Monday, February 20, 2012

Daiboci poised for the next upleg

Results Update

Daiboci has announced its results for QE31/12/2011. Its net profit increased by 30% q-o-q or 42% y-o-y to RM5.9 million while its turnover increased by 12% q-o-q & 0.3% y-o-y to RM75.7 million.

Table 1: Daiboci's last 8 quarterly results

From Table 2 below, we can see that the improvement in Daiboci's results for QE31/12/2011 was due to better performance from the Packaging division, which more than offset the decline in the Property division.

Table 2: Daiboci's latest segmental results

With the upswing in the Packaging division, Daiboci's growth track may continue after a hiccup of 4 quarters. See Chart 1 & 2 below.

Chart 1: Daiboci's last 17 quarterly results

Chart 2: Daiboci's profit margin for last 17 quarterly results


Daiboci (closed at RM2.95 last Friday) is now trading at a PE of 10.9 times (based on the last 4 quarters' EPS of 26.96 sen). At this PE, Daiboci is deemed fairly valued.

Technical Outlook

Daiboci peaked at RM3.58 in March 2010. In April, Daiboci finally broke above its intermediate downtrend line at RM2.70. After that, it moved in a sideway within a trading range between RM2.45 & RM2.88. It may have just broken above that trading range last Friday. If it can recruit sufficient buying interest, Daiboci could be commence on its next upleg.

Chart 3: Daiboci's weekly chart as at Feb 20, 2012_9.30am (Source: Quickcharts)


Based on satisfactory financial performance, reasonable valuation and mildly positive technical outlook, Daiboci could be a good stock foe medium-term investment.

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