PCCS shine out in FYE 2020 despite challenges from Covid19 pandemic

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As you had know, I had been invested into PCCS earlier this year because of several reasons.

I would summarized the reason I am invested into PCCS, or you can refer to my previous posting on PCCS as a research and referencing material for you to study in depth into PCCS.

My core pointers will be

1. PCCS is diversifying into MEDICAL HEALTHCARE TECHNOLOGY. The joint venture between PCCS and SHANGHAI SHENQI MEDICAL had been finalized, and grounds work are going on in bringing the product into the Asia Pacific market (Excluding China and Japan). The product mainly focus on heart related illness.

2. PCCS had been a accidental beneficiaries with the military coup in Myanmar, where apparel orders will divert to neighboring country. PCCS operation in Cambodia will benefit.

3. PCCS label and packing operation will be looking for a good turnaround with more positive development.

4. PCCS had entered into used car financing venture that will see consistent cashflow for the group.

PCCS had delivered Q4 2020 result in a fantastic manner despite being in the Covid19 pandemic.

PCCS deliver EPS 2.81 cents. Future revenue contributor will be used car financing and sales of medical technology product.

Technical outlook

On the technical outlook, PCCS can be seen trading at the bottom support line of the trading range. At the price range of RM 0.46, the share price is well supported.

RM 0.60 will be the resistant line. Breaking above RM 0.60 will signal a very positive uptrend to the share price.

IMPORTANT NOTICE

Please be informed, I am not a professional or certified analyst. I am not a licensed consultant, just a normal retail investor. I am just sharing my ideas and opinion on the market outlook. Any company mentioned should not be interpreted as a buy/sell/trade call. Please do your own research and buy/sell/trade at your own risk.

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Cryptocurrency shift to farming on disk drive storage space are driving up demand for HDD and will benefit MCLEAN positively in the long run

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If you are my hardcore reader, you would have know that I am an avid investor of Mclean Technologies Bhd (Mclean - 0167).

Mclean had established itself as a strategic partner to Seagate by focusing it's resources at Thailand, which is Seagate main production house for data storage devices (HDD/SSD).

The recent market biggest hype cannot be short of cryptocurrency where many multi millionaire and billionaire start appearing as cryptocurrency start to surge into unbelievable amount.

The pioneer of all cryptocurrency - Bitcoin surged past USD 60k for 1 bitcoin last week.

1 of the major letdown on Bitcoin mining is the very high energy consumption to complete the Proof of Work. Very complicated mathematical puzzle are demanding more high powered ASIC / GPU to compute the solution in order to get rewarded with the bitcoin.

While the global leader are tackling on the issue on global warming, bitcoin energy consumption might not be so friendly in the long run. As an improvement to the cryptocurrency technology, a new coin which is based on Proof of Space and Time is now gaining traction globally.

Meet the new coin - Chia Coin

The Chia Coin launching had been gaining massive traction globally, and momentum are getting real when you start to see HDD/SSD getting sold out in certain region.

https://www.techradar.com/sg/news/this-new-cryptocurrency-could-potentially-cause-an-ssd-or-hard-drive-shortage

investing.com/news/cryptocurrency-news/meet-chia-chinas-new-bitcoin-2476600

If that is not convincing you enough, Seagate share price is reflecting positively with strong upside

As we know that Mclean revenue from surface treatment and precision cleaning come from demand of HDD volume.

Since Seagate is going to ramp up production, we can comfortably expect Mclean to deliver revenue growth and better profit.

At the current price of RM 0.46, Mclean market cap is just RM 90 million.

The previous market correction and adjustment and the positive news development in HDD industry had definitely made Mclean a good attractive target for the long run.

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PCCS on an uptrend with positive business development

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If you had been following my investment blog, you would have know that I am invested into PCCS for several reasons.

1. PCCS garment operation to be able to see a strong growth of revenue which will be derived from the demand of orders running away from Myanmar due to the military coup. These orders will not be a one time off bonus, but will be recurring for the next possible 3 to 4 years until very structural reformed being seen in Myanmar that can lure the foreign investor back into the country.

2. PCCS label and packaging business should be able to gain traction and increase with more demand in packaging all over the world.

3. PCCS to diversify into healthcare technology sector, which is an evergreen segment going into the long run. Although the company is currently at it's MOU stages and had not signed into any definite agreement of exclusive partnership for exclusivity in product distribution, the outlook is very positive to see that PCCS will definitely not throw the towel, but making it happen. This is reinforced with the setting up of La Prima Medical in Singapore and Malaysia that is specially for the division of healthcare technology.

PCCS Medical Industry website

http://www.pccsgroup.net/industry01.html

I had previously mentioned about PCCS and is invested in PCCS.

