For QE31/3/2015, Efficen's net profit rose 135% q-o-q & 78% y-o-y to RM2.6 million while revenue increased by 30% q-o-q & 15% y-o-y to RM14.3 million. Profit increased q-o-q due to increase in revenue as well as higher margin from the services rendered for data and document processing contributed by adhoc projects.
Table: Efficen's last 8 quarterly results
Chart 1: Efficen's last 28 quarterly results
Valuation
Efficen (traded at RM0.275 as at 11.45am today) is now trading at a trailing PE of 29 times. At this multiple, Efficen is deemed overvalued.
Technical Outlook
Efficen has been trading in a large triangle formation from 2007 to middle of 2014. In middle of 2014, it broke above the triangle formation (at RM0.22) and rose to a high of RM0.42. Since then, the stock has corrected & consolidated. It should find support at the horizontal line at RM0.25 or the upper line of the triangle at RM0.22.
Chart 2: Efficen's monthly chart as at 29/2/2015_11.45am (Source: ShareInvestor)
Conclusion
Based on improved financial performance & improving technical outlook, Efficen is a stock worth tracking. If the earnings continue to improve - and the valuation may become less demanding - a case can be made for buying into this stock.
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, Efficen.
4 comments:
Hi Alex,
What is your point of view for recent MEDIAC financial earnings (decreased 36.90%) report?
Thanks.
Hi Jim,
Mediac's NP dropped 75% q-o-q or 72% y-o-y to RM9.2 million. The bottom-line was hammered by the recognition of an impairment loss of goodwill and an allowance for impairment loss of interest in an associate totaling US$7,561,000. If these exceptional items were not booked into this quarter, bottom-line would actually improved. Go to item B1 on Page 23 of the notes to the accounts (link below).
However, the negative development to note is the drop in revenue of 13% q-o-q & y-o-y to RM321 million. That resulted from lower revenue from publishing & printing business.
Chartwise, I see the support at RM0.60-0.65. Dividend has declined and that led to a decline in DY to 5.3%.
http://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download?id=186953&name=EA_FR_ATTACHMENTS
Hi Alex,
May I ask you sth about A&M?
A&M annual report 2012 showed that it has 1938.24 acres of land in Mukim Jugra, Pulau Carey (leasehold, expire in 2105) with a net book value of Rm12.279 mil. Year of acquisition/revaluation : 1990.
But A&M annual report 2014 shows the land has depreciated significantly. The total area of the land in Mukim Jugra, Pulau Carey is 1907.18 acres (1378.99+528.19), but the total net book value has become Rm4.318 mil.
Could you please enlighten me on why the company's land in Pulau Carey could depreciate so sharply in about 2 years, given the fact that it still has 90 years to go before it expires in 2105?
Thank you very much in advance.
Hi CW Tan,
You have certainly given me an interesting assignment. The reason is these parcels of land are being developed into the 2000-acre Amverton Cove Golf & Island Resort. Thus, even though the land belongs to A&M, it is not proper to recognized the land as agricultural land with its own valuation but as a part of a building (such as hotel or club house). This is reflected in the A&M's landed properties listing at the end of the Annual Report. However, the land component and building component of these assets are shown separately under item 11. Property, Plant & Equipment.
For more on the Amverton Cove Golf & Island Resort, go to:
http://www.thestar.com.my/Business/Business-News/2013/06/15/Big-plans-brewing-at-Carey-Island-AM-Realty-drawing-up-RM10bil-development-project/?style=biz
Alternatively, you can visit the website at http://www.amvertoncove.com/
The address of Amverton Cove is:
PT673, Jalan Pulau Carey, Mukim Jugra,
42960 Pulau Carey,
Selangor, Malaysia
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