Thursday, August 15, 2013

Scable- has a bullish breakout

Sarawak Cable Bhd ('Scable') is a profitable Sarawak-based company involved in manufacturing of power cables & wires, hybrid power converters, steelworks, builder of mini hydro power plants & general construction.

Its net profit had dropped sharply in FYE31/12/2012 from RM15.6 million to RM6.4 million while revenue had also declined from RM368 million to RM269 million. For 1Q2013, net profit continued to decline from RM1.9 million previous year to RM1.3 million while revenue slipped RM66 million to RM59 million.

Scable's share prices had benefited from the post-GE13 rally which saw the stock rose from RM1.15 in April to an intra-day high of RM2.05. The sharp rally means that the stock has broken above the horizontal line at RM1.95 (its previous high) as well as reclaim its previous uptrend line (SS). Based on these, the stock is expected to continue its prior uptrend.

As such, a trading BUY call on this stock is quite appropriate. However, we must bear in mind that its valuation is very high with PE at 76 times.

Chart: Scable's weekly chart as at August 14, 2013  (Source: Quickcharts)

UPDATE: There was a newspaper report that Scable is "the frontrunner to secure the 500kV Sarawak power transmission line job worth some RM1billion" (here). However this is not something hew as the company has been telling analysts that they are expecting to secure more jobs in the near future. 

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, Scable.


SwingTrader188 said...

Hi Alex,
SCABLE has moved up significantly. Is it still a good time to buy? The big players, who have been accumulating SCABLE at low prices, could be waiting to offload their shares to the retail players.

luckystock2 said...

Hi Alex ,
Can you comment on MFCB's technical outlook also?

Alex Lu said...

Hi luckystock2

MFCB broke above its resistance at RM1.80 on August 7. It went to a high of RM1.97 before correction kicked in.

The breakout above the RM1.80 level could bullish breakout of a cup-with-handle.