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.
Tuesday, May 21, 2013
POS- Top-line & bottom-line still rising
Result Update
For QE31/3/2013, POS's pre-tax profit increased by 10% q-o-q or 13% y-o-y to RM50 million while revenue increased by 10% q-o-q or 12% y-o-y to RM344 million. The increase in pre-tax profit was due to a jump in profit contribution from the Mail segment from RM33.4 million to RM54.7 million & fair value adjustment to investment properties of RM1.1 million. This had more than offset the losses incurred by the Courier & Other segments of RM239k & RM2.2 million, respectively. Other Income also dropped from RM12.4 million to RM6.2 million.
Net profit dropped 37% q-o-q but increased by 21% y-o-y to RM32 million. The q-o-q decline in net profit was due to tax credit of RM6.0 million- a result of over-provision in tax in prior years.
Table: POS's last 8 quarterly results
Chart 1: POS's last 30 quarterly results
Valuation
POS (closed at RM4.60 yesterday) is now trading at a PE of 16.3 times (based on last 4 quarters' EPS of 28.3 sen). This PE multiple is deemed reasonable due to its strong CAGR of its pre-tax profit of 25% last year. If this growth rate can sustain, POS's PEG ratio is only 0.64 time.
Technical Outlook
POS has broken above the line connecting its high for the past 5 years (at RM4.20). With this breakout, POS's uptrend is likely to accelerate.
Chart 2: POS's weekly chart as at May 21, 2013 (Source: quickcharts)
Conclusion
Based on satisfactory financial performance, reasonable valuation & positive technical outlook, POS is still rated a good stock for long-term investment.
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, POS.
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2 comments:
Hi Alex- the last time u highlighted Pos was on 12.12.2012 at 323 with TP at 4.00.Now its 4.60.The new TP should be around 5.50.Am I too bullished? Your comment please.TQ
Hi charles leong
You are right. Assuming a CAGR of 20%. POS is still fairly valued at a PE of 20 times. At that multiple, POS's fair value would be RM5.60.
If the CAGR dropped to 15%, then the stock is fully valued.
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