Monday, January 31, 2011

GAB's net profit jumped

Results Update

Guiness Anchor Bhd ('GAB') has just announced its results for QE31/12/2010. Its net profit increased by 67% q-o-q or 48% y-o-y to RM64.6 million while turnover increased by 15% qo-q or 11% y-o-y to RM421 million. GAB attributed its good results to higher turnover due to earlier CNY for 2011 & write-back of some costs.


Table: GAB's last 8 quarterly results

From Chart 1 below, we can see that GAB's top-line is in a gradual uptrend over the past 20 quarters. Its bottom-line has finally broken above the RM50 million mark!


Chart 1: GAB's last 20 quarterly results

Valuation

GAB (closed at RM9.63 on Jan 28) is now trading at a trailing PE of 15.8 times (based on last 4 quarters' EPS of 61 sen). Its dividend yield is fairly reasonable at 4.7%. Based on the present PE multiple, GAB is trading near its fair value. If the top-line & bottom-line growth momentum can persist, the stock could potentially command a PE multiple of 17-18 times. Thus, the maximum upside for GAB is about 10%.

Technical Outlook

GAB has corrected over the past 2 weeks after recorded a new all-time high of RM11.00. It nearly tested its medium-term uptrend line support of RM9.40. This would be a good first entry to this stock.


Chart 2: GAB's daily chart as at Jan 28, 2010 (Source: Tradesignum)

From Chart 3, we can see GAB's sharp rally since May 2010, where it rose from RM7.00 to the all-time high of RM11.00. The stock needs to consolidate this huge gain. This consolidation would begin if the medium-term uptrend line has been violated. If that were to happen, one can expect GAB to enter into a sideway trading- similar to the period from December 2009 to May 2010. As such, we should not take too large a position in this stock.


Chart 2: GAB's weekly chart as at Jan 24, 2010 (Source: Tradesignum)

Conclusion

Based on technical consideration, GAB could be a trading BUY at its medium-term uptrend line support of RM9.40. Its steady financial performance could continue and this may lead to the stock trading at higher PE multiple. However, after a sharp run-up, the stock needs to consolidate its gain and this may happen if the stock failed to hold about the medium-term uptrend line support of RM9.40.
at

9 comments:

  1. HengMonday, January 31, 2011 10:27:00 AM

    HI Alex
    Good day!

    Any comment for JTI?
    JTI share keep moving uptrend
    any Target Price for JTI?

    Thank & Happy CNY.
    Best regard,
    Heng

    ReplyDelete
  2. Alex LuMonday, January 31, 2011 12:07:00 PM

    Hi Heng

    JTI is quite attractive. For 9-month ended 30/9/2010, its EPS was about 40.7 sen or annualized EPS of 54.3 sen. This means JTI is now trading at a PE of 11.8 times (based on last Friday closing price of RM6.41). BAT (closed at RM48.02) is trading at a PE of 18.8 times (based on annualized EPS of 256 sen). As such, JTI is trading at a discount of 37% to BAT. This discount is quite excessive and the price run-up in JTI reflects the change in market perception between the two stocks. If JTI were to capture half the discount, its upside is about 30% from here.

    Chartwise, JTI tested its all-time high of RM6.70-6.80 recorded in 1997. Can it break above that level? We have to wait & see.

    ReplyDelete
  3. benMonday, January 31, 2011 3:08:00 PM

    HI Alex,

    What do you think of HWGB (9601)?
    Do you think there is alot of tin in Perak?
    Thanks

    ReplyDelete
  4. Alex LuMonday, January 31, 2011 6:00:00 PM

    Hi ben

    In early January 2011, HWGB broke to the upside of its 5-year trading range/bottoming phase, between RM0.15 & RM0.40. Last FRiday, it broke above the horizontal resistance at RM0.60. Its next horizontal resistance is at RM0.80.

    I don't know what's driving the sharp rise. Could be the commencement of the tin mining operation in QE31/12/2010 & the current high prices for tin ore? Go to the link below for the detailed financial statements of HWGB for QE30/9/2010 & look out for the following:
    - Segmental Reporting (page 7)
    - Review of Performance (page 8)

    Aside from the tin mining operation, there is nothing really exciting about HWGB.

    http://announcements.bursamalaysia.com/EDMS/EdmsWebh.nsf/all/482576120041BDAA482577E30035F3F6/$File/Q3%20results-30.09.2010.pdf

    ReplyDelete
  5. MaxWealth88Monday, January 31, 2011 9:02:00 PM

    hi alex,

    Pantech-LA has a 7% coupun rate. What does this mean?
    The conversion ratio is 6:1. Which is more worth it, to buy the share or the ICULs? Ths share has about 3-4% div yield.

    thanks
    maxwealth88

    ReplyDelete
  6. HengMonday, January 31, 2011 11:13:00 PM

    Hi Alex,
    Good day!

    Thanks for your comment on JTI.

    What is your comment on the Acquisition of Latexx by Navis that Offer RM3.10/share??
    Do you think the acquisition will be successful?

    Thank in advance.
    Best regard,
    Heng

    ReplyDelete
  7. UnknownFriday, February 04, 2011 7:56:00 PM

    Hi Mr.Alex
    Happy CNY

    About HWGB (9601) the commencement of the tin mining was located in CHINA right ? if i didn't make mistake ..they mining from china isn't it ? if it doesn't make mistake i'm thinking of holding this share long terms for 10 to 20 years~~~~the commencement price in global now is MADNESS .. unless something happen/announce in this 20 years ...

    Thanks
    Chee_Nian

    ReplyDelete
  8. AlexPTuesday, February 08, 2011 3:14:00 PM

    Hi Alex,
    Could your share your opinion on Efficen? Thanks.

    ReplyDelete
  9. Alex LuFriday, February 11, 2011 9:59:00 AM

    Hi AlexP

    Efficen's financial performance has deteriorated in the past 2 quarters. The lower turnover was attributable to
    a drop in revenue from services rendered for data printing and document processing, which in turn is due to recent postage hike.

    Based on the annualized EPS of 1.84 sen, Efficen is now trading at a PE of 9.7 times. Its immeidate support is at RM0.17-0.18 while its immediate resistance is at RM0.19-0.20.

    ReplyDelete