This is a personal weblog, reflecting my personal views and not the views of anyone or any organization, which I may be affiliated to. All information provided here, including recommendations (if any), should be treated for informational purposes only. The author should not be held liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein.
Wednesday, May 22, 2013
JTInter- bottom-line rebounded
Result Update
For QE31/3/2013, JTinter's net profit rebounded to RM40 million from RM3 million in QE31/12/2012 or RM38 in QE31/3/2012. Revenue was mixed- up 7% q-o-q but down 4% y-o-y to RM310 million. JTInter's revenues increased q-o-q due to higher sales volume. Bottom-line improved q-o-q, driven by higher sales volume, lower marketing investments and lower operating expenditures in the current quarter. In addition, there was a one-time restructuring impact of the Group leaf and stemmery operations amounting to RM12.2 million in the preceding quarter.
Table: JTInter's last 8 quarterly results
Chart 1: JTInter's last 24 quarterly results
Valuation
JTInter (closed at RM6.80 yesterday) is now trading at a PE of 15.5 times (based on last 4 quarters' EPS of 44 sen, after adjusting for the one-time restructuring expenses of RM12.2 million incurred in QE31/12/2012). For a 'consumer' stock, JTInter is deemed fairly valued. It paid dividend of 41 sen in FY2012 & 54 sen in FY2011. Based on last FY dividend payout, its dividend yield is at a respectable 6%.
Technical outlook
JTInter is still in an uptrend line. Its upside is capped at RM6.80-7.00. Until it can break above that level, JTInter is expected to swing between the uptrend line (at RM6.20) and the RM7.00 mark.
Chart 2: JTInter's weekly chart as at May 22, 2013_11.00am (Source: Quickcharts)
Conclusion
Based on improved financial performance, reasonable valuation & positive technical outlook, I would revise JTInter's rating from SELL INTO STRENGTH to 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, JTInter.
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2 comments:
Hi Alex,
Since the cigaratte's price has increased RM0.30, should i buy JT International now at RM6.80 ?
Appreciate your response.
Thank you and take care.
Regards,
Seer Hou
Hi Yee s
I think BAT raised the price of cigarettes by 30 sen but JT Inter and Phillip Morris chose not to raise. I am not sure how this would impact JT Inter or BAT.
Chartwise, JT Inter is in an upward or bearish wedge, with resistance at RM7.00-7.10 and support at RM6.20-6.30. A bearish wedge tends to break on the downside; thus the term bearish wedge. We will see whether JT Inter will defy the commonly accepted technical reading or succumb to it.
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