Friday, August 03, 2018

Unisem: Earnings Rebounded

Results Update

For QE30/6/2018, Unisem's net profit rose 4-fold q-o-q but dropped 26% y-o-y to RM31 million  while revenue rose 7% q-o-q but dropped 6% y-o-y to RM343 million. Revenue & net profit dropped y-o-y primarily due to the depreciation of USD/MYR exchange rates as compared to the prevailing rates a year ago. The decline in net profits for the current quarter and financial period to date was further impacted by the lower profit margins arising from change in product mix. PBT rose q-o-q mainly due to foreign exchange gain of RM10.02 million as opposed to the foreign exchange loss of RM9.95 million previously as well as improvement in sales volume.


Table: Unisem's last 8 quarterly results


Graph: Unisem's last 55 quarterly results

Valuation

Unisem (closed at RM2.59 yesterday) is now trading at a PE of 17 times (based on last 4 quarters' EPS of 14.9 sen). At this PER, Unisem is deemed fully valued. It has a decent dividend yield of 3.9% fro those who wants to hold it for longer term.

Technical Outlook

Unisem tested its long-term uptrend line, SS at RM1.80 in May, and rebounded.


Chart 1: Unisem's monthly chart as at Aug 2, 2018 (Source: Shareinvestor.com)

However Unisem may not have broken above its downtrend since it peaked in August last year.


Chart 2: Unisem's weekly chart as at Aug 2, 2018 (Source: Shareinvestor.com)

Conclusion

Despite the improvement in its financial performance, Unisem's near term outlook is still uncertain due to negative technical outlook and fairly demanding valuation. I think one should take profit (if any) if Unisem reached the RM2.70 mark. 

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.

1 comment:

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