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Wednesday, November 18, 2015

MPI: Another quarter of strong earning growth

Result Update

For QE30/9/2015, MPI's net profit jumped 37% q-o-q or 136% y-o-y to RM47 million. PBT increased 34% q-o-q due to strengthening of USD via-a-vis the MYR. Revenue increased from RM373 million to RM387 million - revenue increased by 17% for USA but remained flat for Europe and Asia.


Table: MPI's last 8 quarterly results


Chart 1: MPI's last 33 quarterly results 

Valuation

MPI (closed at RM7.35 yesterday) is now trading at a trailing PER of 10 times (based on last 4 quarters' EPS of 71 sen). At this PE multiple, MPI is deemed fairly attractive.

Technical Outlook

From Chart 2, we can see that MPI has broken above the long-term downtrend line at RM4.50 last year.


Chart 2: MPI's monthly chart as at Nov 17, 2015 (Source: ShareInvestor.com)

From the weekly chart (Chart 3), MPI's upside is capped by the line, AB at RM7.50. An upside breakout above this line could signal the continuation of the prior uptrend. The next resistance will be at RM9.50.
  

Chart 2: MPI's weekly chart as at Nov 17, 2015 (Source: ShareInvestor.com)

Conclusion

Based on good financial performance and attractive valuation, MPI is a good stock for long-term investment.

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, MPI.

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