Century: A bullish breakout

Technical Breakout

Century broke above its intermediate downtrend line, RR at RM0.77 yesterday. It may revisit its March 2014 high of RM0.87. If it can surpass that high, it could potentially test the psychological RM1.00 mark.


Chart 1: Century's weekly chart as at April 10, 2015_3.00pm (Source: ShareInvestor)


Chart 2: Century's monthly chart as at April 10, 2015_3.00pm (Source: ShareInvestor)

Recent Results

The latest quarterly results (QE31/12/2014) shows a jump in Century's net profit, albeit a lower revenue. Its NP rose by 232% q-o-q or 70% y-o-y to RM17 million while revenue was down 5% q-o-q or 11% y-o-y to RM66 million. The improvement in its bottom-line was attributed to gain on disposal of property, plant and equipment of RM48.2 million and gain on revaluation of investment property of RM2.5 million. If the gain on the disposal of PPE is excluded, the company would report a net loss of about RM31 million. That's something to think about!!


Table: Century's last 8 quarters' results


Chart 3: Century's last 35 quarters' results

Valuation

Century (closed at RM0.81 at the end of the morning session) is now trading at a PB of 1.1x. If we exclude the one-off gain from disposal of PPE, Century would be a loss-making company. Thus, there is no PER to look at.

Conclusion

Based on the above, Century is not a fundamentally exciting stock to look at. The only reason for this post is the technical breakout. That breakout would make Century a Trading BUY.

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, Century.