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Monday, February 27, 2017

3A: Earnings Rose On Better Margin & Forex Gain

Result Update

For QE31/12/2016, 3A's net profit rose 28% q-o-q or 322% y-o-y to RM13 million while revenue rose 8% q-o-q or 1% y-o-y to RM95 million. Revenue rose q-o-q due to higher sales. Profits increased 25.5% q-o-q due to higher product margins and higher forex gain.


Table: 3A's last 10 quarters' P&L


Graph: 3A's last 14 quarters' P&L

Proposed Bonus Issue

3Ahas proposed a Bonus Issue of 1-for-4 in September last year. This proposal is likely to be approved soon as the application of the listing of the new bonus shares has been submitted to Bursa In November last year (here).

Other Development

In October, Securities Commission Malaysia (SC) charged six individuals with insider trading offences under Section 188 of the Capital Market and Services Act 2007 (CMSA). Among those charged are:

  • Fang Chew Ham, 69, the founder and Managing Director of 3A
  • Executive Director Fang Siew Yee, 36, and
  • Non-executive Director Fong Chiew Hean
There is no update on these cases (here).

Valuation

3A (closed at RM1.33 last Friday) is now trading at a PER of 13x (based on last 4 quarters' EPS of 9.89 sen). For a consumer stock with good growth, 3A is deemed fairly attractive valuation.

Technical Outlook

Over the past 2 years, 3A has risen gradual from RM0.90 in January 2015 to a high of RM1.45 in June 2016. If it can break above the intermediate downtrend line, R1-R1 and recruit enough buying support, the stock can commence on its next upleg.


Chart 1: 3A's daily chart as at Feb 24, 2017 (Source: Shareinvestor.com)

3A has been consolidating in a 5-year rounding bottom formation. The gradual rise over the past 2 years is leading to an upswing which could send the stock to retest its 2010 high of RM2.30.


Chart 2: 3A's monthly chart as at Feb 24, 2017 (Source: Shareinvestor.com)

Conclusion

Based on good financial performance, fairly attractive valuation and mildly bullish technical outlook, 3A remains a very good stock to consider for long-term investment. However, the stock's price performance in the near term may be affected by the development of the insider trading case.

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.

EG: Raising Funds For Its Next Growth Phase

Result Update

For QE31/12/2016, EG's net profit rose 6% q-o-q or 43% y-o-y to RM7.6 million while revenue rose 11% q-o-q or 24% y-o-y to RM260 million. Revenue increased q-o-q mainly driven by higher customer’s demand for consumer electronics products due to year-end holiday seasons. Profit before tax rose 8.8% q-o-q on the back of higher sales, which was partially offset by the increased of labor cost due to revision of minimum wage rate and increase in number of contract workers with higher wage rate for production ramp up.

 
 Table: EG's last 8 quarterly P&L

 
Graph: EG's last 19 quarterly P&L 

Proposed Rights Issue

On 15 February, EG announced a Rights Issue of 1 redeemable convertible preference shares (RCPS) for every 4 ordinary shares owned which comes with 1 bonus share for every RCPS subscribed for. The proceeds will be mainly used to fund acquisitions of equipment and machinery, raw materials, and potential new businesses or assets. For more, go here.

Valuation (Updated)

EG (closed at RM0.92 last Friday) is now trading at a trailing PER of 10x (based on last 4 quarters EPS of 9.27 sen). At this PER, EG is deemed fairly valued.

Technical Outlook

EG has been climbing up gradually since 2013. It appears to have broken out of a descending triangle in December last year. The ensuing rally however failed to make headway until early this month.


Chart 1: EG's monthly chart as at Feb 24, 2017 (Source: ShareInvestor.com)

About 10 days ago, EG rallied to a high of RM0.98. This rally was cut short when the company announced the above-mentioned Rights Issue. From the chart below, we can see that EG is now resting on its intermediate uptrend line support of RM0.85-0.87. Alas, EG-WC broke below its uptrend line support of RM0.56. Is the breakdown of EG-WC's uptrend line a harbinger of more selling ahead for the warrant & the stock? We have to wait and see.


