Results Update
For QE31/3/2014, Orient's NP dropped 6% q-o-q but rose 27% y-o-y to RM70 million while revenue was down 3% q-o-q but rose 16% y-o-y to RM733 million.
Table: Orient's last 8 quarterly results
Chart 1: Orient's last 34 quarterly results
Valuation
Orient (closed at RM7.80 yesterday) is now trading at a PE of 24 times (based on last 4 quarters' EPS of 33 sen). At this PE, Orient is deemed overvalued.
Technical Outlook
Orient broke above its downtrend line at RM7.70 in April. With this breakout, Orient's downtrend is over and the stock may move either sideways or up. To start the next upleg, Orient needs to surpass the April high of RM8.02. Today, it made an intra-day high of RM8.05. At the time of writing, it is trading at RM8.00.
Chart 3: Orient's weekly chart as at June 5, 2014 (Source: Tradesignum)
Conclusion
Based on slightly better financial performance & mildly positive technical outlook, Orient could be a good stock for a recovery play. If it can break above the RM8.02 mark, the stock could be a trading BUY. Nevertheless, the stock's s upside potential may be limited as it is trading at demanding valuation.
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, Orient.
Dear Alex
ReplyDeleteI wish to ask what is the fair value for Puncak based on sum of part analysis after divestment of its water concession?
Based on sum of part analysis done by stock analysis, Puncak on fully diluted basis, Puncak sum of part value should be at range RM 4.10-5.50, depending on valuation peg on its oil and gas (10x-15x)
But, the sum of part exclude Puncak current cash and properties value. I wonder why all the research analyst did not take into account Puncak existing cash balance in their sum of part analysis !!??
Based on latest q result, Puncak have cash RM 500.7m (net of pledge deposit) and short term investment RM50.4m, translating into another cash RM 1.00/share on fully diluted basis.
In addition, analyst also failed take into account Puncak properties and vacant landbank which will be return by KDEB to Puncak at no cost, its worth another RM 250m based on its net book in annual report, translating into another RM 0.50/share on fully diluted basis.
Can you take off the full page ad?
ReplyDeleteIs very annoying.
Sorry about the comment.
Can you please take off the "full page" ad?
ReplyDeleteit is very annoying for readers.
sorry about the comment.
Hi Alex,
ReplyDeleteYour Blog Archive 2014
I can't help but noticed that for year 2014 your postings have shrunk to 87 up to date as compared to previous years. Does it mean you are not very confident of the market's direction going forward? Or could it be the coming world Cup that constrain your view of the short term direction of the market? on my part I am keeping a weary eye. Care to put up a comment please?
Hi hng,
ReplyDeleteI believe the cash & properties are integral part of the water treatment & distribution businesses which will be disposed off.
I have seen some reports that valued the stock at about RM3.00 while some above RM5.00.
Hi kenny,
ReplyDeleteThe advertisement is arranged by innity. The format will come and go. I am sure it will not continue for too long.
Hi charles leong
ReplyDeleteI am sorry that I have not been blogging much of late. You are partly right that I am not comfortable with the market. But I have also been quite busy.
I am presenting in the Corporate Profile segment on Capital TV twice a week.
In addition, I am the Club President of IEM Toastmasters. Even though I will be retiring in July, I will still be busy as I have been given a new responsibility: to organize the next semi-annual conference ( here ).
All these activities have affected my blogging. However, I make it a point to write whatever that I feel will benefit my readers - be it a stock about to move higher or lower. I hope to comeback swinging in December.