Analabs Resources Berhad ('Analabs') is an investment holding company, which is involved mainly in the recovery and sale of recycled products primarily in Malaysia and Singapore. In July last year, Analabs acquired 100% equity interest in Coveright Surfaces Malaysia Sdn Bhd ('Coveright Surfaces') for a cash consideration of RM40.0 million. Coveright Surfaces is involved in the manufacturing and sale of resin impregnated papers.
Recent Financial Results
Analabs has just announced its results for 2Q2010 ended 31/1/2010. Its net profit increased by 48% q-o-q or 152% y-o-y to RM5.6 million while turnover increased by 40% q-o-q or 214% y-o-y to RM38 million. The huge jump in turnover & profitability is attributable to the great acquisition of Coveright Surfaces, which in 2 quarters contributed operating profit of RM8.5 million & turnover of RM44.6 million. For full year, we can expect Coveright Surfaces to generate an operating profit of RM17 million or after-tax profit of RM12.75 million (based on tax rate of 25%).
Table: Analabs's last 8 quarterly results
Chart 1: Analabs's last 10 quarterly results
Valuation
Analabs (closed at RM1.39 in the morning session) is now trading at a PER of 4.4 times (based on annualized EPS of 31.9 sen which is derived from the 1st two quarters' results). At this multiple, Analabs is deemed fairly attractive.
Technical Outlook
From Chart 2 below, we can see that Analabs is in an uptrend line with support at RM1.10. Today, Analabs surged past its overhead resistance at RM1.28. The next resistance is at RM1.60.
Chart 2: Analabs' daily chart as at March 30, 2010_3.10pm (Source: Tradesignum)
From Chart 3 below, we can see that Analabs has broken above the 'horizontal' line resistance (RR) at RM1.30. Its next resistance is at RM1.60
Chart 3: Analabs' weekly chart as at March 30, 2010_3.10pm (Source: Tradesignum)
Conclusion
Based on better financial results ahead & attractive valuation, Analabs coudl be a good stock for long-term investment.
23 comments:
Hi Alex,
How about LBS and CSCstel and MBSB which is better for short term investment ?
Hi Alex,
Dont mind to elaborate the current market outlook
Hi Phkoay,
LBS is in a correction phase, with next support at RM0.60. MBSB is in sideway trend, with support at RM0.98-1.00 & resistance at RM1.10-12. CSCtel made a high of RM1.90 a few days ago, surpassing the high of RM1.84 recorded in July 2007. I prefer CSCStel (see my post via the link below), which will be paying out a 20 sen dividend in June. However, the share price has risen quite a bit in the past few months.
http://nexttrade.blogspot.com/2009/11/cscstels-net-profit-soared.html
Hi Cheer,
Our market was fairly overbought by the end of last week. This led to some corrections in the past 3 days. The overbought condition should have subsided after today & our market may recover tomorrow or on Friday.
I must say that the US market may be due for some correction in the next few days. If this correction is very severe, it may impact our market further.
hi alex,
what do you think about cbstech? i notice its fundamentals are good but it's listed in ace.
thanks
maxwealth88
hi alex,
what is your opinion that Success drop after EGM passed its resoln to list its subidiary. is it not a good deal?
thanks
maxwealth88
bro. tenaga finish consolidate? we should enter after beaking what resistance?
Hi MaxWealth88,
For FYE31/12/2009, CBSTech's net profit increased from RM5.6 million to RM11.0 million on a 93%-increase in turnover from RM23 million to RM44 million. Its EPS is about 4.6 sen. Based on its closing price of RM0.365 yesterday, CBSTech is trading at a PER of 7.9 times. This is fairly inexpensive.
CBSTech's immediate resistance si at RM0.38-40.
Hi MaxWealth88,
Success is probably correcting after the recent rally. The IPO share offer should be a positive for the stock. Sadly, the present correction has pushed the share price below the breakout level of RM1.35-36. This means that this stock needs to consolidate for a while before it can rise again.
Hi Wong,
Tenaga is trying to break above the trading range of RM7.90-8.10. If it can succeed in doing so, its next resistance is at RM8.30 & thereafter at RM8.50.
The limited upside for this stock may explain why Tenaga is hardly worth buying or tracking.
thanks Alex.
regards
maxwealth88
Hi Alex,
What is the best software tool to tracking the stock market?They are hundred in the market to choose for.Please advice.
bro. IRCB can buy or not? the fist 3 largest glove stocks keep breaking new high. can we shift to IRCB for cheap exposure?
Dear Alex,
The price of Maxis seems always on the down trend though market has shown bullish sign (i think), what's wrong with it. should I keep this stock??? bought average 5.45. .....Hope to receive pointers from you.
Should I cut this counter for others such as Analabs or success? Or do you have any counter in mind with the approximate value? I have in mind IOI Corp for medium to long term investment. Hope to hear from you soonest. Cheers.
hi alex,
i wanna ask about mitra,since it drop from 1.27 to 1.09 now,is it still worth to keep or will it drop much more?
thx
Hi Alex.. how are you?
Could you give some analysis on TOMEI. The price has dropped from 0.690 to 0.540 for the past few days. Why?
My ABP is about 0.600. I'm getting tense that it may drop more.
Thanks very much for your assistance.
Hi dipankara,
I am not quite sure I understood your question regarding the best software tool for tracking the stock market. If you are talking about portfolio tracking, I have no idea. If you are talking about charting or technical analysis, you can start out with Tradesignum. I used to recommend Quickcharts, but I am fairly disappointed with them because they did not bother to amend the price data after each Rights Issue or Bonus Issue. You can also buy a more powerful charting software (eg. Metastock) & subscribe for data update services, but I think you can survive with a basic charting service such as Tradesignum.
Other than charts, you need to read business newsletter (try the Edge) & results announcement (try the daily reports of your stockbroker). It looks like a lot of work, which many do not even bother to attempt.
Hi wong,
For FYE31/1/2010, IRCB recorded a net profit of RM5.2 million on turnover of RM147 million. EPS was only 2.2 sen. Unless there is a massive change in its results for FY2011, I don't see how one can justify its current price of RM1.10, which translates to a PER of 50 times.
Hi Layman,
Maxis is likely to be an under-performer, i.e. a stock that gives you a return of 5-7% per annum (mostly in the form of dividend). Should you switch to Analabs? If you like the kind of growth that Analabs is achieving, then you should consider it. However, you must accept the trade-off between a stable blue chip stock & an emerging small-cap stock. The latter can give you exciting gain when the time is good but sharp pain when the going gets tough.
Hi stephenchai,
Mitra rose from RM0.60 to RM1.30 over a short period of two months. The sharp rise must now be digested by the market. In the process, the stock may drift to RM0.80-1.00 before we may again see another rally.
Hi Avatar,
For FY2009, Tomei made a net profit of RM18.2 million or a EPS of 13.2 sen. At the close of RM0.545 yesterday, Tomei is trading at a PER of 4 times.
From the chart, the stock has horizontal support at RM0.55. Its medium-term uptrend line support is at RM0.50.
Based on fairly attractive valuation & good technical support at RM0.55 (or, a bit lower at RM0.50), you may want to see the stock through the present soft patch.
Good day Alex,
Thanks for your feedbacks on TOMEI. Yes, I agree.. its a fairly attractive valuation on this counter. I think the share price were pushed down for obvious reasons.
Cheers.
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