My Portfolio Oct20

 Summary for October 2020

Portfolio @ End of Oct20

This October was not a good month for stock market as KLCI retreated 2.5%. Overall my portfolio registers a small gain of 1.2%, thanks to Prolexus, Scientex & Supermax.

I did not have any intention to buy stocks in October as I planned to wait until after the US election to have a clearer picture. 

However, I added my position in Jaks a trading day before the ex-date of its rights issue. I didn't sell any shares since none reaches my target price.

I always have a plan in mind to top up Jaks either before or after the rights issue. I regretted that I missed the chance to do so when its share price was below 80sen not too long ago. 

I rarely talk about Daya during my monthly review. Even though it is categorized as "junk stock" which is left without much care in my portfolio, I still have some hope for it.

After reading its recently released annual report of FY2020, I have slightly higher hope for it to turnaround when the oil & gas sector crawl back.

If it does turnaround, I guess the return would be enormous but if it fails, it might face delisting.

Hibiscus is another stock which suffers a lot during this pandemic. Recent focus will be on its CRPS, which is heavily promoted by its MD. 

How many investors will subscribe to its CRPS with 4% dividend at conversion price of 66sen, while its current share price is 45sen?

I'm positive about its plan to acquire producing assets, that's why I added its shares in September. In hindsight I should have waited more patiently.

For SCIB & KPower, everything looks good so far. I think both will release good quarterly results in term of net profit this month. However, their EPS might not increase too much due to the increase in outstanding shares after private placement.

As part of its initial plan to diversify into logistic space, KPower recently spent RM10mil to acquire 51% of Chemtrax which is specialized in chemicals and gas transportation and forwarding services.

Chemtrax earned RM2.9mil in net profit (EBIDTA RM5.8mil) in FY19 (ended Dec 2019) and there is EBIDTA guarantee of RM5mil in each financial year of FY20 & FY21. 

Although this does not seem a lot with KPower holding 51%, it remains to be seen how KPower's management grow this segment especially when the transportation of chemicals involved in nitrile gloves manufacturing increases. 

In its latest FY2020 annual report, KPower "expects to further increase its orderbook by RM2.0 billion by the end of financial year 2021 (which ends in June 2021)". It has already secured RM1.4 billion contracts in the past one year, another RM2.0 billion in the next 8 months would be great.

Some of the expected contracts will come from LSS4 in which successful bidders will be announced around early 2021. KPower bids to be owner of 50MW LSS farm, as well as EPCC contracts for other successful bidders.

So it's more or less the same with Cypark, Solarvest and newly listed Samaiden.

I have all these 3 companies in my watch list but I haven't make my move to buy yet. Cypark is really very attractive at 80sen but its cashflow remains a concern. I think it needs some time.

Solarvest is good but the share price is relatively high. Samaiden looks promising but I'm a bit worried about the expiration of its zero tax incentive since June 2020.

So why not sticking with KPower if I'm to participate in solar energy business, since I always plan to minimize the number of stocks in my portfolio?

SCIB has already released the circular of its bonus issue with free warrants. If everything goes to plan, shareholders will know the entitlement date in the end of November, probably together with quarterly result announcement, and the ex-date will be in early December. 

Scientex gains 12% in October mainly due to its excellent result and bonus issue announcement in September. The bonus issue entitlement date is still pending.

JHM's share price has been fluctuating up and down around RM1.70 and it has been approved to be transferred to the main board. Even though its future looks promising to me, I'm not very confident that it can post a very good result later this month as I don't have many clues.

Once a star performer, JHM seems to be out of the radar now, as I can see that many news, articles & live talks listing out all tech stocks but JHM seems to be always missing in the list.

Krono delivers a rare good news today as it bags an exabyte-size (1 billion gigabytes) cloud hyperscale supply and managed service contract from a "market leader" in China.

The amount of the contract is not disclosed but it's definitely an encouraging development. Anyway, I don't expect Krono to post a good FY20Q3 result.

I had a plan to top up Prolexus after it released that superb result. However, while I was waiting for its share price to drop back, it shot up fiercely instead. So I'll just keep holding them as I expect better result in the next quarter.

Today Prolexus announced that its face mask has just been registered with US FDA for general public & healthcare personnel. Its registration with European Union is still in progress.

Previously I made a mistake by writing that Prolexus's ProXmask 90v fabric masks are sold in the US market via Amazon.com. It looks like the "ProX" fabric masks sold in Amazon.com are not the same as Prolexus's masks. 

So I think Prolexus mainly sells its fabric masks in local market only before this. It will be great if it can sell to US and Europe after getting the green light.

Lastly, the ever popular Supermax. 

The rally of gloves stocks seems to be out of steam for 2-3 months now. I do not expect a high PE ratio for gloves stocks. A forward PE of 10-12x is good enough for me.

In early November, market continues to go down amid political uncertainty in US as well as locally. New lockdowns have been re-implemented in various countries especially in Europe.

It definitely doesn't look good from here but I believe (and hope) that the market can still end this turbulent year of 2020 in style.