Pharmaniaga Berhad ('Pharma') is the largest integrated local healthcare company in Malaysia. Its core businesses are generic pharmaceuticals manufacturing and R&D, warehousing and distribution of pharmaceutical and medical products, sales & marketing as well as hospital equipping.
Recent Financial Results
For 2Q2009 ended 30/6/2009, its net profit increased by 21.9% q-o-q or 35.0% y-o-y to RM17.7 million. Its turnover was 6.2% higher than 1Q2009 but 5.7% lower than 2Q2008.
Table 1: Pharma's 8 quarterly results
From the chart below, we can see that the growth in Pharma's turnover has hit a slow patch over the past 1 year, after a period of strong growth in FY2007 & FY2006. Its net profit has been flattish for the past 2 years, after peaking in 3Q2007.
Chart 1: Pharma's 15 quarterly results
Valuation
Pharma (closed at RM4.40 on Friday) is now trading at a trailing PE of 7.7 times (based on the last 4 quarters' EPS of 57 sen) or at a Price to Book of 1.2 times (based on NTA per share of RM3.74 as at 30/6/2009). At these multiples, Pharma is deemed attractive.
Technical Outlook
Pharma has been in a downtrend for the past 5 years (see the charts below). A break above the RM4.50 level could signal the start of the recovery in its share price. On weakness, it may drift back to the RM4.00 horizontal line.
Chart 2: Pharma's daily chart as at Aug 21, 2009 (Source: Tradesignum)
Chart 3: Pharma's monthly chart as at Aug 21, 2009 (Source: Quickcharts)
Conclusion
Based on attractive valuation, Pharma may be a good stock for long-term investing. It may even be a good trading BUY if the share price were to break above the RM4.50 level.
Hi Alex,
ReplyDeleteMay I know where do you get all the listed comapanies qtr financial report which u normally put on yr blog?
Hi ahkuih,
ReplyDeleteHa.Ha.Ha... I've been asked this question many times. I'm sorry to say that there is no shortcut. You have to open 4 consecutive quarterly results; identify the relevant numbers; and prepare a spreadsheet based on these numbers. It is not easy task.
Hi Alex,
ReplyDeleteCan you comment about BJCORP-LC?is that safe to buy it?
Hi Teh,
ReplyDeleteBJCorp-LC can be converted to BJCorp ordinary share either by way of 1 unit of BJCorp-LC plus 50 sen or 2 units of BJCorp-LC, in exchange for 1 unit of BJCorp share.
Based strictly on technical analysis, I think BJCorp-LC can be a BUY at RM0.40 while BJCorp share can be a BUY at RM0.80. I have not analyzed the company's accounts, which is a demanding task. If you intend to take a sizable position in this stock, it would be advisable to do so.
Based on the above, I think that it is alright to take a small position in BJCorp-LC now since it's quite near to the support of RM0.40.
Hi Alex,
ReplyDeleteSo is safe since it can be convert to bjcorp.tx a alot.
Hi,
ReplyDeleteCan Berjaya Corp go up as high as RM2? What do you think VT's strategy by taking Cosway to Hong Kong? Is it better to buy Bjcorp-LC for capital appreciation in mid term or buy Bjcorp for divident?