Supermax

 速柏玛（SUPERMX,7106,主板医疗保健组）

活动：股东大会

日期：12月2日（星期三）

时间：上午10时

地点：雪兰莪州布特拉工业园线上进行

●大会重点：

速柏玛坦言，在已结束财政年，集团业务表现杰出，预测下一个财政年，表现将更理想，集团已规划好业务扩充计划，以让集团掌握来年及之后市场强势成长的优势，体现胶手套业庞大的成长潜能。

集团预测，手套生产量将在2021和2022年，分别增至102亿5000万只和120亿只，与2020年比较，2022年生产容量将增加85%，新的生产容量有助集团将高度超卖的情况，转为比较可以管理的水平，使到集团的营业额和净盈利成长率，保持平稳状态。

胶手套业是少数几个大马可以在世界舞台、宣称为市场领军的行业，享有超过60%的全球市占率，这是个有弹力、不受经济衰退影响的领域，管理层深信，胶手套业成长机会是庞大的，接下来，全球对胶手套的需求，估计维持在8至10%的年均复合增长率。

集团已加速推出扩展计划，而且是经营史上，首次同步兴建5家工厂。

虽然积极进行生产容量扩充计划，不过，集团仍不足以应付目前的订单需求，不管怎样，集团还有超过130英亩的土地供未来扩充业务用途。

隐形眼镜镜片有利可图

除了手套业，集团通过子公司SuperVision Optimax从事隐形眼镜业务，是道地的隐形眼镜镜片制造商，放眼成为全球隐形眼镜镜片首要制造商，数据显示，隐形眼镜镜片业蓬勃发展，是一盘有利可图的业务。

速伯玛集团已展开业务多元化发展步伐，涉足这项高科技制造业，至今，投资总额达1亿令吉，已建立最先进的隐形眼镜镜片生产设备，集团的设备能生产市场高度需求、价格可负担的镜片，至今己销售这项产品至世界超过60个国家。

与此同时，集团通过大马和加拿大的生产设备，进军口罩生产业务，也扩展业务至个人防护产品，辅助胶手套产品，善用集团过去这些年在全球建立起来的分销网络，全球对口罩的需求日益增加，是一个可以掌握的庞大市场。

从一开始，集团安置两条生产线，生产容量为年产9600万只，在大马的生产量主要在大马分销，以防范冠病传播，一旦大马疫情受到控制，接下来的产量将出口到海外市场，集团已为这项投资拨出800万令吉。为配合加拿大政府的呼吁，以便在加拿大生产的个人防护品足够应付该国的需求，集团已和加国当地伙伴合作，设立一个两条生产线的设备。

胶手套业前景光明

至今可以肯定的是，胶手套业前景光明，全球对手套的需求，平均每年增长8至10%，市场对医药用途手套需求保持强劲，2020年情景如此，估计接下来一至二年也一样，全球的手套制造商，包括速伯玛在内，皆处于超卖的情况，集团面对新客户、全球政府在医药保健的开销显著增加，以便和冠病宣战。

许多国家的政府机构已重新提呈订单，强大的需求与有限的供应，造成平均售价上涨，买家预先支付庞大订金，多数介于30至50%，确保取得手套供应。

长远来说，这个行业的前景是乐观的，胶手套业的需求成长持稳，主因包括：人口增加、更多国家实施严谨的保健条例，健康和卫生意识提高、缺乏用后丢弃手套替代品，加上中国、印度成长中经济市场潜能大，在保健用品的人均消费，仍落在先进国的后头，这对集团业务的长期发展，前景是乐观的。

Technical Analyzer

Hong Leong Industries (3301) (RM8.53): Technical Buy
Targets: RM9.00, 9.70
Stop: RM8.09

Malaysian Pacific Industries (3867) (RM25.60): Technical Buy 
Targets: RM28.00, 30.00
Stop: RM22.80

KERJAYA (S: RM0.915, R: RM1.02-1.07, LT TP:RM1.12, CL:RM0.91)

S: Support, R: Resistance, LT TP: Long term target price, CL: Cut loss

1) KERJAYA (7161); Technical BUY with +15.2% potential return  

*Last: RM0.99 Target: RM1.09, RM1.14 Stop: RM0.91

*Timeframe: 2 weeks to 2 months 

*Syariah: YES

2) KUB (6874); Technical BUY with +35.2% potential return  

*Last: RM0.61 Target: RM0.77, RM0.825 Stop: RM0.53

*Timeframe: 2 weeks to 2 months

*Syariah: YES

3) KPS (5843); Technical BUY with +26.6% potential return  

*Last: RM0.94 Target: RM1.12, RM1.19 Stop: RM0.83

*Timeframe: 2 weeks to 2 months

*Syariah: YES

Fundamental Reports

Velesto Energy Berhad - Trough in 1Q21F, recovery thereafter (Upgrade to Hold with a higher TP of RM0.14)

Alliance Bank Malaysia Berhad - Potentially lower CCOR in 2HFY3/21F (Maintain Reduce with a higher TP of RM1.83)

Affin Bank Berhad - Higher overheads to dent 4Q20 profit growth (Maintain Reduce with a lower TP of RM1.34)

Bioalpha Holdings - Ravaged by Covid-19 impact (Maintain Hold with a lower TP of RM0.28)

Genting Bhd - Look beyond Covid-19 headwinds in 4Q20F (Maintain Add with a higher TP of RM6.40)

Genting Malaysia - Headwinds abound but recovery imminent (Maintain Add with a higher TP of RM2.95)

IHH Healthcare Bhd - Back to healthier stats in 3Q20 (Maintain Add with a higher TP of RM6.98)

Malayan Banking Bhd - Projecting lower CCOR in 4Q20F (Maintain Hold with a higher TP of RM8.07) 

Malayan Cement Bhd - Better performance due to cost efficiencies (Maintain Hold with a higher TP of RM2.50)

Prestariang - Weak recovery outlook (Maintain Reduce with a lower TP of RM0.36)

Public Bank Bhd - Taking 4Q20F LLP hit before 2021 recovery (Maintain Add with a higher TP of RM20.50)

QL Resources - As steady as it goes (Maintain Reduce with a higher TP of RM5.40)

Velesto Energy Berhad - FY21F work schedule remains wide open (Maintain Reduce with a higher TP of RM0.105)

DRB – Hicom - Sales tax holiday (D)rives (R)evenue (B)oom (Maintain Add with a TP of RM2.35)

Corporate News

 •* Hong Leong Bank Bhd’s* net profit for the first quarter ended Sept 30, 2020 (1QFY21) increased to RM728.9 million or 35.6 sen per share, from RM569.42 million or 27.82 sen per share for the immediate preceding quarter. Revenue also rose 12.7% to RM1.35 billion for the quarter under review, from RM1.2 billion for 4QFY20. On a year-on-year basis, its net profit was up 5.9% from RM688.68 million or 33.65 sen per share, while revenue was 11.01% higher from RM1.22 billion.

•* Hong Leong Financial Group Bhd (HLFG)* reported a 19.75% rise in its net profit for 1QFY21 to RM587.03 million, from RM490.2 million a year ago, lifted by stronger contributions from all of its operating businesses. Revenue climbed 13.02% to RM1.5 billion from RM1.33 billion. Compared to the immediate preceding quarter, the group’s net profit was up 11.79% from RM525.14 million for 4QFY20, while revenue rose 4.87% from RM1.43 billion.

•* Hibiscus Petroleum Bhd* was back into the black in 1QFY21 with a net profit of RM10.03 million, from a net loss of RM145.2 million in the preceding quarter. The oil and gas  group attributed its return to profitability to higher oil prices and greater output from its North Sabah, Anasuria Hibiscus and 3D Oil, VIC/L31 and VIC/P57 assets. Revenue jumped 268.38% to RM145.49 million, from RM39.5 million in 4QFY20.

•A recovery in business activities helped Ekovest Bhd swing back into the black with a net profit of RM10.86 million in 1QFY21, from a net loss of RM53.82 million in the preceding quarter. Revenue increased 63.17% to RM313.77 million, from RM192.3 million in 4QFY20. The group attributed the improved results to more construction work done being recognised, an increase in traffic volume for its toll operations, and an increase in rental income from the EkoCheras Shopping Mall, compared with 4QFY20.

•* Padini Holdings Bhd’s* net profit for 1QFY21 rose 5.67% to RM20.72 million, from RM19.61 million a year ago, thanks to cost control in staff cost and rental rebate received during the quarter. Revenue, however, fell 8.08% to RM310.72 million from RM338.04 million a year ago, mainly due to the adverse impact from the Covid-19 pandemic outbreak.

