For QE31/3/2011, Perstima's net profit dropped by 54% q-o-q or 76% y-o-y to RM6.5 million while turnover dropped 7% q-o-q or 1% y-o-y to RM209 million. The drop in its bottom-line was attributed to lower profit margin due to competition from tinplate from China.
Table: Perstima's last 8 quarterly results
Chart 1: Perstima's past 27 quarterly results
Valuation
Perstima (closed at RM4.70 as at 12.30pm today) is now trading at a PE of 18 times (based on annualized EPS of 26.16 sen). Based on this multiple, Perstima is still overvalued. A fair value would be about RM3.90-4.00 (based on PE multiple of 14-15 times).
Technical Outlook
Perstima broke below its uptrend line in October 2010. It tried to rally back up above the uptrend line in November but failed. Since then, it has been moving sideway in a range between RM4.60 & RM5.40). Today, Perstima came under heavy selling pressure. If this selling persists & the support at RM4.60 is violated, Perstima would reverse into a downtrend.
Chart 2: Perstima's weekly chart as at May 26, 2011 (Source: Quickcharts)
Conclusion
Based on poor financial performance & overvaluation, I would rate Perstima as a SELL. This is especailly so if the RM4.60 support is violated.
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