CSCSTEL (5094) - Technical & Fundamental Analysis

Technical Analysis


- There is a Inverted Hammer (strong buying force) with high volume on 19.12.18.

- CSCSTEL shares price able to sustain above EMA20 and it is challenging EMA60.

- MACD & RSI are bullish and overbought respectively.

- Resistance level, R2: RM1.120

- Resistance level, R1: RM1.100

- Support Level, S1: RM1.060

- Support Level, S2: RM0.990

Fundamental Analysis


Liquidity Ratios


a) Y2015 - Y2016

- Quick Ratio (Cash) has been deteriorated from 7.64x (Y2015) to 6.10x (Y2016) due to huge increment of current liabilities in Y2016.

- Huge increment of current liabilities in Y2016 mainly contributed by Interco Trade transactions with interest at 8% and CSCSTEL purchased two piece of leasehold together with a factory (RM41M) from Tatt Giap Group Bhd

b) Y2016 - Y2017

- Current Ratio improved from 10.45x to 11.56x due to increase of third party trade receivable but not impaired from RM24M to RM73M.

- Impaired trade receivable still maintained at RM0.78M.

c) Overall

- Liquidity of CSCSTEL is healthy and it able to meet short-term liability.

Solvency Ratios


a) Y2016 - Y2017

- Equity Ratio improved from 0.913 to 0.919 due to higher increment of total equity.

- Increase in total equity mainly contributed by transfer from share premium (RM33M) without impact on number of outstanding shares and increase of retained earning by RM8M.

- Higher in total equity indicated higher of commitment from owner and better business perspective in long run.

Efficiency Ratios


a) Y2017

- Although higher in Asset Turnover and Inventory Turnover, CSCSTEL was facing difficulty to collect sales proceeds which lead lower Account Receivable Turnover

- Lower Account Receivable Turnover & Days' Sales n Inventory might due CSCSTEL allow customers enjoy longer credit term to sales position without further reduce in product pricing.

Profitability Ratios


- There are significant bad impact on profitability of CSCSTEL in Y2017 with higher COGS, slow in sales collection, higher trade receivable.

- Thus, shares price reflect the bad impact which decrease from RM2.08 to RM0.99 in Y2017 & Y2018.

Market Prospect Ratios


- From perspective of dividend payout, CSCSTEL never fail to payout dividend to investor in bad or good times.

- As a dividend investor, CSCSTEL is a good dividend cow but we might have a bad experience as dividend payout (cents) are far below depreciation of shares price.


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Location: Malaysia

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