SEG- watch out for the unadjusted earning

Results Update

SEG has just announced its results for QE30/6/2010. The announced results in Bursa was presented without adjusting for the 1-for-2 split & 2-for -5 bonus. See Table 1 below.


Table 1: SEG's results for QE30/6/2010 (Source: Bursa)

The adjustment was not made to the financial statement because the entitlement date was on July 27, which was after the closing date for QE30/6/2010. However, investors looking at the announced results would immediately compute the PER for SEG and unknowingly arrive at a much lower & incorrect PER. I have appended below the adjusted EPS, Dividend per share & NTA per share for SEG (see Table 2). You will see that SEG's adjusted EPS for QE30/6/2010 is about 4.33 sen. Based on its close of RM2.73 yesterday & the last 4 quarters' EPS totaling 9.49 sen, SEG's trailing PER is about 29 times.


Table 2: SEG's last 8 quarterly results

Technical Outlook

SEG is still in a strong uptrend with bearish divergence in the MACD & RSI.


Chart: SEG's daily chart as at Aug 18, 2010 (Source: Tradesignum)

Conclusion

Albeit the still bullish technical outlook, SEG is to be avoided due to its excessively high valuation.