Wednesday, April 29, 2015

MPI: Bottom-line jumped

Result Update

For QE31/13/2015, MPI's net profit jumped 25% q-o-q or 188% y-o-y to RM30million. PBT increased q-o-q due to higher revenue from the smartphone sector, strengthening of USD via-a-vis the MYR and lower material costs. Revenue increased q-o-q from RM338.3 million to RM351.3 million while revenue mix shifted by 3 ppt from Asia to USA & Europe by 1 ppt & 2 ppt, respectively.


Table: MPI's last 8 quarterly results


Chart 1: MPI's last 33 quarterly results

Valuation

MPI (closed at RM6.55 yesterday) is now trading at a trailing PER of 15 times (based on last 4 quarters' EPS of 44 sen). At this PE multiple, MPI is deemed fairly valued.

Technical Outlook

From Chart 3, we can see that MPI has broken above the long-term downtrend line at RM4.50 last year.


Chart 2: MPI's monthly chart as at Apr 29, 2015 (Source: ShareInvestor.com)

From the daily chart (Chart 3), MPI has broken its steep uptrend line, SS at RM7.00 last Thursday. While it managed to rebound from the horizontal line at RM6.50, it is unlikely that the stock can climb back above the uptrend line. The best that we can hope for is a consolidation around the price level of RM6.00-7.00.
  

Chart 2: MPI's daily chart as at Apr 29, 2015 (Source: ShareInvestor.com)

Conclusion

Despite the negative technical outlook, MPI is a good stock for medium-term investment based on the good financial performance and reasonable valuation.

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, MPI.

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