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Thursday, July 28, 2016

Vitrox: Making New High on Thin Volume

Technical Outlook

On thin volume (143,000 shares), Vitrox broke above its horizontal resistance of RM3.80 yesterday. Despite the thin volume, the share price continues to rise today. As at 3.45pm, it is trading at RM3.95 on volume of only 30,000 shares.

 
Chart 1: Vitrox's weekly chart as at July 28, 2016_2.45pm (Source: Kenanga BTX/Chartnexus)


Chart 2: Vitrox's monthly chart as at July 28, 2016_2.45pm(Source: Tradesignum)

Recent Financial Results

For QE31/3/2016, Vitrox's net profit increased by 67% q-o-q & y-o-y to RM15.6 million while revenue increased by 17% q-o-q or 68% y-o-y to RM56 million. PAT increased due to tax credit of RM4.6 million which was the result of 2 subsidiaries obtaining pioneer status for their products, namely embedded high density electronic modules (1/1/2013-31/12/2017) and embedded  intelligent  robotic  inspection system and machine with M2M connectivity and predictive analytic capability for semiconductor and electronics industries (17/6/2015-16/6/2020).


Table: Vitrox's last 8 quarterly results


Chart 3: Vitrox's last 34 quarterly results

Valuation

Vitrox (closed at RM3.95 at the time of writing) is now trading at a PE of 18.2 times (based on last 4 quarters' EPS of 21.71 sen). At this PER, Vitrox is deemed fully valued.

Conclusion

Based on improving financial performance & bullish technical outlook, Vitrox could be a good trading BUY. As always, you should exercise careful discretion as the stock is at its all-time high.

 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, Vitrox.

2 comments:

TFMoney said...

hi bro. please commment on MBMR. can buy at current level ?

Alex Lu said...

Hi TFMoney

MBMR tested and rebounded from its long-term uptrend line at RM2.00 in early part of 2016. The rebound - coinciding with the launch of the compact sedan, Bezza - has caused the share price to break above the "downtrend line" at RM2.10-2.20. However I doubt the share price will continue to rise from hereon. I'm inclined to believe that the share price will trade sideways for a while, with support at RM2.20-2.30. At this level, it would be a good entry to this stock.