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A Walk in the Park with Cypark Resources Berhad (5184)

Lately, I have been searching for a company which has good profit margins, a business model which is non-conventional (i.e., not manufacturing, banking, plantation, and trading in nature), and resilient to external market shocks. I hope I have found the right company! This week I will be looking at Cypark Resources Berhad (5184). Cypark is a company that is involved with the provision of environmental solutions. It has 4 main business segments which are: 1. Environmental engineering: Provision of nature conservation and environmental improvement services. 2. Landscaping and infrastructure: Provision of landscape services, project management services, and infrastructure development. 3. Maintenance: Provision of specialist maintenance works on leachate treatment plants, landscape services for parks, and maintenance of public amenities. 4. Green technology & renewable energy: Solar panel, biogas, biomass, waste-to-energy, and other renewable energy project
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Trading Ideas: Sasbadi Holdings Berhad (5252)

Sasbadi is one of the companies that I came across numerous times back when I was a student. I was a loyal supporter of Sasbadi reference books as I found their books well organized, contained relevant information, and had a good range of exercise questions. If you were born after the 80’s I am sure you would have heard of Sasbadi. In fact, my decent examination results were partially due to purchasing their good quality reference books. 



Today I’d like to take a look at Sasbadi Holdings and see whether it has any investment merit.

Below is a chart of Sasbadi’s share price:

Chart 1: Sasbadi Historical Share Price

Based on the chart above, prices have retraced near to its initial IPO price of about 45 cents. Despite appreciating to a high of RM1.06, prices started to turned south in 2017. 

Chart 2: A detailed look at Sasbadi's share price 

Noticed the long-term bearish Head-And-Shoulders formation which formed in November 2016 to August 2017. This followed with a break of the "neckline" at RM0.87 in August 2017. Prices pulled-back beyond the neckline but eventually gap down in November 2017. This was the beginning of its downtrend and it has not found its bottom yet. Probably the downtrend was initiated by its bonus issue in August 2017, which added about 140 million shares; consequently, this diluted its earnings. Additionally, due losses recorded in Q4 2017, the downtrend was exacerbated. 

Based on technical terms, I would think that prices are still searching for its bottom. Currently, prices are trading at its immediate support at 44 cents. The next immediate support is at 35 cents. 

That is my take on its technical charts. For a holistic view, let's look at its financials.

Chart 3: Quarterly Revenue

Based on the quarterly revenue trend, its revenue seems to be seasonal. Peaking in Q1 and Q2, and trending lower in Q3 and Q4. Probably, this is the time where students purchase reference and revision books -- at the beginning of the year. And demand for its books tapers towards the end of the year due to publishers printing updated versions to cater for the next year. 

This seasonal trend is also echoed in its quarterly operating profit and PAT results in Chart 4 below. It recorded relatively higher profits in Q1 and Q2. 

Chart 4: Quarterly Operating Profit and Profit After Tax (PAT)

Final thoughts
Based on its general trend, Q2 generally performs better than Q1, then its upcoming Q2 2018 financial results should be positive. This could mean that its downtrend may be consolidating sooner than expected and it may be reaching its bottom soon. 


However, until further consolidation is evidenced, I would think it would be wise to keep Sasbadi on the investment radar for further developments. 


 To understand the market sentiment, do check out my article FBMKLCI's trend HERE.

 If you like my posts and this blog please SUBSCRIBE in the link above or follow me on Google+ !!!    THANKS


Note: This is not a recommendation to buy or sell this stock. The writer does not own shares in this company. The writer intends to share his view point on this stock’s potential investment value, any decision to invest or sell shares in this company is entirely at the reader’s own risk.
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