Choo Bee is involved in the manufacturing of flat based steel products and trading in a comprehensive range of flat and long based steel products such as structural steel and building materials. The Group also manufactures flat based stainless steel products and provides steel servicing, a pre-production service to customers with products that have steel as a component such as shearing of sheets and slitting of coils.
Recent Financial Performance
Choo Bee has just announced its results for 1Q2008 ending 31/3/2008. Its net profit soared by 103% q-o-q or 142% y-o-y to RM16.3 million while turnover increased by 21.3% q-o-q or 51.9% y-o-y to RM155.9 million. The improve performance was attributable to improved margins and higher volume sold.
Valuation
Choo Bee (closed at RM2.12 on May 23rd) is now trading at a trailing PE of 6.1 times (based on last 4 quarters' EPS totaling 35 sen) or at a P/Book of 0.65 times (based on NTA per share of RM3.28 as at 31/3/2008). At these multiples, Choo Bee is deemed very attractive.
Technical Outlook
The share price is moving in a very gradual uptrend line, with support at RM2.00. Horizontal supports are at RM2.10 & thereafter at RM1.90, while horizontal resistance are at RM2.30 & RM2.50.
Chart: Choo Bee's weekly chart as at May 23, 2008 (source: Quickcharts)
Conclusion
Based on the bright outlook for the steel sector, Choo Bee's improving financial performance, attractive valuation & good technical picture, Choo Bee is a good investment for medium- & longer-term.
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