Chart 2: EG and EG-WC's daily chart as at Feb 24, 2017 (Source: ShareInvestor.com)

Conclusion

Based on improving financial performance & fair valuation, EG remains a good stock to ride the ongoing electronic manufacturing services play.

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.

Gtronic: Where's The Earning Recovery?!

Result Update

For QE31/12/2016, Gtronic's net profit dropped 30% q-o-q or 58% y-o-y to RM6.4 million while revenue dropped 11% q-o-q or 39% y-o-y to RM47 million. Revenue dropped q-o-q due to the continuous softer volume loadings from some of the Group's customers as a result of reduction in end customers' demand. Net profit dropped q-o-q softer volume loadings; lower grant income of approximately RM0.6 million recognized as compared to preceding quarter of RM1.4 million; and higher taxation expense of RM2.3 million compared to preceding quarter of RM1.3 million.


Table 1: Gtronic's last 8 quarterly results


Chart 1: Gtronic's last 44 quarterly results

Valuation 

Gtronic (closed at RM4.33 last Friday) is now trading at a PE of 47 times (based on last 4 quarters' EPS of 9.13 sen). At that PER, Gtronic is deemed overvalued with no sign of a rebound in both top-line nor bottom-line.

Technical Outlook

Gtronic broke above its downtrend line, RR at RM3.50 in late December. It has since rallied above its rising wedge, ABCD at RM4.30 in early February. If Gtronic can stay above the upper line of the wedge, it may continue to inch up. Given the poor result, it is fairly likely that the share price will not hold above this line.


Chart 3: Gtronic's weekly chart as at Oct 25, 2016 (Source: ShareInvestor.com)

Conclusion

Based on poor financial performance, demanding valuation and precarious technical breakout, Gtronic is looking less like a good Trading BUY since the release of its latest quarterly result. If it cannot stay above the RM4.30 mark, Gtronic will slide back into the wedge. In that case, it would be advisable to close your trade.

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.

CMSB: Profit Continued To Rise

Results Update

For QE31/12/2016, CMSB's net profit rose 73% q-o-q or 30% y-o-y to RM102 million while revenue was mixed, up 26% q-o-q but down 11% y-o-y to RM450 million. The divisions that reported higher PBT q-o-q were the Construction Materials & Trading, Construction & Road Maintenance, Property Development and the Others Divisions. Share of joint ventures’ results also improved almost by threefold. The Property Development Division reported a higher PBT in the current quarter due to the profit recognition from a land sale. The ‘Others’ Division recorded a higher PBT from the profit recognition from a land sale and foreign exchange difference in the current quarter.


Table: CMSB's last 8 quarters' P&L


Graph: CMSB's last 14 quarters' P&L

Valuation

CMSB (closed at RM4.10 last Friday) has a PER multiple of 26 times (based the last 4 quarters' EPS of 15.76 sen). However, if CMSB can maintain its earning similar to what it had achieved in the last 2 quarters, then CMSB's full-year EPS would be about 30 sen. This will lower its PER to about 14 times. At a PER of 14 times, CMSB is deemed fairly attractive.

Technical Outlook

CMSB broke above its intermediate downtrend line, RR and the horizontal line at RM4.00 about 6 weeks ago. Coupled with its MACD going above the zero line, we can conclude that CMSB is now in an uptrend.


Chart: CMSB's weekly chart as at Feb 24, 2017 (Source: ShareInvestor.com)

Conclusion

Based on good financial performance, exciting prospect, fairly attractive valuation and positive technical outlook, CMSB could be a good stock for long-term 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.

