Jotech is involved in the design, fabrication & commissioning of equipment and systems for semiconductors & electronic industries as well as manufacturing of high precision tooling die sets, semiconductors’ moulds and parts. The group’s operation is organized into 3 divisions, namely the Precision Stamping, Semiconductor & Electronics divisions.
Recent Financial Results
Jotech’s latest financial results is for QE30/6/06, where its topline & bottomline have shown significant improvement. When compared to the preceding quarter, Jotech’s net profit increased by 6 folds to RM2.6 mil while turnover increased by 23% to RM63.6 mil. Its net profit has also increased by almost 3 folds when compared to the previous corresponding quarter while turnover increased by 41%.
When comparing the latest 4 quarters’ results with the preceding 4 quarters’ results, we note that turnover increased by 40% from RM166 mil to RM233 mil while net profit has jumped from RM1.4 mil to RM6.7 mil. See the table below.
Valuation
Based the last 4 quarters’ EPS totaling 10.4 sen and its closing price of RM1.39 as at Nov 1, Jotech is trading at a PE of 13.4 times. This is probably above what some may consider to be the fair valuation for a small-cap stock.
Technical Outlook
From the weekly chart below, it appears that Jotech has broken above its medium-term downtrend line at RM1.20 level. It is in a short-term uptrend, which will provide support at RM1.10. Its immediate horizontal support & resistance are at RM1.10 & RM1.50, respectively. The breakout above the medium-term downtrend line may be the beginning of the bullish phase for this stock.
Chart: Jotech's weekly chart as at Nov 1
Conclusion
Based on positive technical outlook & improving financial performance, Jotech could be a good investment for the medium-term.
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