Friday, July 26, 2013

QL- trading at all-time high!

Technical Outlook

QL broke above its horizontal line at RM3.40 on July 15. It traded around the RM3.50 level for the past 6 days and yesterday it tested the underside of the violated uptrend line, SS. For QL to commence its uptrend, it must overcome that resistance. If QL can do that, its technical outlook would turn bullish since it is trading at all-time high.

Chart 1: QL's daily chart as at July 24, 2013 (Source: Quickcharts)

Chart 2: QL's monthly chart as at July 24, 2013 (Source: Quickcharts)

Recent Financial Result

From the table and chart below, we can see that QL's top-line has been rising but its bottom-line has been flattish due to declining profit margin. In QE31/3/2013, QL's pre-tax profit inched up due to higher pre-tax profit form its Integrated Livestock Farming division (which rose from RM10 million to RM21 million) while its Marine Products Manufacturing division suffered a drop in pretax profit (from RM26 million to RM17 million). The Palm Oil Activities division also slipped slightly (from RM5 million to RM4 million).

Table 1: QL's last 8 quarterly results

Chart 3; QL's last 20 quarterly results


QL (closed at RM3.58 yesterday) is now trading at a PE of 22 times (based on last 4 quarters' EPS of 16 sen). At this PE multiple, QL is fully valued.


Despite high valuation & poorer financial performance, QL's share price has rallied in the past 3 weeks to a new all-time high. Technically speaking, the stock is poised to go higher provided it can overtake the violated uptrend line at RM3.60. Can it? We will have to wait & see.

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, QL.

1 comment:

JY said...

Hi Alex,

If QL can break 3.60, what would be the projected target price, technically speaking? Cheers.