Fund manager's stock pick

Stock pick: Thong Guan Industries

GIVEN the pessimistic outlook for many sectors within the market, investors will have no choice but look for companies that are insulated from slowing domestic demand, tough economic conditions and beneficiary of weak domestic currency.

The export sector is a sweet spot and given the run that we had seen in 2015 among glove, furniture and chips sector and selected others in the packaging sector. Narrowing down the search, Thong Guan Industries is a rare gem, despite rising some 63% in 2015, the stock is still deemed to be undervalued as it is trading at P/B of about 0.85x and annualised forward 2015 basic PER of about 10.5x, which is still a bargain.

Thong Guan is also a net cash company, with cash of about 20 sen per share. Growth for the company will basically come from new capacity installation, which is 33-layer nano-technology stretch film line is expected to be ready soon. Thong Guan also raised its production capacity of PVC food wrap to 720 million tonnes with the installation of 2 additional lines this year.

These are key drivers for both topline and bottomline growth. With the new capacity, Thong Guan is rightly placed to benefit to rising demand for plastic films and this could drive earnings by 10%-15% in 2016.

Some 90% of Thong Guan’s revenue comes from plastic films and the current low oil price basically translates to lower selling prices for plastic and hence increase in demand. With a favourable exchange rate, Thong Guan is a winner due to lower input cost as close to 80% of its revenue are derived from exports.

Stock pick: SKP Resources Bhd

EXCITEMENT in a company’s shares always hinges on its track record, ability to deliver strong earnings growth and generate cash flows to reward shareholders with dividends.

SKP Resources Bhd fits this bill. Despite reporting a profit growth of 43% in the last financial year, the company is expected to record a 3-year earnings CAGR of 68.2% until 2018 based on our projections.

This growth will be underpinned by the RM1bil annual orders from its main customer, Dyson, to produce cordless vacuum cleaners. Considering this new source of demand is only taking up about 25% of its newly enlarged 20-assembly line facility that came on board last September, growth potential is enormous. Dyson plans to launch 100 new products by 2018 to satisfy increasing demand for its products and services.

SKP has also mitigated operational risks by having specific agreements with clients to pass through nearly 100% of costs related to changes in raw material prices and currency fluctuations. This not only provided business stability but also some predictability.

SKP has a high ROE of 40% and a strong balance sheet. With current net gearing of only 4.5%, it is expected to turn net cash soon on the back of strong profit growth and cash flows. Thus, our expectations for future dividend yield to remain attractive around 4.6% to 6% are not far-fetched.

While having Dyson as a single largest customer can be considered as a major risk, the management is aware of that and has taken a proactive step by acquiring the subsidiaries of Technic to diversify the product range and customer base. It has also succeeded in growing the business through a win-win strategy that has strengthened the relationship, for the partnership to continue into distant future.

The fair value ascribed to SKP Resources shares is RM2 based on a calendar year (CY) 2016 price earnings (PE) multiple of 18 times, which will dwindle to 16 times and 10 times in CY17 and CY18 respectively on the back of robust earnings growth.

http://www.thestar.com.my/business/business-news/2016/01/02/fund-managers-stock-pick/?style=biz

Wow,so many quality picks towards the end. Those submitted later have an advantage of studying & filtering those stocks submitted by the participants earlier.

I saw a suggestion few days ago that all submission should be private & confidential until it's closed. The idea was excellent & i suggest that it should be adopted next year.

Tessa, bro Hot T now quite active in TJ telegram group.

My Stock Pick For Year 2016

1) CIHLDG - 15 %
2) MAGNI - 15 %
3) OWG - 30 %
4) TGUAN-WA - 10 %
5) TIENWAH - 30 %

Thank You

Wishing all happy new year. May 2016 be your year to conquer Mr Bursa & huat huat all the way.......cheers!!!!!

1MDB to sell 60% stake in Bandar Malaysia for 7.41bil

KUALA LUMPUR: 1Malaysia Development Berhad (1MDB) will sign a share sale and purchase agreement to sell 60% of its equity in Bandar Malaysia Sdn Bhd to a consortium for RM7.41bil, the final milestone in its rationalisation plan.

