Monday, April 22, 2013

Zhulian- bottom-line slipped, uptrend capped

Result Update

For QE28/2/2013, Zhulian's net profit dropped 5.0% q-o-q but rose 4.8% y-o-y to RM30 million while revenue declined by 7.2% q-o-q or 2.8% y-o-y to RM109 million. The decline in bottom-line q-o-q was attributable to lower operating profit from RM24.1 million for QE30/11/2012 to RM22.7 million for QE28/2/2013 (which is in turn due to a slight drop in domestic sales) and a decline in share of profit of equity-accounted investee (net tax) from RM13.3 million for QE30/11/2012 to RM12.6 million for QE28/2/2013.

Table: Zhulian's last 8 quarterly results

Chart 1: Zhulian's last 26 quarterly results


Zhulian (closed at RM2.89 last Friday) is now trading a PE of 11.2 times (based on last 4 quarters of 25.8 sen). Zhulian is deemed attractive based on earning CAGR of 15-20%.

Technical Outlook

Zhulian  is in an uptrend but the share price is capped by the recent high of RM2.90. Can the stock surpass this resistance soon? We will be wait & see.

Chart 2: Zhulian's weekly chart as at April 19, 2013 (Source: quickcharts)


Based on good financial performance, attractive valuation & still-positive technical outlook, Zhulian is still a good stock for long-term investment. However, the share price performance will be capped for the near term until it has surpassed its recent high of RM2.90.

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, Zhulian.

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