Prlexus- improved financial performance

Results Update

For QE31/7/2013, Prlexus's net profit increased by 59% q-o-q or 111% y-o-y to RM4.3 million while revenue jumped by 61% q-o-q or 51% y-o-y to RM75 million. Profit for the current quarter is significantly higher when compared with that of the preceding quarter due to higher revenue, which was due to increased revenue from its garment segment.


Table 1: Prlexus's last 8 quarterly results


Chart 1: Prlexus's last 27 quarterly results

Valuation

Prlexus (closed at RM1.12 as at 4.30pm) is now trading at a PE of 5.3 times (based on last 4 quarters' EPS of 21 sen). At this PE, Prlexus is deemed fairly valued for a small-cap stock.

Technical Outlook

Prlexus has been trading sideway for the past 3-4 months. The sudden rally may be due to the misunderstanding following the latest results where the EPS is stated at 11.68 sen for QE31/7/2013. The correct EPS is 5.84 sen after the 1-to-2 share split.

Chart 2: Prlexus's daily chart as at September 27, 2013_12.30pm (Source: Quickcharts)

 Conclusion

Based on improved financial performance, Prlexus is still a good stock to hold for long-term investment. However, the stock is fairly valued and the technical outlook is unexciting. The sudden rally may be caused on a misunderstanding of the earning of the stock where the 1-to-2 share split was not accounted for in the computation of the EPS. As such, the stock could be a trading sell as it approaches the recent high of RM1.22.

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.