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Friday, June 03, 2016

GCB: Earnings Improved

Results Update
For QE31/3/2016, GCB's NP rose 15-fold q-o-q to RM14 million on the back of a mere 2%-increase in revenue to RM591 million. Revenue rose 34% y-o-y, which help to bring GCB back into the black compared to a net loss of RM1.9 million last year.

Profits increased q-o-q  mainly  due  to  increased  sales  volume  and  selling price  of cocoa  butter  and  cocoa  solids as well as higher  net  gain on  foreign  exchange.


Table: GCB's last 8 quarterly results


Chart 1: GCB's last 46 quarterly results

Valuation

GCB (closed at RM1.00 yesterday) is now trading at a trailing PER of 12.5 times (based on last 4 quarters' EPS of 8.01 sen). At this PER, GCB is deemed fairly valued.

Technical Outlook

GCB had a sharp rally after breaking above its long-term downtrend. The current pullback has found support coming from the horizontal line at RM1.00.


Chart 2: GCB's monthly chart as at June 2, 2016 (Source: ShareInvestor)


Chart 3: GCB's monthly chart as at June 2, 2016 (Source: ShareInvestor)
 
Conclusion

Based on good financial performance, reasonable valuation & mildly positive technical outlook, GCB is still rated a BUY.

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, GCB.

2 comments:

lai said...

Hi Alex,

At current level, i think Ewein is a fair bet. What do you thinK.?

Thanks

Alex Lu said...

Hi lai

Ewein has an exciting project known as “Wellness City of Dreams” resort located in Bandar Tanjong Pinang, Penang. The project will be built on a piece of land of 50 acres which it bought for RM2.83bil from Consortium Zenith BUCG Sdn. Bhd. The project is valued at RM15 billion.

Ewein is fully valued now as it trades at a trailing PER of 11x (based on last 4 quarters' EPS of 7.9 sen). Nonetheless, the share price is well supported at its intermediate uptrend line at RM0.90-0.92.

Based on fairly valuation, positive technical outlook & exciting project in hand, Ewein is a fair bet- as you put it.