Notion- top-line & bottom-line inched up

Results Update

For QE30/6/2012, Notion's net profit increased by 28% q-o-q or 96% y-o-y to RM19.8 million while revenue increased by 13% q-o-q or 57% y-o-y to RM96 million. Revenue increased due to higher shipment of camera orders. In addition, there was a writeback of RM3.3 million of over-provision of losses in regards to the Thailand flood (actual loss was RM2.2 million compared to. RM5.5 million provided for in QE31/3/2012).


Table: Notion's last 8 quarterly results


Chart 1: Notion's last 23 quarterly results

Valuation

Notion (closed at RM1.21 last Friday) is now trading at a PE of 7.6 times (based on last 4 quarters' EPS of 15.93 sen). At this multiple, Notion is deemed reasonably priced.

Technical Outlook

Over the past 2 years, Notion seems to be trading in a range between RM0.80 & RM1.30. Until it breaks above the RM1.30 resistance, the stock's upside is deemed limited.


Chart 2: Notion's weekly chart as at Aug 17, 2012 (Source: Tradesignum)

Conclusion

Based on good financial performance & reasonable valuation, Notion is considered a good stock for medium-term investment. Its upside is however limited due to the strong resistance at RM1.30.