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Monday, January 27, 2014

Spritzr- poorer results due to higher costs


Result Update

For QE30/11/2013, Spritzr's net profit dropped 36% q-o-q & 34% y-o-y to RM3.4 million while revenue dropped 1% q-o-q but rose 18% y-o-y to RM55 million. The drop in the bottom-line was "attributed mainly to the higher operating costs especially on transportation, salary and payroll related expenses, advertising and promotional expenses. The weak Malaysian Currency had caused an increase in the prices of PET resin consumed".


Table: Spritzr's last 8 quarterly results


Chart 1: Spritzr's last 30 quarterly results

Valuation

Spritzr (closed at RM1.70 last Friday) is now trading at a PE of 11.4 times (based on last 4 quarters' EPS of 14.85 sen). At this PE multiple, Spritzr is still deemed relatively attractive for a consumer stock.

Technical Outlook

Spritzr's uptrend line may have run up against a possible double top at RM1.90. With indicators hooking down, Spritzr is set to go into a consolidation. I see its immediate support at RM1.50.


Chart 2: Spritzr's weekly chart as at Jan 24, 2014 (Source: Tradesignum)
 
Conclusion

Despite fairly attractive valuation for a consumer stock, Spritzr is likely to underperform for the next few months due to poorer financial performance & mildly bearish technical outlook. The stock is either a HOLD (ride out the near-term weakness) or a TRADING SELL (sell and buy back later). The choice is yours.

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, Spritzr.

2 comments:

billyboy said...

Hi Alex

Will this affect the stock price & future earnings of YeeLee?

Rgds

Alex Lu said...

Hi billyboy,

It should impact the bottom-line for Yeelee. However, Yeelee has a breakout above its downtrend line at RM1.30-1.31. It will be interesting to see whether Yeelee can still stay above the breakout with the poorer results recorded by Spritzer.