Results Update
Allianz announced its results for QE30/9/2009. Its net profit increased 51.3% q-o-q to RM23.1 million on the back of a 10.7%-increase in turnover to RM632 million. Compared to the previous corresponding quarter, QE30/9/2008, net profit dropped marginally by 1.1% while turnover was up 23.4%. The lower net profit was due to higher effective tax rate of 35% via-a-vis 28% previously, as some expenses were not tax-deductible while some deferred tax assets were reversed.
Table: Allianz's 8 quarterly results
Chart 1: Allianz's 15 quarterly results
Valuation
Based on last 4 quarters' EPS of 51 sen & closing price of RM4.80 yesterday, Allianz is now trading at a PE of 9.4 times. At this multiple, Allianz is fairly attractive.
Technical Outlook
Allianz is now testing its short-term uptrend line at RM4.70. There is a slightly higher probability that we may see a breakdown of this uptrend line as the indicators (MACD, RSI & DMI) are giving negative signals and the 20-day SMA has just crossed below the 50-day SMA. If the short-term uptrend line is broken, the stock may drop to its horizontal supports at RM4.10 & RM4.30.
Chart 2: Allianz's daily chart as at Nov 24, 2009(Source: Tradesignum)
Conclusion
Based on good financial performance & attractive valuation, Allianz is a good stock for long-term investment. The technical outlook is however a bit cloudy now. If the stock can hold above the short-term uptrend line, the good entry level is about RM4.70-80. If that uptrend line is violated, then one may accumulate slowly at RM4.10-30.
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