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Thursday, February 25, 2016

CBIP: Earnings soared

Results Update

For QE31/12/2015, CBIP's net profit rose 162% q-o-q or 61% y-o-y to RM39 million while revenue was mixed; rose 59% q-o-q but dropped 4% y-o-y to 197 million. Revenue increased q-o-q due to higher project billing by special purpose vehicles and palm oil mill equipment segments. PBT rose q-o-q due mainly attributable to improvement in project implementation and management by the special purpose vehicles and palm oil mill equipment segments, and a favorable foreign exchange during the current quarter & 21%-increase in shares of results of associates.


Table 1: CBIP's last 8 quarterly results
 

Despite the sharp swing, one can see that CBIP's revenue and profit are rising in line with the steady growth in the palm oil estates. This is supportive of the management's expectation of satisfactory results for FY2016.


Chart 1: CBIP's last 36 quarterly results 

Valuation

CBIP (closed at RM2.15 yesterday) is now trading at a PE of 12.1 times (based on annualized EPS of 17.7 sen). At this multiple, CBIP is deemed fairly valued.

Technical Outlook

CBIP has recently broken above its downtrend line at RM2.05  as well as the horizontal line at RM2.10. Its immediate resistance is at the horizontal line at RM2.23 & beyond that, the horizontal line at RM2.40.


Chart 2: CBIP's weekly chart as at Feb 24, 2016 (Source: ShareInvestor)

Below we can see that CBIP is in a long-term "uptrend line" with support at RM1.80.


Chart 3: CBIP's monthly chart as at Feb 24, 2016 (Source: ShareInvestor)

Conclusion

Based on good financial performance,reasonable valuation & bullish technical outlook, CBIP 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, CBIP.

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