For QE30/6/2011, WTHorse's net profit dropped by 16% q-o-q or 39% y-o-y to RM11.9 million while turnover declined by 6% both q-o-q & y-o-y to RM131 million. The lower net profit was attributed to lower sales (which is due to festive season) as well as lower profit margin.
Table: WTHorse's last 8 quarterly results
Chart 1: WTHorse's last 25 quarterly results (including profit margin)
Valuation
WTHorse (closed at RM1.72 yesterday) is now trading at a PE of 7.6 times (based on last 3 quarters' average EPS of 5.65 sen). At this PE multiple, WTHorse is very near its full value of RM1.80 (based on PE of 8 times).
Technical Outlook
WTHorse broke its long-term uptrend line at RM1.85 in August. Its immediate support is at the horizontal line at RM1.70.
Chart 2: WTHorse's weekly chart as at Nov 18, 2011_plotted on log scale (Source: Tradesignum)
Conclusion
Based on weaker financial performance, limited upside in share price & bearish technical outlook, the rating for WTHorse remain SELL or REDUCE.
hi alex,
ReplyDeletelooking forward to your analysis on success and seremban engr?
thanks
maxwealth88
how to determine PE value for a given sector? Why some sectors could have larger PE and still in fair value while other which has low PE but tag as over pricey? for example, O&G usually has much larger PE value
ReplyDeletehi alex,
ReplyDeletel read about your chinese-translated comment on harvest court in merdeka review dated 18/11/2011, wonder why couldn't find the original version from your blog in nextrade. pls tell me how to trace the said article in your blog.
tq.
des
Hi Alex, can u comment more on BERTAM?
ReplyDeletehi messageofmyheart
ReplyDeleteI am not familiar with Bertam. It should have good support at RM0.45 and thereafter at RM0.30. This means that it is trading quite near a strong support.
Please check on the financial statements on your own.
Hi des
ReplyDeleteI waited for Merdeka Review to put up my article, which was delayed until late Friday.
I learned on Monday that the article was posted on Merdeka Review. When I re-read my article, I felt it was too strong and I hesitated on posting it. Today, I read a report in the Star about one of its directors, Mohd Nazifuddin Mohd Najib resigning from the company and the major shareholder, Raymond Chan sounded contrite over the speculative play on Harvest.
Sometime, we write about things that can come across as very harsh on certain people. I must be fair & give them the benefit of doubt- even Raymond Chan- that he may not have intended the share price to skyrocket & punters to get burned. I know it may sound silly!!
My intention in posting about Harvest on my blog & writing about it on Merdeka Review was to warn these naive punters of the danger of playing with Harvest or any extremely speculative stocks. Alas, some punters will never learn. Even as Harvest is 'burning' from the designation, these 'naive' punters have moved on to the next plaything. It could be Sumatec for this week! What will it be next week?
As such, I think it sufficed that I have written about Harvest earlier and I shall say no more about this subject again. That includes posting the English version of the Merdeka Review article on my blog.
Hi Kok-Siang
ReplyDeleteThat's a good question. The PE multiples for different sectors are determined by the market. If you followed research reports issued by investment bank or research house, they will have an average for each sector.
How does the market determine the PE multiples? A few factors come into play, such as:
1) nature of the industry (whether cyclical or stable), and
2) growth potential of the industry (Eg. O&G is expected to grow rapidly over the next few years).
Then you need to adjust each stock accordingly, depending on its shareholders/management; size; market position, etc.
Overall, it involves a fair bit of judgement call.
Hi Maxwealth88,
ReplyDeleteYes, I am about to look at Success. Hopefully this week. Offhand, it is attractive & resting at its long-term uptrend line support at RM0.85. It could be a good BUY for medium to long-term holding.
Harvest - Lots of people want to gamble and like to gamble, you can't do much.
ReplyDelete