Malaysia AE Models (“Maemode”) is involved in the designing, manufacturing, installation and marketing of material handling and conveyor systems and parts.
Recent Financial Results
Based on the last 4 quarters’ results, Maemode chalked up a net profit of RM13.6 mil on a turnover of RM309 mil. This represents an increase of 47% & 60% respectively over the topline & bottomline of the preceding 4 quarters.
However, it is noted that the current quarter’s performance has dropped when compared to the preceding quarter. Net profit has declined by 23% while turnover has dropped by 39%. This is likely to be attributable to the completion of a big contract in the preceding quarter.
Valuation
Based on the closing price of RM1.13 as at today & the EPS of 14.3 sen for the last 4 quarters, Maemode is now trading at a PE of 7.9 times. At this multiple, Maemode is still an attractive buy.
Technical Outlook
The share price has corrected some of its recent gains. Today, the share has actually tested the uptrend line at the RM1.12 level. We can see that the share also has some horizontal supports at RM1.13 & RM1.10. This could be a good entry level for Maemode.
Chart: Maemode's daily chart as at Jan 8
Conclusion
Based on undemanding valuation & nice technical set-up, Maemode could be a good investment.
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