For QE30/9/2017, Kianjoo's net profit dropped by 37% q-o-q or 81% y-o-y to RM9.5 million while revenue increased by 7% q-o-q or 12% y-o-y to RM472 million. Profit before taxation decreased from RM18.9 million in QE30/6/2017 to RM13.8 million in QE30/9/2017 due to lower PBT for both the Can & Trading divisions which declined by RM7.7 million & RM0.9 million respectively while the Cartons division reported higher loss before tax of RM4.2 million as compared to RM3.9 million in QE30/6/2017. The Cartons division, which is undertaken by Boxpak, has started a new factory in Myanmar which is expected to incur losses in the remaining quarter of the year due to pre-operating cost incurred.
Table: Kianjoo's last 8 quarterly results
Graph: Kianjoo's last 44 quarterly results
Kianjoo (closed at RM3.01 last Friday) is now trading at a PE of 19 times (based on last 4 quarters' EPS of 15.65 sen). At this multiple, Kianjoo is deemed fully valued.
Kianjoo is in a long-term uptrend line with support at RM3.00. A break below this uptrend line - which is also an important psychological level - could signal a reversal of its gradual uptrend that stretches back to 2010.
Chart 1: Kianjoo's monthly chart as at Nov 24, 2017 (Source: Malaysiastock.biz)
Chart 2: Kianjoo's daily chart as at Nov 24, 2017 (Source: Malaysiastock.biz)
Despite weaker financial performance and full valuation, I maintain my rating for Kianjoo a HOLD as it is still trading above its uptrend line.