Evergrn poised for the next upleg?

Results Update

Evergrn has just announced its results for QE31/12/2011. Its net profit dropped 11% q-o-q to RM21.4 million while turnover rose 6% to RM296 million. Compared to the corresponding quarter last year, its net profit rose 18.5% while turnover was up 22.3%. The q-o-q increase in turnover was attributed to higher average selling price & appreciation in USD while net profit declined q-o-q due to higher cost of glue & logs.


Table: Evergrn's last 8 quarterly results



Chart 1: Evergrn's last 28 quarterly results

Valuation

Evergrn (currently at RM1.03 as at 11.45am) is trading at a PE of 8.3 times (based on last 4 quarters' EPS of 12.43 sen). At this PE multiple, Evergrn is deemed fairly valued.

Technical Outlook

Evergrn is a trending stock, which is a stock that spends more time in either an uptrend or a downtrend. Evergrn rose to a recent high of RM1.12 on February 8. If it can stay above the RM1.00 mark, it may rally again. It looks like it's on the verge of entering into the next upleg. The indicators are supportive of such a move.


Chart 2: Evergrn's weekly chart as at Feb 21, 2012_10.30am (Source: Quickcharts)

Conclusion

Based on satisfactory financial performance, reasonable valuation & mildly positive technical outlook, Evergrn could be a good stock for medium-term investment.