In QE30/6/2016, DSonic's net profit rose 10% q-o-q or 68% y-o-y to RM20.8 million while revenue rose 3% q-o-q or 40% y-o-y to RM76 million. Revenue rose q-o-q principally due to commencement in supplying components for smart cards. This led to higher profits.
Table: DSonic's last 8 quarter's result
Chart 1: DSonic's last 17 quarter's result
Big Government Contracts In Hand
- To supply Malaysian Passport booklets for a period of five years or 13.416 million passports commencing December 1, 2016 (Value: RM222.38 million)
- To supply12 million MyKad raw cards and MyKad consumables for three years and six months commencing July 1, 2016 (Value: RM260.4 million)
- To supply Malaysian passport chips for five years commencing Dec 1, 2016 (Value RM318.75 million)
DSonic (closed at RM1.54 yesterday) is now trading at a PE of 29 times (based on last 4 quarterly EPS of 5.3 sen). In June, RHB was reported to have valued DSonic at RM2.00 (based on a 2017F PE of 25x).
DSonic has just broken above its downtrend line, RR at RM1.50. If the bullish breakout can sustain, the stock may begin its next upleg.
Chart 2: DSonic's daily chart as at Sep 8, 2016 (Source: Shareinvestor.com)
Based on improved financial performance & mildly bullish technical outlook, DSonic could be re-rated as TRADING BUY from a TRADING SELL.
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