Tuesday, August 27, 2013

The Store 9M13 EPS increased 29% YoY

1. Background. The Store Corporation Berhad (Code: TSTORE or 5711) is a leading operator of supermarkets, departmental stores and hypermarkets in the country. The Group has been listed on Bursa Malaysia since 1994. Overall, the Company focus on retail operations with presence throughout every state in Malaysia.
2. 9M13 EPS increased 29% YoY to 23.30 sen. According to its announcement to Bursa, the increase was mainly due to the improvement in revenue, saving in operating cost which derived from the consolidation of certain underperforming outlet with the outlet in the vicinity as well as increase in the other income.
3. 4Q13 should be weak. Last year in 4Q12 TSTORE registered 2.7 sen EPS. Conservatively can assume it manage to get the same 2.7 sen EPS in 4Q13 will make up FY13 forecast EPS of 26.0 sen.
4. Target Price of RM2.47. Assuming 9.5x PE on its FY13 EPS of 26.0 sen. From its current market price of RM2.20, upside is about 12%.

Thursday, August 15, 2013

Time to take profit on MAS

1. Entry at about 30.5 sen. I recommended MAS as stocks to watch on 19-Jun-2013. The post is with the title "3 STOCKS to BUY NOW... Foreign investors turned into net buyers". At that time MAS was trading at about 30.5 sen.

Original link: http://wallstreetklci.blogspot.com/2013/06/3-stocks-to-buy-now-foreign-investors.html

2. MAS share price up recently after Government says looking to sell MAS shares but depend on the price. 

3. 10% gain within 2 months from 19-Jun to 15-August today. For this kind of high risk stocks with little fundamental, I think 10% return is good and it's time to take the chips off the table.

4. Recap of what I wrote last time about MAS as per below...

MAS (Target RM0.34-RM0.35) WARNING: Only for daredevil
>> Nothing much to talk about on this Company fundamental.
>> But due to its strong backing from government, I think this stock unlikely to fall below RM0.30.
>> Technical RSI is only 33 now (very close to oversold level of 30).
>> Expect small rebound to RM0.34-RM0.35 in the next 1 month. Once hit, take profit fast.


Friday, August 2, 2013

FBMKLCI +5 points but net foreign selling RM262m?

1. Lose support in last 5 minutes yesterday. Those who track FBMKLCI closely yesterday would have noticed that at 445pm, FBMKLCI is still +10 points before suddenly erased 5 points of its gain at 450pm. At 450pm, all share price will be "locked" and all trades must be transacted at the same price transacted at that time until 5pm.
2. In the end, FBMKLCI ended only +5 points. And guess what? Net Foreign Selling is RM262m.
3. Net foreign selling RM810m in the last 3 days.
Tuesday:   Net Selling RM122m
Wednesday: Net Selling RM437m
Thursday: Net Selling RM262m
4. What does this mean? It's quite clear net foreign selling has returned and it may stay for about 1 week. Depending on foreign investor confidence in Malaysia, it may end earlier or later.
5. So KLCI may gain today but maybe only 5 points. This is caused by strong liquidity in local market. But KLCI can't appreciate significantly because it will attract major sell from foreign investors again.

Thursday, August 1, 2013

Besides Malaysia, who else downgraded by Fitch?

1. It's Petronas, Maybank and TM. All outlook has been now downgraded to "Negative" from "Stable".
2. In the short term, Maybank and TM will need to pay higher interest cost in the next round they go to the market to raise bond. This should impact their earnings if the bond yield rise significantly.
3. In the long run, this is a wake up sign that Malaysia better get its debt situation under control. Otherwise, the real downgrade on the "A-" situation for Malaysia is just a matter of time.
4. What to do?
>> If you do not believe much will done to ratify the issue raised by Fitch, then go open account which allow deposit in foreign denominated $. This will at least protect against Ringgit depreciation.
>> Diversify stock investment away from pure Malaysia stocks. I am looking at WILMAR (SGD 3.15) because this stock has been bashed down severely from SGD5.50 in the last 1 year. Their earnings will be released next week, hope it will be good then this stock can move.
>> Buy into stocks that fundamentally can benefit from weak MYR such as plantation companies, rubber glove makers and technology stocks.