Monday, November 26, 2012

SCC revised to a HOLD

Result Update

For QE30/9/2012, SCC's net profit dropped by 58% q-o-q or 59% y-o-y to RM355k while revenue increased marginally by 3% q-o-q or 5% y-o-y to RM8.45 million. Net profit dropped q-o-q due to higher admin & other op expenses as a result of its expansion to East Malaysia & allowance for impairment of fixed assets due to a burglary In July 2012.


Table 1: SCC's last 8 quarterly results


Chart 1: SCC's last 9 quarterly results 

Valuation

SCC (closed ay RM0.865 at the end of morning session) is now trading at a PE of 8.4 times (based on last 4 quarters' EPS of 10.32 sen). For a smallcap, SCC is deemed fully valued.

Technical Outlook

SCC is in an uptrend. If we used the 40-week SMA line as a proxy for the uptrend line, the stock is now trading just above the uptrend line.


Chart 2: SCC's weekly chart as at Nov 23, 2012 (Source: Tradesignum)

Conclusion

Based on poorer financial performance & full valuation, SCC's rating has been revised to a HOLD.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, SCC.

7 comments:

Anonymous said...

Hi Alex

Can you comment on WCT and YTL Power recent quarterly result?

Currently, WCT share trade at almost year high, but YTL Power trade at year low level, what are their support and resistance level?

Alex Lu said...

Hi hng

My thoughts on
1. WCT

It is building up its investment properties division nicely. It has sizable order book. It is undertaking corporate exercise involving bonus shares & warrants in preparation for possible rally to come.

If WCT can break above RM2.80-2.85, this stock can rally big-time. It may retest its recent high of RM4.30-4.40.

2. YTL Power

This stock is in a bottoming phase. Good entry at RM1.50. Bottoming phase would be over & next upleg shall begin on upside breakout of the strong resistance at RM1.85-1.90.

Anonymous said...

Thanks Alex

In turn of valuation, WCT still trade at lower PE than IJM and Gamuda. With more diversifying earning base and sustainable earning growth and visibility, WCT should trade at least in par if no higher valuation than IJM.

WCT newly Paradigm mall in kelana Jaya already reach 96% occupancy rate, and is due for revaluation by end of these year and recognized these valuation surplus in next Q4 result.

Anonymous said...

Hi Alex

What is the likelihood that YTL will privatized YTL Power? If via share swap, Yeoh family stake in enlarge YTL corp will be diluted significantly.

I suspect, in order to mitigate these dilution impact, YTL through aggressive share buyback support share performance to lower down ratio exchange with YTL Power. In addition, YTL could also issue new warrant to exchange outstanding YTL Power-WB.

Based on YTL Power latest result, Yes and 1 bestarinet has narrowing loss incur. I believe profit loss from IPP due expire in 2015 could potentially offset by Yes and 1Bestarinet, which should by then breakeven and start contribute steady earning to YTL Power .

Billy Teo said...

Hi Alex,

What's ur view on TOMYPAK lastest Q result?

Rgds

Alex Lu said...

Hi Billy Teo

TOMYPAK's latest results is mixed- down 20% q-o-q but up 28% y-o-y. It is trading at PE of 8.6 times- still attractive.

Alex Lu said...

Hi hng

I have not given much thought about YTL privatizing YTL Power.