F&N has just announced its results for 4Q2009 ended 30/9/2009. Its pre-tax profit dropped by 17.4% q-o-q from RM81.7 million to RM67.5 million on the back of a small 1.4%-decline in turnover from RM921 million to RM908 million. Compared to the previous year's corresponding quarter, pre-tax profit was 19.6% while turnvoer was up 2.7%. Its net profit increased by 3.3% q-o-q or 54.0% y-o-y to RM61.1 million, benefiting from the recognition of deferred tax assets of RM12 million in 4Q2009.
F&N's results for FY2009 shows substantial improvement over that of FY2008. Net profit increased by 35% from RM167 million to RM224 million while turnover increased marginally by 1.3% from RM3.61 billion to RM3.66 billion. Is the drop in pre-tax profit in 4Q2009 a sign that the bottom-line may have hit a plateau for now? We will have to wait & see.
Table 1: F&N's 8 quarterly results
Chart 1: F&N's 12 quarterly results
Valuation
F&N (closed at RM10.56 yesterday) is now trading at a PE of 17 times (based on last 4 quarters' EPS of 67 sen). This high PE multiple may be justifiable as F&N is a well-managed MNC involved in the stable consumer sector. F&N has dividend yield of 4.0% presently.
Technical Outlook
F&N is still rising steadily in a upward channel. The upside resistance is at RM11.30-50 & downside support at RM8.00.
Chart 2: F&N's weekly chart as at Nov 9, 2009 (Source: Quickcharts)
Conclusion/Comment
F&N's results for 4Q2009 may be a sign that its bottom-line growth may have hit a plateau. If this happened, then F&N share price would enter a corrective phase. We need track this stock closely and look out for the results of the next quarter.
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