For QE30/6/2015, SEG's net profit dropped 26% q-o-q but rose 18% y-o-y to RM8.0 million while revenue was similarly dropped 3% q-o-q but rose 5% y-o-y to RM65 million. Lower sequential revenue & net profit is in line with the general trend where the first quarter results are normally stronger that the second quarter. However, it is encouraging to see that the performance is better than last year.
Table: SEG's last 8 quarterly results
Chart 1: SEG's last 29 quarterly results
Possible Error in the Financial Accounting Statements (FAS)
The company again reported that it will be declaring a dividend of 7%. I believe that it is an error, because the same quantum of dividend was declared last quarter and paid out in this quarter. The accountant may have made a mistake between a proposed dividend and a payment of dividend. See the Note to the latest FAS and the announcement for the dividend that paid out.
Diagram 1: Note on Dividend in FAS for QE30/6/2015
Diagram 2: Announcement on Dividend Entitlement for June 2015
Valuation
SEG (closed at RM1.42 yesterday) is now trading at a PER of 35 times (based on last 4 quarters' EPS of 4.2 sen). At this PER, SEG is deemed expensive. However, its DY is fairly attractive at 10% (assuming a dividend payout of 14 sen).
Technical Outlook
SEG has found a support at RM1.40. It is trying to form a base from which the stock may stage its recovery in the future.
Chart 2: SEG's monthy chart as at July 28, 2015 (Source: ShareInvestor.com)
Conclusion
Based on good financial performance and decent dividend yield, SEG could be a good income stock. Due to the possible error on the proposed dividend, the share price may move higher. Do not chase this move.
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, SEG.
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