Analysis of Aeon Co. (M) Bhd

Aeon Co. (M) Bhd

A company that involved mainly in issuance of Credit Cards, Easy Payment schemes, Personal Finance schemes, Insurance business and other services. Hereby attached some statement analysis and technical analysis I have done. (Note: The highlighted red data is from unaudited quater report of Aeon Co. (M) Bhd.)

Financial Statement Analysis

Profit margin ratios: Remain steady from 2007 to 2011. I interpret this as this company are not facing fierce competition from close competitors so need no to cut down margin to gain revenues.

ROE: Uptrend.

Overall cost/revenue or EBIT ratios: Overall downtrend. I interpret as effectively and efficiently in maintaining cost. The growth rate of  revenue/ EBIT has surpassed the growth of costs gives such results in reduction of overall cost/revenue or EBIT ratios.

Net receivable/revenue ratio: Maintain at a healthy range. Here shown the ability to grow receivable base in accordance with revenue.

Current borrowing/Non current borrowing ratio: Remain lowest at year 2011. Indicates less aggressive effort by using more long term debt to finance the business which is appropriate as this prevent the risks of the maturity of short term borrowing and unable to reborrow again. 

Debt to equity: Downtrend. The growth of equity base through increase in retained earnings(results from  uptrend net profit yearly) yearly has decrease this ratio year by year as the growth of debt is lesser than equity.

Capex/Net profit ratio: Downtrend. Indicates the company increase in ability to finance its capital expenditure by using lesser portion of the net profit. This also shown that the R&D expenditure are low for the company to remain competitive in the market.

EPS: Uptrend.

With the consistency provided by the company, the predictability of the company's EPS has increased. With the lowest PE ratio of the  lastest 5 years provided by OSK188.com, which is 6.547 multiply with the projected next 10 years EPS, which is 2.3632 (0.5286*1.16155^10), we will able to get a share price of RM15.47. Based on the price you have invested, for example RM7.4, you will able to get average annual growth rate of 7.65% return on capital gain excluding dividend gain. (FV= RM15.47 and PV= RM 7.4) 

Technical Analysis

MACD: Divergence with price. A higher high in price and a lower high in MACD.

EMA: The price has crossed EMA20d after approximately half year.

Price and volume: The price has pull back from the high with moderate volume.

I interpret this as profit taking by some investors in the market after bullish of approximately half a year. Currently, the stock is trading at retrenchment region. 

(Note: This post does not contain a buy or sell order. Any information disclosed above might contain mistakes and any losses incurred from using the information above I will not be liable.)

Due to the market booming with the bearish economic conditions, I plan not to touch any stocks at this moment and look into gold instead.

Hereby attached daily chart of gold.

Trendline Analysis: As compare to the medium term downtrend line and the short term downtrend line, the downtrend momentum has decreases. 

MACD: Divergence with prices.

Expectations: Retrenchment is happening currently. Next support should be 1680.

Naim's Fundamentals Information

Naim's Fundamentals and Technical Information

Naim has a consistent ratio from year 2003 to year 2010. However, the recent  3 months cumulative result for 2011 is not so favourable as the consistency in margin had been badly affected. Therefore, the ability for the company to get out from the current non favourable situation need to be examined.

Firstly, the loans and borrowings under non current assets had increased dramatically by approximately 1524% accompanied by a decreased in current liabilities by approximately 39%. Even so, the cash and cash equivalents available are able to cover approximately 40% of the total liabilities. From that, the short term financing should not be a problem even though increase in liabilities is not preferable as it increases the debt to equity ratio greatly. Further information is required to determine the purposes of such huge non current loans and borrowings.

Secondly, the law suite facing by Naim currently might further affects Naim's situation.

Thirdly, the suddenly decrease in EPS has also created a doubted situation on the management's abilities to produce a consistent earnings for shareholder's.

However, its investment associate, Dayang, had shown a improved EPS for the recent 3 months cumulative result. This might be able to compensate Naim's non favourable situation.Furthermore, Naim is currently trading approximately 53% discount to its NAV based on the closing price on 27 Jan 2012.

