For QE30/6/2019, F&N's net profit rose 10% q-o-q and y-o-y to RM115 million on the back of a 4%-increase in revenue by q-o-q and y-o-y to RM1.07 billion. Both F&B Malaysia & F&B Thailand revenue improved by 5.5% to RM571.5 million and by 2.1% (0.3% in local currency) to RM493.9 million, respectively. F&B Malaysia rose mainly due to higher Hari Raya festive sales while F&B Thailand revenue increased- driven by higher export revenue.
F&B Malaysia operating profit improved by 87.2% to RM52.7 million from higher revenue, favourable input and packaging material costs and timing of marketing spend for the festive season. However, F&B Thailand operating profit declined by 3.7% (3.9% in local currency) to RM99.1 million due to net unfavourable input and packaging material costs and higher operational expenses in the current quarter.
Table: F&N's last 8 quarterly results
Graph: F&N's last 51 quarterly results
As at 30/6/2019, F&N's financial position is deemed healthy with current ratio at 2.13 times and gearing ratio at 0.39 time.
F&N (closed at RM33.90 yesterday) is now trading at a PER of 29 times (based on last 4 quarters' EPS of 115.5 sen). At this PER, F&N is deemed fully valued.
F&N is in an uptrend line, with support at RM33.00.
Chart 1: F&N's daily chart as at Aug 6, 2019 (Source: Malaysiastock.biz)
Chart 2: F&N's monthly chart as at Aug 6, 2019 (Source: Malaysiastock.biz)
Based on improved financial performance and healthy financial position, I rate F&N as a HOLD. Upside is limited as it is trading at a fairly valuation.
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