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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)