Market Review

Malaysia: Profit taking activities sent the FBM KLCI (-0.3%) lower yesterday after two sessions of gains as the market sentiment was mixed on faltering vaccine rally. The lower liners finished lower, while the broader markets also closed mostly in the red.

Global markets: The US stocks slipped as the Dow (-1.2%) fell after more parts of the country imposed restriction amid mounting Covid-19 cases, overshadowing the positive Pfizer and BioNTech vaccine development which has 95% effectiveness in the late-stage trial. European stockmarkets ended in green, while Asia stockmarkets also closed mostly higher.

The Day Ahead

Signs of profit taking activities are emerging on the FBM KLCI following the key index breakthrough above the 1,600 psychological level. We now expect a consolidation to take place as investors digest their recent gains. The sideways trend is expected to allow fresh legs for further upside over the near term. In the meantime, the lower liners are expected to consolidate as well with the investors focusing on the barrage of corporate earnings releases.

Sector focus: Vaccine-related stocks are on the move again as markets are now expecting the vaccine to be available in 2021. Meanwhile, we continue to like the plantation sector owing to the potential strong corporate earnings that reflects the rally in CPO prices, whilst the energy sector may take cue from the stabilising crude oil prices.

FBMKLCI Technical Outlook

The FBM KLCI was traded largely in the negative territory as the key index remained close above the daily EMA9 level. With the 1,600 level continues to hold a consolidation is expected to take place with immediate resistances at 1,615, followed by 1,645. Immediate support is pegged at 1,570, followed by 1,540. Indicators remained positive as the MACD Histogram has extended another green bar, but the RSI is slightly overbought.

Company Brief

Matrix Concepts Holdings Bhd’s 2QFY21 net profit rose 27.8% YoY to RM75.1m, on recognition of favourable product mix and expedited construction progress. Revenue for the quarter, however, fell 7.3% YoY to RM262.0m. A second interim dividend of 3 sen per share, payable on 8th January 2021 was declared. (The Star)

Berjaya Sports Toto Bhd’s 1QFY21 net profit rose 1.3% YoY to RM67.8m, due to lower prize payout and reduced operating expenses. Revenue for the quarter, however, fell 6.3% YoY to RM1.35bn. An interim dividend of 4 sen a share, payable on 19th January 2020 was declared. (The Star)

Sam Engineering & Equipment (Malaysia) Bhd’s 2QFY21 net profit eased 24.7% YoY to RM15.5m, due to lower contribution from the aerospace segment. Revenue for the quarter, however, rose 5.0% YoY to RM220.9m. (The Star)

Petronas Chemicals Group Bhd (PetChem)’s 3QFY20 net profit fell 14.8% YoY to RM471.0m, on lower product prices. Revenue for the quarter declined 5.7% YoY at RM3.46bn. (The Edge)

TA Enterprise Bhd’s 3QFY20 net loss widened to RM65.8m, from a net loss of RM14.9m recorded in the previous corresponding quarter, due to bleeding hotel operations as a result of Covid-19. Revenue for the quarter declined 14.6% YoY to RM189.7m. (The Edge)

TA Global Bhd’s 3QFY20 net loss stood at RM162.4m vs. a net profit of RM6.4m recorded in the previous corresponding quarter, following an RM179.6m impairment loss in its hotel business. Revenue for the quarter slipped 54.5% YoY to RM87.4m. (The Edge)

TSH Resources Bhd’s 3QFY20 net profit soared 299.2% YoY to RM24.1m, on higher palm commodity prices. Revenue for the quater gained 7.2% YoY to RM194.2m. (The Edge)

Thong Guan Industries Bhd 3QFY20 net profit increased 13.0% YoY to RM19.6m, on more premium products sold. Revenue for the quarter, however, fell 4.2% YoY to RM245.8m. An interim dividend of one sen per share, payable on 18th January 2021 was declared. (The Edge)

Amway (Malaysia) Holdings Bhd’s 3QFY20 net profit jumped 47.1% YoY to RM15.6m, on higher sales. Revenue for the quarter increased 37.0% YoY to RM322.0m. A dividend of five sen per share, payable on 18th December 2020 was declared. (The Edge)

Batu Kawan Bhd’s 4QFY20 net profit dropped 11.9% YoY to RM85.2m, on unrealised losses from its plantation segment and forex losses from its investment holdings activities. Revenue for the quarter, however, increased 4.9% YoY to RM4.12bn. (The Edge)

Eita Resources Bhd is proposing a bonus issue with free warrants. The bonus issue will be a one-for-one issue. Meanwhile, the warrants will be issued on the basis of one free warrant for every three existing shares held. The plans will involve the issuance of up to 130.0m bonus shares and 86.7m warrants. The exercise price of the warrants has been fixed at 70 sen each. (The Edge)

Kuala Lumpur Kepong Bhd (KLK)’s 4QFY20 net profit grew 19.3% YoY to RM208.8m, driven by favourable crude palm oil (CPO) and palm kernel (PK) selling prices. Revenue for the quarter added 5.3% YoY to RM4.00bn. (The Edge)

Source: Mplus Research - 19 Nov 2020