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Tuesday, March 01, 2016

Yeelee: Quarterly earnings at 10 years high

Result Update

For QE31/12/2015, YeeLee's net profit increased by 28% q-o-q or 139% y-o-y to RM10.9 million while revenue rose 20% q-o-q or 43% y-o-y to RM238 million. Profits rose q-o-q due to income from sales of timber logs and better profit margin achieved by palm oil refinery.


Table: YeeLee's last 8 quarterly results


Chart 1: YeeLee's last 38 quarterly results

Valuation

YeeLee (closed at RM2.19 yesterday) is now trading at a PE of 12.4 times (based on last 4 quarters' EPS of 17.6 sen). At this PER, YeeLee is deemed fairly priced for a well-diversified group with large exposure to consumer spending.

Technical Outlook

YeeLee is in a long-term uptrend line (SS), with support at RM1.70-1.80.


Chart 2: YeeLee's monthly chart as at Mar 1, 2016 (Source: ShareInvestor)

In the past 3 years, Yeelee has been rising in a regular cycle. We may be seeing the peak in the current up cycle. If so, the next phase could be a down cycle where the stock will test its uptrend line support at RM1.70-1.80.
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Chart 3: YeeLee's weekly chart as at Mar 1, 2016 (Source: ShareInvestor)

Conclusion

Based on good financial performance, fair valuation & positive technical outlook, YeeLee is a good stock to hold for long-term investment. If you can wait, the good entry level would be at RM1.70-1.80.

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, YeeLee.

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