SEG has just announced its results for QE30/6/2011. Its net profit jumped 68% y-o-y to RM18 million on the back of a 32%-increase in turnover to RM69 million. Bottom-line & top-line were unchanged when compared to the immediate preceding quarter (QE31/3/2011).
Table 1: SEG's last 7 quarterly results
Chart 1: SEG's last 13 quarterly results
Last 10 years' performance
SEG's financial performance for the past 5 years has been very impressive. If you plot this performance (plus the annualized results for FY2011), we can see that SEG's exponential growth for the past 5-6 years.
Chart 2: SEG's last 10 year results (plus the annualized results for FY2011)
Valuation
SEG's latest financial results is up to 30/6/2011. It has however undergone a share split of 1-to-2 in early July. So we have to careful making a comparison for the purpose of determining its PE. Based on the enlarged shares outstanding, SEG's annualized EPS for FY2011 is 13.3 sen. Based on its closing price of RM1.93, SEG is now trading at a PE of 14.5 times. This PE multiple is deemed acceptble given the strong growth in the bottom-line for the past 6 quarters.
Technical Outlook
SEG's share price performance has been as spectacular as its financial results. However, it is now testing its all-time high at RM2.00. Can the stock surpass this level? Only time will tell.
Chart 3: SEG's monthly chart as at July 1, 2011_plotted on log scale (Source: Tradesignum)
Conclusion
Based on good financial performance & reasonable valuation, SEG could be a good stock for long-term investment. However, its upside may be capped at RM2.00 for the near-term unless it can break above this psychological level which is its all-time high price.
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