Friday, May 25, 2012

Perstim- top-line & bottom-line dropped

Results Update

In QE31/3/2012, Perstim's net profit dropped 42% q-o-q or 28% y-o-y to RM4.6 million while its revenue dropped 12% q-o-q or 14% y-o-y to RM179 million. The lower profit was due to lower sales volume coupled with lower profit margin. The lower profit margin was due to the reduction in selling price to remain competitive especially for Malaysia market.


Table: Perstim's last 8 quarterly results


Chart 1: Perstim's last 31 quarterly results

Valuation

Perstim (closed at RM3.40 at the end of the morning session) is now trading at a PE of 9.6 times (based on last 4 quarters' EPS of 35.44 sen). As the financial performance continued to weaken, Perstim's PE multiple continue to be compressed. How much it would be compressed, I am not sure.

Technical Outlook

Perstim's share price movement over the past 12 years is well captured by the two curvilinear lines (in blue). The current downtrend could send the share price to the lower line, where the support will be about RM2.00. At this moment, I think this extreme price is not likely to pan out.


Chart 2: Perstim's monthly chart as at May 24, 2012 (Source: Tradesignum)

Conclusion

Based on deteriorating financial performance and poor technical outlook, Perstim is a stock to be avoided.

5 comments:

Political Crow's Nest said...

Alex, Affin is picking up, as http://www.btimes.com.my/Current_News/BTIMES/articles/20120528102447/Article/index_html

made a mistake whilst waiting for better earning which i thought would be in another 2 or 3 quarters. didnt know they reported better than expected earnings and paying dividends now. mistake mistake! :)

maybe your intake on the dividend proposal and if the next two quarters remains as it is, will spike this stock (although i know its the 2nd smallest banking group)to the levels of CIMB of PBB.

luckystock2 said...

Hi Alex.
Can you comment on KLCCP fundamental and technical outlook ?
Tx!

Alex Lu said...

Hi Political Crow's Nest

I must admit that I am always very cautious when it comes to Affin. About 15 years ago, some of my colleagues joined this group at senior management level. When I saw the mismatch between the capability of the staff & their new position, I know Affin will be in trouble one day. The bank was badly hit in the Asian Crisis. So were other banks but Affin was the slowest to recover. Has the new management team changed sufficiently to warrant a buy on the stock? I am not sure.

Chartwise, the support from the long-term uptrend line is at RM2.40 & the resistance from the intermediate downtrend line is at RM3.15.

Better buy after it has broken above RM3.15.

Political Crow's Nest said...

Thanks Alex. Not too sure when your friends joined but I saw that the new management under the army was determined to address their slide after taking over (about 3 years ago if memory serves me right). Thanks for your take with Affin. Price is still fluctuating just waiting and entry point.

Political Crow's Nest said...

Thanks Alex. Not too sure when your friends joined but I saw that the new management under the army was determined to address their slide after taking over (about 3 years ago if memory serves me right). Thanks for your take with Affin. Price is still fluctuating just waiting and entry point.