KUALA LUMPUR (Dec 8): Affin Hwang Capital has upgraded MTAG Group Bhd to "buy" from "hold", and revised up its target price to 98 sen from 82 sen.

It sees MTAG as a laggard sector play amid the recent run-up in the electronics manufacturing services (EMS) space, supported by its decent earnings growth backed by robust orders and expansion underway.

Affin Hwang Capital’s analyst Tan Jianyuan said in a Dec 7 note that MTAG is expected to take delivery of eight new machines, which should see current capacity expanding by 20%, in anticipation of robust future customers’ orders.

He also gathered that MTAG is in the midst of getting qualified for new customers recently secured by its EMS peers.

“The ongoing supply chain rerouting out of China continue to be a multi-year secular trend, driving EMS sector growth. This should benefit MTAG’s earnings as a result of robust customer new order flows,” said Tan.

SOLAR & MASTER?

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1) SOLAR, FIRST SOLAR & MALAYSIA.
US solar capacity may more than double in 5 years. US First Solar’s sales rose by 70%, driven by strong fleet-wide production with 100% production capacity across all its factories, and expect ?? Malaysia’s factory to start up in 2021.

2) SOLAR PANELS, USUALLY PACKAGED IN CORRUGATED BOXES.
Solar panels are usually packaged in corrugated cardboard boxes.

3) MASTER.
MASTER is a corrugated packaging manufacturer with value-added services. First Solar could be MASTER’s clients. In 2011, First Solar recognised MASTER as one of their Top Suppliers. As of FY2019, solar industry makes up 67% of MASTER’S revenue.

DISCLAIMER
Our study notes are for sharing purpose only. There is no BUY/SELL recommendation.

Congrats to those who discovered this gem together with us!

MBMR_J&T STUDY NOTES (NOV 10)

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1. BULLISH PERODUA SALES.

Perodua recorded its highest-ever monthly sales with 26,852 cars in October 2020, just after setting an all-time monthly sales record of 25,035 units in September 2020. Perodua’s two plants have been running almost at their maximum capacity since August in order tomeet the strong demand.

2) MMBR SELLS & SERVICES PERODUA AUTOMOTIVE.

MBMR sells Perodua, Daihatsu, Hino, Volvo and Volkswagen automotive. Perodua makes up 87% and 74% of the total MBMR vehicles sold and serviced in FY2019.

3) DECENT FUNDAMENTALS.

MBMR has a decent ROE of 6.82%. MBMR has a net cash of RM166.5 million. This is equivalent to a net-cash of 42 sen per share. At current share price of RM2.93, MBMR is traded a PER of 9.5 times and offers a high dividend yield of 7%.

Full article here.

DISCLAIMER
We share study notes for sharing purpose only. Our views could be
inaccurate. No BUY/SELL recommendation.

KRONO (Nov 9 QR Update)

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1) GROWING BUSINESS.

KRONO posted its latest quarterly results with RM4.9 million earnings - contributed by demand recovery across key markets, strong take-up of 'As a Service' and cloud hyperscale business.

2) GROWING REVENUE (& EARNINGS, WE BELIEVE).

KRONO expects revenue growth over the next few quarters.

Assuming a conservative RM5 million, non-growing quarterly earnings in the next four quarters, KRONO will make RM20 million earnings in the next four quarters. This is equivalent to an EPS of 3.8 sen.

3) HOW MARKET VALUES KRONO.

At a share price of 58sen, Mr Market values KRONO is at a forward 1-year PER of 15.3x.

DISCLAIMER
Our study notes are for sharing purposes only. There is no BUY/SELL recommendation.

KRONO_J&T STUDY NOTES

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On 2 Nov, KRONO announced the award of an exabyte-sized cloud hyperscale supply and managed services contract in China.

The implementation involves 《CHINA'S LARGEST CLOUD HYPERSCALE INFRASTRUCTURE》 for cloud-based data archive, long-term data preservation and retention services.

No matter who this Chinese cloud player is, we believe KRONO is
riding on a promising trend.

China's cloud computing market is already the world's second largest but is still just about one-tenth the size of the United States (the world's largest). There is plenty room for market size growth - positive for KRONO.

Read more at our telegr@m channel.

The best investment you can make is investment in yourself.

DISCLAIMER
We share study notes for sharing purpose only. Our views could be inaccurate. Target price is beyond scope. Share prices are ultimately determined by Mr Market. There is no BUY/SELL recommendation. Investors own their investment decisions and decision outcomes.

Welcome to take a look on our study notes in i3investor via the link in our telegr@m channel.

TRANSFORMATION & TURNAROUND
POSSIBLE?

YOU JUDGE.

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If you noticed, share price of POS surged last week. This surge caught our attention. Curious and interested, we dived into POS study.

We think that dismissing POS as a potential stock simply because it has gone up a lot, is unwise. Instead, fundamental investors look for stocks based on fundamental analysis, instead of feeling whether a share price is ‘too high’ or ‘too low’.

The two biggest eCommerce sites in Malaysia are Shopee and Lazada.

Both of them partner with POS (and also J&T Express) for delivery.

In August 2020, POS had experienced a drastic surge in the volume of parcels to be processed and delivered, ranging from 600,000 to 800,000 parcels a day from its capacity of only 300,000 to 400,000 parcels a day. POS expects this trend to continue throughout the rest of the year.

POS is also seeing higher than usual courier volume even after the easing of movement restrictions.

POS surged from a low of 75 sen to 93 sen within just 3 trading days, with abnormally high volumes.

We are curious to find out more.