Kawan: Earnings Dropped Sequentially

Results Update

For QE31/12/2016, Kawan's net profit dropped 41% q-o-q to RM7.2 million while revenue dropped 10% q-o-q to RM42.6 million. Compared to the same quarter last year, net profit rose 4% on the back of a 4%-rise in revenue. Revenue dropped q-o-q due to lower export to the North American market. Profits dropped q-o-q mainly due to lower advertisement and promotion expenses in the preceding quarter.


Table: Kawan's 8 quarterly results


Graph: Kawan's P&L  for last 15 quarterly results

Valuation

Kawan (closed at RM4.41 last Friday) is now trading at a trailing PER of 32x (based on last 4 quarters' EPS of 13.94 sen). The high PER reflects the high expectation of a jump in earning in the current year due to the increased capacity from the new factory. See my earlier post on this stock (here).

Technical Outlook

On Feb 15, Kawan broke above the horizontal line at RM4.00 and gradually rose to RM4.41. Can it continue its uptrend after the latest uninspiring result? We will have to wait and see.


Chart: Kawan's weekly chart as at Feb 24, 2017 (Source:ShareInvestor.com)

Conclusion

Based on positive technical breakout, Kawan could be a good stock for trading BUY. It may even be a good long-term investment if the results for the next 2-3 quarters confirm the uptake for its huge expansion.

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.

Thursday, February 23, 2017

Axiata: In The Red Thanks To Forex Losses

Result Update

For QE31/12/2016, Axiata reported a net loss of RM309 million while revenue rose 6% q-o-q or 8% y-o-y to RM5.79 billion. Revenue increased q-o-q with all the segments registered positive growth. For the period, operating costs increased by 13.2% q-o-q to RM3,809.9 million mainly arising from higher operation cost in Indonesia, Bangladesh and Sri Lanka. As a result, EBITDA margin decreased by 4.1 percentage points to 34.0%. The Group reported an after tax loss of RM272.1 million arising from higher depreciation and amortization due to network modernization in Indonesia and Bangladesh, net finance cost, foreign translation losses and share of losses from associates and joint ventures.  The foreign exchange (forex) losses amounted to RM685 million at PAT level, was mainly due to the USD exposed debt incurred from the acquisition of Ncell.


Table; Axiata's last 8 quarters' P&L

From the 10-year P&L record, Axiata had reported losses in 2 other quarters: December 2008 & December 2010. In December 2008, Axiata (then TMI) incurred a loss after tax of RM613.5 million “mainly driven by exchange loss in the quarter of RM472.3 million which was mainly derived from XL” which resulted from “the strengthening of USD against IDR, RM and other local currencies”. It was also compounded by “negative contribution from Dialog and share of loss from jointly controlled entities”. 

In December 2010, Axiata recorded loss after tax of RM260.8 million mainly due to the impairment on the investment in an associate. The total impairment was RM1,085.0 million and it as for its investment in Idea Cellular Limited (“Idea”) in conjunction with the impairment assessment requirement under FRS 136 “Impairment Of Assets”. The impairment test was undertaken following an impairment indicator arising from the shortfall between the carrying value and market value of the Group’s investment in India as well as intense competition following the entry of a number of new operators into the Indian market.
From these earlier loss events, we can take it that Axiata is likely to bound back. This is part and parcel of operating in an international environment.


Graph: Axiata's last 40 quarters' P&L

Valuation

Axiata (closed at RM4.53 today) is now trading at a PER of 79x (based on last 4 quarters' adjusted EPS of 5.7 sen). This is not a meaningful guide. A better matrix to look at is the Price to Book ratio of the stock today as compared to the last 2 occasions when it made a loss. This is given below:

I think Axiata is fairly priced compared to its book value or NTA p.s.
  
Technical Outlook

Axiata is in a downtrend line, RR. Its immediate support will come from the horizontal line at RM4.45 & then the recent low at RM4.10.


Chart 1: Axiata's weekly chart as at Feb 23, 2017_15.00  (Source: MalaysiaStock.Biz)
 

Chart 2: Axiata's monthly chart as at Feb 23, 2017_15.00  (Source: MalaysiaStock.Biz)
 
Conclusion

As I believe Axiata can recover in the next 1-2 quarter(s), I rate it as a HOLD or a contrarian BUY if it drops to RM4.00-4.20.

