This is a personal weblog, reflecting my personal views and not the views of anyone or any organization, which I may be affiliated to. All information provided here, including recommendations (if any), should be treated for informational purposes only. The author should not be held liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein.
Friday, August 19, 2011
DLady- still an attractive consumer stock
Results Update
For QE30/6/2011, DLady's net profit dropped 2% q-o-q to RM27.8 million on the back of a 2%-increase in turnover. When compared to the same quarter last year, its net profit increased by 47% while turnover increased by 8%. Its y-o-y improvement in turnover was due to higher demand for liquid milk, while pre-tax profit increased due to higher sales & favorable sales mix.
Table: DLady's last 8 quarterly results
Chart 1: DLady's last 13 quarterly results
Valuation
DLady (closed at RM18.24 yesterday) is now trading at a PE of 14.6 times (based on last 4 quarters' EPS of 125 sen). I believe DLady can command a PE multiple of 17-18 times. At 17 times, DLady is valued at RM21.25.
Technical Outlook
DLady seems to be trapped within a giant rising wedge formation, with support at RM13.00 & resistance at RM25.00. However, DLady's immediate resistance is the horizontal line of RM20.00, which is its all-time high price.
Chart 2: DLady monthly chart as at August 1, 2011_plotted on log scale (Source: Tradesignum)
Conclusion
Based on good financial performance, possible room for higher valuation & still positive technical outlook, I would rate DLady a HOLD.
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