PMetal's net profit increased by 38& q-o-q from RM9.2 million to RM12.6 million. This was achieved on the back of a 9%-increase in turnover from RM306 million to RM335 million. The improved performance was due to the contribution from the operation of its Mukah Smelting Plant in Sarawak.
PMetal is putting behind the 2 loss-making quarters, i.e. QE31/12/2008 when it incurred net loss of RM23.1 million due mainly to forex losses of RM16.4 million and QE31/3/2009 when it made provision for inventory impairment loss as aluminium prices deteriorated as well as additional cost to re-start a smelting plant in China.
Table: PMetal's last 8 quarterly results
Chart 1: PMetal's last 9 quarterly results
Financial Position
PMetal's financial position is less than satisfactory as at 31/12/2009. Its liquidity position is tight as reflected in its current ratio of 1.04 times, while its leverage position is high as reflected by its ratio of bank borrowings to total equity of 1.52 times.
Valuation
Based on the closing price of RM1.41 as at the end of the morning session & its average quarterly EPS of 3 sen (over the past 3 quarters), PMetal is now trading at a PER of 12 times. At this multiple, PMetal's upside is limited.
Technical Outlook
The reason that I am looking at this stock is that it may have achieved a bullish breakout above the horizontal resistance of RM1.38-40. The shortcoming is that the volume is still not convincing at this point. The next resistance is at RM1.70-75.
Chart 2: PMetal's daily chart as at April 9, 2010_11.45am (Source: Quickcharts)
Chart 3: PMetal's weekly chart as at April 9, 2010_11.45am (Source: Quickcharts)
Conclusion
Based on technical consideration, PMetal could be a good trading BUY.
12 comments:
Hi Alex,
Any comment on TChong?
TChong Share pushing higher and higher...since too many "good" news like higher Ringgit & etc.
Do you think that at today price of RM4.30 is a good entry point?
Thank in advance.
Best regard,
Heng
Dear Alex,
Any analysis on the Petronas 2 subsidiary for IPO. Will start to save $ for the IPO if it is worth to invest in. THanks.
Good Day.
Hi Heng,
Check out my earlier post below.
http://nexttrade.blogspot.com/2009/12/tchong-time-for-some-profit-taking.html
Hi Layman,
I don't have anything on these Petronas's subsidiaries.
Hi Alex ,
Thanks a lot for the scomi.
Dear Alex,
Thanks for the reply. You got so many good analysis for a green horn investor like me. Thanks alot. Save me lot of unnecessary blunders and avoid flying like a blind fly. Hope to hear about Petronas soon....who knows it might turn out a good retirement stock for a conservative and timid investor like me.... Good Day.
Hi Alex,
Thanks for the info on Genting. I think i will just sell it off soon since it is hovering in the range of 6.50 for almost 2 months.
What do you think about Petra and Ann Joo? Is it a good time to buy now?
alex,
y do some company does a bonus issue so often n y some doesnt do it at all?
wat do u think about this eksons? not popular, low liquidity, profitable, low pe etc... suitable as an investor stock?
Hi Alex,
How is the public bank ? Got chance to move higher?
Thanks in advance
Hi Seng Khoon,
Public bank seems to have strong resistance at RM12.00. After 4-5 attempts, the stock still has not broken above this resistance. On weakness, it may find support at the 100-day SMA line at RM11.30-40.
Hi Zee, Fion,
Technically speaking, Petra may have good support at RM1.60-65. If this support can hold, its next rally may test the resistance at RM1.80-90.
Ann Joo has entered in a correction, with support at RM2.80-90. If it doesn't break below the RM2.80 level, the correction may be short & shallow.
I think Petra & Ann Joo could be a trading BUY at RM1.60-65 & RM2.80-85, respectively.
Hi Wedding Gifts, Favours, Bells,
To have a bonus issue, or not to have a bonus issue? Bonus issue does not add value to a company, but retail investors like bonus issue because they will end up with more shares. It's an illusion because their shareholding percentage remain unchanged. Two halves of an apple is equal to one whole apple.
Your description of Eksons- not popular, low liquidity, profitable, low pe etc- sums up the stock. Technically, it is in a short-term uptrend with support at RM0.95-1.00. I think it is worth getting into this stock given its present weakness.
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