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What Happened This Week

A short trading week in Malaysia with Tesla’s Bitcoin purchase dominating news media globally.

Dagang Nexchange (4456) was up 54%, on news that it won the bid for Malaysia only semiconductor foundry, Silterra. It was reported that Khazanah is looking for at least RM336 million price tag. The company’s latest publicly available balance sheet as at 30 September 2020 shows the company has a cash balance of RM42 million, and a net gearing of 0.26x. To complete its acquisition, the company could see its net gearing levering up close to 1.00x. This does not allow much remaining funding capacity for the company to expand and upgrade the existing facilities.

Opcom (0035) was up 54%, ahead of stake disposals by Mukhirz Mahathir and his wife on Wednesday, and disclosure on Friday.

Bursa Malaysia indices ended the week higher by 1.3% to 2.0%, with small caps leading the way.

Finance was the best performing sector. Healthcare was the worst performing sector, with gloves makers seeing lower share prices as the BursaBets/Telegram groups pump attempts fizzled out. Most sectors were up.

What We Are Watching For Next Week

The market may be in Chinese New Year mood and remains flat, unless unexpected events happened throughout the week. Else, not much that we are watching, except for continue earnings releases.

This Week Top 25 Most Active Stocks

By Volume

By Value

This Week Top 10 Short Trades Value

Year-to-date (YTD) Top 25 Gainers

Year-to-date (YTD) Top 25 Losers

This Week Earnings Results Released

17 companies announced their latest quarter results.

Aemulus (0181) announced its Q1FY2021 results. Comparing against Q1FY2020, revenue was up 163%, profit returned back into the black. Cumulative Free Cash Flow remained negative. Comparing against the immediate preceding quarter, revenue was up 59%, profit was up 49%.

The better performance was due to strong demand for the current quarter on mobile and tablets, RF filter, enterprise storage and automotive markets. The company also recorded a one time gain on the sales of intellectual properties.

Management expects the growth to continue in view of the growing demand and enquiries for the Smartphones/Tablets, CMOS Image Sensors (CIS), Enterprise storage and Automotive markets. Its new building has tripled its capacity to meet these demand.

Tomei (7230) announced its Q4FY2020 results. Comparing against Q4FY2019, revenue was up 23%, profit was up 336%. Cumulative Free Cash Flow was flat. Comparing against the immediate preceding quarter, revenue was down 7%, profit was down 32%. With the current MCO scenario, management has introduced various measures to soften the impact arising from this unprecedented event by employing alternative sales platforms such as e-commerce and social media to capture sales lost from its bricks and mortar outlets.

Genetec (0104) announced its Q3FY2021 results. Comparing against Q3FY2020, revenue was down 18%, profit was down 89%. Cumulative Free Cash Flow was up 28%. Comparing against the immediate preceding quarter, revenue was down 15%, profit was down 70%. The poor performance was due to lower sales volume.

Management anticipates that the growing trend for Electric Vehicles “EV" segment will accelerate and the company will possibly benefit from the global radical shift of demand for EV. Management believes it can expand its market share due to its involvement in developing its systems and technologies together with its clients.

Dialog (7277) announced its Q2FY2021 results. Comparing against Q2FY2020, revenue was down 43%, profit was down 23%. Cumulative Free Cash Flow turned negative. Comparing against the immediate preceding quarter, revenue was up 6%, profit was down 15%. The higher revenue was due to higher downstream activities. However, the lower profits was due to lower profit contribution by JVs and associates. Management remains confident that its well structured business model is able to manage and sustain itself through uncertainty and volatility.

The company continue to develop the Pengerang Deepwater Terminals (PDT) for the midstream sector. The company has recenlty enter into a long term storage agreement with BP Singapore for Phase 3 of PDT, which is expected to commence operations in mid-2021. The company is still in the early stages of developing PDT into the largest petroleum and petrochemical hub in Southeast Asia. It is also investing RM100 million for another 85,000 m3 storage capacity at its Langsat terminal facility, which will be completed by end of 2021. The remaining 17 acres of land at Langsat can add another 200,000 m3 storage capacity over the longer term.

The company is actively involved in maintenance services at RAPDID in the downstream sector, in addition to existing projects in Engineering, Procurement, Construction & Commissioning, (“EPCC”), Plant Maintenance & Catalyst Handling Services, and Specialist Products and Services. The upstream sector remained challenging due to lower demand for petroleum products as a result of the pandemic.

JF Tech (0146) announced its Q2FY2021 results. Comparing against Q2FY2020, revenue was up 54%, profit was up 184%. Cumulative Free Cash Flow was flat. Comparing against the immediate preceding quarter, revenue was up 2%, profit was flat.

Management is cautiously optimistic on its business prospects. Management will focus on expanding its product line along with the advancement in technology, anticipating demand to continue growing for 5G, automotive, IoT and other semiconductor applications.

Its new subsidiary JF TestSense Sdn Bhd for the new test interface business, is now able to provide total turnkey test contacting, interfacing and test program engineering services to semiconductor companies, moving the company up the semiconductor value chain.

Upcoming Earnings Results Releases Expected Next Week

Earnings season is expected to pick up towards the end of next week.

This Week Key Economic Data Releases

Malaysia’s Gross Domestic Product (GDP) contracted 3.4 per cent for the fourth quarter of 2020 as compared to a decline of 2.6 per cent in the preceding quarter. For overall year 2020, Malaysia’s GDP contracted 5.6 per cent as compared to 4.3 per cent in 2019. The last seen of Malaysia’s economic contracted was in 2009 (-1.5%) and this is the lowest contraction after 1998 (-7.4%). 

Next Week Key Economic Data Releases

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