TFP (0145) - (T)he (F)uture (P)roficient

Syariah Status: NO

Market Lising: Ace

Expected Target Price: 0.20/0.25 short to mid term 0.30 Long term

Short to mid term: 1-3 months

Long term: 6-12 months

Company Background

TFP Solutions Bhd is a provider of Business Productivity Solutions and Services for Business Enterprises.
The company operates under two business solutions namely Business Management Solutions and Converged Infrastructure Solutions.

Latest Development

1. Ace-market listed technology solutions provider TFP Solutions Bhd is seeking to turn around its fortunes with the entry of a new managing director last July. Under the new leadership, it aims to stay lean and mean by venturing into new markets.

2. New MD Datuk Hussian Abdul Rahman, 57 who is already a major shareholder also owns MobilityOne Ltd in which TFP also part of the shareholder of MobilityOne Ltd.

3. MobilityOne and TFP are going into new business by providing fintech solution whcih is e-wallet, remittance and content aggregation.

4. TFP Solutions already provides backend software solution support to many big e-walletplayers in the domestic market, so it sees an easy and seamless transition into the larger e-wallet gameplay.

5. MobilityOne is involved in similar businesses as the potential to grow the business will be something investors will be looking forward to.

6. TFP plans to focus on the underserved foreign workers cashless transaction potential, combining it with the company’s capabilities in human capital management services. The company says it is ready tolaunch its e-wallet service within a couple of months.

7. TFP is confident that they will be able to compete with the big players in the e-wallet segment because they are looking at an untapped segment of the cash transaction market – foreign workers and the rural population. TFP Solutions to target over two million Bangladeshi workers who would welcome better and more convenient ways to transfer money back to their home country.

8. TFP Solutions provides human resource payroll solutions as enterprise resource planning (ERP) to clients that include large multinational companies as TFP sees this as an opportunity to better integratethe payroll solutions to its companies and at the same time offer remittance services to the foreign workers using fintech.

Turnaround Story

1. The company has been making losses for the last three financial years. Losses before tax in 2018 widened to RM2.067 mil from RM0.820 mil the previous year. The company attributes the losses mainly to the weaker ringgit and increased cost of equipment. It also faced declining profit margins in its IT hardware business segment.

2. TFP is focusing on the turnaround by venturing into fintech as mentioned earlier in which areas they are focusing to tap into.

3. TFP Solutions is an SAP silver partner providing comprehensive SAP Business One solutions under its subsidiary SBOne Solutions Sdn Bhd.

4. TFP plans to penetrate the halal industry later this year in which could add to its earnings potential.

5. TFP have been in talks with some of the major players in the telecommuncation industry as they hold a mobile virtual network operator (MVNO) licence which enables them to provide internet services.

6. TFP won shareholders’ approval at its recent EGM to dispose of its lossmaking subsidiary, Tech3 Solutions Sdn Bhd, for RM7.9 mil cash. The proceeds will help finance TFP Solutions’ investment in the online business and the e-wallet system.

7. Tapping into MobilityOne's e-payment businesses in the region can help draw investor interest again in this thinly traded counter.

Technical Analysis

TFP is poised for a breakout in which the resistance is at 0.13 which also means the stock will break it's downtrend line.

MACD histogram is above 0 as this is a sign of a bullish trend.

RSI is slightly above 70% but this doesn't mean the stock is overbought because this is a company which has a small market cap and any slight movement tends to move the RSI quite quickly.

KYM (8362) - INDUSTRIAL PAPER BAG SPECIALIST

KYM is engaged in the manufacture and marketing of industrial paper bags and paper egg trays.
They have 3 reportable segments (Manufacturing, Investment & Property). KYM was a hot stock back in 2017 as their financials did pretty well during that time and ever since this stock has tumbled down and we believe it's time to relook into this company because of the reasons below.

Reasons:

1. In August 2018 KYM Holdings Berhad (KYM) announced that they have invested RM65 million to modernise its Tapah plant and introduce a state-of-the-art industrial paper sack line to increase its exports throughout the Asian region.

2. The RM20 million investment for the plant and RM45 million for machines and equipment emphasised the company’s commitment to pursue excellence, and to create more sustainable, innovative and quality packaging solutions in a cost-effective manner.

3. The investment will boost KYM’s wholly-owned subsidiary, Hasrat Meranti Sdn Bhd production capacity by a further 50 per cent to 230 million paper sacks per annum from the current 150 million.

4. Exports had increased 62 per cent from RM18 million in 2017 to RM29 million in 2018 which shows a positive improvement in their exports.

5. The company’s exports have registered a double-digit growth in revenue year-on-year and a compounded annual growth rate of 13.3 per cent for the past 10 year.

6. Hasrat Meranti is the dominant player in the supply of cement packaging bags, commanding a 40 per cent market share in Peninsular Malaysia.

7. As we can see LAFMSIA share price has nearly went up by 80% due to the bullishness on the construction sector especially eversince ECRL is given a green light to proceed which also translates more cement is needed for construction therefore more cement packaging bags are needed to package the cement therefore KYM could be the biggest beneficiarry in the segment.

8. Under the leadership of a new dynamic management team, supported by an experienced board, the Group will focus on activities to increase market share domestically as well as open new markets regionally to further increase sales and exports


Technical Analysis:

1. KYM resistance is at 0.38 and if this resistance is broken we anticiapte the price could go to 0.43.

2. MACD histrogram is at positive level which shows that the stock is quite strong and bullish.

3. RSI is around 50% level which also shows the stock is changing it's trend from oversold to a bullish level.


Conclusion:

KYM has a huge upside because of the given reasons above and we believe that KYM could further improve and be back into the radar.

We hope that many of you will realize the potential of this company and will start to look at it.

dont miss pccs heard that KYY is in..maybe can buy on dips