Perstim: Mixed Results

Results Update

For QE30/6/2015, Pertima's net profit dropped 47% q-o-q but rose 63% y-o-y to RM9.3 million while revenue was similarly mixed- dropped 8.5% q-o-q but rose 6.4% y-o-y to RM158 million. The Group’s lower revenue was due to lower selling price coupled with lower sales volume. The Group's profits declined due to lower profit margin coupled with lower sales volume.


Table: Perstim's last 8 quarterly P&L


Chart 1: Perstim's last 44 quarters' P&L

Tin Prices Trend

From the tin price charts below, we can see that tin prices are at its 15-year low. In the past 1 year, tin prices declined from US24000/tonne in April 2014 to USD14000/tonne in June this year. Last 2 weeks, tin prices may have broken above its accelerated downtrend line, R2-R3 at USD14800/tonne. An uptrend in tin prices would lead to higher selling prices, which will translate to higher top-line and bottom-line.


Chart 2: Tin's monthy chart as at July 28, 2015 (Source: LME)


Chart 3: Tin's weekly chart as at July 28, 2015 (Source: LME)

Valuation

Perstim (closed at RM4.70 yesterday) is now trading at a trailing PER of 10 times (based on last 4 quarters' EPS of 47 sen). With a dividend payout of 35 sen, Perstim's DY is at an attractive 7.4%.

Technical Outlook

Perstim is in a long-term uptrend line with support at RM3.80. Its immediate resistance is at RM5.00-5.20.


Chart 4: Perstim's monthly chart as at July 28, 2015 (Source: ShareInvestor.com)  

Conclusion

Based on attractive valuation & positive technical outlook, Perstim is a good income 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, Perstim.