Perstima has just announced its results for QE30/6/2011. Its net profit rose 127% q-o-q to RM14.7 million while turnover inched up 2.4% to RM214 million. However, its net profit dropped 39% y-o-y despite a 5.8%-increase in turnover. The improved bottom-line when compared to the immediate preceding quarter was due to better profit margin & lower forex losses. However, the company is still suffering from stiff competition from Chinese producers who undercut prices of their products.
Table: Perstima's last 8 quarterly results
Chart 1: Perstima's last 28 quarterly results
Valuation
Perstima (closed at RM3.91 yesterday) is now trading at a PE of 6.6 times (based on annualized EPS of 59 sen). Based on this PE, Perstima looks attractive. However, we should wait for another quarterly results to ascertain whether Perstima has successfully weathered the price competition which caused a sharp drop in its bottom-line in QE31/3/2011. If that problem is a thing of the past, Perstima should be a good stock for long-term investment.
Technical Outlook
As noted previously, Perstima broke its uptrend line at RM4.40 in early June. It found support at the horizontal line at RM3.75-3.80. It recovered above the psychological RM4.00 level but its rise was capped by the horizontal line at RM3.10.
Chart 2: Perstima's weekly chart as at July 27, 2011_10.30am (Source: Quickcharts)
Conclusion
Based on improved financial performance & attractive valuation, Perstima could be a good stock for long-term investment. However, we can afford to adopt a wait-&-see attitude as the technical outlook is still weak.
No comments:
Post a Comment