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Friday, August 10, 2012

Century continued to slide

Results Update

For QE30/6/2012, Century's net profit dropped 20% q-o-q or 60% y-o-y to RM3.4 million while its turnover inched up 1.5% q-o-q but dropped 11% y-o-y to RM66 million. Century's results continued to be affected by reduced activities in the total logistics services segment & losses in the double hull product tanker.


Table: Century's last 8 quarters' results

From the chart below, Century's top-line may have peaked and its bottom-line may continue its downward slide.


Chart 1: Century's last 25 quarters' results

Valuation

Century (closed at RM1.76 today) is now trading at a PE of 9.5 times (based on annualized EPS of 18.46 sen). At this PE, Century is deemed fairly valued.

Technical Outlook

Despite the poor financial performance, Century's share price is still holding up very well. Last week, it even traded very near to RM1.90- the high of 2010 & 2007. Century may test its more gradual uptrend line (S-S2) at RM1.70 soon. There are a few more support levels just below the uptrend line support, such as the horizontal lines at RM1.60 & RM1.50.


Chart 2: Century's weekly chart as at August 10, 2012 (Source: Quickcharts)

Conclusion

Based on poor financial performance, elevated valuation & lthe presence of strong resistance at RM1.90 mark, I would rate Century as a REDUCE or AVOID.

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