Technically, MACD had shown a divergence as against price. EMA 20d crossed over EMA 50d. Volume surged as break out RM1.8 resistance but volume decrease on the next long spread bar might implies exhaustion in buying. Next resistance RM1.96.  Good opportunity for buying during retrenchment. Bullish technically.

Overall, Naim would be a good bargain based on chart and fundamental value for medium term investment.

The top ten secret of successful trader

Just read through Technical Analysis for Dummies, 2nd Edition again to refresh my memory on technical analysis. Found this chapter is significant for a technical analyst, which are the behaviors of  successful technical trader. Wish to highlight it here to remind myself at the same time share to all of my blog reader.

1. Trust the chart. After select securities to trade (either by its fundamental, news or other reason), follow the chart rather than other factors.
2. Befriend the trend.
3. Understand that you make real cash money only when you sell. Take profit when necessary according to technical analysis rather than buy and hold.
4. Take responsibility. Have a reason for making every trades and never have the thought of "gamble".
5. Avoid euphoria and despair.Define suitable trading system and follow it strictly.
6. Focus on making money, not being right. Admit failure, willing to cut loss according predefine stop-loss rather than stubbornly thinking self is correct.
7. Don't let a winning trade turn into a losing trade. Define trading and money management rules.
8. Sidestep the temptation of curve fit. Backtest indicators on historical data to find parameters worked the best.
9. Know when to hold `em and when to fold `em.
10. Diversify. Diversification through the choice of indicators(Use indicator with different principle) and choice of securities.

Happy investing!

Annjoo Technical Analysis

Annjoo's daily chart

Trend: Downtrend with reversal signals

Momentem: The bear momentem for the period 12/12-20/12 has decreased as compare to the period 05/09-27/09. This might indicate a 'true' reversal in coming.

MACD: MACD cross over signal and MACD shown a divergence with price indicate a bullish signal . Bullish price bar broke through 20d moving average. 50d moving average nearby historical resistance, might results in price pull back before further uptrend.

Volume spread analysis: 12/12 - 20/12 bear price movement accompanied by rising volume at the beginning and decreasing volume at the end which might indicates decreasing selling pressure. I interprete the 3rd latest price bar at 3/1/2012 as a testing of supply which is a sucessful test.

Conclusion: High probability for reversal of bear. Profit target 2.2.

(Note: This post does not contain a buy or sell order. Any information disclosed above might contain mistakes and any losses incurred from using the information above I will not be liable.)

Technical analysis for Sunreit

Monthly chart for Sunreit

Overall uptrend for long term outlook.

Weekly chart for Sunreit

Overall uptrend, retrencement might occur next week.


Daily chart for Sunreit

Overall uptrend, retrencement might occur next few price bars.

Conclusion: Retrencement might occurs soon. Make position during retrencement in the range of 1.17 and 1.20.

(Note: This post does not contain a buy or sell order. Any information disclosed above might contain mistakes and any losses incurred from using the information above I will not be liable.)

Fundamental analysis for Sunreit

Due to the uncertainty provided by the local and foreign environment, defensive stocks like reits is recommended as they provide good dividend yield (which higher than FD in bank) while searching for opportunities to invest undervalued stocks.

Reasons for analysing Sunreit

1. Acquisition of the Sunway Putra Place will be expected to give a higher rental income for the company.
2. Sunway Pyramid 3 will be expected to benefit Sunreit.
3. Proposed MRT will be expected to benefit Sunreit. 

By looking at the P/E ratio, Sunreit has a ratio of 5.86 (as at 3 Jan 2012) which is the lowest among all the listings reit counters in Malaysia. After read through the newest report of Sunreit, the low P/E ratio is mainly due to the high unrealized gains of the company which higher than the 2 retail reits players (Hektar and CMMT). I believed that the high unrealized gains will be sustainable even though with a lower growth rate as the newly first quarter report ended 30 September 2011  recorded a higher rental income (rental income is the base for sustainable growth for property prices).

