TECHNICAL AND FUNDAMENTAL ANALYSIS

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KMLOONG (5027) - Fundamental & Technical Analysis

January 1, 2019

Technical Analysis

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- EMA 30/50/150 merged and turned downward on 10.08.2018. It indicated a strong selling pressure on KMLOONG.

- The shares price further drop and complete the neckline (From 27.9.18 to 13.11.18)

- There are strong buying force with high volume and support KMLOONG price open gap up and closed at RM1.180 on last trading day (31.12.18).

- If shares price able to sustain above RM1.170 (Neckline Position), it will able to challenge RM1.240. Overall, KMLOONG still under bearish performance.

- There is an inverted hammer appeared on 31.12.2018. There are selling pressure and/or profit taking which lead uncertainty on next opening trading day.

- Resistance, R1: RM1.240

- Resistance, R2: RM1.201

- Support, S1: RM1.170

- Support, S2: RM1.130

 

Fundamental Analysis

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Liquidity:

- Quick Ratio (Cash & Asset) and Current Ratio decrease significant due to current liabilities increase faster than cash in hand & assets.

-Current Liabilities increased due to Third Party Trade receivable increase by RM14M from YOY2016 - 2017 basis.

- It might lead to difficulty in term of sales collections and/or longer credit term given to customer to sustain revenue.

- Overall, KMLOONG EBIT able to cover interest expense by 116 times.

Solvency:

- Debt to Equity further improve from Y2016-Y2017 with higher retained earning by RM28M which lead higher KMLOONG equity.

- Higher retained earning able to lead company to further expand business model and sustain competition position during crucial market situation.

- Due to higher inventory level in Y2018 (lower demand of crude palm oil), it lead debt ratio lower with higher total asset by RM17M.

Efficiency:

- Although Third Party trade receivable increase since 2015, KMLOONG able to improve account receivable turnover which indicate better management in term of sale collection.

- Overall, better in asset turnover/inventory turnover/Days' sales n inventory indicated current credit management lead a position impact on company efficiency.

Profitability:-

- There are huge improvement in term of ROE/ROA/ROC but shares price reflected the company performance accordingly.

- However, markets suspect KMLOONG unable to sustain such performance in coming years due to crude palm oil price further drop and hovering around RM2000/MT

 

 

 

 

 

 

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