The buyer, a consortium known as IWH-CREC Sdn Bhd, is a 60:40 joint venture between Iskandar Waterfront Holding Sdn Bhd (IWH) and China Railway Engineering Corporation.

A press release issued by 1MDB before the start of the ceremony this morning said that the agreement marked the final milestone in the 1MDB rationalisation plan as presented to the Cabinet on May 29.

The agreement follows from the execution of the Binding Term Sheet with IPIC in June 2015 and the Share Sale and Purchase Agreement with CGN Group last month.

The statement said that the IWH-CREC Consortium has valued the Bandar Malaysia land situated in Sungai Besi at RM12.35bil.

"Accordingly, its 60% share will cost RM7.41bil. 1MDB will receive a 10% deposit of RM741mil upon execution of the Share Sale and Purchase Agreement, with completion of the transaction expected by end June 2016."

http://www.thestar.com.my/news/nation/2015/12/31/1mdb-to-sell-stake-in-bandar-malaysia-for-7_41bil/

Puerto Rico to default on some debts, will pay GO debt

Puerto Rico will default for the second time in five months, but will pay the bulk of $1 billion due on Jan. 4, including its most senior debt, Governor Alejandro Garcia Padilla said on Wednesday.

The Caribbean island's biggest payment, $328.7 million in general obligation debt, will be paid, the governor told reporters at a press conference in San Juan. More than half of that payment was made by taking revenues from other commonwealth agencies, he added.

A default on general obligation (GO) debt would have been seen as a more serious stumble because those bonds have the strongest legal protections of any of the island's obligations.

However, it also keeps alive the drama surrounding its deteriorating finances and $70 billion debt load as investors wait for the next shoe to drop.

The default opens the door to potential litigation from affected creditors, while the island must now turn its focus to trying to achieve a consensual debt restructuring with GO holders before its next big payment of $1.9 billion is due in July.

http://www.reuters.com/article/us-usa-puertorico-debt-idUSKBN0UD11B20151230

Technical Ideas - 31 Dec 2015 - IKHMAS (5268)

http://klse.i3investor.com/blogs/bursakakis/88910.jsp

KTC super bullish, already up 32.3 % in 3 trading days. Still a long way before 2016 ends.

@najib zamry...tdm chart wise very nice, breakout from the downtrend line and also bollinger band. Wish you luck.

Technical Ideas - 30 Dec 2015 - CIHLDG (2828)

http://klse.i3investor.com/blogs/bursakakis/88837.jsp

OWG
http://www.stockhut.com.my/news/89372

Poh Huat gets RM4.2 million fire damage claim

PETALING JAYA: Poh Huat Resources Holdings Bhd has received an interim payment of VND22 billion (RM4.2 million), as part of a fire damage claim for its Vietnam factory.

In a filing with the stock exchange, the company said it had received the first portion of VND11.0 billion on Dec 11 and the second portion of VND11.0 billion on Dec 23.

“The total settlement of the claim is pending finalisation and an announcement will be made upon confirmation/acceptance of the same,” it said.

Poh Huat’s factory building and warehouse in the province of Binh Duong caught fire on Aug 23.

The total net book value of the damaged factory buildings together with the plant and machinery are RM2.89 million, while damaged stock are worth RM6.12 million.

http://www.thesundaily.my/news/1649451

The company on Sept 17, had submitted a fire claim of US$3.62 million (RM15.57 million) to the insurance company, Bao Minh Insurance Corp

Poh Huat unit incurs RM9mil losses

PETALING JAYA: Furniture maker Poh Huat Resources Holdings Bhd, whose Poh Huat Furniture Industries Vietnam JSC unit’s factory was damaged in a fire on Aug 23, has assessed the losses at RM2.89mil for plant and machinery while stock losses amounted to RM6.12mil.

The fire had affected two factory blocks, which houses a finishing line and a finished goods warehouse, the company said in a stock-exchange filing

http://www.thestar.com.my/business/business-news/2015/12/29/poh-huat-unit-incurs-rm9mil-losses/?style=biz

Technical Stocks To Watch on 29/12/2015 - PESONA (8311), EFORCE (0065), COCOLND (7205) & TECGUAN (7439)

http://fatta888.blogspot.my/

Stock With Momentum: OKA Corporation

OKA (Fundamental: 2.4/3, Valuation: 1.8/3) triggered our momentum algorithm yesterday, closing 2.7% higher at 96 sen. With six plants scattered across Peninsular Malaysia, OKA is a major precast concrete products manufacturer catering to the infrastructure, construction and highway industries.

