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


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)


Based on satisfactory financial performance, reasonable valuation & positive technical outlook, POS is still rated a good stock for long-term investment.

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.


Anonymous said...

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

Alex Lu said...

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.