Chart: D&O's weekly chart as at September 25, 2018_12.30 (Source: Malaysiastock.biz)
Recent Quarterly Result
In QE30/6/2018, net profit rose 58% q-o-q or 119% y-o-y to RM8.1 million while revenue was unchanged q-o-q but rose 11% y-o-y to RM113 million. Pre-tax profit rose 19.5% to RM11.8 million, lifted by a RM2.2 million government grant, a RM3.2 million net gain from the settlement of a civil suit (refer the note below) and RM0.7 million foreign exchange gain (versus RM1.6 million loss in QE31/3/2018), which partially offset by higher inventory write offs and higher R&D expenses (which doubled to RM8.9 million from RM4.4 million).
Note: D&O lost a suit in the Melaka High Court in May 2018. The suit was brought by Geepar Enterprise Sdn Bhd where the judgement awarded was RM18,964,923.38. Subsequently, D&O accepted an offer of a full and final settlement amount of RM10,156,000, including cost, from Geepar Enterprise Sdn Bhd.
Graph: D&O's last 14 quarterly results
D&O (closed at RM0.84 in the morning session) is now trading at a trailing PER of 31 ttimes (based on last 4 quarters' EPS of 2.65 sen). At this PER, D&O is deemed fully valued.
Based on bullish technical breakout, D&O could be a good trading BUY.
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