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Friday, August 08, 2014

Petdag: Profit improved

Result Update

For QE30/6/2014, Petdag's net profit increased by 20% q-o-q but dropped 6% to RM186 million while revenue inched up 1% q-o-q or 6% y-o-y to RM8.368 billion. 
Revenue increased q-o-q by RM74 million to RM8.368 billion due to 2%-increase in sales volume but partially offset by 1%-drop in selling prices. Group operating profit increased by RM24 million to RM253 million. This is due to higher gross profit margin by RM30 million as a result of lower product cost of RM15 million  & higher volume contribution of RM15 million. Lower product cost was due to favorable timing differences of the MOPS prices compared to previous quarter.


Table: Petdag's last 8 quarterly results


Chart 1: Petdag's last 25 quarterly results

Valuation

Petdag (closed at RM20.00 yesterday) is now trading at a trailing PE of 28 times (based on last 4 quarters' EPS of 72 sen). Based on PE multiple, Petdag is expensive.

Technical Outlook

Petdag broke its uptrend line in early February (here). It failed to hold onto its horizontal support at RM23. It may have better luck with the current horizontal support at RM19.


Chart 2: Petdag's weekly chart as at Aug 7, 2014 (Source: Tradesignum)

Conclusion

Based on high valuation & bearish technical outlook, Petdag is best to be avoided. If you are having the stock, you should try to sell on the current rebound.

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, Petdag.

3 comments:

J-base said...

Hi Alex, mind to share what exactly is MOPS price and how does it come into picture? Tried to google it but not much explanation found.

Alex Lu said...

Hi J-base,

I am not sure how MOPS price comes into the mix. It could be a proxy* or it could be the input cost of fuel oil through the process of petroleum distillation#.


* http://en.wikipedia.org/wiki/Mean_of_Platts_Singapore

# http://en.wikipedia.org/wiki/Fuel_oil

Billionaire Tan said...

thank you for your reply. will proceed to invest in fiamma