Cypark: Top-line & bottom-line improved

Result Update

For QE30/4/2015, Cypark's net profit dropped 70% q-o-q or 7% y-o-y to RM14.5 million while revenue increased by 22% q-o-q or 6% y-o-y to RM73 million. Revenue increased q-o-q mainly contributed by the increase in sale of renewable energy due to better weather and the commencement of the Phase 2 works of the environmental engineering project. Pre-tax profit also increased by 66% q-o-q due to higher revenue generated and savings achieved in finance costs in current quarter as compared to the immediate preceding quarter.


 Table: Cypark's last 8 quarterly results


Chart 1: Cypark's last 20 quarterly results

Financial Position

Cypark's financial position has improved with continuous capital raising exercise (here). This has increased the number of shares outstanding to 100.7 million from 90.3 million a year ago. The result of this exercise is that the gearing ratio dropped 1.1 times to 0.9 time. Current ratioimproved marginally to 1.1 times.

Valuation

Cypark (closed at RM1.69 yesterday) is now trading at a PE of 7.8 times (based on last 4 quarters' EPS of 22 sen). At this multiple, Cypark is deemed attractively valued.

Technical Outlook

Cypark is trapped within a large triangle formation. A few weeks ago, it broke to the downside of the triangle (below RM1.70), which is a bearish development. However, it has since climbed back within the triangle. Until it has broken out of this triangle, the stock will likely trade between RM1.70 & RM3.00.


Chart 2: Cypark's weekly chart as at June 30, 2015 (Source: ShareInvestor.com)

Conclusion

Despite the good financial performance & attractive valuation, Cypark is still rated a 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, Cypark.