There is an article in the Star newspaper yesterday entitled “KWAP in tie-up with Can-One” where the gist is as follows:
Can-One Berhad has made due and diligent inquiry (sic) with its directors, major shareholders and all such other persons reasonably familiar with the matter and wishes to clarify that Can-One has been approached by a number of parties (including Kumpulan Wang Persaraan (Diperbadankan)) expressing interest to acquire equity interest in F&B Nutrition Sdn Bhd.
The 2 main assets of Canone are:
- 100% in F&B Nutrition (valued at RM840 million)
- 32.9% in Kianjoo (market value at RM473 million)
In QE31/12/2015, Canone's net profit dropped 49% q-o-q or 47% y-o-y to RM14 million while revenue dropped by 3% q-o-q or 5% y-o-y to RM236 million. Revenue dropped q-o-q due lower sales of general cans division (due to lower demand for jerry cans) and lower revenue from food products division (due to lower demand for sweetened creamer). Lower sales of food product plus higher material consumption & higher operating expenses led to a drop in PBT for the latter division. Despite lower revenue, general cans division recorded higher PBT due to better contribution by tin cans & lower losses in flexi packaging.
Table: Canone's last 8 quarterly results
Chart 1: Canone's last 36 quarterly P&L results
[Note: P&L diagram displays chronological order from left to right.]
Canone's share price is in a tentative intermediate uptrend line, SS with support at RM3.80. It has broken above its medium-term downtrend line, RR at RM3.90 in early April.
Chart 2: Canone's daily chart as at April 18, 2016 (Source: ShareInvestor.com)
Canone is in an irregular long-term upward channel.
Chart 3: Canone's daily chart as at April 18, 2016 (Source: ShareInvestor.com)
Based on satisfactory financial performance, attractive valuation & potential windfall from a possible sale of a 30%-stake in F&B Nutrition, Canone could be a good stock for trading BUY.
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, Canone.