In QE30/9/201, Evergrn's net profit rose 144% q-o-q but dropped 11% y-o-y to RM15.1 million while revenue rose 0.4% q-o-q or 7% y-o-y to RM260 million. Its revenue increased q-o-q mainly due to commercial run of new Particle Board Plant in Segamat. Its profit before tax increased q-o-q mainly due to production efficiency and effective cost measures of new Particle Board Plant in Segamat.
Table: Evergrn's last 8 quarters' financial performance
Graph: Evergrn's last 51 quarters' financial performance
As at 30/9/2017, Evergrn's financial position is deemed satisfactory with current ratio at 2.05 times and gearing ratio at 0.34 time.
Evergrn (closed at RM0.69 last Friday) is now trading at a trailing PER of 12 times (based on last 4 quarters' EPS of 5.87 sen. At this PER, Evergrn is still deemed fairly valued.
Evergrn has been in a slow decline after it peaked at RM1.68 in January 2016. The decline takes the form of a downward channel, with the lower line at RM0.65 providing support.
Chart: Evergrn's weekly chart as at Jan 5, 2017 (Source: Malaysiastock.biz)
Based on satisfactory financial performance & position and reasonable valuation, Evergrn is a good stock for long-term investment. However, its share price recovery will only begin once earnings begin to improve noticeably.
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