Thursday, August 10, 2017

CEPAT: Too Slow For Comfort

Result Update

For QE30/6/2017, Cepat's net profit increased by 56% q-o-q or 91% y-o-y to RM9.7 million while turnover rose 19% q-o-q or 37% y-o-y to RM70 million. Profits rose q-o-q due mainly to an increase in FFB production and export of electricity by 27% and 21% respectively while the oil mill also contributed by giving a higher milling margin. CPO and PK selling price decreased by 14% and 39% respectively.

Table: Cepat's last 8 quarterly results

Graph: Cepat's last 43 quarterly results


Cepat (at RM0.84 yesterday) is trading at a PE of 8 times (based on adjusted last 4 quarters' EPS of 10.48 sen) as well as trading at only 0.5x its book value (based on NTA of RM1.57 per share as at 30/6/2017).At these multiples, Cepat is deemed fairly attractive.

Technical Outlook

Cepat is still in an intermediate downtrend line. If it can break above this downtrend line at RM0.94, Cepat may begin its next upleg.

Chart: Cepat's monthy chart as at November 16, 2016 (Source:


Based on improving financial performance & attractive valuation, Cepat could be a good stock for long-term investment.


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.


steve said...

Hi, I'm interest to know your opinion on Tambun on both fundamental and technical aspect.

Thank you!

Alex Lu said...

Hi steve

I am not familiar with Tambun. Chartwise, the stock is now moving sideways, resting on the support from the horizontal line at RM1.15. Immediate resistance is at RM1.25 & the next support is at RM1.00.

In term of financial performance, Tambun's top-line has been dropping since early 2014. Bottom-line was able to hold up pretty well since the last 2 quarters. Nevertheless its EPS for 1H2017 is 10.26 sen. Presumably, 2H2017 EPS may be lower. Assuming that 2H2017 EPS comes in at only 6 sen, FY2017 EPS will be about 16 sen. AT the current price of RM1.15, Tambun's PER is decent at 7x.

As such, I think Tambun should be rated as a HOLD.