JTiasa has just announced its results for QE31/10/2011. Its net profit dropped 26% q-o-q to RM41 million on the back of a 8%-decline in turnover to RM240 million. Compared to the corresponding quarter last year, its net profit increased by 37% while turnover was higher by 25%. The q-o-q decline in the bottom-line was attributable to lower prices for logs, plywood and FFB.
Table: JTiasa's last 8 quarterly results
From the Chart below, we can see that JTiasa's performance is now driven equally by the timber products segment and the oil palm segment.
Chart 1: JTiasa's last 10 quarters' segmental results
Valuation
JTiasa (closed at RM6.99 yesterday) is now trading at a PE of 9.7 times (based on last 4 quarters' EPS of 71.71 sen). At this PE multiple, I believe JTiasa is fully valued.
Technical Outlook
Since the call to BUY JTiasa in March 2010, the stock has risen steadily. If I were to draw a trading band over the price movement for the past 18 years, the stock appears to be trading at the upper reach of the band. Can it break beyond that level?
Chart 2: JTiasa's monthly chart as at Dec 1, 2011 (Source: Tradesignum)
Conclusion
Based on full valuation & strong resistance from the trading band, I believe it is a time to take profit on our investment in JTiasa.
4 comments:
Hi Alex ,
Can you comment on Hsplant ? This counter only traded within 2.69 and 2.7 these few days and a lot of large volume are traded. Is it some exchange of shares between some big players in open market?
Tx!
Hello Mr. Jtiasa has 70,900 hectares of planted area for palm oil cultivation and according to 2011 only 55766 hectares are planted and only 37399 hectares are matured. Out of the matured area 38% or 21,060 hectares are among 4-6 years old and 8% or 4,195 hectares are 7-8 years old. According to 2011 359,100 tonnes of FFB. Don't you think that Jtiasa's production can be easily double once the trees are in their prime period? Jtiasa's prospect look good from the annual report. Don't you think that your suggestion is unjustifiable?
Hi lmenwe
Thank you for sharing.
Sometimes, we have to ask the question whether all these good news or developments have been factored into the price. I admit I could be wrong but I believe that the facts, as mentioned by you, are substantially baked into the price.
hi luckystock2
I can't tell what's exactly happening in the stock. The tight trading range between RM2.69 & RM2.70 is interesting. I will watch it over the next few days. The immediate support & resistance are at RM2.60 & RM2.70.
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