Tuesday, October 13, 2015

Johotin: Milk Power!

Johotin has rallied from a low of RM1.30 to this morning high of RM1.90. What can we make of this stock? Is there more upside?

Results Update

For QE30/6/2015, Johotin's net profit increased by 68% q-o-q on the back of a 25%-increase in revenue to RM114 million. Johotin reported a net loss of RM334k in the corresponding quarter last year due to production issue which had since been resolved. The sequential increase in net profit was due to increase in PBT from tin manufacturing segment from RM1.31 million to RM2.66 million (where the company benefited from higher selling in line with higher raw material cost) as well as increase in PBT from F&B segment from RM5.24 mil to RM7.25 mil (due to higher revenue).

Table 1: Johotin's last 8 quarterly results

Chart 1: Johotin's last 23 quarterly results 


Johotin (closed at RM1.84 yesterday) is now trading at a trailing PE of 9.2 times (based on last 4 quarters' EPS of 20 sen). At this PER, Johotin is deemed fairly attractive.

Technical Outlook

Johotin broke above its intermediate downtrend line, RR at RM1.55 in early October. Its imediate resistance is the psychological RM2.00 & beyond that, the September 2012 high of RM2.23. In the event of correction, its support would be at RM1.80.

Chart 2: Johotin's monthly chart as at Oct 12, 2015  (Source: Share


Based on improved financial performance, fairly attractive valuation and positive technical outlook, Johotin is a good stock for long-term investment.

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, Johotin.

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