On July 19, Perstim announced its results for QE30/6/2012. Its net profit dropped 61% q-o-q or 88% y-o-y to RM1.8 million while revenue increased 3% q-o-q but declined 14% y-o-y to RM185 million. The company attributed the lower pre-tax profit to lower profit margin which in turn was due to the reduction in selling price to remain competitive especially for Malaysian market.
Table: Perstim's last 8 quarterly results
Chart 1: Perstim's last 30 quarterly results
Valuation
Perstim (closed at RM3.06 yesterday) is now trading at a PE of 14 times (based on last 4 quarters' EPS of 22.42 sen). At this PE, Perstim is deemed overvalued.
Technical Outlook
Perstim broke its strong horizontal support at RM3.10-3.12. Unless a quick rebound kicks in, Perstim could continue to slide until the next horizontal support at RM2.50.
Chart 2: Perstim's daily chart as at Aug 8, 2012 (Source: Quickcharts)
Chart 3: Perstim's monthly chart as at Aug 8, 2012 (Source: Tradesignum)
(Note: The price data for Quickchart & Tradesignum are not the same. Quickchart adjusts its price s for dividend while Tradesignum does not. The impact is noticeable for a stock that pays high dividend like Perstim. I do not believe this difference would invalidate our study but it may cause some problem in pinpointing the exact support or resistance. To be sure, you may want to see a breakout that appears on both charts).
Conclusion
Based on poor financial performance, demanding valuation and slightly bearish technical outlook, I would rate Perstim a SELL or AVOID.
7 comments:
Hi Alex
Can you comment on Faber? stock price has been bashed down consistently to reach at 1.30 now. What is support and resistance level for Faber?
Dear Alex,
Could you kindly comment on SEAL(4286)?It's a net cash(57million) company with a 5.98 sen earnings for the last quarter.That's more than 25 sen of cash per share based on it's share base of 221 million.The management had even forcasted better future quarters due to its property development activities.Is it worth investing in?
Thank you in advance.
Hi newbie
SEAL's results is simply fantastic. The QE31/3/2012 was a game changer for the stock, with a huge jump in top-line & bottom-line. All this came form the property development segment.
However, if you studied the company's website, you may become a bit cautius with regards to future proerty development projects. The current projects are:
- Taman Sejahtera Jaya (completed & sold out)
- Eco-Industrial Park (current phase of 60 light industrial buildings sold out. Next phase is 85 commercial buildings designed for the birds nest cultivation business. This may not sell well given the current brouhaha with regards to swiftlet farming. SEAL may need to redesign these building for other purposes).
New projects in the pipeline may not receive similar good response.
•Bayan City
•North Avenue
Nevertheless, the stock is inexpensive & the current financial performance is encouraging & may continue.
Technically, it broke above the RM0.50 resistance & it may go to RM0.60 and then the 2011 high of RM0.68.
Dear Alex,
Thank you for the swift(no pun intended) reply.You are a gem to the investing community.Keep it up!Have a good weekend.
Hi hng
I think you should know that I don't like Faber. It is a tricky stock and the management is far from professional. The same management style has persisted for years.
Chartwise, its support is at RM1.20-1.30. Resistance levels are at the horizontal line at RM1.50 & the intermediate downtrend line at RM1.65.
The last time I looked into this stock, we were awaiting development with regards to the Concession Agreement ('CA') between Faber Medi-Serve Sdn Bhd ('FMS') & Ministry of Health ('MOH'). I have not updated myself on this point. Looking at the price chart, I think there has not been fresh leads in this matter.
I would avoid this stock. If you choose to go in, you should be very careful. A trading approach may serve you better.
Dear Alex
Thanks for your comment on Faber, I think i'm attracted by its strong balance sheet,especially when its share trade at low price, the risk is mitigated by the fact that Faber is in net cash position, 72sen/share or 55% of current share price is in the form of cash! In addition, dividend also at 8sen, give rise to yield of more than 6%
Nonetheless, the major risk still remain its ability to secure extension of its IFM concession However, by just looking at its status as GLC, control by PNB and LTH, is will just a matter of time to iron out new T&C and charge rate to be finalized for renewal.
Ho Alex
WCT seem is building up momentum to once again try to breakthrough its immediate resistance level at 2.55. The success as you earlier pointed, WCT may upswing to its next level at 2.80.
The next week EGM could offer another catalyst as it show WCT is aggressive embark on bigger property development in prime land, OUG KL. Follow by Q2 result scheduled to be release by Wed.
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