Ajiya's net profit for QE31/8/2008 increased by 9.2% q-o-q or 57.5% y-o-y to RM7.0 million while its turnover increased by 7.8% q-o-q or 19.0% y-o-y to RM87.0 million. Ajiya's EPS for the past 4 quarters increased by 39% to 32.5 sen (from 23.4 sen recorded in the preceding 4 quarters) while its turnover rose by 18.5% from 259 million to RM307 million during the same periods.
Based on its closing price of RM1.01 as at October 23, Ajiya is now trading at a PE of 3.1 times or at a P/Book of 0.44 times (using its NTA per share of RM2.28 as at 31/8/2008). At these multiples, I believe Ajiya is very attractively-priced.
From Chart 1 below, we can see that Ajiya has slid back from its high of RM1.75 in July 2007. Presently, it is trading very near to its strong horizontal support of RM1.00. However, the share price has violated its long-term uptrend line support of RM1.10, which commenced in August 1998. The break below the long-term uptrend line could signal further weakness ahead.
Chart 1: Ajiya's weekly chart as at October 23, 2008 (source: Quickcharts)
Chart 2: Ajiya's monthly chart as at October 23, 2008 (source: Quickcharts)
Based on attractive valuation, Ajiya could be a good stock for long-term investment. However, the technical outlook has turned negative due to the breakdown of the long-term uptrend line.
Note: This may appear to be a rather unexciting post, in the light of the carnage in the market right now. I've prepared this post quite early in the day because I was quite surprised by Ajiya's results. I would appreciate if anyone can shed some light on why Ajiya can still chalk up steady growth in this tough time.
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