Thursday, January 05, 2012

Cocolnd broke above its downtrend line at RM2.20

Cocoaland Holdings Bhd ('Cocoland') has just broken above its intermediate downtrend line and its strong horizontal line at RM2.20. The breakout is on very thin volume. If the stock can stay at or above this breakout level, the outlook for the stock could turn positive.

For the 9-month ended 30/9/2011, Cocolnd reported a net profit of RM10.5 million on a turnover of RM123 million. Based on this earning, Cocolnd's annualized EPD for FY2011 is expected to be about 8.1 sen. Based on this earning, Cocolnd (at RM2.35) is now trading at a PE of 29 times. At this PE, the market is pricing in an aggressive CAGR of 30% for the stock (based on the assumption that the market accepts a PEG ratio of 1 time). This may not be unreasonable as Cocolnd is 23% owned by F&N. For more, go here.

Based on technical consideration, Cocolnd could be a good trading BUY. this is especially so if the share price eased back closer to the RM2.20 level.


Chart: Cocolnd's daily chart as at Jan 4, 2012 (Source: Tradesignum)
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4 comments:

  1. JYThursday, January 05, 2012 4:15:00 PM

    Hi Alex

    Daiboci also break out?

    ReplyDelete
  2. Alex LuFriday, January 06, 2012 12:37:00 PM

    Hi JY

    Daibochi broke above its intermediate downtrend line at RM2.70. Immediate resistance at RM2.90-3.00.

    ReplyDelete
  3. robertanTuesday, January 10, 2012 10:24:00 AM

    F&N Hldgs has recently increased their stake in Cocolnd to 27.19%. I wonder if this is a precusor to a GO in the near future because F&N would probably want a higher stake if they want to use Cocolnd as a platform for their regional expansion into the snacks and beverage market. Can someone confirm if Cocolnd is already packing the F&N fruit juice range?

    ReplyDelete
  4. Alex LuTuesday, January 10, 2012 5:11:00 PM

    Hi robertan

    I don't think F&N Hldgs will make a GO for Cocolnd in the near future. It is likely to use its investment in Cocolnd to gain knowledge about the market before deciding what's the next move- whether to strike out in its own (which is cheaper) or to buy-out Coclnd (which is more costly).

    I have no idea whether Cocolnd is already packing the F&N fruit juice range.

    ReplyDelete