Market Review

Malaysia: In line with its regional peers, the FBM KLCI skidded 1.3% after lingering in the negative territory, mainly dragged by the selling pressure in banking heavyweights. The lower liners ended mixed while the broader market closed mostly in the red. However, we noticed solar-related counters such as SAMAIDEN, CYPARK and SOLARVEST traded positively towards the closing of the day.

Global markets: Despite the worsening Covid-19 situation in the US where unemployment claims remains high, Wall Street flipped higher as the Dow (+0.2%) rebounded in the second trading session, supported by the gains in technology sector.

The Day Ahead

Expectedly, the toppish condition that warrants a pullback saw the FBM KLCI retreated. The meteoric rise since the start of the month has seen a shift in sentiment as investors were quick to lock in recent gains. Meanwhile, the uncertainty over the passing of Budget 2021 also weighed on the recent market sentiment. Going forward, we expect choppiness to prevail with mild bargain hunting activities to take place. Elsewhere, the lower liners are likely to trend higher, boosted by the liquidity driven market, coupled with the rotational play.

Sector focus: We continue to favour the plantation sector on the back of the rising CPO prices that has yet to demonstrate any reversal pattern at current juncture. The construction sector is also picking pace in anticipation of packages to be awarded for the flurry of mega-infrastructure projects.

FBMKLCI Technical Outlook

The FBM KLCI gapped down as the key index was languished in the negative territory for the entire trading session before finishing at its intraday low yesterday. With the pullback pattern taking shape, we reckon that the 1,570 will play a key support, followed by 1,540. Any recovery is expected to see gains limited towards the immediate resistances at 1,610, followed by 1,640. Indicators are negative as the MACD Histogram has extended another red bar, while the RSI is overbought.

Company Brief

Petronas Gas Bhd’s 3QFY20 net profit rose 36.9% YoY to RM591.0m, on the back of higher revenue contributions from its business segments. Revenue for the quarter gained 5.2% YoY to RM1.41bn. A third interim dividend of 18 sen per share, payable on 22nd December 2020 was declared. (The Star)

Bintai Kinden Bhd's partner Generex Biotechnology Corporation has signed a US$50.0m licensing and development deal for its Ii-Key vaccine platform technology. For each product developed using the Ii-Key technology, Generex will receive an upfront payment, full funding for product development, regulatory approval, and commercialisation in China, a success fee upon product approval, and a royalty to be determined on a case-by-case basis. (The Star)

Bumi Armada Bhd's 3QFY20 net profit fell 44.2% YoY to RM85.6m, due to lower operating profit and impairments totalling RM16.2m. Revenue for the quarter, however, increased 6.9% YoY to RM564.4m. (The Star)

Spring Art Holdings Bhd will launch its business-to consumer (B2C) website in February 2021 for its ready-to-assemble (RTA) furniture products. Spring Art is targeting to achieve up to RM3.0m sales from the B2C e-commerce website by 2021. (The Star)

Mestron Holding Bhd's 3QFY20 net profit jumped 183.4% YoY to RM3.1m, due to the general recovery in sales following the business interruptions experienced during the Movement Control Order (MCO) in March and April 2020. Revenue for the quarter increased 6.2% YoY to RM19.1m. (The Star)

Petron Malaysia Refining and Marketing Bhd’s 3QFY20 net profit soared 183.6% YoY to RM97.6m, on higher gross profit and cost rationalisations. Revenue for the quarter, however, fell 39.2% YoY to RM1.68bn. (The Edge)

Pharmianaga Bhd’s 3QFY20 net profit surged 200.0% YoY to RM1.4m, on lower operating expenditure during the MCO period. Revenue for the quarter declined 12.7% YoY to RM625.8m. (The Edge)

IGB Bhd’s 3QFY20 net profit slumped 74.4% YoY to RM17.0m, as a result of lowerincome from its property development, retail property investment and hotel divisions. Revenue for the quarter declined 23.2% YoY to RM279.8m. (The Edge)

Apex Healthcare Bhd’s 3QFY20 net profit improved marginally by 0.7% YoY to RM14.2m, helped by measures implemented to rightsize its operating costs in the new business environment. Revenue for the quarter dropped 6.4% YoY to RM169.1m. (The Edge)

Sunway Construction Group Bhd (SunCon)’s 3QFY20 net profit fell 28.2% YoY to RM24.0m, on lower construction margins. Revenue for the quarter, however, grew 4.2% YoY to RM419.4m. (The Edge)

AirAsia X Bhd’s 3QFY20 net loss widened to RM308.5m, from a net loss of RM229.9m recorded in the previous corresponding quarter, amid the current Covid19 air travel slump. Revenue for the quarter slumped 94.1% YoY to RM59.9m. (The Edge)

MBM Resources Bhd’s 3QFY20 net profit expanded 16.5% YoY to RM65.0m, on higher vehicle sales. Revenue for the quarter gained 16.5% YoY to RM600.0m. (The Edge)

Chemical Company of Malaysia Bhd’s (CCM) 3QFY20 net loss stood at RM1.6m vs. a net profit of RM3.7m recorded in the previous corresponding quarter, on lower earnings in its chemical division. Revenue for the quarter, however, grew 9.7% YoY to RM106.3m. (The Edge)

Mega First Corp Bhd’s 3QFY20 net profit surged 512.1% YoY to RM89.5m, on better earnings from both its resources and packaging and labels divisions. Revenue for the quarter increased 68.3% YoY to RM211.2m. (The Edge)

GHL Systems Bhd’s 3QFY20 net profit jumped 65.5% YoY to RM12.1m, as it recorded higher contribution across its business divisions. Revenue for the quarter rose 4.7% YoY to RM91.8m. (The Edge)

Amtel Holdings Bhd is planning a bonus issue with free warrants. The bonus issue will be on the basis of one bonus share for two existing shares held. The free warrants issued after the bonus issue will be issued on the basis of one free warrant for every two existing shares held. The warrants’ exercise price has been set at 65 sen. (The Edge)

Source: Mplus Research - 20 Nov 2020