Results Update
For QE30/6/2013, Wellcal's net profit increased by 38% q-o-q or 10% y-o-y to RM6.8 million while its revenue was mixed- up 16% q-o-q but down 5% y-o-y - to RM35.5 million. The reason for the improvement results was lower cost of raw material (such as rubber) and favorable exchange rate movement. Like many manufacturers, Wellcal will benefit from the weakened MYR.
Table: Wellcal's last 8 quarterly results
Chart 1: Wellcal's last 24 quarterly results
Valuation
Wellcal (currently at RM2.81 as at 12.00pm) is trading at a PE of 16 times (based on
last 4 quarters' EPS of 17 sen). The stock is trading near its fair
value. However, Wellcal is a good income stock as it pays out nearly 100% of its earning as
dividend. Thus the stock has an attractive dividend yield of 6.0%.
Technical outlook
Wellcal is still in an uptrend. It recently broke above its horizontal line at RM2.74. The target of the current move could be RM3.00.
Chart 2: Wellcal's daily chart as at Sep 9, 2013_11.50am (Source: Quickcharts)
Chart 3: Wellcal's monthly chart as at Sep 9, 2013_11.50am (Source: Quickcharts)
Conclusion
Based on good financial performance and still-positive technical
outlook, Wellcal remained a good stock for long-term investment. Its
upside potential may be limited as it is trading at a PE of 16 times.
However, it is a good dividend stock as it has a dividend yield of 6%.
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, Wellcal.
1 comment:
Hi Alex,
Do you think the termination of J&J distributorship will affect Yeelee future earnings?
Rgds
Post a Comment