Target Invest KLSE: PCCS NEW BUSINESS VENTURE INTO HEALTHCARE TECHNOLOGY TO SEE GREATER UPSIDE (targetinvest88.blogspot.com)

Target Invest KLSE: PCCS garment manufacturing department to see windfall from Myanmar political coup which affect the garment industry supply (targetinvest88.blogspot.com)

I will be looking to see PCCS growing further into a big company in the foreseeable future.

The technical outlook for PCCS is very good with convincing strong uptrend. Technical wise, it will be looking for a break out above RM 0.60 once final consolidation at the range of RM 0.57 is completed.

I have to inform all reader that I am invested in PCCS.

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PCCS garment manufacturing department to see windfall from Myanmar political coup which affect the garment industry supply

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We are heading into the 4th month of 2021, battling the Covid-19 pandemic for more than 1 year. The local market is finding it's new balance after a period of rebound, and I believe that a lot of major fund are reallocating their assets after a conclusion of financial year end 2020. Good performing companies will continue to see investment coming in, bad performing companies will see funds paring down their exposure.

The latest global news hitting the papers would be the escalating tension in the political situation in Myanmar. A coup d'etat in Myanmar started in the morning of 1st February 2021, when democratically elected members of Myanmar's ruling party, the NATIONAL LEAGUE FOR DEMOCRACY (NLD) were deposed by the Tatmadaw - Myanmar Military- which vested power in a stratocracy.

The situation had gone from bad to worse, and with the current outlook, from worse to worst. The tension had protestor going from attacking military into burning factories.

Myanmar is known for it's cheap labour for the global garment industry. The garment industry is valued at USD 6 billion (RM 24 billion) per annum. The current coup is starting to get fashion company in a scrambling effort to secure production supply elsewhere.

Source news during month of February 2021

https://asia.nikkei.com/Spotlight/Myanmar-Coup/Myanmar-coup-clouds-future-of-country-s-crucial-garment-industry

Entering March 2021, protestor had began torching and burning garment factory.

Source 

https://www.washingtonpost.com/world/asia_pacific/china-myanmar-coup-military/2021/03/17/39989378-86c2-11eb-be4a-24b89f616f2c_story.html

HOW WILL THIS SITUATION TURN INTO MAJOR BENEFITS FOR PCCS IN THE NEXT COMING YEARS ?

Myanmar is one of the main production output for popular fashion wear companies such as H&M, Mark and Spencer, C&A and other brands. The current political mess and coup d'etat already putting in the option that EU will potentially withdraw of EBA arrangement on Myanmar. EBA - Everything but Arms will provide duty free access to the EUROPEAN UNION.

Industry analyst are positive that fashion retailer will shift new sourcing from other region, potentially towards Cambodia and Vietnam. Cambodia is a high likely destination as Cambodia had EBA arrangement with the EUROPEAN UNION.

Reference source

https://www.just-style.com/analysis/clothing-sector-likely-major-loser-from-myanmar-coup_id140644.aspx

PCCS had strong footing in the garment industry in CAMBODIA. Their newly build factory "WAN HE DA MANUFACTURING COMPANY LIMITED" which completed in 2018 will be able to swing into full capacity soon. Capacity is 1.2billion pieces per month.

In addition, PCCS also have existing business with the affected fashion retailer (H&M, M&S, C&A) at Myanmar, hence industry expert will be seeing more orders from fashion retailer for PCCS garment factory at Cambodia.

I had to informed all my readers that I had vested interest in PCCS. If you are reading my earlier blog post, I am invested to PCCS for it's new business expansion into medical healthcare. However, the current situation happening in Myanmar could be just landing a big immediate windfall for PCCS current business operation in the garment industry.

My personal opinion is that the current situation in Myanmar will not end soon, just as how HongKong protest can drag into more than 6 months. As the current situation become more violence, fashion retailer will possibly sever ties with Myanmar. 

With demand looking to pick up in Q2 2021, there will be higher DEMAND and lesser SUPPLY due to the sudden shortage of production factory. Existing OEM manufacturer will be able to command better pricing and profit margin.

Will this situation turn the table upwards for PCCS, potentially going towards RM 1.50 ?

IMPORTANT NOTICE

Please be informed, I am not a professional or certified analyst. I am not a licensed consultant, just a normal retail investor. I am just sharing my ideas and opinion on the market outlook. Any company mentioned should not be interpreted as a buy/sell/trade call. Please do your own research and buy/sell/trade at your own risk.

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MINHO TO SEE BIG UPSWING WITH HIGHER GLOBAL TIMBER PRICES

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This covid-19 pandemic had unleashed a massive amount of money into the global financial system, resulting in creeping up inflation. We can see that stock market are heading higher with higher PE ratio, crypto currency are gaining track in the market as the digital gold, and commodities are going higher as well.

