For QE30/6/2016, F&N's net profit rose 3.3% q-o-q or 12.8% y-o-y to RM93 million while revenue increased by 9.7% q-o-q or 1.8% y-o-y to RM1.10 billion. Revenue rose q-o-q due to increased revenue in F&B Malaysia of RM57.2 million & F&B Thailand of RM39.0 million. F&B Malaysia's revenue rose due to effective festival sell-in (supported by consumer-driven packaging formats); favorable product portfolio mix and higher sell-in in June (brought on by earlier Hari Raya). Nevertheless, F&B Malaysia's operating profit dropped from RM64.3 million to RM62.6 million mainly due to higher advertising and promotions expenditure and accrual for staff costs. F&B Thailand revenue increased due to its anniversary campaign. This helped to boost its operating profit from RM41.2 million to RM52.8 million. The higher operating profit led to higher pre-tax profit. (Note: F&N's result for QE30/6/2016 was announced on August 2, 2016.)
Table: F&N's last 8 quarterly results
Chart 1: F&N's last 39 quarterly results
F&N (closed at RM24.50 last Friday) is now trading at a PE of 23 times (based on last 4 quarters' EPS of 107.10 sen). At this PE multiple, F&N is deemed fairly valued.
F&N broke out of its 5-year trading range between RM16.00 and RM19.00 in February this year.This brought on a sharp rally to RM27.00. Its current correction could lead to a prolonged sideways trading- possibly around RM24.00.
Chart 2: F&N's weekly chart as at Aug 5, 2016 (Source: ShareInvestor.com)
Chart 3: F&N's monthly chart as at Aug 5, 2016 (Source: ShareInvestor.com)
Based on good financial performance, fair valuation and good prospect in near term, F&N remains a good stock for long-term investment.
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