NTPM has a bullish breakout at RM0.36

Background

NTPM is involved in the manufacture of toilet & tissue paper as well as sanitary products.

Recent Financial Results

NTPM's results for the last 4 quarters are significantly better than those achieved in the preceding 4 quarters. Its net profit for the last 4 quarters amounted to RM31.5 mil, which is 51.6% higher than the preceding 4 quarters while turnover increased by 15.4% to RM256.7 mi from RM222.4 mil.

The improvement in the current quarter is even more encouraging. For QE31/10/06, its net profit increased 8.3% y-o-y or 69.4% q-o-q to RM8.4 mil. Turnover has also increased by 3.4% q-o-q or 15.7% y-o-y to RM67.6 mil.



Valuation

Based on the last 4 quarters' cumulative EPS of 5.0 sen and its closing price of RM0.37, NTPM is now trading at a PE of 7.4 times. At this PE multiple, I believe NTPM is still inexpensive given its steady growth and exposure to the stable consumer sector.

Technical Outlook

NTPM has broken above its downtrend line in the w/e Feb 17 at the RM0.30 level. Since the breakout, the share has been trading in an ascending triangle pattern with the resistance at RM0.36 level. Today, NTPM has finally broken above the RM0.36 level & closed at RM0.37. Volume accompanying the breakout is quite heavy.

Chart: NTPM's weekly chart as at Dec 27

Conclusion

Based on improving financial performance & technical bullish breakout, NTPM is a good stock for medium-term investment.