For QE31/7/2014, KESM's pre-tax profit increased by 391% q-o-q or 61% y-o-y to RM6.7 million while revenue increased by 16% q-o-q or 7% y-o-y to RM69 million. Bottom-line increased due to higher revenue, which is in turn due to higher demand for burn-in and testing services.
Table: KESM's last 8 quarterly results
Chart 1: KESM's last 39 quarterly results
Valuation
KESM(closed at RM2.85 yesterday) is now trading at a PE of 11.3 times (based on last 4 quarters' EPS of 25.3 sen). At this PE, KESM is deemed fairly valued.
Technical Outlook
KESM's share price is in an uptrend line, well supported by the 20-week EMA line at RM2.75-2.80 (see Chart 2). The sharp rise in KESM's share price in the past 8 months followed the breakout of the long-term downtrend line at RM2.00 in early 2014 (see Chart 3).
Chart 2: KESM's weekly chart as at Sept 19, 2014 (Source: Tradesignum)
Chart 2: KESM's monthly chart as at Sept 19, 2014 (Source: Equities Tracker)
Conclusion
Based on good financial performance, reasonable valuation & positive technical outlook, KESM remains a good stock for long-term investment.
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, KESM.
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