Lingui is about to break above its downtrend line

Lingui, which is one of the largest integrated timber group in Malaysia, has seen its share price sliding since making a high of RM4.20 in March 2007. It made a low of RM1.26 on March 24th & 25th. Yesterday, the share price rose 11 sen to close at RM1.45 (on volume of 1.2 million). As at 12.00 noon today, Lingui is up 19 sen to RM1.64 (on a volume of 1.75 million).

From the weekly chart below, we can see that the downtrend line resistance is at RM1.63-65. Lingui is about to test this downtrend line.


Chart: Lingui's weekly chart as at April 15, 2008 (courtesy of Quickcharts)

From the table below, we can see that Lingui's turnover & net profit have been sliding for the past 4-5 quarters. For QE31/12/2007, Lingui's net profit dropped by 27% q-o-q or 57% y-o-y to RM32.6 million. Its turnover has declined by 11% y-o-y to RM363 million, but inched up 2% when compared to the preceding quarter.



I expect Lingui's results for QE31/3/2008 to be unchanged when compared to those recorded in QE31/12/2007. However, some improvement maybe forthcoming in the next quarter due to higher prices seen in timber products (go here). The present rally in the share price maybe in anticipation of better times ahead for Lingui.