Daiman- a breakout, finally

Technical Breakout

Today, Daiman broke above its 2 years old 'horizontal resistance' at RM1.90 as well as the psychological RM2.00 mark. With this breakout, Daiman could rise to its next resistance at RM2.30 (or even the following resistance at RM2.60). See Chart 1 & 2 below.


Chart 1: Daiman's weekly chart as at Mar 12, 2013 (Source: Quickcharts)



Chart 2: Daiman's monthly chart as at Mar 11, 2013 (Source: Quickcharts)

Recent Financial Result

From the table below and the 22-quarter top-line & bottom-line chart below, we can see that Daiman is a profitable company with a slow albeit erratic growth. Throughout the past 5 years, its profit margin is fairly high at 25-30%. This high profit margin may be the limiting factor that restrained the growth of the company. It reminded me of a friend's comment when he resigned from his company, a listed property developer where he said that the boss is so obsessed with getting maximum profit margin that new launches are held back because prices are rising. Is Daiman's management like that?


Table: Daiman's last 8 quarterly results


Chart 1: Daiman's last 22 quarterly results

Valuation

Daiman (closed at RMRM2.03 today) is now trading at a PE of 9 times (based on last 4 quarters' EPS of 22.35 sen). At this multiple, Daiman is deemed fairly valued for a mid-size developer.

Conclsuion

Daiman is probably benefiting from the Johore property theme play. Based on techncial breakout, Daiman could be a good stock for a trading BUY.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Daiman.