Perusahaan Sadur Timah Malaysia Bhd ('PERSTIMA') is involved in the production of high quality Tinplate for both domestic and export market. The Malaysian operation has a production capacity of 260,000 MT per annum. In 2002, it established PERSTIMA (VIETNAM) Co. Ltd. which also produces prime grade tinplate, with a rated capacity of 90,000 MT/annum.
Recent Financial Results
Perstima has just announced its results for QE31/12/2009, where its net profit increased marginally q-o-q but jumped by 16-fold y-o-y to RM20.7 million. Turnover was mixed, down by 25% y-o-y but up a meager 3.2% q-o-q.
Table: Perstima's last 8 quarterly results
Perstima's Performance & Tin Prices
I have appended below the last 22 quarterly results of Perstima (the lower chart, with chronological order running from right to left) & the price movement of tin during the same period (the upper chart, with chronological order running from left to right). We can see a close correlation between these two charts. So, if tin prices continued to trend higher, Perstima's bottom-line would continue to rise.
Chart 1: Tin Prices & Perstima's 22 quarterly results (Source of Tin Prices: LME)
Financial Position
Perstima is in excellent financial position. Its liquidity position is very good as reflected by a current ratio of 5 times while leverage position is negligible as reflected by its borrowings to shareholders' funds of only 0.05 times.
Valuation
Perstima (trading at RM3.80 as at 11.15am) has a PER of 6 times (based on last 4 quarters' EPS of 65 sen). At this PER multiple, Perstima is deemed very attractive.
Technical Outlook
Perstima is in an medium-term uptrend, guided by either the 50-day SMA line or 100-day SMA line (see Chart 2). However, Perstima seems to be range-bound in the past 5 years, with support at RM2.00 & resistance at RM4.00 (see Chart 3). As such, Perstima's short-term upside may be limited, unless it can surpass the RM4.00 resistance level.
Chart 2: Perstima's daily chart as at Jan 29, 2010_9.45am (Source: Quickcharts)
Chart 3: Perstima's weekly chart as at Jan 29, 2010_11.30am (Source: Quickcharts)
Conclusion
Based on good financial performance & attractive valuation, Perstima can be a good stock for long-term investment. Its upside potential is somewhat limited if viewed from the technical angle. In the current uncertain market condition, you can wait for better prices to appear (say, a pullback to the 50 or 100-day SMA line).
Alex,
ReplyDeleteIs this one of the stocks still hold by Rin KM, the major shareholder of EON Capital?
Alex
ReplyDeleteLike to read your write-ups, consists of both tech. and fund.
It could be better if more articles
on good stocks,esp. those in the limelight eg. HAIO, CIMB etc.
I had expected Perstima to post substantial earnings improvement in the 3 months ending 30-6-09 due to the large drop in iron ore price sometime in the 2nd half of 08. However, the improved earnings came later than my anticipation. Fortunately, I didn't lose my patience. I think Perstima is very generous with their dividend payment. Based on today's price of RM 3.65, the dividend yield is several times higher than the current 12 month FD. Be careful also, once raw material prices start to pick up, their margin will be squeezed.
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