Prlexus- top-line & bottom-line slipped

Results Update

For QE30/4/2013, Prlexus's net profit dropped 45% q-o-q but rose 5% y-o-t to RM2.7 million while revenue dropped 27% q-o-q but rose 5% y-o-y to RM47 million. The q-o-q drop in revenue is as a result of lower revenue from the garment division (which was due to less available production days during the quarter). Profit was significantly lower when compared with that of the preceding quarter due to lower revenue and the implementation of minimum wages in Malaysia.. Would revenue recover with more available production days? Would higher revenue lead to a recovery in bottom-line?


Table 1: Prlexus's last 8 quarterly results


Chart 1: Prlexus's last 19 quarterly results

Valuation

Prlexus (closed at RM1.86 at the end of the morning session) is now trading at a PE of 5.2 times (based on last 4 quarters' EPS of 36 sen). At this PE, Prlexus is deemed fairly valued for a small-cap stock.

Technical Outlook

Prlexus is in an uptrend line with support at RM1.83-1.85. Can the stock stay at or above the uptrend line?


Chart 2: Prlexus's daily chart as at June 25, 2013_12.30pm (Source: Quickcharts)

 Conclusion

Despite the drop in its financial performance, Prlexus is still a fairly attractive stock with a positive technical outlook. For these reasons, I would rate Prlexus a HOLD.

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, Prlexus.