SKPERES - Taman Sungai Besi 22 2 13.pdf

7/29/2019 SKPERES - Taman Sungai Besi 22 2 13.pdf

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Indices of World Market Stock Exchanges

US

DJIA 13,880.60 -46.92 -0.34%

S&P 500 1,502.42 -9.53 -0.63%

NASDAQ 3,131.49 -32.92 -1.04%

ASIA

NIKKEI 11,258.40 -50.69 -0.45%

HANG SENG 22,906.70 -400.74 -1.72%

S&P/ASX 200 5,045.30 +65.21 +1.31%

Sources: Bloomberg

Commentary on Todays KLCI

FMB: KLCI closed at 1614.05, gained 0.72 points or 0.04% points on Thursday. From our point of view, KLCI is closing to the

support or psychological level of 1600, it is very likely to break below 1600 when the GE13 is getting closer. Today s market

opens at 1617.29, gained 3.24 points from yesterday. Perhaps is the opitmism from the recent announcement of 6.4% GDP

growth of Malaysia, or the general reverse momentun after a sharp fall.

Nonetheless, we deemded that the fall of KLCI in the coming moment is almost ineviatable. As such, there will be the

opportunity for long-term investors to add worthy income shares (blue chips) into their portfolio.

Economies Highlights:

FRANCE

Government debt 86% of GDP and budget/fiscal deficit of 4.5% of GDP

President Hollande has tax and spend policy: Not interested in austerity measures

Criticism from IMF (recommends austerity drive) and Labour Minister Michel Sapin (totally

bankrupt)

Economic growth of 03% in 2012 and projection of 0.9% in 2013

UNITED KINGDOM

Government debt of 81% of GDP and 9% fiscal deficit

PM David Cameron's policy: austerity drive to cut deficit and increase tax

Economy to have grown 1% in 2012 and to grow 1.9% in 2013

They need an answer to boost economic growth

EUROPE

STOXX 50 2,579.76 -60.59 -2.29%

FTSE 100 6,291.54 -103.83 -1.62%

DAX 7,583.57 -145.33 -1.88%


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UNITED STATES

Government debt of 102% of GDP and fiscal deficit of 10%

Obama policy: increased tax and reduced spending. Obamacare and sweeping new financial

regulations. More taxes for the rich and less for the poor and middle income

"Fiscal Cliff" is the sharp decline in budget deficit that could 1 have occurred beginning 2013 due to

increased taxes and reduced spending as required by previously enacted laws

Economic growth of 2% in 2012 and 3% in 2013

CHINA

Government debt of 26% of GDP, fiscal surplus

GDP growth is between 8-9%

Banking system: No free flow of capital into and out of the country. Most of its capital is from

deposits from households. Government sets interest rate below the rate of inflation, meaning savers

earn negative rate of return. What's bad for savers is good for spenders.

MALAYSIA

Government debt is 53% of GDP, fiscal deficit of 4.5%

Transformation programme to reach developed status by 2020 (income per capita of US$15,000)

Private-public partnership to foster growth

Aiming at sustainable growth with balanced development

GDP growth reported at 6.4%

Sources: The Star


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Stock Recommedation: SKPRES (7155) - A Choice of Resilient Counter In The Times of Market Anxiety

Current Price: RM0.34

Target Prices: RM0.54 (Kenanga Research)

RM0.54 (OSK Research)

RM0.58 (TA Securities)

Corporate profile:

SKPRES is principally involved in the manufacturing of plastic parts and components, contract

manufacturing, precision mould making, the sub-assembly of electronic and electrical equipment and

other secondary processes.

Fundamental analysis:

We like the companys strong balance sheet and earnings growth, as well as its increasing valuation. This

is backed by a dividend yield of forecasted 6.8% for 2013 and forecasted 8.4% for 2014.

Directors efforts to polish the companys image.Dato Gan Kim Huat the Executive Chairman and

Managing Director of SKPRES had invited LembagaTabung Haji to purchase 10% of SKPRES shares to

become the substantial shareholder and the contract had been confirmed and signed. The move

will create more public awareness of the company and its valuation is likely to adjust accordingly.

Healthy balance sheet. The groups balance sheet remained solid, with a net cash position of 9.8 sen

per share as the company replenished its coffers with RM26.2m in cash and cash equivalents during

the third quarter of 2012.

Positive free cash flow since FY08. SKPRES retained earnings stood at RM101.9m as at 1QFY13

while cash and bank balances totaled RM71.6m. The company has no borrowings.

Strong earnings growth. SKPRESs 1HFY13 is making up of 51.9% and 51.6% of consensus full-yearforecasts. Revenue increased 44.2% y-o-y while earnings grew 64.9% y-o-y, bolstered by stronger

demand for its plastic moulding products and value added services.

Attractive dividend yield of >7%. Armed with its strong coffers and net cash per share of 8 sen per

share as at end-June 2012, the company has consistently paid out dividends and has been raising its

dividend in the past 2 financial years. The top management has set a policy of paying of 50% of its

profits as dividend.

Declared 1.3 sen dividend. Backed by 9.8 sen cash per share for the reporting quarter vs. 8 sen pershare in 1Q13, management declared an interim dividend of 1.3 sen per share. This represents 52%

of full-year dividend forecast of 2.5 sen per share. The entitlement date for the dividend is 22 Nov

with payment on 21 Dec. At current prices, the stock still offers an alluring dividend yield of 6.8% for

FY13 and 8.4% for FY14.Sources: OSK Research


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Technical View: Chart

Strong supports were found at RM0.33 in the historical prices, purchase can be made at RM0.34.

Therefore, with the price traded lower than RM0.33 there should be a stop-loss. If the recent high of

RM0.375 is violated, the price is likely to trade higher until next the resistance level.

There was a slight improved volume after price RM0.375 then remained quiet; the market might be

waiting to speculate until next hot time.

Summary: Robust fundamentals, technically right time to enter during bewildered market.

Prepared by Marshall Liew Kher Yau & Mohd. Shahrulnizam,

Disclaimer: The information and opinions in these slides were prepared by RHB Branch Broking. The

investments discussed or recommended in these slides may not be suitable for all investors. These slides

have been prepared for discussion purposes only and are not an offer to sell or a solicitation to buy any

securities. The employees of RHB Branch Broking may from time to time have a position in or with the

securities mentioned herein. Members of the RHB Group and their affiliates may provide services to any

company and affiliates of such companies whose securities are mentioned herein. The information herein

was obtained or derived from sources that we believe are reliable, but while all reasonable care has beentaken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that

it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any

loss that may arise from the use of these slides. All opinions and estimates included in this session

constitute our judgement as of this date and are subject to change without notice.

Resistance = RM0.375

Support = RM0.33

High Volume

Improved Volume

Documents

SKPERES - Taman Sungai Besi 22 2 13.pdf