Petronas Dagangan Bhd ('Petdag') is in the marketing and distribution of various petroleum products, such as motor gasoline, aviation fuel, kerosene, diesel, fuel oil, bunker fuel, lubricants, LPG, and asphalt.
Recent Financial Results
Petdag has recently announced its results for QE30/6/2010, where its net profit increased by 24% q-o-q to RM199.7 million while turnover was unchanged at about RM5.456 billion. The increased net profit on a q-o-q basis was attributable to lower operating expenditures.
Compared to the previous corresponding quarter (QE30/6/2009), Petdag's net profit declined by 2.9% on the back of a 14.2%-increase in turnover. The higher turnover on a y-o-y basis was higher selling prices & sales volume while lower net profit was attributable to lower gross profit.
Table: Petdag's 8 quarterly results
Chart 2: Petdag's last 9 quarterly results
Valuation
Petdag (closed at RM10.80 yesterday) is now trading at a PE of 14.2 times (based on last 4 quarters' EPS of 75.80 sen). At this multiple, Petdag is deemed fairly valued. If we assumed a PE of 15 times, the value of Petdag would be about RM11.40.
Technical Outlook
What really interest me is the long-term chart of Petdag. Chart 2 is the monthly chart plotted on log scale, which shows a stock that is in an uptrend line. Petdag has recently broken above the strong horizontal resistance of RM9.20 and it could be slowly rally towards the parallel line at about RM17-18.00.
Chart 2: Petdag's monthly chart as at Sept 1, 2010_log scale (Source: Tradesignum)
If we look at Chart 3, which is a monthly chart plotted on arithmetic scale, we can see from a different perspective the potential of the current rally in the stock. If the current breakout can travel a distance equivalent to 1 time the distance between the breakout level & its recent low of RM6.20, then the target price could be RM12.20. Alternatively, it may travel a distance equivalent to 1.68 time the distance between the breakout level & its recent low, then the target price could be RM14.24.
In 2007, Petdag broke above its then strong horizontal resistance of RM4.00 & traveled a distance of 1.68 time the distance between the breakout level (of RM4.00) & the low of about RM1.00.
Chart 3: Petdag's monthly chart as at Sept 1, 2010_arithmetic scale (Source: Tradesignum)
Conclusion
Based on technical consideration, Petdag could be a trading BUY or a medium-term investment. However, Petdag is trading very close to its full value of RM11.40 (assuming a PE of 15 times).
Note: Petdag is trading at RM11.80 as at 4.12pm!
hi alex. if i going to buy BJCORP call warrant now, which one is better BJCORP-CA or BJCORP-CC ?? Thx bro.
ReplyDeleteHi wong
ReplyDeleteBJCORP-CC is cheaper than BJCORP-CA as well as having a longer tenor.
The main terms are:
1) BJCORP-CC
Expiry date: June 8, 2011
Exercise Price: RM1.00
Exercise Ratio: 2-to-1
2) BJCORP-CA
Expiry date: February 28, 2011
Exercise Price: RM1.15
Exercise Ratio: 2-to-1
Dear Alex,
ReplyDeleteWould like to hear your comments on Lonbisc's current situation. Has it been moved from a gem to something neutral? Will you suggest a hold on it?
Appreciate your feedback.
Thank you!
Hi Alex
ReplyDeleteCan we expect more good news from QSR/KFC? Both stocks have strong positive cashflow ? Thks
Hi, Alex
ReplyDeleteIs Aeon will shine or going to shine furhter in Malaysia ?
In Investment point of view in consumer stock....whot are their similar business model counter?
AL
Hi Alex,
ReplyDeleteReally need yr favour, yes i know u told us before that u are not going to touch on mudajaya anymore, however i bought the share after seeing your first blog, yr 2nd blog touching on mudajaya when the share price drop drastically. it is too late for me to pull back, however i did read all the financial report and think it is a good investment before i bought this share.
Now the share went down below RM4.00, please advise on the technical view, should i sell to cut loss, or hold for long term, as i still believe the share will goes up to RM5 based on company solid earning.
Hi ysney26
ReplyDeleteI have posted on the technical outlook of Mudajaya for your guide. At time like this, the historical financial statements may not be very useful. This is an extreme period for the stock, with ongoing development & unresolved problems. Despite the negative movement, I take some comfort in the fact that the stock did not drop too badly in the past few days where the market was quite weak. That's a positive point. Let's see how the stock would perform when it finally tests the horizontal support at RM3.75.
Hi Alex,
ReplyDeleteThank you very much for your effort to put the technical outlook of mudajaya.
Hi steve
ReplyDeleteLonbisc's favorable technical outlook has come & gone. What happened? I am going to post on this matter shortly.
Hi nightradersdk
ReplyDeleteKFC is a good stock. It is rising on its merit and also because it has announced a bonus issue. QSR is its parent & it is going along for a ride.
Hi Ai Ling
ReplyDeleteAeon will track middle Malaysia very well. Its products cater for the middle-income group and as long as Malaysia economy is okay, it would do well.
For 1H2010, Aeon recorded EPS of 21.4 sen. At the close of RM5.31, Aeon is trading at a PE of 12.6 times. I think for its size & the stable business model, it could fetch a PE of 14-15 times.
Technically, its immediate resistance is at RM5.30 & then RM5.50 & RM6.00.
Stocks with similar business model would be Parkson. However Parkson's exposure is wider as its area of operation includes China & Vietnam.