SKPetro broke above its intermediate downtrend line, RR at RM1.60 in late December 2016.
Chart 1: SKPetro's daily chart as at Feb 6, 2017 (Source: MalaysiaStock.Biz)
The upside breakout could be the start of the next upleg for SKPetro. Its upcoming resistance will be from the psychological RM2.00 mark and then the horizontal line at RM2.20.
Chart 2: SKPetro's weekly chart as at Feb 6, 2017 (Source: MalaysiaStock.Biz)
Recent Financial Performance
The results for the last 4 quarters show the poor performance of the company due to the slowdown in the O&G sector. However I believe that the worst could be over and what's ahead for SKPetro is a slow but steady recovery.
Table: SKPetro's last 8 quarters' P&L
Graph: SKPetro's last 22 quarters' P&L
Latest Financial Position
As at 31/10/2016, SKPetro's financial position is deemed tight. Current ratio stood at 1 time and gearing ratio was at 1.8x.
SKPetro (closed at RM1.80 yesterday) si now trading at a PER of 20x (annualized EPS of 9 sen based on last 2 quarters' EPS). I believe this is a fair PER given that the company is coming off its trough earnings.
Based on improving financial performance and position, fair valuation & mildly positive technical outlook, I rate SKPetro a good stock to consider for long-term investment.