Huayang: An attractive property stock

Results Update

For QE30/6/2015, Huayang's net profit rose by 1% q-o-q but rose 25% y-o-y to RM30 million while revenue was mixed- dropped by 7% q-o-q but rose by 4% y-o-y to RM143 million. The y-o-y improvement in revenue & PBT (of 24%) were attributed to steady construction progress of all
on-going projects.


Table: Huayang's last 8 quarterly results


Chart 1: Huayang's last 28 quarterly results 

Valuation

Huayang (at RM1.90 yesterday) is trading at a PE of 4.3 times (based on last 4 quarters' EPS of 44 sen). At this PE, Huayang is still deemed fairly attractive.

Technical Outlook

The daily chart shows that Huayang is trending downward in an irregular downward channel, ABCD. As it is very near to the lower line, BD, I expect the share price to be well-supported. In the event of a break below the BD line at RM1.80, the stock would test the strong horizontal support at RM1.75.


 Chart 2: Huayang's daily chart as at Jul 13, 2015 (Source: ShareInvestor.com)

The monthly chart shows that Huayang has broken below its uptrend line, SS. It is now moving sideways, with support at the horizontal line RM1.75 & resistance at the horizontal line RM2.50.


Chart 3: Huayang's monthly chart as at Jul 13, 2015 (Source: ShareInvestor.com)

Conclusion

Despite the mildly negative technical outlook, Huayang is still a good stock for long-term investment based on attractive valuation & satisfactory financial performance. 

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, Huayang.