Mediac: Top-line & Bottom-line weakened further

Results Update

For QE31/12/2014, Mediac's net profit rose 13% q-o-q but dropped 24% y-o-y to RM37 million while revenue dropped 8% q-o-q or 10% y-o-y to RM368 million.


Table 1: Mediac's last 8 quarterly results

The drop in profit is attributable to overall drop in revenue. The revenue drop is especially sharp for Malaysia and other S.E.A. countries (from RM76 million to RM67 million) and this had resulted in a PBT drop from RM18 million to RM12 million.


Table 2: Mediac's Quarterly Segmental Results

From the chart below, we can see that revenue has been flattish for the past 4 years while profit margin has been sliding.


Chart 1: Mediac's last 28 quarterly results 

Valuation

Mediac (closed at RM0.715 on Friday) is now trading at a trailing PE of 9.6 times (based on last 4 quarters' EPS of 7.4 sen). It paid out a dividend of 4.6 sen, which gives a respectable DY of 6.5%. Based on these, Mediac is deemed fairly attractive.

Technical Outlook

Mediac broke its uptrend line at RM1.10 in 2013. It is now resting on its horizontal support at RM0.70.


Chart 2: Mediac's monthly chart as at Feb 27, 2015  (Source: Share Investor.com)

Conclusion

Despite poorer financial performance and negative technical outlook, Mediac maybe a good stock for long-term investment based on its decent DY.

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, Mediac.