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2021-12-09 06:38:39 Come join our final webinar for 2021 - Growth Investing Masterclass, happening next Saturday, 11th Dec from 10.30am to 11.45am. We have invited renowned speaker, Mr. Shane Choo to share his professional insights on growth investing!

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2021-12-09 03:53:21 Technical tracker - HLIB Retail Research – 9 December 2021

SIMEPLT(RM3.76) – Risk reward ratio has become attractive

CPO prices may stay buoyant until 2Q22, mainly led by persistent labour shortage in Malaysia as well as sustainable robust demand coming from China and India. According to MPOB, 4QTD average CPO prices stood at RM5,202 (17% higher against 3Q21 average of RM4413), which is expected to boost SIMEPLT’s upstream business. Despite consensus’ view that CPO prices may start to trend down more noticeably by 2Q22, we do not rule out the possibility of a re-rating on CPO prices assumption in the wake of: (1) labour shortage in Malaysia is not resolved timely; (2) fertilizer prices continue to escalate and may eventually hurt CPO output; and (3) La-Nina events may strengthen in the coming months.

Undemanding valuation. Being the highest weighted palm oil company in Bursa Malaysia Plantation Index (21.8% as of 8 Dec), SIMEPLT performance was pathetic, sliding 25% YTD to RM3.76 (vs KLCI -8% YTD and BURSA Plantation Index -11.9%) yesterday, mainly driven by intensifying selling pressure from institutional fund amid lingering ESG issue. Nevertheless, we see values resurface after recent sell down, underpinned by undemanding valuation of 14.4x FY22 P/E (6%% discount against peer’s average of 15.4x) together with a decent dividend yield of 3.2% in FY22. Note that, our FY22 EPS had factored in the higher fertilizer cost (which SIMEPLT has secured most of its fertilizer requirement).

Will the positive Dec return strike continue? Since listed on the main board in 2017, SIMEPLT had achieved an average return of 8.6% in December (100% winning rate), mainly due to the possibility of year-end window dressing activities. For 2021, we believe the history would repeat due to (1) undemanding valuation; (2) majority of the outstanding shares are held by funds (Figure# 4); and (3) material YTD negative returns.

Trading near its uptrend support. Technically, SIMEPLT is trading near its uptrend channel support of RM3.67-3.80 with indicators showing uptick bias. In the wake of the higher lows pattern, a decisive breakout above RM3.86 will spur prices higher towards RM4.25-4.40 territory. Cut loss at RM3.58.


Collection range: RM3.65-3.70-3.76

Upside targets: RM4.00-4.25-4.40

Cut loss: RM3.58

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Technical tracker - HLIB Retail Research – 9 December 2021

SIMEPLT(RM3.76) – 风险回报率变得有吸引力

*原棕油价格可能会保持强势直到2022 年第二季度*，这主要是由于马来西亚劳动力短缺的问题持续以及来自中国和印度的强劲需求。根据 MPOB 的数据，第四季度至今原棕油平均价格为 5,202 令吉（比 21 年第三季度的平均价格 4413 令吉高出 17%），预计这将提振 SIMEPLT 的上游业务。尽管市场普遍认为原棕油价格可能会在 2022 年第二季度开始更明显地下跌，但我们认为重新评估原棕油价格的可能性依然存在若：(1) 马来西亚的劳动力短缺没有及时解决； (2)化肥价格持续上涨，最终可能会影响棕油产量； (3) 未来几个月拉尼娜事件可能会加强。

*估值不高*。作为马股种植指数中权重最高的棕油公司（截至 12 月 8 日为 21.8%），SIMEPLT 的股价表现并不亮眼，年初至今下滑 25% 至 RM3.76 （对比隆指YTD表现为 -8%和种植指数YTD -11.9%） ，主要是由于ESG 的问题促使机构基金的抛售压制了股价的表现。尽管如此，我们认为在最近的抛售后价值已经浮现，其22 财年市盈率为14.4 倍的低估值（相对于同业平均 15.4 倍的折让 6%）以及 2022 财年高达 3.2% 的股息收益率。值得一提的是，22 财年的每股收益已经包括了肥料成本高昂的影响（SIMEPLT 已锁定其大部分肥料需求）。

