Adventa reported higher net profit for QE31/1/2007

Background

Adventa Bhd ('Adventa') is involved in the production of disposable medical gloves.

Recent Financial Results

Adventa has just announced its results for QE 31/1/2007, which shows continued improvement in its financial performance.

For the QE 31/1/2007, its net profit jumped by 124% q-o-q or 41.0% y-o-y to RM5.7 mil while its turnover increased by 4.3% q-o-q or 74.1% y-o-y to RM47.9 mil. When you compare the last 4 quarters with the preceding 4 quarters, you can see that net profit has grown by 12.8% from RM13.6mil to RM15.3 mil while turnover has increased by 37.6% from RM126mil to RM174 mil.



Valuation

Based on the last 4 quarters' result, we see that Adventa has reported an EPS of 12.13 sen. At its closing price of RM0.84 as at March 28, Adventa is now trading at a PE of 7 times only. That's fairly attractive.

Technical Outlook

The technical picture of Adventa is however not exciting. The share price appears to be drifting down. If the share price can break above the 200-day SMA at 94 sen (also, its downtrend line), then the outlook may improve (see the chart below).


Chart: Adventa's daily chart as at March 28

Conclusion

Adventa is a relatively attractive stock, trading at an undemanding PE multiple of 7 times. Technically, the share price movement has yet to issue a BUY signal. For this to happen, it needs to surpass the RM0.95 level for reason given above.