LHH- a speculative play developing: "Background

Leong Hup Holdings Bhd ('LHH') is involved in poultry farming and breeding, processing and marketing of chickens and related products as well as manufacturing and trading of food products. In addition, it is also involved in housing development and oil palm cultivation.

Technical Outlook

Recently, LHH has broken to the upside of its symmetrical triangle at RM1.15-18 (see Chart 1). From the monthly chart (Chart 2), we can see that LHH has a cycle of 2 years, where the stock has a sharp rally. That cycle was broken in 2008. The same disruption in the 2-year cycle was also observed in 1998- during the Asian Financial Crisis. After the Asian Financial Crisis, LHH rose steadily until it peaked in 2000. Could LHH repeat the same performance now (with the Global Financial Crisis over) & re-establish the 2-year cycle again? Only time will tell...


Chart 1: LHH's daily chart as at Jan 8, 2010_9.25am (Source: Quickcharts)


Chart 2: LHH's monthly chart as at Jan 7, 2010 (Source: Tradesignum)

Financial results

I have appended below LHH's results for the past 8 quarters, which is nothing to shout about. In addition, I have appended the charts of its last 17-quarter results (Chart 3) and for the last 10-year results (Chart 4). Chart 3 presents the results in reverse chronological order, while Chart 4 presents the results in chronological order. We can see that LHH's top-line has been rising steadily while its bottom-line remain unchanged over the years.


Table: LHH's 8 quarterly results


Chart 3: LHH's 17 quarterly results


Chart 4: LHH's 10 yearly results

Conclusion

LHH is a speculative stock which may be played again. If you like to get into this play, you must do so asap on the next pullback.
"