•* Axiata Group Bhd’s* net profit jumped 96.9% to RM352.99 million or 3.8 sen per share in 3QFY20, from RM179.27 million or two sen per share a year ago, thanks to lower depreciation and amortisation, plus narrower forex loss and tax. Quarterly revenue, however, slipped 1.6% to RM6.11 billion from RM6.21 billion in 3QFY19, due to decline in all operating companies, except mobile operations in Bangladesh, Sri Lanka and the infrastructure segment.

•* Alliance Bank Malaysia Bhd’s* net profit for the second quarter ended Sept 30, 2020 (2QFY21) fell 10.02% to RM103.94 million from RM115.52 million a year ago, due to higher reserves. Revenue, however, rose 11% to RM474.45 million from RM427.44 million a year ago. The bank said it did not declare a first interim dividend in the second quarter of FY21 and will consider future dividend proposals, once the full economic impact of the Covid-19 pandemic is clearer.

•* QL Resources Bhd's* net profit for 2QFY21 grew 0.64% to RM70.13 million from RM69.68 million a year ago, underpinned by improved margins from its marine product manufacturing division. Revenue inched up 0.5% to RM1.08 billion, from RM1.07 billion.

•* KNM Group Bhd* has secured a US$23 million (RM93.63 million) contract for the supply of equipment, piping systems and process control, and the integration of an energy storage vessel, from Germany-based power company Vattenfall Wärme Berlin AG. The contract involves the supply of overall engineering equipment (static and rotary), piping systems, process control and integration of the energy/heat storage vessel for the Vattenfall Energy Storage “Reuter-West”, Berlin Project.

Malayan Banking Bhd (Maybank) saw a slight fall in its net profit for 3QFY20 to RM1.95 billion, down 2.3% from RM2 billion for the previous year’s corresponding quarter, amid lower net operating income due to the Covid-19 pandemic. Revenue for the quarter contracted 0.6% to RM13.76 billion from RM13.83 billion. The bank declared an interim dividend of 13.5 sen per share, which will be made under its dividend reinvestment plan.

•* Affin Bank Bhd* reported a net profit of RM48.72 million in 3QFY20 versus RM67.4 million in 2QFY20, representing a 28% drop which was mainly due to the recognition of modification losses on the loan moratorium and higher overhead expenses. Revenue in the quarter, however, was 35% higher at RM694.2 million, compared with RM512.96 million in the preceding quarter. No dividend was declared this quarter, as well as the last.

•* Public Bank Bhd’s* net profit for 3QFY20 rose 2.2% year-on-year to RM1.39 billion from RM1.36 billion, despite lower revenue, as it recorded higher investment income during the quarter. Quarterly revenue fell 8.6% to RM5.13 billion from RM5.61 billion. Like in the two previous quarters of this year, the bank did not announce any dividend for 3QFY20.

•* CIMB Group Holdings Bhd* reported a net profit of RM194.44 million for its 3QFY20, down 80.8% from the RM1.01 billion it made a year ago, amid lower net interest margin (NIM) and higher provisions across several business segments, with the commercial banking segment posting a loss. The group's revenue or operating income for the quarter slipped 3.7% to RM4.46 billion from RM4.64 billion, largely due to weaker fee-based non-interest income and lower NIM, as a result of the overnight policy rate cuts in Malaysia and low-interest rates in its core markets.

•* Kenanga Investment Bank Bhd* has recorded an eleven-fold hike to its net profit for the third quarter ended Sept 30, 2020 to RM49.27 million, from RM4.29 million in the same quarter last year, boosted by its stockbroking and investment management business. Revenue doubled to RM319.49 million, from RM159.42 million a year earlier. It said this was largely driven by increased brokerage fees, higher net interest income, trading and investment income, as well as management fee income.

•Diversified conglomerate Sunway Bhd is back in the black in its third-quarter, with a net profit of RM132.83 million from a net loss of RM6.71 million in the immediate preceding quarter, following the resumption of business activities on the lifting of movement restrictions imposed earlier this year to curb the pandemic's spread. The group's revenue for 3QFY20 rebounded to RM1.03 billion from RM556.64 million in 2QFY20.. Almost all business segments registered improved profit contributions, the group noted, except for its property development and other segments.

•* Paramount Corp Bhd* returned to the black with a net profit of RM19.82 million in its 3QFY20, after the property developer slipped into a net loss of RM3.7 million in the preceding quarter ended June 30. The improved earnings came as quarterly revenue tripled to RM218.87 million from RM64.20 million in 2QFY20, its bourse filing showed, following the resumption of construction activities for a full quarter, coupled with strong sales from new property launches.

•* Boustead Heavy Industries Corp Bhd (BHIC)* has lodged a report with the Malaysian Anti-Corruption Commission (MACC) on possible irregularities in the RM9 billion littoral combat ship project, which its associate Boustead Naval Shipyard Sdn Bhd (BNS) is undertaking. BHIC said the findings of the forensic audit, which was commissioned in February 2020, were handed over to the MACC in September.

•* TDM Bhd's* CEO Zainal Abidin Shariff, 53, has resigned from the position with immediate effect, over disagreements with its chairman. The oil palm planter and healthcare operator said Zainal Abidin and group chairman Raja Datuk Idris Kamarudin disagreed over trade contract issues, practices and queries involving its subsidiary’s palm oil trading activities.

Technical Analyzer

Uchi Technlogies (7100)
Outlook: Breakout MYR2.65
Levels: MYR2.74, MYR2.80
Exit: MYR2.65
(time frame: 2-4 weeks)

Hexza Corp (3298)
Outlook: Breakout MYR1.36
Levels: MYR1.44, MYR1.54
Exit: MYR1.36
(time frame: 2-4 weeks)

Bioalpha Holdings (0179)
Outlook: Pending breakout MYR0.295
Levels: MYR0.325, MYR0.35
Exit: MYR0.285
(time frame: 2-4 weeks)

MY E.G Services (0138)
Outlook: Pending breakout MYR1.60
Levels: MYR1.70, MYR1.75
Exit: MYR1.56
(time frame: 2-4 weeks)

*Formosa Prosonic Industries (9172)* (RM2.31): Technical Buy

Targets: RM2.50, 2.60

Stop: RM2.05

*Kumpulan Powernet (7130)* (RM5.00): Technical Buy 

Targets: RM5.50, 5.80

Stop: RM4.39  

Stock Name: HEXZA (3298)
Entry: Buy around RM1.35
Target: RM1.44 (6.7%), RM1.54 (14.1%)
Stop: RM1.30 (-3.7%)
Shariah: No
Technical: Resistance breakout

Stock Name: GDB (0198)
Entry: Buy above RM0.81
Target: RM0.88 (8.6%), RM0.90 (11.1%)
Stop: RM0.76 (-6.2%)
Shariah: Yes
Technical: Flag-formation breakout

1) ANNJOO (6556); Technical BUY with +30.4% potential return  

*Last: RM0.79 Target: RM0.935, RM1.03 Stop: RM0.695

*Timeframe: 2 weeks to 2 months

*Syariah: YES

2) PENSONI (9996); Technical BUY with +38.8% potential return  

*Last: RM0.515 Target: RM0.615, RM0.715 Stop: RM0.445

*Timeframe: 2 weeks to 2 months

*Syariah: NO

3) PARLO (0022); Technical BUY with +36.8% potential return  

*Last: RM0.435 Target: RM0.57, RM0.595 Stop: RM0.36

*Timeframe: 2 weeks to 2 months

*Syariah: YES

Fundamental Report

*Uchi Technologies* - Stronger brew prospects ahead (Upgrade to Add with a higher TP of RM3.00)

*UMW Holdings* - Earnings go the extra mile, riding tax holiday (Upgrade to Add with a higher TP of RM3.30)

*DKSH Holdings (Malaysia)* - Likely to ride out short-term challenges (Maintain Add with a higher TP of RM3.90)

*Hap Seng Plantations* - 3Q benefitted from high output and price (Maintain Add with a higher TP of RM2.30)

*Heineken Malaysia Bhd* - Still reeling from Covid-19 (Maintain Hold with a lower TP of RM22.40)

*Magnum Bhd* - CMCO is only a bump on road to recovery (Maintain Add with a lower TP of RM2.30)

*Media Chinese Int'l* - Itching to fly in FY3/22F (Maintain Add with a higher TP of RM0.20)

*Power Root Bhd* - Looking beyond short-term weakness (Maintain Add with a higher TP of RM2.80)

*Protasco* - Still in the red in 9M20 (Maintain Hold with a higher TP of RM0.23)

*Sime Darby Bhd* - Riding on China’s growth recovery (Maintain Add with a higher TP of RM2.70)

*WCT Holdings* - A tough recovery story post 9M20 (Maintain Hold with a higher TP of RM0.42)

*Westports Holdings* - Near-term momentum to moderate in 4Q20F (Maintain Reduce with a higher TP of RM3.63)

*YTL Corporation* - Primed for a comeback in the rail space? (Maintain Add with a higher TP of RM0.85)

*Economic Update* - Budget 2021: Major hurdle cleared

*7-Eleven Malaysia Holdings* - Steady despite near-term footfall challenges (Maintain Add with a TP of RM1.70)

*Tenaga Nasional* - Electricity demand picked up post-MCO (Maintain Add with a TP of RM13.20)

*WCT Holdings* - Strategising its recovery plans (Maintain Hold with a TP of RM0.42)

*YTL Power International* - Multi-utilities unit making a comeback (Maintain Hold with a TP of RM0.69)

Corporate News

 •* Sime Darby Bhd’s* net profit for 1QFY21  rose 14.23% to RM281 million, from RM246 million a year ago, on strong growth of the group’s motors division, particularly in China. The group’s revenue for 1QFY21 also climbed 14.78% to RM10.88 billion, from RM9.48 billion a year ago, its filing with Bursa Malaysia showed.