There appears no significant development recently save for quarterly results announcement on November 23. For 2QFYMar2016, net profit surged 23% y-y to RM6.2 million despite a 9.8% decline in revenue to RM37.6 million, thanks to favourable sales mix and lower operating expenses.

Concurrently, the company proposed an interim dividend of 1.5 sen per share, which goes “ex” on February 4. Dividends for FY2010-FY2015 ranged from 3 sen to 4 sen, translating into a net yield of 3.1-4.2%.

OKA, one of InsiderAsia’s Top 10 picks, is seen as a beneficiary of proposed infrastructure projects in West Malaysia. The stock currently trades at a trailing P/E of 9.1 times and 1.1 times book.

http://www.theedgemarkets.com/my/article/stock-momentum-oka-corporation

Insider Asia’s Stock Of The Day: UPA Corporation

UPA Corporation Bhd ( Valuation: 2.60, Fundamental: 2.50)

Given prevailing market uncertainties, investors are likely to gravitate towards more defensive stocks with high yields and, better yet, export exposure.

Founded in 1975, UPA (Fundamental: 2.5/3, Valuation: 2.6/3) has grown into one of the leading diary and paper products manufacturers in Asia. The paper and plastic division accounted for 88% of revenue in 2014 with the balance coming from distribution of printing related machines.

We like UPA for its attractive valuations and underlying fundamentals. It has a strong balance sheet with net cash and a good dividend track record. It also stands to benefit from the export business, which accounted for 50.6% of its 2014 revenue.

The company has consistently paid dividends, since 1999. Dividends totaled 8 sen per share annually over the past 2 years, translating into 4.02% yield. Furthermore, net cash stood at RM40.9 million, equating to 26.6% of its RM153.9 million market capitalization.

Additionally, UPA trades at an undemanding trailing P/E of 8.5 times and 0.8 times book. Valuations are cheap relative to its better-known peer, Asia File Corporation BHD ( Valuation: 2.00, Fundamental: 3.00), which currently trades at 13.6 times P/E and 1.7 times book.

Amidst a slew of disappointing corporate results this year, UPA has actually fared very well.

For 3Q2015, revenue rose 20.3% y-y to RM45.2 million, boosted by higher sales from the machine trading segment. In tandem with the revenue growth, net profit surged 76.4% y-y to RM5.7 million. The increased in margin was due, primarily, to higher other income of RM3.8 million as compared to RM2.3 million last year. Netting off the increase in other income would have resulted in 27.7% net profit growth. We believe the improved results can be attributed to their export exposure that benefited from the recent weakening of ringgit

http://www.theedgemarkets.com/my/article/insider-asia%E2%80%99s-stock-day-upa-corporation-1

Agreed with you Icon, paperplane2016 is a sadist. He only ventures into all the thread daily to take & never share. He will later shit on other's good work before leaving.

Just saw this research paper by Wilson & Yoke this morning
http://klse.i3investor.com/files/my/ptres/res33776.pdf

CCK (7035) - More Than Chicken & Egg

http://klse.i3investor.com/blogs/bursakakis/88762.jsp

CCK (7035) - More Than Chicken & Egg

http://klse.i3investor.com/blogs/bursakakis/88762.jsp

Good Gary, Keinhin is in my Top 10 Stocks For Year 2016 posted yesterday

Technical Ideas - 29 Dec 2015 - GHL (0021) | Keinhin (7199)

http://klse.i3investor.com/blogs/bursakakis/88767.jsp

Technical Ideas - 29 Dec 2015 - GHL (0021) | Keinhin (7199)

http://klse.i3investor.com/blogs/bursakakis/88767.jsp

Technical Ideas - 29 Dec 2015 - GHL (0021) | Keinhin (7199)

http://klse.i3investor.com/blogs/bursakakis/88767.jsp

Keinhin, based on latest q earning of 3.08 cts, should be value 1.23 forward PE of 10

Japan factory output drops 1 per cent on-month in November

TOKYO - Japan's factory output fell for the first time in three months in November, data showed on Monday, a sign that weak emerging market demand continues to cloud prospects for a sustained recovery in the world's third largest economy.

