Century has a good FY2007

Century Logistics Holdings Bhd ('Century')is in the business of providing total supply chain management solutions that encompass all logistics functions, from production and transport to delivery. The company ventured into oil and gas in 2001 and is looking to this business segment to elevate it to the next level of growth. In the field of oil and gas, Century offers ship to ship transfers, moving bunker fuel from floating storage units to its ultimate destination.

Century has just announced its results for 4Q2007 ended 31/12/2007. For QE31/12/2007, its net profit increased by 231% y-o-y from RM1.8 million to RM6.0 million on the back of a 36.4%-increase in turnover from RM32.7 million to RM44.6 million. When compared to the immediately preceding quarter, its net profit has declined by 12.1%. The drop was attributable to the company recognizing some deferred tax assets in QE30/9/2007, thus boosting the net profit. As you can see, the pre-tax profit for QE31/12/2007 had in effect increased by 26.7% q-o-q from RM6.1 million to RM7.8 million.

For FY2007, Century's net profit declined by3 folds from RM5.1 million to RM20.7 million, while its turnover has increased by 30.0% from RM125 million to RM161 million.



Century (closed at RM1.65 as at Feb 28) is now trading at a trailing PE of 4.0 times (using its last 4 quarters' EPS of 41 sen) or at a Price to Book of 0.8 times (using its NTA per share of RM2.09 as at 31/12/2007). At these multiples, Century is deemed cheap.

Century had risen from 60 sen in October 2006 to a high of RM2.80 in September 2007, The current correction could see the share price testing the horizontal supports of RM1.60 & RM1.30. The uptrend line support is at RM1.35-40.


Chart: Century's daily chart as at February 27, 2008 (courtesy of Quickcharts)

Yesterday, Century-WA ceased trading due to its expiry. In the last few days of trading, this warrant appears to be accumulated at prices around 55-60 sen. Normally, an expiring warrant is purchased by knowledgeable investors or insiders. These buyers will have to pay RM1.00 to convert the warrants to shares; thus their cost is about RM1.60. They have to be fairly confident to go through this exercise, given the present bearish market outlook. As such, Century could be a BUY for the medium-term at prices near to RM1.60.

Note: Century closed at RM1.81 at the end of the morning session.