Huayang has just announced its results for QE31/12/2011. Its net profit rose 5% q-o-q or 90% y-o-y to RM14.6 million while its turnover rose 11% q-o-q or 71% y-o-y to RM84 million. The improvement due mainly to better performance in the property development segment.
Table: Huayang's last 8 quarterly results
Chart 1: Huayang's last 14 quarterly results
Chart 2: Huayang's profit margin for last 14 quarterly results
Valuation
Based on the current price of RM1.36, Huayang is now trading at a PE of 4 times (based on last 4 quarters' EPS of 34 sen). At this multiple, Huayang is deemed inexpensive.
Technical Outlook
Huayang is presently pressing against its overhead resistance at RM1.36-1.37. If it can break above this resistance, Huayang may hit a high of RM1.70 (assuming a 1-to-1 gain of 35 sen from the breakout level of RM1.36).
Chart 3: Huayang's weekly chart sa at Jan 16, 2012 (Source: Tradesugnym)
Chart 4: Huayang's monthly chart sa at Jan 16, 2012 (Source: Tradesugnym)
Conclusion
Based on attractive valuation, continuing good financial performance & positive technical outlook, Huayang could be a good stock for medium-term investment.
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