Zhulian has recently announced its results for QE30/11/2011. Its net profit increased by 18.4% q-o-q or 18.6% y-o-y to RM28.8 million while turnover eased off 5.4% q-o-q but rose 2.3% y-o-y to RM86.8 million. The improved bottom-line was attributed to higher share of profit from an equity-accounted investee of RM792k and forex gain.

Table: Zhulian's last 8 quarterly results

Chart 1: Zhulian's last 21 quarterly results
Valuation
Zhulian (closed at RM1.97 today) is now trading at a PE of 9.4 times (based on the last 4 quarters' EPS of 20.9 sen). For a company with a CAGR of about 10%, Zhulian's PEG of about 1 time is deemed fair.
Technical Outlook
Zhulian has slowly risen steadily in the past few weeks. It is poised to test its recent high of RM2.00 soon. If it can break above the RM2.00 mark, Zhulian's uptrend could continue.

Chart 2: Zhulian's weekly chart as at Jan 27, 2012 (Source: quickcharts)
Conclusion
Based on good financial performance and fair valuation, Zhulian is rated a HOLD. If the stock were to break above the RM2.00 mark, it may be a good trading BUY.
