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.

Unisem: Unexciting Earning

Results Update

For QE31/12/2016, Unisem's net profit increased 33% q-o-q but dropped 15% y-o-y to RM51 million while revenue rose 12% q-o-q or 3% y-o-y to RM362 million. Profits increased q-o-q primarily attributable to higher revenue.


Table: Unisem's last 8 quarterly results

From the graph below, we can see that both revenue & profits are at the high for the past 12 years. Its failure to report a higher pre-tax profit and a net profit for QE31/12/2016 as compared to QE31/12/2015 could be an indication that earning has peaked.
 

Graph: Unisem's last 49 quarterly results

Valuation

Unisem (closed at RM2.77 at end of the morning session) is now trading at a PE of 13 times (based on last 4 quarters' EPS of 22.12 sen). At this multiple, Unisem - a cyclical stock - is deemed fairly valued. 

Technical Outlook

Unisem is in an uptrend line, SS. Its upside is capped by the line connecting the recent peaks, with resistance at RM2.80.

 
Chart: Unisem's weekly chart as at Feb 23, 2017_15.00 (Source: MalaysiaStock.Biz)

Conclusion

Based on good financial performance, fair valuation valuation and still positive technical outlook, Unisem remains a good stock for medium-term investment. Its inability to report a higher quarterly earning could be an early sign that its earning has peaked. It may be a good idea to take profit by SELLING INTO STRENGTH at prices above RM2.70.

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.

Petronm: A Bumper Profit (Updated)

Results Update

For QE31/12/2016, PetronM's net profit rose 141% q-o-q or 558% y-o-y to RM113 million owhile revenue rose 26% q-o-q or 22% y-o-y to RM2290 million. Revenue rose y-o-y due to 14%-increase in crude oil (from USD58 to USD40 per barrel) and 13%-increase in sales volume from 7.3 million to 8.3 million barrels. PBT increased due to improvement in price differential between the finished products and processed crudes.


Table: PetronM's last 18 quarterly results (updated)


Graph: PetronM's last 18 quarterly results

Valuation

PetronM (closed at RM4.63 yesterday) is now trading at a PER of 5.3 times (based on annualized EPS of 88 sen). At this PER, PetronM is deemed fvery attractive.

Technical Outlook (Updated Commentary)

PetronM broke above the trading range (ABCD) at RM4.50 3 weeks ago. After it rallied to RM5.20, it pulled back to RM4.50 again. The breakout of the trading range signals the start of the continuation of the prior uptrend.


Chart 1: PetronM's weekly chart as at Feb 22, 2017 (Source: ShareInvestor,com) (updated)

The interesting question is whether Petronm can test the upper line of its upward channel. If it can do so - let alone breaking thru it - Petronm may go above its early 2016 high of RM7.20 to RM8.00.


Chart 2: PetronM's monthly chart as at Feb 22, 2017 (Source: ShareInvestor,com) (updated)

Conclusion

Based on improved financial performance, attractive valuation  & positive technical outlook, PetronM could be a good stock for a medium-term 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

Oldtown: Cashing In On the Cafe Society Crowd

Results Update

In QE31/12/2016, Oldtown's net profit rose 93% q-o-q or 120% y-o-y to RM24 million while revenue rose 16% q-o-q or 13% y-o-y to RM116 million. PBT rose q-o-q due to 33%-increase in PBT from café chain operation and 98%-increase in PBT for the Beverage Manufacturing operation mainly due to higher export sales.


Table 1: Oldtown's last 10 quarterly P&L


Table 2: Oldtown's Segmental Result for QE31/12/2016 & FYE31/12/2016

As a result of the big jump in the revenue & profits from the Beverages Manufacturing segment, Oldtown's Top-line & Bottom-line were lifted up significantly. I believe this is an earning event that should lead to re-rating of the stock.