•* PPB Group Bhd’s* third-quarter net profit rose 4.41% to RM411.57 million, from RM394.18 million a year ago, thanks to higher profit contribution from associate Wilmar International Ltd. Revenue for the quarter ended Sept 30, 2020, fell 13.17% to RM1.04 billion, from RM1.19 billion a year earlier, the group’s filing with Bursa Malaysia showed. Despite the drop in revenue, the group said its profit contribution from Wilmar increased by RM67 million to RM409 million

•* Dutch Lady Milk Industries Bhd* saw its 3QFY20 net profit fall 56.5% to RM9.24 million from RM21.23 million in 2QFY20 following a one-off valuation impact on raw material or milk investors. It declared a 40 sen second interim dividend.  Quarterly revenue was 4.9% higher at This was despite 4.9% higher quarterly revenue of RM286.82 million from RM273.52 million in 2QFY20.

•* Hengyuan Refining Company Bhd’s 3QFY20 net profit tripled to RM154.91 million or 51.64 sen per share, from RM48.67 million or 16.22 sen per share in the preceding quarter, on higher average prices of oil products. Revenue for the third quarter ended Sept 30, 2020, increased 30.84% quarter-on-quarter to RM1.59 billion, from RM1.21billion. It posted a quarterly net loss of RM11.43 million reported a year earlier. Revenue, meanwhile, was just half of the RM3.23 billion reported for the year-ago third quarter.

•* Velesto Energy Bhd* posted a modest net profit of RM479,000 in 3QFY20 after a loss-making second quarter. Revenue for the quarter, however, was 7.3% lower at RM130.66 million compared with RM140.95 million in 2QFY20. Velesto said the slightly curtailed revenue was mainly due to lower revenue from its drilling services division as a result of lower average jack-up rig utilisation of 60% compared with 67% in the preceding quarter.

•* DRB-Hicom Bhd* returned to the black in 3QFY20, posting a net profit of RM47.5 million compared with a net loss of RM306.08 million in the immediate preceding quarter. its automotive segment was the main driver to lift it out of the losses in 3QFY20. Quarterly revenue ballooned nearly 78% to RM3.56 billion from RM2 billion in 2QFY20.Owing to its change of financial year-end from March 31 to Dec 31, no comparative figures were available for a yearly comparison.

•* Genting Malaysia Bhd (GenM)’s* net loss has narrowed to RM704.64 million or 12.46 sen per share against RM900.42 million or 15.93 sen per share in the immediate preceding quarter (2QFY20) as the group’s resort operations worldwide have resumed progressively during the quarter under review. Quarterly revenue surged more than 12 times to RM1.42 billion from RM114.91 million, according to its filing with Bursa Malaysia today.

Meanwhile, Genting Bhd saw its net losses narrow to RM130.75 million in 3QFY20, after posting a net loss of RM786.05 million in 2QFY20. The gaming giant said the losses in the preceding quarter were on account of losses suffered in the leisure and hospitality division following the temporary closure of its resort operations in 2QFY20, which have since resumed business with a reduced capacity. Revenue wise, the groups its revenue surged by 197.74% to RM3.3 billion, from RM1.11 billion in 2QFY20.

•* Westports Holdings Bhd’s* net profit improved 28% year-on-year to RM203.85 million for the third quarter 3QFY20, due to higher container revenue and lower operational cost. Growth in container throughput pushed up revenue to RM528.36 million, from RM460.43 million previously. Its net profit for the nine months rose to RM490.99 million from RM465.46 million previously, while revenue climbed to RM1.43 billion from RM1.33 billion.

•* Heineken Malaysia Bhd* reported a net profit of RM61.25 million for its 3QFY20, compared with the net loss of RM18.19 million it recorded in 2QFY20. Revenue jumped 86.7% quarter-on-quarter to RM473.75 million from RM253.74 million, on the back of sequential sales improvement as its on-trade channel gradually recovered during the Recovery MCO period.

•* Press Metal Aluminium Holdings Bhd’s* third-quarter net profit by 35.43% to RM121.98 million from RM90.07 million in the preceding quarter, following higher aluminium prices. The higher prices also saw the group’s revenue for the quarter ended Sept 30, 2020, rising 7.6% to RM1.86 billion from RM1.73 billion in the second quarter, the group said in a filing today. On a year-on-year basis, net profit was higher by a marginal 0.39% from RM121.56 million previously while revenue was down 12.2% from RM2.12 billion.

•* Magnum Bhd* was back in the black for its 3QFY20, posting a net profit of RM30.26 million or 2.13 sen per share from a net loss of RM23.67 million or 1.67 sen per share in the immediate preceding quarter. The number forecast operator (NFO) said the reversal of 2QFY20’s losses in its most recent financial quarter was due to the better performance achieved by its gaming division.It declared a third interim dividend of two sen per share, raising its total dividend payout to date to 6.54 sen. The latest dividend is payable on Dec 24, 2020. Total revenue for the quarter skyrocketed to RM485.71 million, from RM50.55 million in 2QFY20.

•* Tenaga Nasional Bhd (TNB)’s* 3QFY20 net profit dropped to RM1.01 billion from RM1.2 billion a year earlier as the government-controlled utility’s revenue fell due to a Covid-19 pandemic-driven decline in electricity sales. TNB said revenue fell to RM11.11 billion in the third quarter ended Sept 30, 2020 (3QFY20) from RM12.64 billion.

•* Hock Seng Lee Bhd (HSL)’s* net profit for 3QFY20 surged 174.88% to RM10.87 million, from RM3.95 million in the immediate preceding quarter, on higher revenue. The group’s revenue also jumped 94.04% quarter-on-quarter to RM161.16 million from RM83.05 million, the group’s filing to Bursa Malaysia showed. However, on a year-on-year basis, the group’s net profit for 3QFY20 fell 25.36% from RM14.56 million, while its revenue slipped 7.3% from RM173.84 million.

•* Kerjaya Prospek Group Bhd’s* net profit tripled to RM30.38 million or 2.48 sen per share I the 3QFY20, from RM10.06 million or 0.82 sen per share in the preceding quarter as the group resumed its construction projects. Quarterly revenue was also up 73.5% to RM222.21 million, from RM128.1 million in 2QFY20, according to its filing to Bursa Malaysia today. The group had proposed an interim dividend of 1.5 sen per share for the financial year ending Dec 31, 2020 (FY20), amounting to RM18.49 million. It will be paid on Jan 6, 2021.

Malaysia Oil Stream

 

Technical Analyzer

Muda Holdings (3883)
Outlook: Breakout MYR1.85
Levels: MYR2.00, MYR2.10
Exit: MYR1.82
(time frame: 2-4 weeks)

AWC (7579)
Outlook: Breakout MYR0.43
Levels: MYR0.48, MYR0.55
Exit: MYR0.425
(time frame: 2-4 weeks)

Naim Holdings (5073)
Outlook: Breakout MYR0.77
Levels: MYR0.83, MYR0.845
Exit: MYR0.77
(time frame: 2-4 weeks)

Maxim Global (4022)
Outlook: Breakout MYR0.295
Levels: MYR0.355, MYR0.40
Exit: MYR0.31
(time frame: 2-4 weeks)

GHLSYS (0021)
Entry: Buy around RM1.690
Target: RM1.88 (11.2%), RM1.93 (14.2%)
Stop: RM1.59 (-5.9%)
Shariah: Yes
Technical: Resistance breakout

CAELY (7154)
Entry: Buy above RM0.48
Target: RM0.535 (11.5%), RM0.57 (18.8%)
Stop: RM0.45 (-6.2%)
Shariah: Yes
Technical: Consolidation breakout

