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Monday, October 01, 2018

CYPARK: Earning Stayed Healthy

Result Update

For QE31/7/2018, Cypark's net profit rose 2.5% q-o-q or 16.4% y-o-y to RM19 million while revenue was mixed- down 24% q-o-q but unchanged y-o-y to RM75 million. Revenue dropped q-o-q mainly due to the completion of certain environmental engineering projects since the end of the preceding quarter while the newly secured projects were at the early implementation stage. Despite the 24%-decline in revenue, the profit before tax rose only dropped by 0.3% mainly due to the better contribution by the specialist work activities performed in the Environmental Engineering division during this quarter.


 Table: Cypark's last 8 quarterly results


Graph: Cypark's last 33 quarterly results

Financial Position

As at 31/7/2018, Cypark's financial position is deemed mixed with adequate current ratio of 1.3 times but elevated gearing ratio of 1.3 times.

Valuation

Cypark (closed at RM2.40 last Friday) is now trading at a PE of 9.2 times (based on last 4 quarters' EPS of 26.22 sen). At this multiple, Cypark is deemed fairly attractive.

Technical Outlook

Cypark is in an uptrend line, S1-S1 at RM2.30. DMI & ADX readings suggest that the recent price weakness may have ended. There is no sign yet of the uptrend ahead.


Chart: Cypark's weekly chart as at Sep 28, 2018 (Source: Malaysiastock.biz)

Conclusion

Based on the good financial performance and fairly attractive valuation, I consider a good stock for long-term investment; my current rating remains as a HOLD.

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.

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