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Sunday, June 04, 2017

Harbour: Earning Tumbled Badly

Result Update

For QE31/32017, Harbour's net profit dropped 93% q-o-q or 96% y-o-y to RM0.54 million while its revenue was mixed - up 22% q-o-q or down 17% y-o-y  - to RM151 million. Revenue rose q-o-q due to higher revenue from Shipping & Logistics divisions but partially offset by lower revenue from Engineering & Property divisions. Despite higher revenue, Shipping & Logistics divisions suffered a drop in PBT as did the Engineering & Property divisions. The Engineering division reported a loss before tax due to certain projects near completion and anticipated delay in new projects. (Harbour's latest result was announced on May 24.)


Table: Harbour's last 8 quarterly results


Graph: Harbour's last 39 quarterly results

Valuation

Harbour (closed at RM0.72 last Friday) is now trading at a PE of 8 times (based on last 4 quarters' EPS of 9 sen). At this PER, Harbour is deemed fairly valued. (Note: Harbour completed a 1-to-2 share split, 1-for-10 bonus share issue & 1-for-10 bonus warrant in March 2016.) 

Technical Outlook

Harbour broke below its recent low of RM0.76 after the announcement of its bad result.


Chart 1: Harbour's daily chart as at NJun 2, 2017 (Source: ShareInvestor)
 
With this breakdown, Harbour may drop to its long-term "uptrend curved line" with support at RM0.60.


Chart 2: Harbour's monthly chart as at NJun 2, 2017 (Source: ShareInvestor)

Conclusion

Despite the weak financial performance, I still have faith in Harbour. However, I am lowering my rating for Harbour from a BUY to a HOLD while I await a turnaround in the company's performance.

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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