UOB

1) CAELY (7154); Technical BUY with +27.7% potential return  

*Last: RM0.505 Target: RM0.64, RM0.795 Stop: RM0.405

*Timeframe: 2 weeks to 2 months

*Syariah: YES

2) WASEONG (5142); Technical BUY with +35.7% potential return  

*Last: RM0.49 Target: RM0.595, RM0.665 Stop: RM0.41

*Timeframe: 2 weeks to 2 months

*Syariah: YES

3) AWC (7579); Technical BUY with +35.2% potential return  

*Last: RM0.44 Target: RM0.54, RM0.595 Stop: RM0.38

*Timeframe: 2 weeks to 2 months

*Syariah: YES

Corporate News

Dow Jones : 29,872.47

⬇️ 173.77 / 0.58%

Nasdaq : 12,094.40

⬆️ 57.62 / 0.48%‼️

Wall Street catches breath after Dow hits 30K; Nasdaq hits record

GOLD PRICE : 1,8076.00

⬆️ 0.19 / 0.01%

WTI CRUDE OIL : 45.86

⬆️ 1.05 / 2.34%‼️‼️

BRENT OIL : 48.83

⬆️ 0.92 / 1.92%‼️‼️

USD/MYR : 4.09

 •* Malaysian Pacific Industries Bhd (MPI)’s* net profit for the first quarter ended Sept 30, 2020 (1QFY21) was 50.32% higher at RM55.31 million from RM36.79 million a year ago, with revenue increasing 19.37% to RM440.59 minion from RM369.1 million. It has declared a dividend of 10 sen per share, payable on Dec 24. On a quarter on quarter basis, net profit rose 12.77% from RM49.05 million in 4QFY20, while revenue increased 8.67% from RM405.45 million.

•* Parkson Holdings Bhd’s* net losses reduced to RM21.73 million in 1QFY21, from RM44.62 million in 1QFY20, while revenue fell 8% to RM812.1 million from RM887.45 million. The lower losses were due to better operating profits from the group’s Malaysia and China operations. Meanwhile, the reduced revenue was on account of Covid-19 hitting footfall and purchases at its stores in Malaysia, Indonesia and Vietnam.

•* IJM Corp Bhd* saw its second quarter ended Sept 30, 2020 (2QFY21) net profit balloon to RM99.52 million, from RM1.27 million in 1QFY21 on business recovery from the Movement Control Order (MCO). Quarterly revenue increased 62.4% to RM1.43 billion, from RM897.8 million a year prior. It declared a first interim dividend of two sen per share, to be paid on Dec 30. 2QFY21 net profit was higher by 42% from RM70.1 million in 2QFY20, while revenue fell 9.2% from RM1.57 billion last year.  

 •Meanwhile, its plantation unit IJM Plantations Bhd saw its 2QFY21 net loss narrow to RM1.04 million from RM2.32 million, while quarterly revenue grew by 22.28% to RM211.37 million from RM172.86 million. The better top and bottom line were due to higher commodity prices and revenue, specifically from its Malaysian operations.

•* Glomac Bhd* registered a 62.95% growth in its net profit for the second quarter ended Oct 31, 2020 (2QFY21) to RM9.11 million, from RM5.59 million a year prior on the resumption of construction actives post-lockdown. Tax expenses more than doubled to RM4.57 million from RM6.23 million, mitigating earnings. Revenue for the quarter rose 70.07% year-on-year to RM104.61 million from RM61.51 million.

•* Genting Plantations Bhd (GenP)* saw its net profit in the third quarter ended Sept 30, 2020 (3QFY20) surge to RM61.39 million, from RM17.96 million, while revenue grew  35.8% to RM645.56 million from RM475.37 million year prior. The top and bottom-line earnings growth were driven by higher palm oil prices. Nine-month net profit more than doubled to RM175.31 million, from RM80.39 million a year earlier, while revenue rose 8.39% to RM1.76 billion from RM1.62 billion in 9MFY19.

•* KNM Group Bhd’s* net profit in 3QFY20 rose 60.21% to RM17.98 million, from RM11.22 million in 2QFY20 on higher unrealised exchange gain, gain on disposal of a non-profitable business unit in China, and cost savings from operations. Revenue fell 3.52% to RM321.32 million, from RM33.03 million. 3QFY20 net profit surged 70.27% from RM10.56 million in 3QFY19, while revenue fell 28.26% from RM447.88 million a year prior.

•* MMC Corp Bhd* saw its net profit fall 8.16% to RM60.03 million in 3QFY20, from RM66.34 million a year prior. Quarterly revenue fell 10.22% to RM1.12 billion, from RM1.25 billion on lower progress of the MRT2 (Putrajaya Line) project and lower passenger and cargo volumes at Senai Airport due to the MCO. The group declared an interim dividend of 1.5 sen, payable on Dec 23.

•* Sime Darby Property Bhd* saw its second straight quarterly loss in 3QFY20, posting a net loss of RM355.26 million, from RM81.77 million in 2QFY20. Its quarterly revenue more than doubled to RM592.63 million, from RM288.23 million in the immediate preceding quarter. The wider losses were due to an RM377.1 million impairment charge for its 40% share in the Battersea Power Station project in London, the UK. It posted a net profit of RM25.24 million on revenue of RM850.03 million for the corresponding period of the previous year.

•* TDM Bhd* posted a profit after tax of RM22.37 million in 3QFY20, from a loss after tax of RM3.81 million a year prior on higher plantation income. Revenue rose to RM121.42 million, from RM105.93 million a year earlier. The group posted a profit after tax of RM815,000 in 9MFY20, from a loss after tax of RM5.04 million a year prior.

•* Telekom Malaysia Bhd (TM)* saw its net profit for 3QFY20 rise 26% to RM329.4 million, from RM261.3 million a year prior amid the Covid-19 shift to working from home. Revenue for the quarter fell 5.7% to RM2.69 billion from RM2.85 billion for the previous year’s corresponding quarter. 9MFY20 net profit was 11% higher at RM756.67 million, from RM683.77 million previously, while cumulative revenue was down 6.7% at RM7.84 billion versus RM8.4 billion a year ago.

•* UOA Development Bhd’s* 3QFY20 net profit more than doubled to RM208.93 million from RM101.91 million a year ago, on a fair value adjustment to investment properties of RM114 million with the revaluation of UOA Corporate Tower. Revenue fell 53.43% to RM134.34 million, from RM288.44 million for 3QFY19. In 9MFY20, net profit rose 24.22% to RM356.33 million, from RM286.86 million a year earlier, while its revenue fell 25.86% to RM650.49 million from RM877.44 million.  

•* UEM Edgenta Bhd’s* net loss narrowed in 3QFY20 to RM19.01 million, from RM26.91 million in the immediate preceding quarter. It noted 2QFY20 losses included a one-off impairment of RM50 million on unsold property inventories. Revenue came in slightly higher at RM482.91 million, compared with RM448.47 million in 2QFY20. In contrast, it posted a net profit of RM17.28 million in 3QFY19, while revenue was down 17.8% from RM587.64 million last year.

大众投银研究

投资建议：跑赢大市
目标价：91仙
闭市价：78.5仙（截至11月25日）
每股盈利：5.7仙（2020财年估计）
本益比：13.5倍（2020财年估计）
股息收益率：4.4%

大众投银研究继续看好大资全球（HEXTAR，5151，主要板工业）前景，虽该公司已成为国内农用化学品市场的领导者，但仍然有充足成长空间，因为为了确保食品安全，农药的需求依然很高。农业业务将继续推动增长。

该公司管理层仍对于并购保持开放态度，以促进未来增长。该公司今年刚完成收购计划，涉足生物气体绿色业务与5G技术开发，但到目前为止还没有取得重大进展。

大资全球近期公布的第3季表现健康，累计9个月净利按年升77.1%至3300万令吉，尽管仅占全年预测的71.2%，但由于种植业状况更为健康，料未来几个季度将强劲增长。另外，该公司宣布第3次中期单层股息为1仙，使今年至今累计派息达3.2仙。

Top Glove - Citi Takeaways from Analyst Briefing

How it started and where we are now  

Earlier this month, a group of workers were tested before they were allowed to fly back their hometown, from which 12 tested positive. The Group since then did contact tracing, and tested more people; unfortunately positive cases started to rise significantly, mostly asymptomatic. As part of the Enhance Movement Control Order (EMCO) announced last week on the Group’s worker dormitories, c.5.8k workers have been tested; as many as 4k workers tested positive (updated as of Nov 24th) thus far. As previously noted, the 28 factories cited include 20 glove factories (c.50% of annual capacity), whereas the rest include condom, dental dam, face mask, chemical factories, amongst others.

What happens now

The aim is to test all workers in Klang, even those outside the EMCO area. The Group clarified that it has c.8.2k workers in Klang, out of which at least 70% have been tested; swabbing the rest could take just a few days. Those who test negative will need to isolate for 14 days before returning to work; Top Glove will utilize apartments/flats and hotels nearby for this purpose (at least 500 workers have been discharged due to minor infection and deemed not contagious). Still no details as to how/when exactly the operations of 28 facilities will be halted, but the current understanding is for the disruption to last for the two weeks of the EMCO period (Top Glove’s factories in Klang have been operating at just c.10% utilization since last week due to the EMCO), and operations can resume once all employees are tested and sites are sanitized. In the meantime, Top Glove will seek to increase more nitrile output from other factories whose lines are interchangeable. Currently, there is no indication to extend the testing to other facilities, although SOP pre-cautionary measures such as temperature checks will remain.

