Thursday, May 16, 2013

GAB- priced to 'perfection'


Result Update

For QE31/3/2013, GAB's net profit dropped 8% q-o-q but rose 19% y-o-y to RM61 million while revenue increased 3% q-o-q or 21% y-o-y to RM443 million. The revenue increased q-o-q, mainly driven by Chinese New Year sales and promotional activities. However, bottom-line was lower q-o-q mainly due to higher costs invested in commercial activities to promote sales for Chinese New Year.


Table: GAB's last 8 quarterly results


Chart 1: GAB's last 25 quarterly results

Valuation

GAB (at RM20.80 as at 4.30pm) is trading at a PE of 29 times (based on last 4 quarters' EPS of 72.5 sen). At this multiple, GAB is deemed overvalued. In a world where everyone is chasing yield, GAB's high PE multiple can be overlooked as it pays a dividend yield of 3.6%. (Note: Carlsbg (at RM15.64) has a dividend yield of 4.0%.)

Technical Outlook

GAB is in an irregular upward channel. It has in fact broken above that channel and its uptrend may even accelerate.


Chart 2: GAB's daily chart as at May 15, 2013 (Source: quickcharts)

We can see that Carlsbg, which was in an expanding triangle, has also broken above the triangle. This means that Carlsbg's uptrend can also accelerate.


Chart 3: Carlsbg's daily chart as at May 15, 2013 (Source: quickcharts)

Conclusion

Based on improving financial performance & positive technical outlook, GAB is expected to continue to rise. As such, GAB is rated a HOLD courtesy of unconventional monetary policies from the central banks from America, Japan & Europe.

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, GAB & Carlsbg.

4 comments:

Stanley said...

Hi Alex, would you mind comment on Parkson pls

Alex Lu said...

Hi Stanley

Parkson is in a gradual downtrend. Its next support will be at RM3.50-3.60. From there, it may stage a rebound back up to RM4.30-4.50. You may consider selling into the rebound.

Hk Wong said...

Carlsberg maybe in acquring some company

Hk Wong said...

What do you think of DKSH?