Wednesday, December 12, 2012

GCB broke its uptrend line

Results Update

For QE30/9/2012, GCB (formerly, Guanchg)'s net profit dropped 22% q-o-q but rose 6% y-o-y to RM27.4 million while revenue rose 11% q-o-q but dropped 5% y-o-y to RM348 million. Bottom-line declined q-o-q due to lower gain on commodity futures contracts and net fair value loss on forex derivatives.


Table: GCB's last 8 quarterly results


Chart 1: GCB's last 32 quarterly results

Valuation

GCB (closed at RM1.70 yesterday) is now trading at a PE of 6.4 times (based on last 4 quarters' EPS of 26.57 sen). This means that GCB is now trading in the middle of its PE band of 4.5 & 8.5 times.

Technical Outlook

GCB broke its long-term uptrend line at RM1.86. Its next strong support is at the horizontal line at RM1.60 and thereafter at RM1.25. .


Chart 2: GCB's weekly chart as at Dec 12, 2012_12pm (Source: quickcharts)

Conclusion

Based on technical consideration, GCB is rated a trading SELL. However, GCB is a good stock and for those with patience, it is good buy if the stock finds support at the horizontal line at RM1.60 (or RM1.25).

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, GCB.

6 comments:

hng said...

Hi Alex

Can you comment on latest SP setia Q4 result, EPS record high at 6.23sen and has proposed final dividend of 9sen. It also exceed target sale of RM4b to as high as RM 4.23b.

Already SPsetia set new target price next year to reach RM 5.5b

Alex Lu said...

Hi Hng,

Sorry, I sat on your comment on SPSetia. As you have rightly pointed out, SPSetia's performance has been impressive. The stock came under selling pressure due to its exclusion from the FBMKLCI index. Once the selling subsides, the share price may rebound back.

It does look like it can stay above the RM3.00 mark.

hng said...

Hi Alex

I've check its 2 year chart, SP setia look alike last time sell down but manage to rebound back. If historic repeat itself, SP setia did rebound back to 3.40 level, then the main beneficial will be its WB.

Already, today SP setia response positively to Q4 result, up 12sen, its WB also follow but the percentage is magnificent, as high as 200%!?

Jardin said...

Hi Alex, What do you think about fiscal cliff? Will it impact Malaysia? What is your recommendation if it does happen?

Alex Lu said...

Hi Jardin

The US fiscal cliff, if badly played out, will affect everyone. I believe US can avoid the worst simply because the Republicans will back down and accept Obama's proposal, whatever it is. Republican's position of not accepting higher tax for the top 2% of the richest Americans is just untenable, politically. To hold onto a stupid position will be the undoing of the Republican party.

Alex Lu said...

Hi hng

SP setia's immediate support is at RM3.00. If it can stage a rebound from here, it may go to RM3.50.