*12 月会有积极的股价表现吗？*自2017年主板上市以来，SIMEPLT在12月份实现了平均8.6%的回报率（100%成功率），我们认为是年终橱窗粉饰的可能性。对于 2021 年，我们认为历史将重演，原因是 (1) 估值不高； (2) 大部分流通股由基金持有； (3) 年初至今较差的股价表现。

*股价目前仍然在上升趋势线支撑*。从技术方面，SIMEPLT 目前仍处于其上升通道，支撑位 RM3.67-3.80 ，技术指标也显示有上涨倾向。在更高的低点形成之后，股价若成功突破 RM3.86 将刺激股价上探至 RM4.25-4.40 区域。投资者可以把 RM3.58 设为止损。


买入范围：RM3.65-3.70-3.76

上行目标：RM4.00-4.25-4.40

止损：RM3.58


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2021-12-07 05:42:16 HLIB Retail Research – 7 Dec - Bullish Tracker:

IGBCR(RM0.60) : Main market, REITS

Grossly oversold, expecting technical rebound

Entry: RM0.59-0.60
Stop Loss: RM0.57
Resistance: RM0.63-0.66-0.70
Target price: RM0.66-0.70
Risk profile: Moderate

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2021-12-07 03:43:16 Technical tracker - HLIB Retail Research – 7 December 2021

JHM(RM1.70) – Futuristic yet trading at undemanding valuations

LED lighting modules expert. Listed in July 2006, JHM is one of the main Electronics Manufacturing Services (EMS) providers in providing one-stop solutions for LED Lighting modules. It is mainly engaged in the manufacturing and assembly of surface mount technology and PCBA assembly for LED lighting modules. Its LED lighting modules are mainly catered for the well-known Tier-1 automotive manufacturers. The automotive segment is the largest revenue contributor to the Group, contributing approximately 62% to FY20 revenue while the industrial segment and others contributed 37% and 1%, respectively.

Risk-reward profile turns attractive. Being an EMS provider for automotive players, JHM is deemed to be a good proxy to ride on the sector’s recovery. Although the global chip shortage continues to put a cap on global car production, the orders from JHM’s existing automotive customers remain robust, with global automotive LED lighting market expected to grow at a CAGR of 12.9% in 2020-2027, based on Precedence Research’s forecast. On the other hand, its industrial segment which is engaged in 5G signal test modules and test solutions for electric vehicle charging applications is another key earnings driver. Despite the promising outlook, JHM is currently trading at an undemanding valuation of 23.0x FY22 P/E (49% and 28% discounts against D&O and KLCITEC FY22 P/E of 45.3x and 32x, respectively).

Better 4Q and beyond To recap, JHM’s 9MFY21 core earnings of RM13.1m registered a 5.1% decline YoY, primarily affected by the implementation of Phase 1 restrictions (only allowed to operate at 60% capacity). Nevertheless, we opine the worst is likely over and expect JHM to perform better in 4Q21 and 2022, underpinned by (1) ramp-up in automotive orders and fulfillment of backlogged orders; (2) production returned back to the optimal levels since Sept; (3) new automotive projects that is expected to contribute by FY22.

Grossly oversold. Technically, JHM is grossly oversold and is poised for a technical rebound, supported by upticks in technical indicators. A successful rebound above RM1.81 will spur the prices toward RM1.90- 2.00 levels. Cut lost at RM1.59.


