Monday, May 30, 2011

Asiafle- broke its long-term uptrend line

Results Update

For QE31/3/2011, Asiafle's net profit increased by 10% q-o-q or 8% y-o-y to RM12.6 million while turnover was up 11% q-o-q but dropped 10% y-o-y to RM65 million. The improved bottom-line was attributable to improvement in operation efficiency & successful passing of costs to customers.


Table: Asiafle's last 8 quarterly results



Chart 1: Asiafle's past 25 quarterly results

Financial Position

Asiafle's financial position as at 31/3/2011 is considered satisfactory with current ratio at 2.8 times & debts to equity at a negligible 0.1 time.

Valuation

Asiafle (closed at RM4.01 on May 27, 2011) is now trading at a PE of 9.1 times (based on last 4 quarters' EPS of 43.88 sen). Due to the declining sales & profitability over the past 3 years, this stock may not be able to command a PE multiple above 10 times. As such, its upside is very limited.

Technical Outlook

Asiafle has broken below its long-term uptrend line at RM4.40 in early May. last week, it broke below the horizontal line RM4.10. These double breakdowns cast a bearish outlook for Asiafle.


Chart 2: Asiafle's monthly chart as at May 27, 2011 (Source: Tradesignum)

Conclusion


Based on Asiafle's bearish technical outlook and struggling financial performance over the past 3 years, Asiafle is now rated as a SELL. This is despite the slight improvement in its bottom-line as noted above.

6 comments:

AlexP said...

Hi Alex, could you please share your opinion on Hunzpty? It looks fundamentally strong but I'm uncertain on viability of property stocks going forward. The managing director has started buying the company shares again however which is a good sign. Thanks.

@h Tong said...

Hi ALex,
How do u see MAS,
was it a good time to accumulate?
Where is the support line for this?RM1.05?
thx

Alex Lu said...

HI AlexP,

Hunzpty is in an uptrend line, with support at RM1.55. Its overhead resistance is at the horizontal line RM1.65 & then RM1.70.

Its EPS for 9-month ended 31/3/2011 is 29.7 sen. This means that it is trading at a PE of 5.3 times. That's quite attractive.

We need to check out how are the company's current launches faring & its land bank. This may give an indication of its future earning. I think the market is wary of the stock, otherwise it should be trading at higher PE than this.

Alex Lu said...

Hi @h Tong

See my post on MAS.

AlexP said...

Hi Alex, thanks for the comments on Hunzpty. I did some searching and found the following report which details the company's current and future projects. Looks quite attractive.

http://www.hunzagroup.com/alliance_110511.pdf

Alex Lu said...

Hi AlexP

Thanks. I agree the stock has potential to go higher.