Monday, December 24, 2007

UMcca reported big jump in net profit

UMcca has just announced its results for QE31/10/2007. Its net profit increased sharply by 62.2% q-o-q or 122.5% y-o-y to RM27.7 million while its turnover also increased by 39.7% q-o-q or 87.6% y-o-y to RM65.1 million. If you compared its last 4 quarters' results with the preceding 4 quarters', you will see that its net profit has jumped by 172% from RM28.6 million to RM77.7 million, while turnover has increased by 62.2% from RM111 million to RM181 million.

Based on its closing price of RM7.20 as at December 21 & its last 4 quarters' EPS totaling 58.0 sen, UMcca is now trading at a trailing PE of 12.4 times. I believe that there is still further upside of about 15-20% to this stock in the medium-term.

The share price of UMcca has been rising in a steady uptrend until mid-August 2007. Then, it went on a sharp rise- riding on the crest of a boom in the price of CPO. From a low of RM4.88 in mid-August, the share rose to above RM7.00 today. In the short-term, one can expect a fair bit of volatility on this stock. Despite the potential upside in the stock, a correction of its sharp price gain cannot be ruled out.

Chart: UMcca's weekly chart as at December 21 (courtesy of Quickcharts)

Based on the good results, UMcca is still a BUY for the medium-term.

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