The latest QE is the known USD1.9 trillion which President Biden had signed into effect. How is the market going to reflect on this money?

Today I am going to talk about Commodities.

CPO chart are showing massive uptrend on the palm oil. The trend is not stopping and will be looking to hit RM 5000 in the next 3 months to come. Some analyst are projecting RM 6000 to RM 7000.

Here are some metal prices. 

ALUMINIUM GLOBAL PRICES

COPPER GLOBAL PRICES

PLATINUM GLOBAL PRICES

Now, I want to talk about TIMBER prices

TIMBER GLOBAL PRICES

Global timber price will look set to trade around USD 1000 per bdsf. This could be a new norm going forward due to the excessive money printing exercise.

As you can see, when commodities prices go up, a lot of raw material prices will go up, and in the end it will end up in inflation because good and product will go up eventually.

In Malaysia, the steel sector already go up. Leading steel maker - Annjoo, despite report a operating losses, share price went up more than 300%

WHAT IS THE NEXT COMMODITY SECTOR TO SEE UPLEG ?

I believe the next one will be TIMBER SECTOR. Timber companies involved in upstream logging and downstream manufacturing will see massive upleg.

One of the laggard is Minho (M) Bhd - MINHO 5576

The company is involved in timber upstream logging, and downstream manufacturing from plywood to sawn timber. Export market 80% and local usage 20%.

Current share price NTA RM 1.10 per share. MINHO chart shown a breakout from short term down trend. With more than 6 months in consolidation and global timber prices breaking upwards, MINHO is just another company waiting to see a big upwards swing in it's share price.

IMPORTANT NOTICE

Please be informed, I am not a professional or certified analyst. I am not a licensed consultant, just a normal retail investor. I am just sharing on my ideas and  opinion of the market outlook. Above materials are taken from original source as a referencing material. This is not a buy/sell/trade call. Please do your own research and buy at your own risk.

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PCCS NEW BUSINESS VENTURE INTO HEALTHCARE TECHNOLOGY TO SEE GREATER UPSIDE

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We are entering the 3rd month of year 2021. 1 year through the Covid-19, the equity market is still nowhere to be seen dropping below 1000 as the naysayers goes saying. In fact, US equity are going strong and breaking into new heights with trillions of stimulus injected into the global economy. The only way for you to stay in the inflation is to stay invested - in the right stock with growth prospect.

Healthcare stock are good in the long run. Company that diversify into healthcare industry (except glove) should be given attention as the medical needs will continue to rise with aging population.

The stock that came to my attention is PCCS GROUP BHD (PCCS - 6068). It is regarding their planned diversification to the medical industry with a strategic partnership with Shanghai Shenqi Medical, a medical technology company focusing in R&D of new medical instrument for treatment.

Source

https://www.theedgemarkets.com/content/advertise/pccs-group-berhad-pccs

This venture is not a rogue decision as PCCS had already set up a company that will be dealing in sales, rental and repair of medical equipment in Singapore through the name - La Prima Medicare Pte Ltd in 2020.

What is so good about Shanghai Shenqi Medical Co.

Shenqi Medical is establised 6 years ago. Shenqi Medical has completed the R&D of a number of interventional products, including the detachable coil embolization system with fibrous hair, peripheral microcatheters, distal access (DA) guiding catheter, drug-coated balloon catheter used in coronary, left atrial appendage (LAA), etc. In addition, Shenqi Medical has about 10 products under development.

Two core products of Shenqi Medical have achieved good results. The independently developed drug-coated balloon catheter was approved by NMPA in December 2019, and another product, LAA, is in the clinical stage and is expected to be launched by the end of 2021.

Shenqi Medical just recently completed a USD 14million Series C funding for the marketing for their products.

Personally, I am very positive that the MOU between PCCS and SHENQI MEDICAL CO. will materialize and see a signing before the 30 June 2021 deadline. One of the reason is because of the company owner and the management team that is real businessman that will walk the talk. PCCS is owned by the Chan's family in Johor. From a track record of growing PCCS from just a garment manufacturing company into labelling, packaging and hot print with branded names under their belt is a proof of record.

Technical Outlook

The current price chart for PCCS is looking to see a breakout from consolidation point. The share is under good accumulation and will be looking on a positive upside with new diversification on healthcare industry.

IMPORTANT NOTICE

Please be informed, I am not a professional or certified analyst. I am not a licensed consultant, just a normal retail investor. I am just sharing on my ideas and  opinion of the market outlook. Above materials are taken from original source as a referencing material. This is not a buy/sell/trade call. Please do your own research and buy at your own risk.

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