Daiboci has just announced its results for QE30/9/2011. Its net profit dropped by 8.7% q-o-q or 5.8% y-o-y to RM4.5 million. Its turnover also dropped by 7.5% q-o-q or 5.3% y-o-y to RM67.7 million. During the quarter under review, a few machinery in the packaging segment broke down. This has resulted in lower output & higher wastage. This may explain the lower top-line & bottom-line.
Table: Daiboci's last 8 quarters' results
Chart 1: Daiboci's last 16 quarters' results
Chart 2: Daiboci's profit margin for last 16 quarters' results
Valuation
Daiboci (closed at RM2.57 on Friday) is now trading at a PE of 10.5 times (based on last 4 quarters' EPS of 24.38 sen). At this PE multiple, Daiboci is deemed fully valued. The stock pays a decent dividend of 13% per annum last year, which translate to a dividend yield of 5.06%.
Technical Outlook
Daiboci is likely to continue to trade in a sideway manner for the next few weeks or months. Its trading range is between RM2.40 & RM2.80.
Chart 3: Daiboci's weekly chart as at Oct 21, 2011 (Source: Tradesignum)
Conclusion
Based on unexciting financial performance & technical outlook, I would rate Daiboci as a HOLD.
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