Zero impact to orders, ASPs still robust

No order cancellations so far; Top Glove in a reply to a recent Bursa Malaysia query noted that it expects 2-4 weeks' delay in delivery of its products with a c.3% impact to FY21E volume, no penalty expected. The Group also clarified that any contact between its workers and the end products only happens towards the end of the production process (packaging, quality control) with workers required to don the necessary equipment (gloves, masks etc). The risk of product contamination is low, as the temperature in factories is often higher than room temperature, which would reduce the virus survival rate significantly. Further to that, it is unlikely that the virus could last for the 2-4 weeks required to ship products to customers. Spot ASPs are now at US$140-150 per 1,000 pieces. NBR glove ASPs for Nov-20 deliveries already hit US$100, and management expects another 15%/10% MoM hike in Dec-20 and Jan-21 respectively.

Valuation

Our target price for Top Glove is RM16.00, derived from what we think is a conservative 15.8x CY21E EPS based on 1SD below the stock’s five-year mean. While we expect robust earnings on the back of margin expansion even in CY21E, the market may look further out and begin to bake in normalized demand and ASP. Our target PE is closer to Malaysia's market multiple.

Technical Analyzer

Tomypak (7285)
Outlook: Breakout MYR0.83
Levels: MYR0.915, MYR0.945
Exit: MYR0.83
(time frame: 2-4 weeks)

ARBB (7181)
Outlook: Pending breakout MYR0.315
Levels: MYR0.335, MYR0.37
Exit: MYR0.28
(time frame: 2-4 weeks)

Censoft (5195)
Outlook: Breakout MYR0.18
Levels: MYR0.235, MYR0.265
Exit: MYR0.195
(time frame: 2-4 weeks)

IFCA MSC  (0023)
Outlook: Breakout MYR0.41
Levels: MYR0.46, MYR0.50
Exit: MYR0.41
(time frame: 2-4 weeks)

Dancomech Holdings (5276) (RM0.705): Technical Buy

Targets: RM0.79, 0.85

Stop: RM0.605

TIME dotCom (5031) (RM13.92): Technical Buy 

Targets: RM15.00, 16.00

Stop: RM12.60  

Maybank -  Breakout Stocks

MUDA – BUY, SL: MYR1.69, R1: MYR2.02, R2: MYR2.29 

IFCAMSC – BUY, SL: MYR0.395, R1: MYR0.470, R2: MYR0.515 

INNATURE – BUY, SL: MYR0.480, R1: MYR0.580, R2: MYR0.660 

SLP – BUY, SL: MYR0.900, R1: MYR1.03, R2: MYR1.12 

TAMBUN – BUY, SL: MYR0.550, R1: MYR0.635, R2: MYR0.710 

CRUDE PALM OIL – Volatility on the rise 

KLCI INDEX FUTURES – On-going pullback

Corporate News

 •Berjaya Land Bhd’s losses in the first quarter ended Sept 30, 2020 (1QFY21) narrowed to RM41.88 million, from RM136.77 million in 4QFY20, following the lifting of movement restrictions nationwide. Revenue more than doubled to RM1.46 billion from RM541.58 million in 4QFY20. However, the  1QFY21 net loss is over six times higher, compared with RM5.99 million in 1QFY20. Revenue declined by 7.7% from RM1.58 billion in 1QFY20.

•Inari Amertron Bhd’s 1QFY21 net profit jumped 47% to RM70.07 million, from RM47.73 million a year prior, on higher volume loading of products and a reversal of deferred tax provision. Revenue climbed 10% to RM347.62 million, from RM316.61 million. The group declared a first interim dividend of two sen per share, payable on Jan 8, 2021. The payout is higher than the 1.3 sen it declared a year ago.

•Hong Leong Industries Bhd posted a net profit of RM50.72 million in 1QFY21, after posting a net loss in 4QFY20. Revenue more than doubled to RM652.66 million compared with RM311.11 million in 4QFY20. The group declared an interim single-tier dividend of 17 sen per share, payable on Dec 23. On a year-on-year basis, Hong Leong’s net profit was 19.9% lower than the RM63.35 million reported for 1QFY20, while revenue was down  9.2% from RM719.37 million.

•AirAsia Group Bhd’s net profit for the third quarter ended Sept 30, 2020 (3QFY20) narrowed to RM851.78 million, from RM992.89 million in 2QFY20, on pent up demand from local holidaymakers. Revenue rose by four times to RM442.91 million from RM118.94 million in 2QFY20. On a year-on-year basis, losses widened from RM51.44 million in 3QFY19, while revenue fell 86% from RM3.07 billion. Nine-month net loss stood at RM2.66 billion, compared with a net profit of RM80.72 million in the same period last year, while revenue shrank 68% to RM2.87 billion from RM9.09 billion.

•ARB Bhd’s 3QFY20 net profit inched up 1.27% to RM8.4 million from RM8.29 million in 3QFY19, with growth mitigated by higher cost of sales. Revenue increased 71.78% to RM58.3 million from RM33.94 million a year ago. Nine-month net profit rose 7.91% to RM23.72 million from RM21.98 million a year ago, while revenue more than doubled to RM146.99 million from RM57.65 million. Separately, the group said it is teaming up with China’s state-owned China United Network Communications Group Co Ltd (China Unicom) to undertake smart building projects and other ancillary businesses in Malaysia.

•Malakoff Corp Bhd’s 3QFY20 net profit dropped 38% to RM50.8 million from RM82.49 million a year earlier, on lower revenue and absence of now disposed subsidiary Malakoff Australia Pty Ltd. Revenue fell to RM1.48 billion from RM1.82 billion. Nine-month net profit rose to RM244.94 million from RM176.83 million a year earlier, although revenue from continuing operations was lower at RM4.76 billion versus RM5.56 billion.

•UEM Sunrise Bhd saw its net loss narrow to RM28.87 million in 3QFY20 from RM93.36 million in 2QFY20. Revenue jumped 94% to RM217.44 million, from RM111.96 million in 2QFY20, on higher sales and construction activities during the Recovery Movement Control Order (RMCO), the absence of costs on written down inventories and lower unfavourable share of results from joint ventures and associates. The group had posted a net profit of RM27.1 million in 3QFY19, while the latest quarterly revenue is 33.63% higher than the RM327.61 million reported in 3QFY19. For the nine-month period, net loss rose to RM144.17 million from RM97.56 million in the same period last year. Nine-month revenue fell to RM572.5 million, from RM1.75 billion.

•Syarikat Takaful Malaysia Keluarga Bhd (STMKB)’s lower family takaful product sales resulted in 3QFY20 net profit falling by 26.74% to RM82.6 million, from RM112.34 million in the 3QFY19. Quarterly revenue declined marginally by 0.01% to RM753.47 million, from RM753.51 million. STMKB’s 9MFY20 net profit was down 10.51% at RM259.27 million, from RM289.73 minion in the corresponding nine months last year. Revenue declined 6.9% to RM2.18 billion from RM2.34 billion.

•Tan Chong Motor Holdings Bhd saw net losses narrow to RM7.33 million in 3QFY20, from RM78.36 million in 2QFY19, following a rebound in vehicle sales and sales tax exemptions for locally-manufactured vehicles. Revenue expanded by 88% to RM964.54 million from RM512.89 million in 2QFY20. The group declared an interim dividend of 1.5 sen per share payable on Dec 28. Tan Chong posted a net profit of RM9.25 million in 3QFY19 and revenue was higher at RM1.05 billion. For the nine-month period, the group posted a net loss of RM95.96 million versus a net profit of RM44.66 million a year earlier, as revenue dropped 31% to RM2.21 billion from RM3.2 billion.

•Leong Hup International Bhd’s 3QFY20 net profit was up 38.5% from RM16.27 million in 2QFY20, on improved revenue from Vietnam and smaller losses from its Indonesian operations. Revenue was up 10.4% at RM1.57 billion from RM1.43 billion in 2QFY20. Compared with a year ago, net profit was 49.2% down from RM44.38 million, while revenue increased from the RM1.53 billion in 3QFY19. Nine-month net profit halved at RM60.59 million, from last year's RM121.05 million, while revenue declined 1.7% to RM4.43 billion, from RM4.51 billion.

