Monday, July 15, 2013

Plenitu- broke above a strong horizontal resistance at RM2.30


Plenitude Bhd (“Plenitude”) is involved in property development & investment. Its property development is likely to last for the next 10-15 years as it has a large landbank of about 2000 acres, located in Johor Bahru & the Klang Valley. For details of its property development projects & investment properties, see the two graphs below.

Graph 1: Plenitu's Property Development Projects

Graph 2: Plenitu's Investment Properties

Recent Financial results

Plenitu's financial performance dropped significantly in 2011-2012. It hit a bottom in QE30/9/2012 and slowly recovered in the past 2 quarters. The reason given for the decline in revenue due to low contribution from newly launched projects as they were in the early stages of construction (in early 2012). Revenue has picked up in the past two quarters as these projects have since begun to contribute to the Group's top-line and bottom-line. Nevertheless, the Group has yet to complete its hotel renovation and as such there was no contribution from this segment.

Table 1: Plenitu's last 8 quarterly results

Chart 2: Plenitu's last 27 quarterly results


Plenitu (closed at RM2.38 today) is now trading at a PE of 14 times (based on last 4 quarters' EPS of 17 sen). At this PE, Plenitu is deemed fully valued.

Technical Outlook

Plenitu has just broken above its horizontal resistance at RM2.30. Based on technical projection, Plenitu may rose to a high of RM3.00-3.10.

Chart 2: Plenitu's weekly chart as at July 15, 2013 (Source: quickcharts)

Chart 3: Plenitu's monthly chart as at July 15, 2013 (Source: quickcharts)


Despite demanding valuation & improving-but-weak financial performance, Plenitu could be a stock for trading BUY as it has broken above its strong horizontal resistance at RM2.30.

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, Plenitu.


Anonymous said...

Hi Alex- how is your reading on QL? and Supermax ?

hng said...

Hi Alex

Can you comment on OKA? stock price have been laggard many year but its earning keep improving and increase dividend payout.

Based on last financial earning, OKA trading at PE = 6.7x, EPS= 9.5, NTA= RM 1.63, dividend : 3.5sen TE; yield at 5.5% nett. What is fair value for OKA?

Alex Lu said...

Hi charles leong

My take on:
1) QL has just surpassed its all-time high of RM3.40-3.44. Any stock that makes a new high is a bullish stock. So, watch this like a hawk!

2) Supermax is moving sideway. Until it breaks above RM2.28-2.30 (or, below RM1.80), I expect the trendless move to persist.

Alex Lu said...

Hi hng

What you wrote about OKA is correct! The chart shows that this stock has been trading in a range between RM0.45 & RM0.67 since October 2009.

Investors' disinterest in this stock may be attributed to the business OKA is involved in: Furniture!

Until we have a breakout, the stock will continue to be range-bound for sometimes.