MISC- bottom-line soared after booking in a one-off gain

Result Update

In QE31/12/2013, MISC's PBT rose 50.1% to RM1.08billion from RM721.11million a year ago, boosted by bigger share of profit from joint ventures (from RM64 million to RM891 million), especially the one-off gain from the disposal of the Gumusut-Kakap Semi-Floating Production System through a finance lease.

For FYE31/12/2013, MISC's net profit jumped 170.7% to RM2.08billion from RM770.24million, boosted by bigger share of profit from joint ventures (from RM274 million to RM1.17 billion).



Table: MISC's last 8 quarterly results


Chart 2: MISC's last 31 quarterly results 

Valuation

MISC (closed at RM6.50 yesterday) is now trading at a PE of 13.8x its FY2013 EPS of 47 sen. If exceptional gain (such as the one-off gain from the disposal of the Gumusut-Kakap Semi-Floating Production System of unknown quantum), the PE would be higher. Would that be compensated by better tanker shipping rates? We will wait & see.

Technical Outlook

Last week, MISC broke above its strong horizontal resistance at RM5.80. Its immediate resistance could come from the line connecting the highs for the past two years (AB) at RM6.45-6.50. Beyond that, the resistance would at the horizontal line at RM6.90-7.00. Thus, its short-term upside is limited.


Chart 1: MISC's weekly chart as at Feb 13, 2014 (Source: Tradesignum)

Conclusion

Based on improved financial performance, better outlook for tanker shipping rates & positive technical outlook (albeit short-term road blocks ahead), MISC remains a good stock for a recovery play.

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, MISC.