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Tuesday, August 19, 2014

Star: Bottom-line improved

Result Update

For QE30/6/2014, Star's net profit rose 142% q-o-q or 38% y-o-y to RM39 million while revenue increased by 30% q-o-q or 9% y-o-y to RM275 million. Revenue increased q-o-q due to higher revenue contribution from the Print and Event segment. PBT was higher q-o-q as PBT in 1QFY14 was affected by the holding back of spending from advertisers due to MH370 incident as well as VSS expenses.


Table 1: Star's last 8 quarterly results


Chart 1: Star's last 31 quarterly results

Valuation

Star (closed at RM2.60 yesterday) is now trading at a PE of 13 times (based on last 4 quarters' EPS of 19.5 sen). At this multiple, Star is deemed fairly valued.

Technical Outlook

Star is in a downward channel with resistance at RM2.80. Until it has surpassed the RM2.80 mark, Star will remain within the downward channel.


Chart 2: Star's weekly chart as at Aug 18, 2014 (Source: Tradesignum)

Conclusion

Based on improved financial performance, I revised Star's rating from a SELL to a HOLD.  Those who have bought the stock at the recent low of RM2.20, may take profit at RM2.80 mark.

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,Star.

2 comments:

Ivan said...

Correct me if I am wrong.

If we removed the RM90mil gain from land disposed, STAR 2Q14 archive a losses RM50mil; which was far below than 2Q13.

Notable, the DPS is higer than EPS by using it's retain earning?

Alex Lu said...

Hi Ivan,

If you are referring to the RM90 million gain from the sale of Sec. 13 land in PJ, that was recorded in QE31/12/2012.