Friday, March 08, 2013

JTinter- profit slid further

Result Update

For QE31/12/2012, JTInter's net profit dropped by 90% q-o-q or 89% y-o-y to RM3 million while revenue was mixed, dropped 9% q-o-q but rose 5% y-o-y to RM290 million. The dropped in net profit q-o-q was attributable to lower sales volume, higher marketing investment* & a one-time restructuring impact of the Group leaf and stemmery operations amounting to RM12.2 million which included an impairment of plant and machinery (RM3.3 million), employee redundancy payments (RM4.2million), and a goodwill exit payments to growers (RM3.1million). [*Note: We can't tell how much was  the additional marketing investment but we can see that Other Operating Expenses increased by 20% y-o-y from RM168 million to RM201 million as compared to the 9% y-o-y increase in revenue from RM266 million to RM290 million.]

Table: JTInter's last 8 quarterly results

Chart 1: JTInter's last 23 quarterly results


JTInter (closed at RM6.54 yesterday) is now trading at a PE of 17 times (based on last 4 quarters' EPS of 38.73 sen). At this PE, JTInter is fully valued.

Technical Outlook

JTImter is still in an uptrend line with support at RM6.20.

Chart 2: JTInter's weekly chart asat Mar 7, 2013 (Source: Quickcharts)


Based on poorer financial performance & unattractive valuation, I think it is advisable to take some profit on JTInter. However, since the stock is still in an uptrend line, we can afford to do so by selling into strength.

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, JTInter.


MaxWealth88 said...

hi alex,

how about analysis on success?


james said...

Hi Alex,

Wonderful job you are doing in this blog! I have 2 questions for you.

Firstly, what are the price target objectives from a technical analysis standpoint for Sunway since it managed to close above the historical high of RM2.75 on good volume?

Second question is on Sunway-wa. The exercise price is RM2.80 and the expiry is not until Aug2016. If the mother share is able to hit the above price target objective, what is the warrant's price target objective?


Alex Lu said...

Hi MaxWealth88

Success is at the uptrend line. If it can go above RM1.05, its new upleg may begin.

This is a very attractive stock, trading at a PE of 4 times. Price to Book is 0.6 time.

Financial position is healthy with current ratio at 2.4 times & gearing ratio at 0.4 time.

Success is a long-term investment that truly test our patience. However, it will reward us this round.

Alex Lu said...

Hi james

The target price for Sunway once it surpassed the horizontal resistance at RM2.75 will be the psychological RM3.00 level. If you visit Tradesignum (link below), you will find the combined price chart of the old Sunway & the current Sunway. If this stock trades in the same fashion as its predecessor, the combined chart will be valid for charting purposes. From that chart, we can see the next two resistance levels are RM3.00 & RM3.60.

The warrant at RM0.50+ is now trading at a premium of 16%. It is slightly overvalued but the great thing is that it has high gearing. For the same amount spent on the shares, you would get 5 times the exposure. However, gearing is a double-edge sword that cut both ways. On the way up, you will lose more. On the way down, you will lose more.

Good luck!

james said...

Alex, thanks for your thoughts on Sunway and the warrants.