•My EG Services Bhd (MyEG)’s 3QFY20 net profit was 12.19% higher at RM70.74 million, from RM63.06 million in 2QFY20. Revenue rose 9.46% to RM136.09 million from RM124.34 million. The higher earnings were due to an increase in volume from Covid-19 health screening and sale of groceries through its “Nak Beli” online store, as well as the introduction of new services including the online renewal of motorcycle insurance, road tax and competent driving licence. No comparative year-on-year numbers were provided due to a change in the group’s financial year-end from Sept 30 to Dec 31. 9MFY20 net profit was RM192.64 million on revenue of RM382.17 million.

•Wah Seong Corp Bhd’s 3QFY20 net losses ballooned to RM255.83 million from RM29.64 million in 2QFY20 on RM265.2 million worth of adjustments (including impairments and provisions). Revenue jumped 86% to RM453.3 million, from RM243.12 million in 2QFY20. The group sunk into the red from a net profit of RM15.29 million in 3QFY19, with revenue slumping 30% from RM644.49 million a year prior. For the nine-month period, the group saw a net loss of RM329.89 million compared with a net profit of RM54.72 million a year prior, while revenue halved to RM1.02 billion from RM2.09 billion.

•Omesti Bhd’s 51%-owned indirect subsidiary bagged a  two-year contract to provide network equipment maintenance services for the Federal Court’s eCourts Phase 2 project. The contract is worth RM19.88 million. 

•Top Glove Corp Bhd estimates revenue for its financial year ending Aug 31, 2021 (FY21) to only drop by 3%, following the temporary closures of its 28 factories in Klang due to the outbreak of Covid-19 in its worker dormitories. Sixteen of its facilities in Meru, Klang have temporarily stopped production since Nov 17. Each facility would be able to resume operations in stages, after the balance of employees are tested and the sites are sanitised. The balance 12 facilities are currently operating at about 20% capacity and will be temporarily closed in stages for employee testing and full-site sanitisation before reopening. The group noted that the 28 facilities in Meru represent 50% of its total production capacity.

CLSA 

* Malaysia banks (Back in business)

With promising vaccine tests, CLSA peers into 2021 for longer-term drivers. Asset quality concerns still fester in the near term amid movement curbs but we see this as factored in (figure 7). This allows us to be less defensive, preferring a tilt to corporate versus consumer for pump-prime leverage. While Malaysia has rerated well versus the region, we see this as justified, with leading yields amid dividend caps by some countries. With this visibility, we find it justified to peg against up to 2022 ROE in our recs. We upgrade CIMB from U-PF to O-PF and downgrade Public to U-PF after a stellar rise since November. Our top pick remains RHB.

* MyEG - BUY (Better safe than sorry)

Reopening of the economy drove record 3Q20 profits (+17% YoY) for MYEG. Incremental revenues came from higher Covid-19 tests conducted on the workforce and a restart of job matching services to fill in labour shortages. We expect a stronger 4Q20 and subsequently an even better 1Q21, with the launch of the new MySafeTravel platform for inbound travellers. Assuming the company is able to renew its pioneer tax status, we expect 21CL earnings growth to accelerate to 24% YoY. We reiterate BUY at an unchanged target price of RM2.25.

* AirAsia - SELL (Premature exuberance)

AirAsia reported a lower QoQ 3Q20 core net loss of RM600m (2Q20: loss of RM930m), still below expectations on slower-than-expected domestic travel. This brought 9M20 losses to 100/86% of our/consensus forecasts. October reinstatement of Malaysia’s 2020 movement control order, along with a prolonged expected downturn in 1H21, leads us to further widen 2020/21 loss expectations. Recent vaccine news has led AirAsia’s share price to rebound 30% from its low but this appears premature, while potential equity fundraising will likely be highly dilutive. We maintain a SELL and cut our target price from RM0.52 to RM0.30

CGS-CIMB 

* MY E.G. Services - Charging ahead

■ 9M20 results beat our expectation due to stronger 3Q20 EPS delivery and

made up 77% of our full-year forecast, albeit broadly in line with consensus.

■ MOH e-payment concession and improvement in job-matching service

following government’s re-hiring programme to drive FY21F EPS growth.

■ Reiterate Add rating with a higher RM2.50 TP, based on 23x CY22F P/E.

* Inari-Amertron Bhd - Hello, strong earnings recovery!

■ 1QFY21 results beat expectations, making up 32%/30% of our/Bloomberg

consensus FY21 forecasts due to higher-than-expected RF output utilisation.

■ We expect its earnings growth momentum to continue on the back of new

SiP line capacity expansion and robust demand for new 5G smartphones.

■ Upgrade to Add, with RM3.00 TP, based on a higher 31x CY22F P/E.

Syarikat Takaful Malaysia Keluarga Bhd - Lack of earnings catalyst post Covid-19 (Downgrade to Hold with a lower TP of RM5.06)

Lee Swee Kiat Group - Riding on higher local and overseas demand (Maintain Add with a higher TP of RM0.96)

Salcon - Still not out of the woods with 9M20’s losses (Maintain Reduce with a lower TP of RM0.25)

Success Transformer Corp - A robust 1QFY21 (Maintain Add with a higher TP of RM0.87)

Tan Chong Motor Holdings - Dragged down by overseas operation (Maintain Reduce with a lower TP of RM0.95)

Wellcall Holdings - Looking ahead to a recovery in FY21 (Maintain Add with a higher TP of RM1.29)

Malakoff Corporation - Potentially better numbers in 4Q20F (Maintain Add with a TP of RM1.05)

Top Glove Corporation - All plants in Meru to be temporarily closed (Maintain Add with a TP of RM10.00)

Autos - TIV recovery stuck in second gear in Oct (Maintain Neutral) 

Palm Oil Drops to Two-Week Low on Softer Demand and Lower Soyoil

Malaysia Posts Record 2,188 New Coronavirus Cases on Tuesday

AirAsia (AAGB MK): Quarterly Loss Narrows From Record To $208 Million

Inari Amertron (INRI MK): 1Q Net Income 70.1M Ringgit Vs. 47.7M Ringgit Y/Y

My EG (MYEG MK): 4Q Net Income 70.7M Ringgit Vs. 60.4M Ringgit Y/Y

Syarikat Takaful (STMB MK): Cut To Hold At Cgs-Cimb; Pt Myr5.06

Top Glove (TOPG MK): Sees Delays In Some Deliveries By About 2 To 4 Weeks; May Mean Possible 3% Impact On Projected Annual Sales; Comments On The Closure Of Factories Due To Covid-19

Top Glove

RHB Research

Top Glove organised a conference call with sell side analysts at 10am-11am today 24-Nov.

Conference call update

1. For Teratai cluster, a total of 5767 test has been conducted out of which 2534 are positive. According to media, most of the positive case is from Top Glove. However, the % is not shared during the conference call.
2. None of the positive COVID case are in ICU. The media report on high ICU cases from Top Glove workers is not true. Out of those positive cases, 500 have been discharged and back to work.
3. Cost per COVID-19 test is MYR150 but claimable from SOCSO. Some urgent test cost for 500 workers is higher at MYR200 so the net cost will be MYR50 after deducting the MYR150 claim.
4. Top Glove plans to test all of its 8200 workers in Klang area. 5700 workers in Meru has been tested so the remaining 2500 will be tested soon or already tested and pending result.
5. Industry ASP should rise due to supply shortage. Nitrile gloves ASP for January delivery has increased 10% MoM and now is at around USD120 per box.
6. Short term plan is to get more local workers on contract basis.

Our view: Short term negative but long term neutral

The news is short term negative on the stocks as production process will be affected.

For every 2 weeks of operation loss, we estimate MYR181m earnings impact or 1.9% of FY21 earnings. Having said that, we estimate ASP increase should cover some of the earnings loss.

The news is long term neutral on the stock as it does not change the Company’s fundamentals as we believe that eventually the workers affected will resume working.

We maintain our BUY call with TP MYR9.50. Top Glove is now trading at close to -2SD valuation hence almost all of the bad news should have been priced in.

Top Glove - Victim of its own luck by CLSA 

The Malaysian authorities have mandated 28 of Top Glove’s factories (50% of its capacity) to close in stages given rising Covid-19 cases amongst its workers. Details are scarce on how the progressive closure will take place, but we estimate a worst case impact of 4% to its bottom-line assuming a month of full closure. Given recent developments, we believe investors are unlikely to ascribe an above-mean multiple even to the group’s higher FY23 sustainable earnings until there is greater visibility in forecasts. We downgrade Top Glove from BUY to Underperform and lower our target price RM10 to RM7.20 with it offering a 21CL dividend yield of 8%.