Graph: Oldtown's last 13 quarterly P&L

Valuation

Oldtown (closed at RM2.03 yesterday) is now trading at a PER of 13 times (based on last 4 quarters' EPS of 15.33 sen). If the share price is adjusted for the net cash of RM0.33 per share, the PER would be lowered to 11 times. Assuming its final dividend for FY2017 is same as FY2016 (without the special dividend), Oldtown's dividend yield would be about 4.4%. Based on this DY & the adjusted PER, Oldtown is deemed very attractive for a consumer stock.

Technical Outlook

Oldtown has just broken above its triangle (ABC) at RM1.97. This upside breakout of a continuation pattern means that the stock is likely to continue with its prior uptrend.


Chart 1: Oldtown's weekly chart as at June 20, 2016 (Source: Kenanga/Chartnexus)

The monthly chart shows that Oldtown has broken above its intermediate downtrend line, RR at RM1.65 in May last year. Its next resistance will come form the horizontal line at RM2.20.


Chart 2: Oldtown's monthly chart as at Feb 22, 2017 (Source: ShareInvestor.com)

Conclusion
 
Based on satisfactory financial performance, attractive valuation & bullish technical outlook, Oldtown could be a good stock for long-term 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.

Wednesday, February 22, 2017

Emetall: Not Such An Excting Stock After All

Result Update

In QE31/12/2016, EMETALL reported a net loss of RM3.2 million on a 70%-increase in revenue of RM29 million. The loss was incurred mainly due to increase in production cost of steel product and trading activity segment.


Table: EMETALL's last 8 quarters' P&L  

The last 2 quarters of poor earnings raised serious doubt as to the earlier assumption made about this stock.


Graph: EMETALL's last 12 quarters' P&L  

Valuation

EMETALL (closed at RM0.64 yesterday) is now trading at a trailing PER of 8.6x (based on last 4 quarters' EPS of 7.39 sen). With 2 quarters of poor results, EMETALL - a small-cap stock - does not deserve a PER of 8x or better. Thus this stock is deemed fully or over-valued.

Technical Outlook

EMETALL is now hanging onto its intermediate uptrend line, with support at RM0.63. If this uptrend line is violated, it may drop to the support from the horizontal lines at RM0.50 or RM0.40.


Chart 1: EMETALL's weekly chart as at Feb 21, 2017 (Source: Shareinvestor.com)


Chart 2: EMETALL's monthly chart as at Feb 21, 2017 (Source: Shareinvestor.com)

Conclusion

Based on ipoor financial performance and demanding valuation, I downgrade my rating for EMETALL to a SELL.

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.

Pharma: Earnings Plunged

Results Update  (annjoo)

For QE31/12/2016, Pharma's net profit dropped 80% q-o-q or 83% y-o-y to RM4 million while revenue rose 13% q-o-q but dropped 14% y-o-y to RM582 million. Revenue dropped y-o-y mainly due to reduced orders from the concession business, notwithstanding improved contributions from the Indonesian operations and private sector business. As a result of lower revenue and higher finance costs, Pharma posted a lower profit before tax (PBT) of RM4 million. After booking in a deferred tax charge of RM4.27 million, Pharma incurred a net loss of RM900k.

Table: Pharma's last 8 quarterly results


Graph: Pharma's last 41 quarterly results

Valuation

Pharma (closed at RM5.05 yesterday) is now trading at a PER of 29x (based on last 4 quartres' EPS of 17.61 sen).At this PER, Pharma is overvalued.

Technical Outlook

 Pharma is now resting on its uptrend line with support at RM5.00. If this support is violated, Pharma may go into a downtrend. Its next support may come from the horizontal lien at RM4.00.


Chart: Pharma's monthly chart as at Feb 21, 2017 (Source: ShareInvestor.com)

Conclusion

Based on poor financial performance and demanding valuation, Pharma is a stock to avoided. Its only saving grace is that it's now hanging onto a strong technical support. If that support goes, its fall will begin.

