For QE31/1/2013, VS's net profit plummeted 100% q-o-q & y-o-y to RM40k while revenue dropped 29% q-o-q or 12% y-o-y to RM234 million. VS's bottom-line dropped caused by lower sales & lower profit margin (due to fierce competition) and loss arising from dilution of interest in an associate in China amounting to RM5.9 million.
Table 2: VS's last 8 quarterly results
Chart 1: VS's last 32 quarterly results
VS (closed at RM1.39 yesterday) is trading at a PE of 8.7 times (based on last 4 quarters' EPS of 16 sen). If the bottom-line continued to deteriorate, VS's PE ratio may expand in the next few quarters.
VS is now in a downtrend line (R2-R2), with resistance at RM1.70. Its support may come from the curving line, C-C2 at RM1.30. If this curving line is violated, VS's next support would be the horizontal lines at RM1.20 & then at RM1.00. In an extreme situation, it may test the 'horizontal' line, SS at RM0.85-0.90.
Chart 2: VS's monthly chart as at Mar 26, 2013 (Source: Tradesignum)
Despite poor financial performance, VS is rated a HOLD based on possible technical support and potential recovery in the next few quarters. However, if the share price were to drop to RM1.00 level, the stock could become a good stock to accumulate for recovery play.
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, VS.