Technical Analyzer

Focus Dynamics (0116)
Outlook: Breakout MYR0.73
Levels: MYR0.79, MYR0.88
Exit: MYR0.73
(time frame: 2-4 weeks)

Perdana Petroleum (7108)
Outlook: Breakout MYR0.15
Levels: MYR0.165, MYR0.185
Exit: MYR0.15
(time frame: 2-4 weeks)

Ahmad Zaki Resources (7078)
Outlook: Pending breakout MYR0.245
Levels: MYR0.26, MYR0.275
Exit: MYR0.235
(time frame: 2-4 weeks)

JAKS Resources (4723)
Outlook: Pending breakout MYR0.655
Levels: MYR0.70, MYR0.725
Exit: MYR0.62
(time frame: 2-4 weeks)

SKP Resources (7155) (RM2.03): Technical Buy
Targets: RM2.20, 2.30
Stop: RM1.85

Kelington Group (0151) (RM1.77): Technical Buy 

Targets: RM1.90, 2.00

Stop: RM1.53 

Stock Name: FOCUS (0116)

Entry: Buy around RM0.735

Target: RM0.79 (7.5%), RM0.845 (15.0%)

Stop: RM0.685 (-6.8%)

Shariah: No

Technical: Breakout-pullback-continuation

Stock Name: DELEUM (5132)

Entry: Buy above RM0.59

Target: RM0.655 (11.0%), RM0.685 (16.1%)

Stop: RM0.56 (-5.1%)

Shariah: Yes

Technical: Consolidation breakout

Malaysia Strategy - Fund flows – Recovery play list expanding 

Malaysia Strategy - Supermax to replace KLCCP in KLCI index?

Tune Protect Group Bhd - Long and bumpy road to recovery (Downgrade to Reduce with a lower TP of RM0.25)

CCK Consolidated Holdings - Expecting a weaker 4Q20 result (Maintain Add with a higher TP of RM0.80)

EITA Resources Bhd - An overlooked recovery play (Maintain Add with a lower TP of RM2.06)

Karex Berhad - On the comeback trail (Maintain Add with a higher TP of RM1.38)

Malaysian Resources Corp - 9MFY20 core losses due to weaker billings (Maintain Add with a lower TP of RM0.56)

Sunway REIT - CMCO clouding over sunny days (Maintain Hold with a lower TP of RM1.50)

GHL Systems Bhd - Near-term challenges persist (Maintain Reduce with a TP of RM1.40)

InNature Bhd - 3QFY20: Commendable qoq recovery (Maintain Add with a TP of RM0.628)

Corporate News

 • Karex Bhd saw a net profit of RM4.46 million for the first quarter ended Sept 30, 2020, from RM167,000 in net losses a year prior,  due to favourable sales mix and improved cost control initiatives. Revenue rose 6.27% to RM101.73 million from RM95.73 million, driven by condom sales from the sexual wellness segment and record-high contribution from the medical segment.

• Tiong Nam Logistics Holdings Bhd saw its net profit increase to RM3.69 million in its second quarter ended Sept 30, 2020, from RM1.31 million a year earlier. Revenue dipped to RM149.05 million, from RM155.54 million. The group’s logistics and warehousing services segment saw an increased net profit. For the half year, the group saw a net loss of RM1.84 million, compared with a net profit of RM3.25 million in the same period last year. Half-year revenue fell 10.98% to RM272.04 million from RM305.57 million.

• Boustead Plantations Bhd posted a net profit of RM17.97 million in the third quarter ended Sept 30, from a net loss of RM34.31 million a year prior, on higher palm commodity production volume and prices. Revenue was up 48% to RM205.68 million, from RM139.24 million For the nine months ended Sept 30, net profit was down 46% to RM15.5 million, from RM28.72 million last year. Revenue for the period grew 34% to RM389.1 million from RM137.33 million.

• Sime Darby Plantation Bhd posted a third quarter net profit of RM190 million, compared with a net loss of RM243 million a year ago, on higher palm commodity prices. Quarterly revenue was up 13% to RM3.18 billion from RM2.82 billion previously. For the nine months ended Sept 30, net profit surged to RM1.04 billion from a net loss RM142 million a year ago, on the back of a 9% increase in revenue to RM9.44 billion against RM8.69 billion.

• Lotus KFM Bhd directors Wong Sak Kuan and Yau Ming Tek’s general offer for MESB Bhd failed to secure any acceptance from MESB shareholders. At the offer’s close, MESB shares held by the two remained at 46.83 minion or a 44.14% stake. The offer was triggered on Oct 12 after they bought 29.49 million shares for RM8.85 million.

• Guan Chong Bhd’s third quarter net profit declined 23% to RM46.78 million, from RM60.53 million a year prior on lower cocoa sales, narrower margins and higher tax expenses. Quarterly revenue was 13% higher at RM841.59 million from RM744.61 million. Nine-month net profit was up 1% at RM175.93 million from RM174.67 million, with revenue growing 24% to RM2.66 billion from RM2.15 billion. The group declared a second interim dividend of 1.5 sen per share, payable on Jan 20, 2021.

• Dayang Enterprise Bhd’s 3Q net profit declined 66.3% to RM36.08 million, from RM107.10 million a year ago. Quarterly revenue was down 35.6% at RM230.21 million, from RM357.58 million last year. The lower earnings were due to lower vessel utilisation and extra costs as from Covid-19 standard operating procedures.  Nine-month net profit was down 72% at RM44.42 million, from RM158.05 million a year prior. Nine-month revenue fell 24.7% to RM573.22 million from RM761.16 million.

• Malaysian Resources Corp Bhd (MRCB) saw its 3Q net profit slump 63% at RM920,000 from RM2.52 million a year prior on slower construction activities amid Covid-19. Quarterly revenue was down 20% to RM297.63 million, from RM372.74 million a year prior. The group posted a net loss of RM203.04 million for the January-September period, from a net profit of RM17.71 million a year prior on impairment provisions, Nine-month revenue was 5% at RM890.56 million from RM847.76 million previously.

• Serba Dinamik Holdings Bhd’s 3Q net profit  grew to RM148 million, from RM113.16 million a year prior on a strong performance from its operation and maintenance (O&M) segment. Revenue was 41.8% higher at RM1.48 billion, from RM1.05 billion previously. Nine-month net profit rose 20.76% to RM429.6 million, from RM355.76 million in the same period last year, while revenue rose 32.52% to RM4.2 billion from RM3.17 billion. The group declared a third interim dividend of 1.35 sen per share, payable on Dec 30.

• Hextar Global Bhd’s agriculture segment brought its 3Q net profit 43% higher at RM12.47 million, from RM8.74 million a year prior, while revenue rose to RM111.56 million from RM97.18 million. The group declared an third interim dividend of one sen per share, or about RM8.21 million in total, to be paid on Dec 28. This brings its year-to-date dividend declared to 3.2 sen per share, 79% of its current year's earnings.

• Top Glove Corp Bhd will temporarily shut down 28 factories in Klang due to a high number of Covid-19 cases among its workers. Senior Minister (Security) Datuk Seri Ismail Sabri Yaakob said the factories would cease operations in stages to allow for factory workers to undergo screening and mandatory quarantine to contain the spread of the virus. The Teratai cluster linked to Top Glove’s workers saw 1,067 new Covid-19 cases today.

• TA Enterprise Bhd’s substantial shareholder and co-founder Datuk Tony Tiah’s takeover to acquire the remaining 39.83% stake in TA Global Bhd has been deemed as not fair but reasonable. Independent adviser BDO Capital Consultants Sdn Bhd said the share exchange options is more favourable as the implied offer price of TA Global of 94.9 sen to 95.2 sen represents a discount of approximately 2.96% to 3.26% to the fair value per TA Global share. As the Covid-19 pandemic is still ongoing, the independent adviser has also recommended holders to accept the cash option.

• Kanger International Bhd has received support from the Ministry of Science, Technology and Innovation  to purchase Covid-19 vaccines for private-sector use in Malaysia. The moinistry’s agency National Institutes of Biotechnology Malaysia (NIBM) had no objection for the company to liaise with China National Pharmaceutical Group Corp (Sinopharm) on the purchase of the vaccines.

• Samaiden Group Bhd has secured an RM115.6 minion contract from BTM Resources Bhd to develop a biomass-based power plant in Terengganu. Samaiden has taken on an engineering, procurement, construction and commissioning (EPCC) contract for the development of a 10MWac biomass power plant in  in Teluk Kalong, Terengganu. Work will start on Jan 2, 2021, for completion within 23 months.

• Mesiniaga Bhd has signed an agreement with Maxis Bhd to provide the latter with hardware and software services for an information technology and engineering network modernisation project. The contract will last until Dec 31, 2025.