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.

Parkson: Net Profit From One-off Gain


Result Update

For QE31/12/2016, Parkson reported a net profit of RM72 million on the back of a revenue of RM1.046 billion. Revenue rose marginally y-o-y but gained 19% q-o-q mainly due to higher consumer spending during the year-end festivities and the holiday seasons.

Parkson returned to profitability due to gain of RM802.3 million on disposal of Beijing Huadesheng Property Management Co Ltd, a subsidiary in China less impairment losses on intangible assets and other receivables of RM313.2 million. Despite the return to profitability, Parkson is not out of the wood yet as its operating loss increased actually to RM30 million from RM11 millionincurred in the same quarter last year.


Table: Parkson's last 8 quarterly results

 
Graph: Parkson's last 40 quarterly results 

Valuation
Parkson (closed at RM0.70 yesterday) is now trading at a PBR of 0.29 times (based on last 4 quarters' NTA of RM2.38 per share). Parkson has a negative PER as it recorded a net loss of RM111 million in the past 4 quarters.

Technical Outlook

Since my last posting, Parkson went below its the 2003 low of RM0.90 to make a low of RM0.62-0.63 in the past 2 months. Judging by the gaps between the 3 moving average lines and the share price, Parkson could be poised to a sharp rebound. All it needs is a convincing turnaround story which alas did not come from the latest quarterly result (though the headline number may look seductive!).


Chart 1: Parkson's monthly chart as at Feb 21, 2017 (Source: ShareInvestor.com)

If we looked at the daily chart, we can see that Parkson has just tested its intermediate downtrend line at RM0.73. If it can break above this downtrend line, we may see a short rally to RM0.85-0.90. I doubt it can surmount the psychological RM1.00 mark.


Chart 2: Parkson's daily chart as at Feb 21, 2017 (Source: ShareInvestor.com)

Conclusion

Based on poor financial performance & bearish technical outlook, Parkson is a good stock for long-term contrarian investment. At the present depressed price, the stock has probably priced for the worst scenario- a winding up. If that happens, you would certainly not lose money as its PBR is at 0.29X. If you have this stock in your portfolio, you should just hold onto it.

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.

Tuesday, February 21, 2017

Padini: Earnings Soared


Result Update

for QE31/12/2016, Padini's bet profit rose 90% q-o-q or 65% y-o-y to RM54 million while revenue rose 38% q-o-q or 25% y-o-y to RM427 million. Revenues rose sharply q-o-q due to the Christmas season and the year-end school holidays. Operating expenses did not increase proportionately to the increase in revenue, resulting in the q-o-q improvement in profit before taxation by 83% (RM33.1million).


Table: Padini's 8 quarterly results

We can see clearly that Padini's net profit was way above the net profit achieved in QE31/12/2015. The acceleration in net profit could herald a new phase of earning growth for Padini.


Graph 2: Padini's P&L  for last 18 quarterly results

Financial Position

Padini's financial position is deemed satisfactory as at Dec 31, 2016 with current ratio at 2.1x and gearing ratio at 0.7x.

Valuation

Padini (closed at RM2.58yesterday) is now trading at a trailing PER of 11x (based on last 4 quarters' EPS of 23.65 sen). At this PER, Padini is very attractive.

Technical Outlook

Padini has broken above its intermediate downtrend line, RR at RM2.40 last week. MACD has hooked up and it could well re-enter the positive territory again. This would signal the co nitnuation of its prior uptrend.


Chart 1: Padini's weekly chart as at Feb 20, 2017 (Source: Shareinvestor.com)

From the monthly chart, we can see that Padini is still in a long-term uptrend line with support at RM2.20.


Chart 2: Padini's monthly chart as at Feb 20, 2017 (Source: Shareinvestor.com)

Conclusion

Based on good financial performance and satisfactory financial position, attractive valuation and positive technical outlook, Padini is a good stock to buy for long-term 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.