Stock Market Books

Monday, September 9, 2013

Hot Stock Green Packet, warrant surge on retail play

Hot Stock Green Packet, warrant surge on retail play
Business & Markets 2013
Written by Ho Wah Foon of
Monday, 09 September 2013 13:27

KUALA LUMPUR (Sept 9): GREEN PACKET BHD [] and its warrant rose
sharply in active trades on renewed retail trading play although there was no
news flow, said retail dealers.

“We don’t hear any positive news about the company today but we do see
retail play coming in from Sept 2 when it was at 31 sen per share. Though
loss-making, this firm is still a significant mobile broadband player,” said
Goh Kay Chong, senior remisier at SJ Securities Bhd.

At 12.30 midday break, Green Packet surged 6.5 sen or 20% to 39.5 sen per
share, on trades of some 19 million shares; while its warrant soared 4.5 sen
or 50% to end at 13.5 sen on 26.5 million units.

While Green Packet was the 6th most active counter, its warrant ranked 4th
on the active list.

According to exchange filings, net assets per share of Green Packet as at
end-June 2013 was 15 sen.
“I have checked this morning and there is no news at the moment. So we
reckon it could be retail trading play or speculative play by some big players.
“Due to regular quarterly losses, this company’s share has suffered selldowns. The stock price is now at its lows and is seen coming back on technical rebound. But I am wary of this stock as there is too much speculative play by hit-and-run payers,” said another senior dealer.

For the first half of this year, Green Packet incurred a wider total loss of
RM39.6 million compared to loss of RM32.6 million a year ago. But revenue rose to RM300.3 million, from RM266.5 million.

However, Green Packet’s managing director C.C. Puan said in a statement before releasing the company’s second quarter results that the firm had posted huge increase in its earnings before interest, tax, depreciation and amortisation (EBITDA) for the quarter due
to its business transformation plan.
The mobile broadband services provider posted an EBITDA of RM9.4million, a 116% year-on-year jump. Green Packet’s revenue for the second quarter rose 9% to RM151 million.
“We revised our strategies for better performance all-around in view of challenging market conditions and it is proving effective in getting us on track for 2013,” he said.

According to Puan, better cost management and lesser capital expenditure this year should see EBITDA margins improving.

Recently, the company also announced it intended to sell a property of a wholly-owned subsidiary for RM49 million to help pay off debts and reduce gearing. This will also help raise the net assets per share to 22 sen.

Dealers said Puan, who has recently replaced his long-time friend Michael Lai as chief executive officer of P1, might be another factor that boosted Green Packet’s share price. Puan is the controlling shareholder of Green Packet.

Packet One Networks (P1) is a telecommunications, broadband and 4G service provider. The company, founded in 2002, is the main subsidiary of Green Packet.

Thursday, September 5, 2013

Hot Stock: Supermax surges for 2nd day on upbeat analyst reports, weak ringgit, valuation

Hot Stock: Supermax surges for 2nd day on upbeat analyst reports, weak ringgit, valuation

Written by Jeffrey Tan of
Thursday, 05 September 2013 15:57

KUALA LUMPUR (Sept 5): Supermax Corporation Bhd saw its share and warrants rise sharply for the second consecutive day, after more analysts recommend a “buy” on the undervalued stock.

The glove stock rose by as much as 21 sen or 8.5% today. Yesterday, it rose 13 sen or 5.5% to close at RM2.46 per share.

The sharp fall in the ringgit vis a vis the US dollar is a positive for the company and the rubber glove sector in general, as export sales are denominated in dollar.

Supermax is also credited for having built a strong own brand manufacturing (OBM) presence and the stock price is seen as undervalued by 40% by a research firm.

At 3.36 pm today, Supermax share rose 19 sen or 7.7% to RM2.65, with volume of some 12 million shares. It was the fifth top gainer.

Dancing along with Supermax were its structured warrants. At 3.30 pm,SUPERMX-CM rose 11.5 sen or 109.5% to 22 sen with trades of 62 million units. It was the second top active counter.

“The big quantum change in Supermax’s share price is mainly due to the
weakening of the ringgit against the US dollar and as a result, its warrants rose too,” said senior remisier Goh Kay Chong over the telephone.

In a note today, Kenanga Research highlighted that Supermax will be a beneficiary of the weakening ringgit since the group did not hedge its US dollar receipts.

The research house said it likes the glove producer because it was trading at 10.5 times FY14 earnings per share (EPS) compared to its average 14% net profit growth over the next two years.

It added Supermax’s year to date share price performance (up 20%), was still lagging behind other players such as Kossan (up 90%) and Hartalega (up 40%), it said.

“We maintain outperform rating on Supermax with target price (TP) of RM2.82 based on twelve times FY14 EPS,” said Kenanga.

Meanwhile, TA Research said in a note yesterday that the glove producer had strong OBM presence, which made up 69% of sales mix.

“We are confident Supermax’s marketing capabilities will help ensure new capacities are utilized as and when they arrive,” said TA Research.

The research house has reiterated its ‘buy’ call on Supermax, with unchanged TP of RM2.90.

Wednesday, September 4, 2013

Hot Stocks Pelikan and China Stationery fall, merger deal reportedly off

Hot Stocks Pelikan and China Stationery fall, merger deal reportedly off
Business & Markets 2013
Written by Kamarul Anwar and Ho Wah Foon of
Wednesday, 04 September 2013 13:24

KUALA LUMPUR (Sept 4): Pelikan International Corporation Bhd fell by as much as seven sen or 14% early today while China Stationery Ltd (CSL) fell 4% after their merger deal was reported to be falling apart by a Chinese newspaper yesterday.

Another news report today said that a CSL official had confirmed that the two companies’ distribution synergy had been called off.

The official said the main reasons were cultural differences between the two companies and differences in opinion over the pricing strategy.

At 12.30 lunch break, Pelikan shares receded 4.5 sen or 9% to 45.5 sen on heavy trades of 32.6 million shares. The net value of the share as at endJune 2013 was RM1.04.

CSL of China ended at 23 sen per share, down 0.5 sen or 2% after falling to a low of 22.5 sen, on trades of 32.8 million shares. Its net value per share stood at RM1.14 as at end-June 2013.
Both counters were among the top ten actives.

According to senior remisier Goh Kay Chong, the plunge of Pelikan shares today could also be due to profit-taking, as the stock had surged 14.5 sen or 41% to close at 50 sen yesterday.

Goh of SJ Securities told that Pelikan had surged after the news report yesterday because investors thought “it is good for Pelikan to split with China company.”

“To split with China Stationery of China could be good for the stock as investors do not have much confidence in China companies. Punters who bought yesterday are making money today,” said Goh.

He said lately investors are also looking for penny stocks to play as blue-chip counters have been victims of the volatility brought forth by the impending tapering of the US Federal Reserve quantitative easing.

In addition, investors do not like the way Pelikan had been sold down by CSL

According to exchange filings, Pelikan had been a subject of recent disposal by China Stationery. As of yesterday, CSL held only 2.37% of Pelikan shares after disposing 3.56% stake between August 28 and 30.

Last December, Pelikan signed a two-year dealership agreement with CSL for the latter to distribute and sell office and school stationery products marketed by Pelikan under the "Pelikan" trademark in China and Hong Kong on a non-exclusive basis.

But CSL has been reducing its shareholding in Pelikan after the former had paid a premium to acquire a 9.79% stake for RM50 million  via a share swap.