But manufacturers expect to increase output in the coming months, offering some relief for the Bank of Japan as it struggles to jump-start growth and accelerate inflation toward its 2 percent target.

Industrial output fell 1.0 percent in November from the previous month, more than a median market forecast for a 0.6 percent decline, trade ministry data showed.

"Factory output is moving sideways," the government said, keeping its assessment on industrial production unchanged from last month.

http://www.cnbc.com/2015/12/27/japan-factory-output-drops-1-percent-on-month-in-november.html

My ultimate purpose is to share. If it's for competition, I won't be showing you my cards. The share price may also run up these few days due to this posting, thus putting me in a disadvantage position.

soros228 http://themalaysianreserve.com/new/story/century-bond-jv-pt-bosowa-corporindo-set-plant-indonesia

27/12/2015 14:13

Vietnam economy grows at fastest pace in five years

HANOI - Vietnam reported that its economy grew 6.68 percent in 2015, the fastest pace in five years, helped by an expanding industrial sector and record foreign direct investment.

The annual growth rate exceeds a 6.55 percent forecast by Prime Minister Nguyen Tan Dung early this month and the official target of 6.2 percent, the government said on Saturday.

In the fourth quarter, gross domestic product (GDP) increased 7.01 percent from a year earlier, accelerating from 6.87 percent in July-September to be the year's best quarter, the General Statistics Office (GSO) said in a report.

The Southeast Asian nation's growth rate has been rising every year since 2012 as the country made reforms after being on the brink of a crisis after a property bubble burst and bad debts soared to reach 17.5 percent of total loans.

The 2015 rate "is an achievement of a five-year period but not a result of efforts of a single year," Nguyen Bich Lam, GSO head, told a media conference.

The GSO said growth has been supported by 9.4 annual percent growth in manufacturing and expansion of 10.8 percent, the highest in five years, for construction.

As of Dec. 15, actual foreign direct investment (FDI) this year was $14.5 billion, or 17.4 percent above the year-earlier figure.

http://www.cnbc.com/2015/12/26/vietnam-economy-grows-at-fastest-pace-in-five-years.html

@koonbee, all depends on next quarter profits. If recent revenue & profits can be maintained, then Icon's tp of 1.40 can be easily achieved.

@koonbee, seacera have many plans but the deals has not been confirmed. Almost all my picks already have firm commitments, either expansions or will be completed in 2016.

My Picks - Top 10 Stocks For Year 2016

http://klse.i3investor.com/blogs/bursakakis/88705.jsp

Bursa Malaysia likely to continue upward momentum

KUALA LUMPUR: Bursa Malaysia is likely to continue its upward momentum next week, with bargain hunting expected to push up the local index.

Affin Hwang Investment Bank Vice-President/Head of Retail Research Datuk Dr Nazri Khan Adam Khan said investors are expected to begin their pre-new year shopping in the last week of 2015.

"December and January are usually the seasonal buying months for stock market investors. With the oil prices starting to rebound, we expect some early buying for next year," he told Bernama.

He said he expects the local bourse to trade at between 1,660 and 1,680 points next week.

The sentiment would also be supported by the US Federal Reserve's decision to finally increase its interest rates, which has resolved uncertainty among investors, giving them a clearer investment direction.

"Also, investors are eagerly awaiting the China stimulus package early in January, which is expected to be in a positive way," he added.

The world's second-largest economy recently concluded its annual planning meeting, pledging to be more proactive and flexible in using fiscal and monetary policy to keep growth in a "proper range".

Back home, Nazri said the movement of the ringgit moving forward and the Trans-pacific Partnership (TPP) are expected to be the key drivers for the FBM KLCI's performance.

"The ringgit should go up as commodity prices rebound," he added.

http://www.thesundaily.my/news/1647573

Soros228, agreed with you.

Technical Ideas - 28 Dec 2015 - Mieco (5001) | Cenbond (7171) 

http://klse.i3investor.com/blogs/bursakakis/88680.jsp

Technical Ideas - 28 Dec 2015 - Mieco (5001) | Cenbond (7171)

http://klse.i3investor.com/blogs/bursakakis/88680.jsp

Congrat Icon, your articles has benefited many. Thank you.

