Monday, December 07, 2015

KSeng: Next Upleg Starting?

Results Update

For QE30/9/2015, KSeng's net profit rose 152% q-o-q or 149% y-o-y to RM117 million on the back of a revenue of RM243 million, which rose 8% q-o-q but dropped 19% y-o-y. The sequential rise in revenue was mainly due to higher quantity of refined oil sold in 3Q 2015. Profits increased q-o-q due to better performance by the manufacturing segment & forex gain of RM104.55 million.

Table: KSeng's last 12 quarterly results

Chart 1: KSeng's last 12 quarterly results

If the forex gain of RM104.55 million is excluded from the bottom-line, KSeng's huge profits would shrink to a size of the disappointing QE30/6/2014.

Chart 2: KSeng's last 12 quarterly results- unadjusted & adjusted

KSeng (closed at RM5.62 as at 11.30am this morning) is now trading at a trailing PER of 8.5 times (based on the last 4 quarters' EPS of 66 sen). If the exceptional forex gain is excluded, the last 4 quarters' EPS would reduce to 36 sen, the trailing PER would rise to 15.6 times. At this PER, KSeng is deemed fully valued.

Technical Outlook

KSeng broke above its intermediate downtrend line at RM5.20 last week.

Chart 3: KSeng's weekly chart as at Dec 7, 2015_11.30am (Source: ShareInvestor,com)

The upside breakout came after the stock tested its long-term uptrend line, SS at RM4.50. The upside breakout last week is very similar to the past 2 breakouts, which was followed by a decent rally to the upside.

Chart 4: KSeng's monthly chart as at Dec 7, 2015_11.30am (Source: ShareInvestor,com)


Based on technical breakout, KSeng could be a good stock for a trading BUY. Its valuation & financial performance are unexciting at this moment and would not warrant a rating of 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, KSeng.


ronnie said...

Keck Seng owns valuable land in Johor near Pengerang and Singapore.

The RNAV is RM23/share.

cheer said...

gcb is a buy ?

steve said...
This comment has been removed by the author.
steve said...

Hi ronnie,
K.Seng is a long time value trap for many investors, i was one of them few years ago. haha!
How's it now? Has it started to unlock values on its land assets (property development or land sales) ?

Alex Lu said...

Hi Cheer,

Check out my earlier post ob GCB,