The vertical analysis has shown a normal distribution among all the components available in statement of financial position as compared to (Hektar and CMMT).

Vertical analysis for Sunreit	2011 (000)	Ratio
Assets
Non-current assets
Plant and equipment	122	2.78595E-05
Investment properties	4,379,000	0.999972141
Investment in a subsidiary
	4,379,122	1
Current assets
Trade receivables	9,393	0.127323004
Other receivables	5,068	0.06869722
Amount due from a subsidiary
Cash and bank balances	58,606	0.794409879
Derivative financial instruments	706	0.009569897
	73,773	1
Total assets	4,452,895
Equity and liabilities
Unitholders’ funds
Unitholders’ capital	2,350,437	0.848211689
Distributable income	420,613	0.151788311
	2,771,050	1
Non-current liabilities
Borrowings	1,502,025	0.966520468
Long term liabilities	52,029	0.033479532
	1,554,054	1
Current liabilities
Trade payables	815	0.006377601
Other payables	67,626	0.529192197
Borrowings	59,350	0.464430202
	127,791	1
Below are ratio analysis among the retail reits counters	4,452,895

	Sunreit	CMMT	Hektar
Income statement ratio analysis
Net property income/Gross revenue	0.7453	0.6956	0.609
Net investment income/Gross revenue	1.9291	1.5652	0.6221
Profit for the period/Gross revenue	1.691	1.156	0.4312
ROE (ratio) before adjustment	0.2356	0.0825	0.1194
ROTA (ratio) before adjustment	0.1243	0.048	0.05
Realised income (ratio)	0.3022	0.2564	0.9742
Unrealised income (ratio)	0.6978	0.7436	0.0258
Balance sheet ratio analysis
Current ratio	0.5773	1.7972	0.13
Debt to equity ratio	0.6069	0.5877	0.8565
NAV per unit (according to lastest report)	1.014	1.0333	1.32
Market ratio
P/E ratio	5.8624(price=1.21)	17.78(price=1.44)	10.78(price=1.32)
Dividend Yield	5.438(price=1.21)	4.674(price=1.44)	7.803(price=1.32)

From the income statement ratio analysis, sunreit has shown a better result as compared to Hektar and CMMT because I seen it has a better profitability efficiency (in my opinion). 

From balance sheet ratio analysis, sunreit's current and debt to equity ratio lies between ratio figures of Hektar and CMMT. I look this as appropriate as the the ratio figures of Hektar and CMMT are in the extreme. However, Hektar has a better NAV per unit as compared to Sunreit and CMMT.

From market ratio, Sunreit has a better P/E ratio while Hektar has a better dividend yield.

Analysis of unitholdings

Sunway City Berhad (36.72%) , EPF (8.85%), Government of Singapore Investment Corporation Pte Ltd (4.99%) and AmanahRaya Trustees Berhad (5.87%) are the major shareholders of the company.

Overall, I interpret Sunreit has a good fundamental background and good growth opportunities in the future. 

(Note: This post does not contain a buy or sell order. Any information disclosed above might contain mistakes and any losses incurred from using the information above I will not be liable.)

Market outlook for 2012

1. Volatility and uncertain as 2011 due to lack of clear measures and resolutions for the debt Eurozone crisis and also the US debt deficit problem. There is high possibility of major developed economies will slowdown.
2. Countries like Malaysia as an emerging market which relies greatly on exports expected a slower export and growth.
3. Singapore Stock Exchange (SGX) will be linking up with other South East Asian neighbours Bursa Malaysia and Stock Exchange of Thailand (SET) in 2012. Might attract more foreign funds into Malaysia market. Overlooked stocks might be brought to fair value in ease in the future.
4. General election(GE) might results in withdrawal of funds by the foreign funds due to the uncertainty provided by the GE. KLCI index is expected to drop below 1500 points before GE as the breakout for 1500 during the last week of 2011 might be due to window dressing.
5. Defensive stocks like healthcare and reits are recommended. 

Happy investing!