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Thursday, January 26, 2017

MPI: Top-line and Bottom-line Rose Strongly

Result Update

For QE31/12/2016, MPI's net profit rose 38% q-o-q or 67% y-o-y to RM55 million while revenue rose 12% q-o-q or 6% y-o-y to RM401 million. PBT rose q-o-q due to higher revenue & strengthening of USD-MYR. Revenue rose due to increased sales to the Asia, USA and European segments by 11%, 20% and 7%. 


Table: MPI's last 8 quarterly results


Graph: MPI's last 40 quarterly results 

Valuation

MPI (closed at RM7.95 yesterday) is now trading at a trailing PER of 8.8 times (based on last 4 quarters' EPS of 90.75 sen). At this PER, MPI is deemed fairly attractive. Its dividend yield is also decent at 2.9%.

Technical Outlook

MPI has been in a steady uptrend since it broke above its long downtrend line in early 2013. It tested its current uptrend line support at RM7.20-7.30 from November to December last year. At the start of this year, MPI rebounded from the uptrend line and may soon test the resistance from the horizontal line at RM8.10-8.20.

 
Chart 1: MPI's monthly chart as at Jan 25, 2017 (Source: MalaysiaStock.Biz)


Chart 2: MPI's weekly chart as at Jan 25, 2017 (Source: MalaysiaStock.Biz)   

Conclusion

Based on improved financial performance, attractive valuation and mildly positive technical outlook, I revise MPI's rating from a HOLD to a BUY.

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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