Collection range: RM1.62-1.65-1.68

Upside targets: RM1.89-1.92-2.00

Cut loss: RM1.59

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*JHM (RM1.70) –前景亮利, 估值便宜*

*LED照明模组专家*。于 2006 年 7 月上市，JHM作为 LED 照明模块的主要电子制造服务 (EMS) 供应商之一，从事LED照明模组表面贴装技术及PCBA组装的制造与组装，并销售至知名的Tier 1供应商。汽车部门是本集团最大的收入贡献者，占 20 财年收入约 62%，而工业部门和其他分部贡献 37% 和 1%。

*风险回报比率转正*。作为一家 供应给汽车厂的EMS，JHM 被认为是该行业复苏的受益者。尽管全球芯片短缺继续限制全球汽车总生产量，但 JHM 现有汽车客户的订单仍然强劲，根据 Precedence Research 的预测，全球汽车 LED 照明市场预计在 2020-2027 年将以 12.9% 的复合年增长率增长.另一方面，其从事电动汽车充电应用的 5G 信号测试模块和测试解决方案的工业部门是另一个主要的盈利驱动力。尽管前景乐观，但JHM 23.0 倍的 FY22 市盈率依然在低估的情况（分别低于D&O 和 KLCITEC 45.3 倍和 32 倍的FY22 市盈率 49% 和 28%）。

*前景亮利.* JHM 9MFY21 的核心盈利为 1,310 万令吉，同比下降 5.1%，主要受第一阶段限制令（仅允许以 60% 的产能运营）所影响。尽管如此，我们认为最坏的情况可能已经过去，并预计 JHM 在 2021 年第四季度和 2022 年的表现会更好，这得益于 (1) 工厂正加产以履行因MCO而堆积的订单； （2）生产线自9月回到最优生产规模； (3) FY22将有新的汽车项目。

*短期可能技术反弹。* 从技术分析上，JHM 已严重超卖，并准备进行技术反弹。成功反弹至 1.81 令吉以上将刺激价格升至 1.90-2.00 令吉的水平。投资者可以把止损设置在 RM1.59。


买入范围：RM RM1.62-1.65-1.68

上行目标：RM1.89-1.92-2.00

止损：RM1.59

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2021-12-06 06:28:39 Bullish Tracker Results for November

We’ve achieved 69.2% successful hit rate and 2.25% return !

Start trading today with HLeBroking: www.hlebroking.com.

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2021-12-06 03:44:46 Technical tracker - HLIB Retail Research – 6 December 2021

BIMB(RM2.91) – One of the banks with lowest GIL ratio

Solid yet trading at undemanding valuation. After correcting 14.5% from a high of RM3.40 (21 Oct) to RM2.91 last Thursday, BIMB’s risk-reward ratio has turned attractive, underpinned by undemanding 0.7x FY22 P/B (56% and 41% discount against 5-year average of BIMB and Bursa Finance index of 1.6x and 1.2x, respectively) coupled with 5.2% dividend yield. Although we expect the overall gross impaired loans (GIL) ratio for the banking industry to rise towards the end of the repayment assistance, we are not overly concerned on BIMB given its solid asset quality among smaller-sized banks where B40 group constitutes only <10% of its consumer book. All in all, we opine BIMB is one of the banks that have the lowest credit risk in the industry.

The worst is likely over for banks. To recap, Oct 2021 system loans growth gained traction (Oct: +3.3% YoY vs Sep: +2.9% YoY), lifted by both household and business segments. Encouragingly, this is in line with our expectations (FY21E:+3.0-3.5%), all thanks to the reopening of the economy and relaxation of the Covid-19 movement restriction. We believe Covid-19 woes will likely fizzle out in 2022 as we reckon the state of the economy and banking sector will only get better in time. Hence, we continue to like the banking sector as a broad base recovery proxy especially since the valuations of the banking sector is now undemanding. Overall, HLIB retains an Overweight rating in banking sector and a BUY rating for BIMB with TP RM 4.80 (+64% potential upside).

