For QE31/3/2017, Dufu's net profit was mixed - dropped 58% q-o-q but rose 38% y-o-y - to RM6 million while revenue was mixed- down 3% q-o-q but up 13% y-o-y - to RM46 million.PBT dropped q-o-q due to the presence in the preceding quarter of gain on dissolution of subsidiary amounting to RM3.71 million; reversal of receivable and inventories amounting to RM1.16 million and RM1.22 million respectively; unrealized forex gain of RM0.5 as compared to unrealized forex loss of RM0.7 in current quarter. Excluding these favorable items, PBT for QE31/12/2016 would be RM12.17 million while for current quarter would be RM8.7 million. It is still a decline of 34% q-o-q. (Dufu's result for QE31/3/2017 was announced on May 24.)
Table: Dufu's last 8 quarterly result
Graph: Dufu's last 15 quarterly result
Dufu (closed at RM1.47 last Friday) is now trading at a trailing PER of 8.6x (based on last 4 quarters' EPS of 17.02 sen). At this PER, Dufu is still attractive.
Dufu is in an uptrend, supported by the 30-day EMA line at RM1.40.
Chart 1: Dufu's daily chart as at 1un 2, 2017(Source: ShareInvestor)
Dufu's strong rally saw the share price pulling way ahead of its weekly moving average lines. With weaker financial performance, the share price may move sideways to consolidate for a while.
Chart 2: Dufu's weekly chart as at Jun 2, 2017(Source: ShareInvestor)
Despite the attractive valuation & positive technical outlook, I would recommend some profit-taking due to the recent sharp rally as well as some weakness in its financial performance.