For QE30/9/2013, AHealth's net profit dropped 5% q-o-q to RM6.5 million while revenue dropped marginally by 2% to RM102 million. Compared to same quarter last year, net profit was up less than 1% while revenue was up 4%.
Table: AHealth's last 8 quarterly results
For the past 3 years, AHealth's top-line has been rising but its bottom-line was flattish. Was this a deliberate strategy to gain market share?
Chart 1: AHealth's last 22 quarterly results
Financial Position
As at 30/9/2013, AHealth's financial position is deemed satisfactory, with current ratio at 2.6 times and debts to equity ratio at a negligible 0.01 time.
Valuation
AHealth (closed at RM4.79 yesterday) is now trading at a PE of 15 times (based on last 4 quarters' EPS of 32 sen). At this PE multiple, AHealth is deemed fairly valued, with limited upside potential. With earning relatively unchanged over the past 3 years, the increase in share price was due to expansion in PE multiple (from 10 times in March 2011 to 15 times today).
Technical Outlook
AHealth is in an uptrend. Its immediate resistance is at RM4.90 while its immeidate support is at RM4.20. The MACD indicator has a negative cross-under, which may signal correction ahead.
Chart 2: AHealth's weekly chart as at Nov 20, 2013 (Source: Quickcharts)
Conclusion
Based on good financial performance & financial position, AHealth is a good stock for long-term investment. However, with mildly negative technical outlook & nearly full valuation, the stock is a good stock for profit-taking.
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, AHealth.
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