Pohuat: Uptrend to continue

Results Update

On Dec 24, Pohuat announced a good set of results for 4Q14. A comparison between FY14 & FY13 results shows that revenue grew by 5% to RM377 million while net profit increased by 42% to RM11 million. The improvement in bottom-line is attributable to higher net profit margin of 6.3% vs. 4.7% previously. This is partly due to higher production of furniture by low-cost subsidiaries in Vietnam as well as favorable forex movement.


Table 1: Pohuat's last 8 quarterly results


Chart 1: Pohuat's last 32 quarterly results

10-quarter P&L and Cash Flow

From the diagram below, we can see that Operating Cash Flow has been very healthy for the past 10 quarters.


Diagram 1: 10-quarter P&L & Cash Flow (Powered by Shareinvestor.com)

10-year P&L and 6-year Cash Flow

From the diagram below, we can see the improved profit margin as well as the strong Operating Cash Flow in the past 3 years.

 
Diagram 2: 10-year P&L & 6-year Cash Flow (Powered by Shareinvestor.com)

Fundamental Snapshot

Using the information available in Shareinvestor.com, we can see the following:
1. Improving liquidity & gearing position
2. Improving management efficiency
3. Lowering of PE ratio & increasing DY
4. Rising profit marginal albeit erratic revenue trend


Diagram 3: Fundamental Snapshot (Powered by Shareinvestor.com)

Technical Outlook

Last week, Pohuat broke above its symmetrical triangle at RM1.40 - a continuation of its prior uptrend. After a shoot pause at that level for the past 3 days, the stock is again marching higher. (see Chart 1). At the time of writing,m the stock was trading at RM1.55.


Chart 2: Pohuat's weekly chart as at Jan 2, 2015 (Source: ShareInvestor.com)

From Chart 2, we can see that the next resistance will be at RM1.80.


Chart 3: Pohuat's monthly chart as at Jan 2, 2015 (Source: ShareInvestor.com)

Conclusion

Based on good financial performance & position, attractive valuation & positive technical outlook, Pohuat could be a good stock for medium-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, Pohuat.