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Hi to all investors and traders! After technical correction and rest for few days, today finally the glove stocks show sign of moving upward. For overall they are all still in trend, hopefully to test the previous high again.
Beside that, the other stocks related to medicine, medical equipment, healthcare also start to show some price increase after correction. for those who are still holding, can ride the trend.
Today I would like to share my thoughts to the following counter:
KIM TECK CHEONG CONSOLIDATED BHD or KTC (Code 0180, ACE Market, Consumer Products & Services)
Equipped with over 81 years of industry experience, the business has been successfully managed and it continues to expand its business presence and branding throughout East Malaysia and Brunei.
Today, Kim Teck Cheong (“KTC”) is a first tier provider of market access and coverage in the distribution of Consumer Package Goods (“CPG”) in East Malaysia with over 7,355 sales and distribution points covering more than 84 districts. KTC’s core business focuses on providing market access and coverage of CPG including food and beverage (“F&B”), personal care, household, baby care, over-the-counter (“OTC”) drugs and health supplements.

Why KTC?
There are 3 reasons:
  1. Result improved.
  2. Technical uptrend.
  3. Recent Gardenia license allow the business to expand not only in East Malaysia but also to Indonesia, Good future.

We can see from the chart that from Date of IPO until mid of 2018, the result delivered by KTC not looking good, and starting from mid 2018 the business only start to show sustain revenue and profit, the price been sideway between Rm 0.14 to RM 0.20 for year 2019, totally not reflex the real value for the QR delivered.
Also, the result can be sustainable, we can expect the good result to be delivered in this year. This is show in Annual report 2019(future outlook):
The continued acquisition of new agencies and brands, accompanied by the stabilising consumer sentiment, are expected to result in a sustained profitable growth for the Group in 2020 and beyond.

Technical chart

For technical indicators, the current price is above the EMA(50,20,10) line, and the line start to point upward, showing signal of entry.

New Market available
Kim Teck Cheong Consolidated Bhd said today that it has obtained the exclusive right to use the Gardenia trademark in Sabah, Sarawak and Indonesia, after inking two separate licence agreements with the registered trademark holders.
The first agreement will enable Gardenia Bakeries to operate the business of manufacturing bread, cakes and ice cream under the trademark, as well as to transport, supply and distribute the same in Sabah and Sarawak.
The second agreement, meanwhile, means Gardenia Bakeries can do the same business in Indonesia, and will allow the company to further expand its portfolio of distribution of third party brands and products across the country.
KTC said both agreements are expected to contribute positively to its earnings and net assets per share for the financial year ending June 30, 2020 (FY2020) and throughout the tenure of the deals.

Source: United States Department of Agriculture
We can see that the Indonesia market is around 6 times larger compare to Malaysia, if KTC success to expand the business to the country, it can greatly contribute positively to its earnings and net assets per share.

For all the reasons above, I believe KTC has potential for future, the QR result getting improve and recent of getting the opportunity to enter Indonesia market show bright future for the company, but share price do not reflex the real value, once break Rm 0.2 resistant will go higher. TP1 RM 0.25, TP2 RM 0.35.

Thanks for reading and see you in the next post.
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DISCLAIMER : Investment involve risk, including possible loss of principle and other losses. This article and charts are provided for information only and should not be construed as a solicitation to buy or sell any of the instruments mentioned herein. The author may have positions in soe of these instruments. The author shall not be responsible for any losses or lost profits resulting from investment decisions based on the use of the information contained herein. If investment and other professional advice are required, the services of a licensed professional person should be sought.

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