NTPM- profit margin starting to expand

Result Update

For QE31/10/2013, NTPM's net profit increased by 34% q-o-q or 31% y-o-y to RM16.0 million while revenue inched up 2% q-o-q or 7% y-o-y to RM127 million. The improvement in top-line & bottom-line came from both the paper products & personal care products divisions. 


Table: NTPM's last 8 quarterly results

NTPM's profit margin is beginning to improve and this could set the stage for an increase in its net profit. The last time this happened was in early 2008 which led to a rally in NTPM.


Chart 1: NTPM's last 33 quarterly results

Valuation

NTPM (closed at RM0.75 last Friday) is now trading  at a PE of 15.3 times (based on last 4 quarters' EPS of 4.9 sen). At this PE multiple, NTPM is deemed fairly valued.

Technical Outlook

NTPM is in an uptrend after it broke above the horizontal line at RM0.62 in September.


Chart 2: NTPM's weekly chart as at Dec 13, 2013 (Source: Tradesignum)

Conclusion

Despite trading at its fair valuation, NTPM could continue its uptrend based on improving financial performance & still-positive technical outlook,

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, NTPM.