Result Update
For QE31/3/2013, CCM's net profit dropped 76% q-o-q or 35% y-o-y to RM4.4 million while revenue dropped 24% q-o-q or 19% y-o-y to RM288 million. Revenue dropped q-o-q due to lower revenue contribution from the Chemicals and Fertilizers Divisions. Pre-tax profit decreased by 41% q-o-q due to lower profit contribution from all the Divisions. In addition, the preceding quarter’s profit before tax included an amount of RM7.4 million as fair value change on investment properties.
Table: CCM's last 8 quarterly results
Chart 1: CCM's last 29 quarterly results
Valuation
CCM (closed at RM1.22 last Friday) is now trading at a PE of 15 times (based on last 4 quarters' EPS of 8.2 sen). For a company with continuous deterioration in its earning, CCM does not deserve a PE of 15 times.
Technical Outlook
CCM is still in a downtrend line, with resistance at RM1.20-1.25. Its immediate support is at the horizontal line at RM1.10.
Chart 2: CCM's weekly chart as at May 31, 2013 (Source: Quickcharts)
Conclusion
Based on challenging operating environment, unexciting financial performance, demanding valuation & negative technical outlook, CCM is rated at a SELL.
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, CCM.
6 comments:
Dear Alex,
Dsonic 1Q eps 16.7sen, market price only rm2.20, do you mind please kindly analyze it.
Thank you.
Hi oomn,
DSonic has been trading within a tight range of RM1.90 & RM2.00 for 4 months before it broke above the RM2.00 resistance. Since then, it has been rising. There is a generous 1-for-2 bonus issue. This could be the catalyst for the current rally.
DSonic's earning is fairly commendable, ranging from 10-16 sen a quarter. Its QE31/12/2012 was an exception, with EPS of only 4 sen. If we assume a full-year EPS of 40 sen, the stock is now trading at a PE of 6 times. That makes it fairly attractive.
Dear Alex,
Do you mind to comment on Redtone please? The price has shoot up to 0.775 recently.
Hi Ming Hoong Law
Redtone has broken above two strong resistance levels in the past few days. These resistance levels are the horizontal lines at RM0.45 & RM0.70. Its next resistance is at RM0.80-0.90. At the next resistance, you should slowly take profit. This is notwithstanding the good news in the market now.
Hi Alex
Can you comment on Puncak share performance?
I think technically, Puncak look set to breakup its immediate resistance at RM 2.00.
Puncak cum dividend of 5sen TE now could spur by its next catalyst, free warrant to be declare next week, 10 for 1 free warrant (exercise price at RM1.00; implying intrinsic value of RM 1.00 for warrant).
According to the yesterday source, Selangor MB has indicate that ongoing talk among all water player are progressing well and each player has show strong interest to complete water restructuring as soon as possible.
I think it sense now for all water player to seriously make their decision on KDEB latest offer as 12% ROE and resume their debt are best opportunity for them to exit and realize handsome gain.
Hi hng
Puncak's share price has been moving within a downward channel since Mar 2008. The upper boundary of that channel is at RM2.10-2.15.
Nevertheless, the movement in Puncak's share price has been very encouraging as it has broken above the horizontal line at RM1.90-1.95 7 the psychological RM2.00 mark. Its next horizontal resistance is at RM2.30. To see that level, Pucak has to break above the downward channel at RM2.10-2.15.
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