Harbour: May have a bullish breakout

Result Update

For QE31/12/2014, Harbour's net profit rose 15% q-o-q or 99% y-o-y to RM13 million while revenue was mixed - down 6% q-o-q but rose 19% y-o-y to RM128 million.


Table 1: Harbour's last 8 quarterly results

Bottom-line has improved y-o-y due to the logistics services and equipment rental division reporting higher profit before tax of RM12.866 million (cf RM6.542 million last year) which offset a slump in PBT from the engineering works division - from RM2.887 million to RM0.916 million - due to a sharp drop in revenue from RM24.829 million to RM11.817 million. The 1H2015 & 1H2014 segmental results are tabulated below:


Table 2: Harbour's segmental results for 1H2015 & 1H2014

Harbour's top-line, bottom-line & profit margin have grown steadily over the past 5 years.


Chart 1: Harbour's last 30 quarterly results

(Note: The next quarterly result for QE31/3/2015 should be out in mid-May.)  

Valuation

Harbour (closed at RM1.79 yesterday) is trading at a PE of 7.8 times (based on my projected EPS of 23 sen). At this multiple, Harbour is deemed fairly attractive. It could command a PE of 10 times- giving the stock an upside potential of 25%.

Technical Outlook

Harbour has broken above its downtrend line, RR at RM1.70. With this breakout, Harbour may move sideways or it may begin to rise.

 
Chart 2: Harbour's weekly chart as at April 24, 2015_3.00pm (Source: Share Investors) 

Conclusion

Based on good financial performance, reasonable valuation & mildly positive technical outlook, Harbour is still 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, Harbour.