Daiboci- top-line & bottom-line rose due to increased export

Result Update

For QE30/9/2013, Daiboci's net profit rose 23% q-o-q or 7% y-o-y to RM7.4 million while revenue rose 26% q-o-q or 33% y-o-y to RM87 million. The q-o-q increase in revenue was attributed to increased export revenue in the packaging segment from 37% to 44% in the current quarter. Despite higher raw material costs in the current quarter, Daiboci's pre-tax profit increased q-o-q to RM10.08 million.


Table: Daiboci's last 8 quarterly results


Chart 1: Daiboci's last 24 quarterly results

Financial Position

As at 30/9/2013, Daiboci's financial position is deemed satisfactory with current ratio at 1.7 times and gearing at 0.3 time only. However, it should noted that trade & other receivables increased from RM61 million as at 31/12/2012 to RM79 million as at 30/9/2013 (or RM66 million as at 30/6/2013). This means the receivable collection period increased from 84 days as at 30/6/2013 to 94 days in 30/9/2013. It may be due to more favorable credit term granted but this is an item that we should watch out for next quarter.

Valuation

Daiboci (closed at RM3.65 yesterday) is now trading at a PE of 15.5 times (based on last 4 quarters' EPS of 23.58 sen). At this PE, Daiboci is deemed fairly valued, with limited upside. However, this stock pays good quarterly dividend, making it an income stock. Its dividend yield is 4.0%.

(Note: As at 11.00am, Daiboci is trading at RM3.77)

Technical Outlook

Daiboci is in an uptrend with resistance at RM3.75. An upside breakout above this resistance would lead to a continuation of its prior uptrend.


Chart 3: Daiboci's weekly chart as at Nov 6, 2013 (Source: quickcharts)

Conclusion

Based on good financial performance & positive technical outlook, Daiboci remains a good stock for long-term investment. However, it is trading at its fair value where its medium-term upside potential may be limited.

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, Daiboci.