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Thursday, November 30, 2017

Freight: Earning Maintained

Results Update

For QE30/9/2017, Freight's net profit increased by 1.8% q-o-q & 12.5% y-o-y to RM5.9 million while revenue rose 2.9% q-o-q & 21.9% y-o-y to RM128 million. Revenue increased q-o-q mainly due to higher activities in Airfreight, 3PL & Warehousing, Landfreight and other Supporting services.
PBT decreased by 1.7% due to higher losses in Tug & Barge service despite better performance from other divisions such as Seafreight and Airfreight. NP however rose q-o-q due to lower tax expense as a result of higher deferred tax recognized.


Table: Freight's last 8 quarterly results


Graph: Freight's last 38 quarterly results

Financial Position

As at 30/9/2017, Freight's financial position is deemed satisfactory with current ratio at 2.3x and gearing ratio at 0.6x.

Technical Outlook

Freight is struggling to hang onto its long-term uptrend line, though it's not very convincing. Strictly speaking, it is below my preferred uptrend line, SS. However if we choose to be a bit lenient, we can fit the price trend into the next uptrend line, S-S1. The deciding factor will be whether the MACD can climb back above the zero line. the jury is out.


Chart: Freight's monthly chart as at Nov 29, 2017 (Source: Malaysiastock.biz)

Valuation

Freight (closed at RM1.25 yesterday) is trading at a PE of 10.7 times (based on last 4 quarters' EPS of 11.67 sen). The stock is trading near its fully value.

Conclusion

Based on good financial performance and position, Freight is considered a good stock for long-term investment. However its next upleg may not begin until it has sorted out the technical picture, which is mildly negative.

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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