Wednesday, March 14, 2007

KESM's performance improved further

I've called a BUY on KESM in December last year (go here) when the stock was trading at a PE of only 5.1 times. The stock did not move up much, nor did it drop much in the recent market selloff. Yesterday, KESM has announced its results for QE31/1/2007, which has improved upon its performance in the preceding quarter.

For QE31/1/2007, KESM's net profit has increased by 28.6% q-o-q or 51.5% y-o-y to RM4.6 million while its turnover has gained 7.7% q-o-q or 45.5% y-o-y to RM51.7 million. If you compared KESM's last 4 quarters with the preceding 4 quarters, you can see that its net profit has increased by 34.0% from RM12.3 million to RM16.5 million while turnover has increased by 21.0% from RM159 million to RM193 million. Its EPS has also increased 34.4% from 28.5 sen to 38.3 sen. Based on yesterday's closing price of RM1.80, KESM is now trading at a trailing PE of 4.7 times.



I've re-drawn KESM's downtrend line, with the downtrend remaining in tact. During the current weakness, I expect the stock to drift down to its strong horizontal support of RM1.65 or its recent low of RM1.50. These would be good entry levels for KESM.

Chart: KESM's weekly chart as at March 13
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2 comments:

  1. swifzThursday, March 15, 2007 9:46:00 PM

    I disagree on the way the downtrend is drawn because:
    1. You only connect the extreme points
    2. The current monthly chart all points upwards

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  2. Alex LuFriday, March 16, 2007 12:21:00 PM

    I think you have a valid point about the drawing of the trend line. If I revert to the trend line as per the earlier post, KESM's bullish breakout of its downtrend is intact. After that breakout (at the RM1.75/80 level), the share price went as high as RM2.08. In the current weak market, it has been drifting lower & may test the horizontal supports of RM1.65 or RM1.50.

    From the monthly chart, KESM appears to be in a very gradual uptrend, with support at about RM1.60. Good point.

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