Technical Analyzer

MRCB (1651)

Outlook: Pending breakout MYR0.465

Levels: MYR0.50, MYR0.53

Exit: MYR0.455

(time frame: 2-4 weeks)

BINACOM (0195)

Outlook: Pending breakout MYR0.375

Levels: MYR0.425, MYR0.45

Exit: MYR0.36

(time frame: 2-4 weeks)

Rohas Tecnic (9741)

Outlook: Breakout MYR0.345

Levels: MYR0.365, MYR0.395

Exit: MYR0.335

(time frame: 2-4 weeks)

Excel Force MSC (0065)

Outlook: Breakout MYR0.48

Levels: MYR0.505, MYR0.53

Exit: MYR0.475

(time frame: 2-4 weeks)

Boustead Holdings (2771)

Outlook: Pending breakout MYR0.64

Levels: MYR0.66, MYR0.685

Exit: MYR0.63

(time frame: 2-4 weeks)

Prestariang (5204)

Outlook: Pending breakout MYR0.505

Levels: MYR0.535, MYR0.58

Exit: MYR0.48

(time frame: 2-4 weeks)

MTAG Group (0213)

Outlook: Breakout MYR0.74

Levels: MYR0.80, MYR0.845

Exit: MYR0.74

(time frame: 2-4 weeks)

OpensSys (M) (0040)

Outlook: Breakout MYR0.625

Levels: MYR0.675, MYR0.715

Exit: MYR0.625

(time frame: 2-4 weeks)

CCK Consolidated (7035)

Outlook: Breakout MYR0.50

Levels: MYR0.545, MYR0.575

Exit: MYR0.49

(time frame: 2-4 weeks)

Scope Industries (0028)

Outlook: Pending breakout MYR0.275

Levels: MYR0.29, MYR0.31

Exit: MYR0.26

(time frame: 2-4 weeks)

ATA IMS (8176) (RM2.33): Technical Buy

Targets: RM2.47, 2.60

Stop: RM2.13

Wellcall Holdings (7231) (RM1.24): Technical Buy 

Targets: RM1.35, 1.40

Stop: RM1.09 

GHL Systems Bhd - Recovery could be delayed due to CMCO (Maintain Reduce with a higher TP of RM1.40)

Only World Group Holdings - Looks like a patchy recovery ahead (Maintain Hold with a lower TP of RM0.27)

Pharmaniaga Bhd - Not immune to Covid-19 challenges (Maintain Reduce with a lower TP of RM4.15)

DiGi.com - Room to manoeuvre against headwinds (Maintain Hold with a TP of RM4.15)

1) DBHD (3484); Technical BUY with +29.0% potential return  

*Last: RM0.345 Target: RM0.395, RM0.445 Stop: RM0.295

*Timeframe: 2 weeks to 2 months

*Syariah: YES

2) HEXZA (3298); Technical BUY with +22.6% potential return  

*Last: RM1.33 Target: RM1.53, RM1.63 Stop: RM1.19

*Timeframe: 2 weeks to 2 months

*Syariah: NO

3) HEXTAR (5151); Technical BUY with +26.8% potential return  

*Last: RM0.785 Target: RM0.925, RM0.995 Stop: RM0.695

*Timeframe: 2 weeks to 2 months

*Syariah: YES

DNONCE – Riding on the positive healthcare and E&E growth

In 1QFY4/21, DNONCE recorded strong earnings of RM3.8m, which exceeded the RM0.6m in 16MFY4/20, primarily attributed to the robust results from glove packaging boxes, capacity expansion plans in the glove packaging business, coupled with the recovery in the E&E segment (amid global digitalisation trend and surging global datasphere) 

Following a 17.5% fall from RM0.715 (52W high) to RM0.59, valuation is undemanding at 11.6x FY21E P/E (about 28% below peers), capitalising on customers’ growth and capacity expansion coupled with promising prospects from the twin engines of growth (i.e. healthcare and E&E sectors)

Trend:  Pending a bullish triangle breakout

R1-R2: 0.62-0.66

LT objective: 0.715 

S1-S2: 0.57-0.56

Cut: 0.54 

Corporate News

 •Rubberex Corp (M) Bhd's net profit for the third quarter ended Sept 30, 2020 (3QFY20) surged 13 times to RM39.52 million from RM3.11 million a year ago, driven by higher nitrile glove demand. Revenue grew 75% to RM109.03 million from RM62.23 million. Nine-month (9MFY20) net profit surged near 10 times to RM71.74 million from RM7.47 million a year prior, while revenue increased 57% to RM236.56 million from RM168.33 million.

•The Employees Provident Fund (EPF) has emerged as the substantial shareholder of Hartalega Holdings Bhd, after buying 174.32 million shares or 5.09% stake in the rubber glove maker company. The block was purchased by EPF on Nov 17 (Tuesday). However, the transacted price was not disclosed in the filing. Hartalega shares price closed at RM14.64 that day. Based on the closing price, the block of shares is valued at RM2.55 billion. The provident fund bought more shares recently to take advantage of the recent share price weakness caused by the positive newsflow on the Covid-19 vaccine development.

•Top Glove Corp Bhd has spent close to RM1 billion, buying back its own shares since September. The world’s largest glove maker forked out RM69.94 million today to buy 9.58 million shares on the open market — marking its ninth-straight day of buybacks — at between RM7.25 and RM7.35 apiece. Today’s purchase has now raised the amount it has spent on share buy backs this month to RM629.13 million, after spending RM355 million in September — or a total of RM984.13 million.

•InNature Bhd’s 3QFY20 net profit surged 110% to RM6.58 million from RM3.13 million in 2QFY20, as revenue grew almost 33% to RM41.74 million from RM31.43 million, as store sales recovered. It declared an interim dividend of one sen per share, which is payable on Jan 15, 2021. On a year-on-year basis, net profit dropped 38.62% from RM7.2 million, while revenue was down 10.3% from RM46.52 million. Its net profit for 9MFY20 declined 43.95% y-o-y to RM12.47 million from RM22.24 million, while revenue dropped 20% to RM110.55 million from RM138.2 million.

•CSC Steel Holdings Bhd's net profit for 3QFY20 rose 21% y-o-y to RM12.72 million from RM10.53 million, as it sold more higher-margin products. 3QFY20 revenue was down 13% at RM306.84 million from RM353.67 million a year prior, on lower sales volume and average selling prices. Net profit for 9MFY20 declined 44% y-o-y to RM15.57 million from RM27.74 million, as revenue sank 31% to RM712.51 million from RM1.03 billion.

•Tropicana Corp Bhd recorded a 14% y-o-y drop in its 3QFY20 net profit to RM14.51 million from RM16.8 million, on lower sales and a temporary pause in activities, amid Covid-19. Quarterly revenue shrunk 9% y-o-y to RM223.97 million from RM246.13 million. For 9MFY20, the group's net profit was down 57% y-o-y to RM43.95 million from RM101.88 million, while revenue fell 7% to RM702.37 million from RM755.35 million.

•Perdana Petroleum Bhd posted a wider net loss of RM30.52 million in 3QFY20, from RM2.88 million in 2QFY20, as it saw lower vessel utilisation rates. The results were also impacted by impairment losses on property, plant and equipment, worth RM17.9 million. Quarterly revenue was down 13% to RM52.45 million, from RM60 million. Year-on-year, the group sank to the red from a net profit of RM18.09 million in 3QFY19, when its revenue was 40% higher at RM87.41 million. For 9MFY20, the group's net losses more than doubled y-o-y to RM47.3 million from RM20.29 million, though revenue dipped only 2% to RM172.12 million from RM175.95 million.

•Maxis Bhd’s wholly-owned Maxis Broadband Sdn Bhd (MBSB) has been hit with an RM140 million tax bill. It was served with notices of additional assessment with penalties for tax years 2016 and 2017 from the Inland Revenue Board (IRB) on Nov 17. The notices were raised, following the disallowance of MBSB’s deductions of interest expenses during 2016 and 2017. It is challenging the move via legal channels.

•AirAsia X Bhd (AAX) has been ordered to pay a total of RM133.05 million in two lawsuits brought against it in the UK, involving aircraft leasing. One is a claim from BOC Aviation Ltd (BOCA) over a breach of contract from which the court has granted a summary judgment against AAX and ordered it to pay BOCA RM97.31 million, with costs. BOCA, who has been leasing four aircraft to AAX since 2014, claimed the airline had breached its lease agreements. In the second lawsuit, the court made a judgment in default and ordered AAX to pay RM35.74 million to International Lease Finance Corp, a trustee for two aircraft leased by AAX.

低风险投资策略

买卖指标：

股息殖利率超过 5% 的股票。

选股原则：

① 该公司过去 5 年的营收获利稳定；

② 每年都有稳定的配息，并以现金股息为主；

③ 该公司所属的产业非景气循环股，若是有独特利基更好。

当某支股票股价下跌，现金股息殖利率高於 5% 时，就开始买进，安稳地坐等 5% 利息入袋。

反之，若是有公司股价涨幅过高，以至於股息殖利率， 低於 2% 时就卖出，赚取股价价差。

坚守原则：

① 具有坚定的信念，不受任何杂音的干扰。

② 遵守 5% 殖利率的投资原则。看好的股票若是股价过高，无法符合 5% 殖利率标準，就不进场。

③ 不随著市场起舞，重挫时进场捡便宜。