Jobst's net profit dropped by 1.9% q-o-q to RM11.3 million despite a 14.6%-increase in turnover to RM33.6 million. The decline in net profit is due to tax payable. A better view of the company's profitability can be seen in the increase in pre-tax profit of 35.0% q-o-q to RM16.1 million, mainly due to the impact of higher sales and receipt of grant income. When compared to the same quarter last year, net profit was up 30% while turnover was up 22%.
Table: Jobst's last 8 quarterly results
Chart 1: Jobst's last 20 quarterly results
Valuation
Jobst (closed at RM2.80 yesterday) is now trading at a PE of 20 times (based on the last 4 quarters' EPS of 13.8 sen). While the PE multiple may appear high, the PEG ratio of 0.5- which is considered attractive. PEG ratio is computed by dividing PE by the Annual Growth Rate (which is about 40%).
Technical Outlook
Jobst is still in an uptrend line with support at RM2.60-2.65. The indicators are all pointing lower, which means that the near-term outlook is slightly bearish. If Jobst can stay above the uptrend line, you should hold onto the stock.
Chart 2: Jobst's daily chart as at May 18, 2011 (Source: Tradesignum)
Conclusion
Based on satisfactory financial performance, fair valuation & positive technical outlook, Jobst is still rated a HOLD. I would rate it a BUY if it were to eased back to the uptrend line support at RM2.60-2.65.
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