Friday, May 18, 2012

Notion returned to profitability

Results Update

Notion has announced its results for QE31/3/2012. It returned to profitability with a net profit of RM15.5 million as compared to a net loss of RM4.8 million in the immediate preceding quarter (QE31/12/2011). When compared to the  corresponding quarter last year (QE31/3/2011), its net profit increased by 43.5%. This was on the back of a sharp rise in revenue of 113% q-o-q or 57% y-o-y to RM84.5 million. Notion attributed the increased turnover to orders from 3 new HDD customers & an existing camera customer who had to catch up with production back log due to the flood in Thailand in late 2011.

Table: Notion's last 8 quarterly results

Chart 1: Notion's last 22 quarterly results

Prospect for the Current Year

Notion is confident that this quarter of exceptional good performance was not merely a turnaround after the previous quarter where its results was severely impacted by the flood in Thailand. It is experiencing strong growth even in the month of April where it achieved a revenue of RM33 million- equating the previous month revenue. The group is expanding in Thailand & Malaysia, buying new equipment & hiring more worker. For more, go to B3. Prospect for the Current Year on Page 7 of the Notes to the Accounts (here)


Notion (closed at RM1.16 yesterday) is now trading at a PE of 5.4 times (based on last 4 quarters' EPS of 21.58 sen). If we give more credence to the management's bullish outlook, then the future earning should be 21.58 sen & the PE, which is reasonably attractive, would become even more attractive.

Technical Outlook

Notion broke above its intermediate downtrend line (RR) in January this year. The last time it broke above an intermediate downtrend line (R1-R1) was in mid-2009, when it charged up from RM0.70 to RM1.90 in 2010. Its immediate support is at the horizontal line at RM1.10 & then at the psychological RM1.00 level while its immediate resistance is at the horizontal line at RM1.30 & then at RM1.50.

Chart 2: Notion's weekly chart as at May 17, 2012 (Source: Tradesignum)


Based on good financial performance, bullish management guidance & positive technical outlook, Notion could be a good stock for a medium-term investment.



Dear Alex,

Can you comment on the latest result of Kumpulan Fima and the technical trend?

Thanks a lot.

Alex Lu said...


Kumpulan Fima is quite attractive, trading at a PE of 5.8 times. Its top-line & bottom-line are still rising steadily, albeit a decline in the past 3 quarters (for top-line) & earlier 2 quarters followed by a rebound this quarter (for bottom-line).

KFima is in a long-term uptrend, with support at RM1.60. However, I believe this stock will not violate the 200-day SMA line support at RM1.80 anytime soon.


Thanks Alex.