Friday, April 27, 2012

DIGI broke above its medium-term downtrend line

On April 25, Digi announced its results for QE31/3/2012 where its net profit declined to RM321 million from RM331 million recorded in QE31/3/2011. Its turnover has however increased from RM1.43 billion to RM1.57 billion. When compared to the immediate preceding quarter (QE31/12/2011), Digi's net profit declined by 18.5% due mainly to the inclusion of 2009-2011's tax incentives related to mobile broadband network facilities which resulted in a lower tax rate for that quarter. The management is satisfied with the continued growth in its data revenue & its ability to maintain its EBITDA margin at 47%. It seems that the market shares the same view, resulting in the share price breaking above its medium-term downtrend line at RM4.00.  Based on the technical breakout, DIGI could be a trading BUY.

Chart: DIGI's daily chart as at April 27, 2012_11.00am (Source: Quickcharts)


Jimmy Yeoh said...

Hi Alex,

Can you comment on UCHITEC?


Alex Lu said...

Hi Jimmy Yeoh

UCHITEC is range-bound between RM1.05 & RM1.30. It is trading at a fair PE of about 8-9 times. Its dividend yield is about 9-10%, which is very attractive. As such, it is a good income stock.