PICorp- another recovery attempt?!

Results Update

PICorp's net profit rose 63% q-o-q or 216% y-o-y to RM5.4 million while revenue rose by 12% q-o-q or 17% y-o-y to RM28 million. Bottom-line improved q-o-q due to higher profit from the Laboratory Testing while Environmental Consultancy contributed less to earning. Continued global demand on environmental awareness and increased efficiency in the Group's operation are expected to have a positive impact on the Group's performance for the year 2013.


Table: PICorp's last 8 quarterly results

The chart below shows that top-line and bottom-line are rising. Profit margin also looks set to rise too. These would lead to faster rise in net profit in the next few quarters.


Chart 1: PICorp's last 26 quarterly results

Valuation

PICorp (closed at RM0.215 yesterday) is now trading at a PE of about 8.3 times (assuming a normalized earning of 2.6 sen). At this multiple, PICorp- a smallcap- is deemed fairly valued.

Technical Outlook

From the daily chart below, we can see that PICorp has broken above its downtrend. Its immediate horizontal support and resistance levels are RM0.20 & RM0.25.


Chart 2: PICorp's daily chart as at Mar 3, 2014 (Source: Tradesignum)

Conclusion

Based on positive technical outlook & improving financial performance, PICorp could e a good stock for long-term investment.

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, PICorp.