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Thursday, September 15, 2016

SKPRES: Potential Bullish Breakout

Recent Financial Results

In QE30/6/2016, SKPRES's net profit dropped 16% q-o-q but rose 2% y-o-y to RM18 million while revenue rose 38% q-o-q or 32% y-o-y to RM321 million. Revenue increased q-o-q as a result of the increase in sales intake by existing key customers. Profit before tax decreased marginally from RM25.13 million in last quarter to RM24.01 million mainly due to higher labor costs incurred as a result of relying on higher cost contract workers to cater for the increase in sales orders.


Table: SKPRES's last 8 quarterly results


Chart 1: SKPRES's last 33 quarterly results

Valuation

SKPRES (closed at RM1.28 yesterday) is now trading at a PER of 17 times (based on last 4 quarters' EPS of 7.45 sen). Its PEG ratio is 0.3x (based on last 2 years' earning CAGR of 65%). As such, SKPRES is deemed fairly attractive for a growth stock.

Technical Outlook

SKPRES has just broken above its intermediate downtrend line at RM1.25-1.26. If this upside breakout can sustain, SKPRES can commence on its next upleg.



Chart 2: SKPRES's weekly chart as at Sep 14, 2016 (Source: ShareInvestor.com)

Conclusion

Based on good financial performance, fairly attractive valuation for a growth stock & potentially bullish technical outlook, SKPRES could be a good stock to consider for investment.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

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