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Sunday, November 27, 2016

Ulicorp: Earnings Recovered

Result Update

For QE30/9/2016, Ulicorp's net profit rose 27% q-o-q or 38% y-o-y to RM11 million while revenue was mixed - down 6% q-o-q but up 14% y-o-y to RM52 million. Profit before taxation rose q-o-q mainly due to better profit margin achieved on goods sold during the quarter under review.


Table: Ulicorp's last 10 quarterly results


Graph: Ulicorp's last 13 quarterly results

Valuation

Ulicorp (closed at RM3.50 last Friday) is now trading at a trailing PER of 14.6x (based on last 4 quarters' EPS of 23.91 sen). As the company has once again returned to high growth - with earnings CAGR of 39% in the past 2 years - the PEG ratio is down to less than 1 time. Thus its valuation is deemed acceptable.

Technical Outlook 

Ulicorp hase found support at the horizontal line at RM3.50.


Chart: Ulicorp's weekly chart as at Nov 25, 2016 (Source: Chartnexus)

Conclusion

Based on improved financial performance and attractive valuation as a growth stock, I revised my rating for Ulicorp from a SELL to a HOLD.

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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