For QE31/12/2016, Pharma's net profit dropped 80% q-o-q or 83% y-o-y to RM4 million while revenue rose 13% q-o-q but dropped 14% y-o-y to RM582 million. Revenue dropped y-o-y mainly due to reduced orders from the concession business, notwithstanding improved contributions from the Indonesian operations and private sector business. As a result of lower revenue and higher finance costs, Pharma posted a lower profit before tax (PBT) of RM4 million. After booking in a deferred tax charge of RM4.27 million, Pharma incurred a net loss of RM900k.
Table: Pharma's last 8 quarterly results
Graph: Pharma's last 41 quarterly results
Pharma (closed at RM5.05 yesterday) is now trading at a PER of 29x (based on last 4 quartres' EPS of 17.61 sen).At this PER, Pharma is overvalued.
Pharma is now resting on its uptrend line with support at RM5.00. If this support is violated, Pharma may go into a downtrend. Its next support may come from the horizontal lien at RM4.00.
Chart: Pharma's monthly chart as at Feb 21, 2017 (Source: ShareInvestor.com)
Based on poor financial performance and demanding valuation, Pharma is a stock to avoided. Its only saving grace is that it's now hanging onto a strong technical support. If that support goes, its fall will begin.