Building solid base. Given the recent lacklustre performance in the overall Bursa stock exchange (8 out of 10 negative breadths over the last ten trading days), we opine investors will be incentivised to invest in value stocks such as BIMB to safeguard capital in the volatile market whilst achieving good returns. Technically, BIMB is building a solid base near RM2.80-2.95 levels. A successful breakout above psychological level of RM3.00 will spur the prices toward RM3.25-3.42 territories. Cut lost at RM 2.77.


Collection range: RM2.80-2.85-2.91

Upside targets: RM3.18-3.25-3.42

Cut loss: RM2.77

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2021-12-03 07:26:59 Come join our final webinar for 2021 - Growth Investing Masterclass, happening next Saturday, 11th Dec from 10.30am to 11.45am. We have invited renowned speaker, Mr. Shane Choo to share his professional insights on growth investing!

Free registration here:
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2021-11-29 08:59:41 HLIB Retail Research – 29 Nov - Bullish Tracker:

FRONTKN (RM3.69-HLIB Research BUY-TP4.15) , Main Market : Technology

Grossly oversold; Potential downtrend reversal amid hammer pattern

Entry: RM3.60-3.70
Stop Loss: RM3.55
Resistance: RM3.80-3.90-4.00
Target price: RM3.90-4.00
Risk profile: Moderate

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2021-11-24 03:18:55 Technical tracker - HLIB Retail Research – 24 November 2021

KGB(RM1.70) – On a solid footing

Ultra-high purity gas provider. Listed since 2009, Kelington Group Berhad (KGB) is mainly engaged in providing Ultra High Purity (UHP) gas to the electronics and semiconductor industry. Over the years, the Group has expanded its exposure to include turnkey engineering services and industrial gasses business. The group derived 71% of its revenue from its UHP divisions in FY20, whilst Process Engineering (12%), General Contracting (11%), and Industries Gasses (6%) accounted for the rest. Overall, Malaysia, China, and Singapore dominated 94% of its topline in FY20.

Riding on the fab expansion plans. With chips shortage showing no signs of abating, we expect more fab expansions in the pipeline and KGB is well-positioned to tap into more UHP jobs, as chip foundry investment sweeping across Asia (source), especially in China and Singapore where majority of KGB’s UHP projects are located in. Interestingly, this started to reflect from its all-time high outstanding order-book amounting to RM979m as at Oct-21 (FY2020: RM490m).

Industry gas division to cater into F&B. To recap, KGB commenced its liquid carbon dioxide (LCO2) plant in Kemaman, Terengganu on the 23 Oct 2019 with a total capacity of 50,000 tonnes of LCO2 pa. Over the years, the plant utilization rate plant had gradually picked up from 20% (FY2019) to 50% (1HFY2021) within 15 months of operations. As the group is in the final stage of securing the Halal Certification from JAKIM to start the qualification process for the F&B industry, this is expected to drive its LCO2 plant utilization rate to greater heights (CO2 is widely used in F&B business i.e. manufacture of carbonated drinks and food freezing etc.).

Pending for a downtrend line breakout. Technically, KGB is pending for a downtrend line breakout. A successful breakout above its downtrend line resistance (RM1.74) will spur the prices to challenge its previous high of RM1.88 (30 Sept) territories. Cut lost at RM1.61.


Collection range: RM1.65-1.68-1.74

Upside targets: RM1.83-1.88-1.92

Cut loss: RM1.60

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2021-11-23 09:28:39 HLIB Retail Research – 23 Nov - Bullish Tracker:

MEDIA (RM0.505: HLIB Research Buy -TP RM0.61), Main Market : Telecommunications & Media

Technical indicators showing uptick bias, accumulate at retracement phase.

Time frame: 7 days
Entry: RM0.485-0.51
Stop Loss: RM0.47
Resistance: RM0.525-0.55-0.60
Target price: RM0.56-0.60
Netcash/shr (sen): RM0.21
FY12/22E P/E: 9.7
FY12/22E DY: 5.9%
Risk profile: Low

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