Three Chinese industrial firms say they might miss bond payments

SHANGHAI (Dec 23): Three privately-owned Chinese industrial firms have said they might be unable to make bond payments due in less than a week.

Separate statements from the three unlisted firms were posted on the website of China's interbank market operator on Tuesday.

Huaian Farun Chemical Co and Huaian Jiacheng Hi-Tech Chemical Industry Co said they may be unable to make payments due Dec. 28 on a collective 350 million yuan (US$54.04 million)note maturing that day.

In their statements, both of the firms cited severe operating losses and cashflow difficulties as the reason.

Separately, Henan Sanli Carbon Products Co, a producer of graphite products and electrodes, said that due to business difficulties it was unsure if it could make payments due Dec 27 on a collective 270 million yuan note maturing that day.

In their statements, all three firms said that if they were unable to make payments, bond guarantor China Bond Insurance Co would be responsible for repayment.

During 2015, a growing number of Chinese companies have struggled to make bond payments on time. The construction, heavy industry and mining sectors remain under severe pressure from weak demand and falling factory gate prices.

Nonetheless, high-rated Chinese corporate debt has continued to perform well in the fourth quarter as falling interest rates and other monetary support have helped push down yields. That has raised concerns among analysts that some corporate bonds may be overpriced.

Earlier this year, several Chinese firms warned of defaults on collective notes, which are usually issued by small firms unable to secure credit on their own.

http://www.theedgemarkets.com/my/article/three-chinese-industrial-firms-say-they-might-miss-bond-payments

Rubber glove prices to go up next year

PETALING JAYA: Rubber glove producers are expected to increase product prices next year in a move to alleviate the cost of manufacturing following the latest increase in natural gas tariff, said the Malaysian Rubber Glove Manufacturers Association (Margma).

Margma estimates that this round of increase will mean an additional cost of 40 cents to 70 cents per 1,000 pieces of nitrile gloves and 30 cents to 50 cents for latex gloves.

Margma president Denis Low Jau Foo said in a statement yesterday that the 17.2% increase in the price of natural gas beginning Jan 1, 2016 comes too soon and too suddenly, with just 10 days' notice, and the quantum is too high.

It pointed out that it was only six months ago that Gas Malaysia increased the tariff by 10.27%, on July 1, 2015.

"Whist we understand the move, we are concerned that the announced quantum is too high, too sudden and a burden to us now. The 10 days' notice is too short and makes it difficult for manufacturers to manage the sudden increase in production costs as the selling prices for orders were already fixed months ahead," said Low.

He said that each manufacturer will have to adjust their pricing depending on the product type and their manufacturing costs.

Low noted that while the rubber gloves business is still robust with companies reporting good profits recently, the buyers are actually getting lower and lower price offers.

"The buyers are requesting lower prices every time there is an upward movement in the US dollar and a downward movement on commodity prices. This is resulting in profit margins being squeezed and may eventually hurt the rubber glove industry and the Malaysian economy in general," he added.

Meanwhile, HLIB Research in a separate report yesterday said any revision in the natural gas tariff will impact rubber glove manufacturers as, on average, it constitutes about 10% of total cost production.

"The final impact of the hike will actually depend on how soon rubber glove manufacturers are able to pass it to their end clients, which in our opinion, likely to be about three month lag," its analyst Nick Foo Mun Pang said.

Having anticipated the latest round of tariff increase, Foo has a neutral stance on the rubber products sector.

http://m.thesundaily.my/news/1646214

Multi-Code bags RM240mil contracts to supply Proton parts

KUALA LUMPUR: Multi-Code Electronics Industries (M) Bhd (MCE) expects to generate RM240mil in revenue from newly-clinched contracts to supply anti-theft systems, parking sensors and other parts for Proton cars.

The automotive electronics parts manufacturer told Bursa Malaysia that the five-year contracts also included the supply of power regulator systems, functional switches and ignition key set systems.

The supply of the parts will start in the second and third quarters of MCE’s financial year ending July 31, 2016.

The company estimated the initial investment outlay for the projects from Perusahaan Otomobil Nasional Sdn Bhd is RM1.55mil.

