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Friday, August 17, 2012

CBIP- another bumper dividend???

Results Update

For QE30/6/2012, CBIP's net profit soared 560% q-o-q or 580% y-o-y to RM163 million while revenue increased 34% q-o-q or 107% y-o-y to RM152 million. The sharp jump in net profit was attributable to the gain on disposal of investment in two subsidiaries, Sachiew & Empresa totaling RM139.6 million. These disposals were announced last year and they were completed only in the last quarter.

As a result of the disposal of these subsidiaries & other plantation assets, CBIP has adjusted its financial statements for QE30/6/2011 & QE31/3/2011 for comparison purpose. If you look at the table below, the revenue & profit numbers are not directly comparable as the numbers for QE31/12/2011, QE31/12/2010, QE30/9/2011 & QE30/9/2010 have not been adjusted.



Table: CBIP's last 8 quarterly results

Another Bumper Dividend?

The most important item to note in the account is the dividend of 30 sen. This is not a proposed dividend but the booking in a dividend that has actually been paid out in May [ex date: May 15. Payment Date: May 30]. For  more, go here.

Could this be the reason why the stock rallied 20 sen this morning?

Valuation

CBIP (at RM2.90) is trading at a PE of 9.4 times (based on estimated EPS of 31 sen). At this PE multiple, CBIP is not expensive. It could trade up to a multiple of 10-12 times.

Note: Estimated EPS of 31 sen is arrived at by dividing the estimated net profit of RM84 million by issued shares of 272 million. Estimated net profit of RM84 million is in turn arrived at by annualizing the combined net profit for QE30/6/2012 after deducting the extraordinary gain from disposal of Sachiew & Empressa was RM23 million and the net profit for QE31/3/2012 after deducting profit from discontinued operation would be RM19 million.

Technical Outlook

CBIP is in an uptrend line. It will encounter strong resistance from the horizontal resistance at RM2.90, which was the high recorded in 2007.


Chart: CBIP's monthly chart as at Aug 16, 2012 (Source: Tradesignum)

Conclusion

Based on good financial performance & still inexpensive valuation, CBIP is still a good stock for long-term investment. With the strong resistance at RM2.90, investors holding CBIP could do a trading SELL (i.e. sell now & buy back when the stock failed to surpass the RM2.90 level & drop back). Beware that the share price may have risen sharply today due to erroneous belief that the company is paying out 30-sen dividend (which has actually been paid out in May).

1 comment:

seow said...

They did propose a 20% dividend on RM 0.50 share which works out to be 10 sen per share. The market went up 20 sen. I was not willing to chase the price once I saw the overaction.