QL made a new high

QL is involved in 3 main businesses, i.e. marine products manufacturing, Crude Palm Oil milling and integrated livestock farming. In the recent quarters, QL's financial performance has been very much dependent on Crude Palm Oil milling and integrated livestock farming.

Its results for 3Q2008 ended 31/12/2007 shows its net profit increasing by 14.3% q-o-q or 29.8% y-o-y to RM23.6 million, while turnover has increased by 14.8% q-o-q or 21.3% y-o-y to RM353 million.



QL (closed at RM4.10 today) is trading at a trailing PE of 11.8 times (based on its last 4 quarters' EPS of 34.6 sen) or at a P/Book of 2.64 times (based on its NTA per share of RM1.55 as at 31/12/2007). At this multiples, QL is nearly fully-priced.

However, QL's share price rose 8 sen to a new high of RM4.10 today (see Chart 1 below). In the past, QL share price has rallied following similar breakouts (see Chart 2 below). Given the current poor market sentiment, I believe that the current price breakout may not be immediately followed by a strong rally. It may re-test its breakout level of RM4.00 again, before moving higher. That could be a good entry to this stock, which has a very good track record of delivering consistent topline & bottomline growth for a good 8 years (since its listing in March 2000).


Chart 1: QL's weekly chart as at April 9, 2008 (courtesy of Quickcharts)



Chart 2: QL's monthly chart as at April 9, 2008 (courtesy of Quickcharts)