MCE, headquartered in Johor, began operations in 1990 to manufacture and supply car alarm systems, central locking and power window regulators. It has grown to become an original equipment manufacturer (OEM) specialising in a full spectrum of design, manufacture and supply of automotive electronics and mechatronics parts for the Malaysian and regional markets.

MCE shares gained 1 sen to close at 84 sen on Wednesday.

http://www.thestar.com.my/business/business-news/2015/12/23/multi-code-bags-rm240mil-contracts-to-supply-proton-parts/?style=biz

Thong  Guan  Industries  may  trend  higher  after  inching  above  the MYR2.87 level in its latest session.  Traders may buy as a bullish bias could  be  present  above  this  level,  with  a  target  price  of  MYR3.30. The stock may consolidate  if it falls back below the  MYR2.87  mark. In  this  case,  further  support  is  anticipated  at  MYR2.63,  where traders  can  exit  upon  a  breach  to  avoid  the  risk  of  a  further correction.
Sourse : RHB Research 23 Dec 2015

Magni-Tech 2Q net profit soars, pays 8 sen dividend

KUALA LUMPUR: Garments and plastic packaging products manufacturer Magni-Tech Industries Bhd saw its net profit soar 2.7 times year-on-year (y-o-y) to RM21.63 million in its second quarter ended Oct 31, 2015 (2QFY16) from RM8 million, largely due to the stronger US dollar against the ringgit during the period.

Revenue for the quarter rose 21.8% y-o-y to RM197.34 million from RM162.04 million, its filing with Bursa Malaysia yesterday showed.

The company also declared an interim dividend of five sen per share, along with a special dividend of three sen per share for the financial year ending April 30, 2016 (FY16). Both dividends are payable on Jan 26, 2016, and will go ex on Jan 7.

The group said its profit before taxation for the current quarter rose by 165%, mainly due to higher garment revenue and higher other operating income, which came about from the favourable currency exchange rate, and positive results from ongoing productivity improvement and cost-control measures.

It highlighted that its garment business was a beneficiary of the stronger greenback, which resulted in a 27.5% increase in the segment’s revenue, though that was partly offset by a 2.6% fall in revenue from its packaging business.

For the first half of its financial year (1HFY16), net profit more than doubled y-o-y to RM37.2 million from RM18.09 million, as revenue rose 15% y-o-y to RM391.16 million from RM339.28 million.

Going forward, the group expects its garments business to remain its major revenue contributor — it accounted for about 84.8% of its revenue for the financial period — and expects both its business divisions to remain profitable for the remainder of FY16.

Magni-Tech fell two sen or 0.48% to RM4.18 yesterday, which valued it at RM680.22 million.

US consumers lend economy a boost in November

WASHINGTON (Dec 22): US consumer spending picked up in November as households loosened their purse strings at the start of the holiday shopping season, boosting prospects for fourth quarter economic growth.

Spending rose by 0.3% last month after holding steady in October, according to data inadvertently released late on Tuesday by the Commerce Department.

http://www.theedgemarkets.com/my/article/us-consumers-lend-economy-boost-november

Insider Asia’s Stock Of The Day: REXIT (23/12/2015)

http://klse.i3investor.com/blogs/the_edge_insider_asia_stock/88607.jsp

Technical Ideas - 23 Dec 2015 - TGuan (7034)

http://klse.i3investor.com/blogs/bursakakis/88580.jsp

OPENSYS (0040): Price has breakout above the RM0.305 level. TP: RM0.325-RM0.345. SL: RM0.28.

Source :M+Online Research - 22 Dec 2015

Solution Engineering was testing the MYR0.42 resistance level in its latest session. Traders may buy if this level is breached in the near term, with a target price of MYR0.45, followed by MYR0.475. In the meantime, the stock may drift sideways if the MYR0.42 level cannot be breached. Support may be found at MYR0.395, where traders can exit upon a breach to avoid the risk of a further correction.

Source: RHB Research - 22 Dec 2015

Technical Ideas - 22 December 2015 - Solution (0093) | OpenSys (0040)

http://klse.i3investor.com/blogs/bursakakis/88510.jsp

Technical Ideas - 22 December 2015 - Solution (0093) | OpenSys (0040)

http://klse.i3investor.com/blogs/bursakakis/88510.jsp