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Sunday, June 04, 2017

Yeelee: Earnings Plummeted

Result Update

For QE1/3/2017, YeeLee's net profit dropped by 48% q-o-q or 47% y-o-y to RM6.2 million while revenue was mixed - down 8% q-o-q but up 6% y-o-y - to RM268 million. Revenue dropped q-o-q due to lower sales of beverages, Campbell's products and palm-based products. This led to a drop in profits. (The result was announced on May 31.)


Table: YeeLee's last 8 quarterly results


Graph: YeeLee's last 44 quarterly results

Valuation

YeeLee (closed at RM2.49 last friday) is now trading at a PE of 11.9 times (based on last 4 quarters' EPS of 20.93 sen). At this PER, YeeLee is deemed quite attractive for a well-diversified group with large exposure to consumer spending.

Technical Outlook

YeeLee is in a long-term uptrend which is well-supported by either its 10-month SMA line at RM2.50 or its 20 or 30-month EMA lines at RM2.20-2.30.


Chart 1: YeeLee's monthly chart as at Jun 2, 2017 (Source: Chartnexus)

Yeelee has a strong support from its horizontal line at RM2.43.


Chart 2: YeeLee's weekly chart as at Jun 2, 2017 (Source: Chartnexus)

Conclusion
Despite the weaker financial performance, YeeLee is a good stock to hold for long-term investment based on attractive valuation & positive technical outlook.

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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