Results Update
MFlour's net profit increased by 5% q-o-q or 68% y-o-y to RM30.0 million while turnover increased by 39% y-o-y to RM459 million but was unchanged when compared to the immediate preceding quarter (QE31/12/2010). However it in worth noting that MFlour's pre-tax profit declined by 13.7% q-o-q to RM40.0 million due to a drop in profit margin. We need to track the company's results closely to see whether the drop in the pre-tax profit is an one-off event or is it the beginning of a trend.
Table: MFlour's last 8 quarterly results
Chart 1: MFlour's past 20 quarterly results
Valuation
MFlour (closed at RM6.98 at noon today) is now trading at a PE 7.8 times (based on the last 4 quarters' EPS of 90 sen). At this multiple, MFlour is deemed attractive.
Technical Outlook
MFlour broke above its all-time high of RM6.70 today. The possible resistance is the parallel line to the uptrend line, which is at RM7.50.
Chart 2: MFlour's monthly chart as at May 24, 2011_plotted on log scale (Source: Tradesignum)
Conclusion
Based on attractive valuation & bullish technical outlook, MFlour is still good for long-term investment.
No comments:
Post a Comment