PMetal has just announced its results for QE31/3/2010. Its net profit increased by 157% q-o-q from RM12.6 million to RM32.4 million, while turnover increased by 18.0% from RM335 million to RM395 million. Compared to the previous corresponding quarter (QE31/3/2009), PMetal has turnaround from a net loss of RM8.8 million on the back of a 53%-increase in turnover from RM258 million. Higher revenue was mainly due to the contribution from the smelting plant in Mukah, Sarawak, which commenced operations on November 2009. PMetal's bottom-line for QE31/3/2010 includes a negative goodwill of RM18.0 million arising from the acquisition of equity share from the minority interest. If this exceptional item is excluded, its pre-tax profit would be about RM22.6 million as compared to RM22.3 million recorded in the immediate preceding quarter (QE31/12/2009).
Table 1: PMetal's last 8 quarterly results
Chart 1: PMetal's 10 quarterly results
Valuation
PMetal (closed at RM1.39 yesterday) is now trading at a PER of 7.5 times (based on last 4 quarters' EPS of 18.6 sen). If we exclude the negative goodwill of RM18 million, the last 4 quarters' EPS would be about 14 sen. On this basis, PMetal's PER would be about 10 times. If we valued PMetal at a PER of 12 times, then its fair value would be about RM1.68.
Technical Outlook
PMetal has tested its uptrend line support at RM1.33. It should also get good support from the 40-week SMA line (equivalent to 200-day SMA line) at RM1.28.
Chart 2: PMetal's daily chart as at May 31, 2010 (Source: Quickcharts)
Chart 3: PMetal's weekly chart as at May 31, 2010 (Source: Quickcharts)
Conclusion
Based on good financial performance, reasonable valuation & positive technical outlook, PMetal could be a good stock for medium-term investment.
10 comments:
hi bro. need ur help to comment on Proton. Proton will annouce the deal with VW soon, u think this round will success?? how Proton technically??
Hi Alex,
Would you mind to share ur thought on the latest quarter report on MNRB?
Hi Wong,
The last I read, Proton's possible tie-up with VW is off. The "rumor" of a Proton-VW deal appeared when Proton announced its latest results for QE31/3/2010 last week. The results was not uplifting & the rumored deal was thrown in as a sweetener to soften the blow.
I think Proton would likely to trade sideway with a downward bias for the next few months. Better to dispose of this stock & move on.
need your help to comment on TDM
Would you mind to comment on EFORCE?
Hi ryan,
For QE31/3/2010, MNRB incurred a net loss of RM9.0 million. This was attributable to provision for impairment loss of RM44.5 million for its investment in PIHL.
MNRB's financial performance for the past 2 years has been rather pathetic. It incurred losses in 5 quarters. In total, it reported net profit of RM71.7 million over the past 2 years. This gives an average EPS of 17 sen. Based on the close of RM2.89 yesterday, MNRB is trading at a PER of 17 times.
Chartwise, MNRB has a strong horizontal support at RM2.70. Its resistance is at RM2.90-3.00 (coming from the 100 and 200-day SMA line).
Hi Pan,
TDM's financial performance has been quite impressive in the past 3 quarters, with EPS of 8-9 sen per quarter. Based on its close of RM1.70 yesterday, TDM is trading at a PER of about 5 times.
Technically speaking, TDM is in an uptrend line, with support at RM1.60.
I think TDM could be a good stock for long-term investment.
Hi mandyhew,
For QE31/3/2010, EFORCE reported a net profit of RM1.4 million. This is lower than the net profit recorded in the preceding past 3 quarters, which ranges from RM1.5 million to 2.0 million.
In middle of May, EFORCE broke above its strong horizontal resistance at RM0.51-52 & hit a high of RM0.825. Since then, the share price has corrected somewhat. On May 27, it announced a 1-for-2 bonus issue, which could be the basis for the earlier rally. However, I doubt punters would be too excited to jump back into this stock in the current cautious mood.
HI Alex,
Do you mind to share about Annjoo? It share price keep dive and keep on dive.
Understand that the demand of steel from China will reduce, but long term wise do you think steel producer is a good stock to hold?
What is the good price to enter Annjoo?
Thanks
Heng
Hi Heng,
The slowdown in China has affected the demand for steel & a host of basic material. This coupled with the cautious-to-bearish market sentiment led to a selloff in Annjoo.
We can see that Annjoo has entered into a downtrend. Its immediate support is the horizontal lines at RM2.00-2.10 & thereafter at RM1.50-1.65.
I think you can start accumulating at the RM2.00 level.
Post a Comment