue for the quarter slipped 6.4% Y.o.Y to RM1.88 bln.
  • For 1HFY19, cumulative net profit slipped 64.5% Y.o.Y to RM339.3 mln. Revenue for the quarter declined 3.1% Y.o.Y to RM3.76 bln. A first interim dividend of 3.5 sen, payable on 22nd March 2019, was declared. (The Edge Daily)
  • D&O Green Technologies Bhd’s 4Q2018 net profit improved 77.7% Y.o.Y to RM12.3 mln, on the back of higher revenue and better gross profit margins. Revenue for the quarter rose 6.1% Y.o.Y to RM140.6 mln.
  • For 2018, cumulative net profit gained 60.8% Y.o.Y to RM36.0 mln. Revenue for the year increased 5.9% Y.o.Y to RM490.8 mln. (The Edge Daily)
  • Favelle Favco Bhd have secured six contracts to supply tower cranes and offshore cranes to various clients for a cumulative sum of RM61.1 mln. Its units, Favelle Favco Cranes Pty Ltd, Favelle Favco Cranes (USA), Inc and Favelle Favco Cranes (M) Sdn Bhd received the purchase orders or letter of intent for the contracts from the period of 1st November 2018 till 20th February 2019. (The Edge Daily)  

Source: Mplus Research - 21 Feb 2019

Share this

Related Stocks

Chart Stock Name Last Change Volume 
MATRIX 1.70 -0.01 (0.58%) 104,400 
AZRB 0.22 -0.005 (2.22%) 634,800 
RANHILL 0.85 -0.025 (2.86%) 71,600 
HEIM 20.82 -0.68 (3.16%) 20,100 
IOICORP 4.46 -0.04 (0.89%) 349,100 
MSM 0.475 -0.005 (1.04%) 197,000 
D&O 0.99 -0.01 (1.00%) 1,417,500 
FAVCO 2.32 +0.02 (0.87%) 77,200 

  Be the first to like this.

I3 Messenger
Individual or Group chat with anyone on I3investor
MQ Trader
Perform Technical & Fundamental Analysis on Stocks
MQ Affiliate
Earn rewards by referring your friends

426  309  570  1066 

Top 10 Active Counters
 ASB 0.16-0.03 
 MNC 0.045-0.005 
 MTRONIC 0.085+0.005 
 MTOUCHE 0.065-0.005 
 KANGER 0.245-0.015 
 PERMAJU 0.205+0.005 
 LAMBO 0.0350.00 
 MMAG-WB 0.14-0.03 
 PARKSON 0.1350.00 
 TOPGLOV 8.45+0.43 


1. The Equity Market Index Benchmark in Malaysia CMS
2. Trading Scenarios of Derivatives Bursa Derivatives Education Series
3. Derivatives 101 Bursa Derivatives Education Series
4. Why Trade FKLI? Bursa Derivatives Education Series
5. MQ Trader - Introduction to MQ Trader Affiliate Program MQ Trader Announcement!