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Monday, October 09, 2017

SKPRES: Next Upleg Beckons?

Result Update

In QE30/6/2017, SKPRES's net profit rose marginally by 1% q-o-q or 83% y-o-y to RM33 million while revenue was mixed, down 11% q-o-q but up 64% y-o-y to RM525 million. Revenue dropped q-o-q mainly due to lower sales recorded in June 2017 as a result of Hari Raya festive holidays. Despite the sharp drop in revenue, PBT dropped only marginally by 1.4% as a result of improved margin due to operational efficiency. (Note: SKPRES's result was announced on August 25.)


Table: SKPRES's last 8 quarterly results


Graph: SKPRES's last 37 quarterly results

Financial Position

As at 30/6/2017, SKPRES's financial position is deemed fairly satisfactory with good current ratio at 1.76x but slightly elevated gearing ratio at 0.92x. (Note: SKPRES's gearing ratio is no worse off when compared to VS's gearing ratio of 1.27x as at 31/7/2017. These EMS groups are doing a roaring business which is very taxing on its capital.)

Valuation

SKPRES (closed at RM1.58 yesterday) is now trading at a PER of 15 times (based on last 4 quarters' EPS of 10.01 sen). Its PEG ratio is 0.4x (based on last 2 years' earning CAGR of 35%). As such, SKPRES is deemed fairly attractive for a growth stock.

Technical Outlook

SKPRES is now testing its recent high of RM1.58. If it can break above level, SKPRES can commence on its next upleg.


Chart 1: SKPRES's weekly chart as at Oct 6, 2017 (Source: ShareInvestor.com)


Chart 2: SKPRES's monthly chart as at Oct 6, 2017 (Source: ShareInvestor.com)

Conclusion

Based on good financial performance, attractive valuation for a growth stock & potentially bullish technical outlook, SKPRES could be a good stock to consider for investment.

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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