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Monday, May 12, 2014

Spritzr: Bottom-line improved due to festive season and water crisis

Result Update

For QE28/2/2014, Spritzr's net profit increased 82% q-o-q & 23% y-o-y to RM6.1 million while revenue increased 8% q-o-q or 4% y-o-y to RM60 million. Bottom-line improved q-o-q due to increase in sales during festive season and as a result of water crisis, the reduction in cost of packaging material and the higher sales of better-margin products.


Table: Spritzr's last 8 quarterly results


Chart 1: Spritzr's last 31 quarterly results

Valuation

Spritzr (closed at RM1.89 last Friday) is now trading at a PE of 12 times (based on last 4 quarters' EPS of 15.6 sen). At this PE multiple, Spritzr is still deemed attractive for a consumer stock.

Technical Outlook

Spritzr's uptrend is likely to continue after the stock broke above its flag formation at RM1.85 on April 7. However, after the breakout and a short rally, the stock dropped to its breakout level due to weak market sentiment. If this breakout level is not violated, the stock can continue its prior uptrend once the market sentiment has improved.


Chart 2: Spritzr's weekly chart as at May 9, 2014 (Source: Tradesignum)

Conclusion

Based on improved financial performance, attractive valuation and bullish technical outlook, Spritzr's rating is now revised from a HOLD to a BUY.

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.

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