EATECH: Earnings soared

Background

E.A. Technique (M) Berhad (“EATECH”) owns and operates marine ship vessels, floating storage units, liquefied petroleum gas tankers and offshore support vessels. As of December 31, 2014, it operated a total fleet of 31 marine vessels.

EATECH also provides various port marine services, including towage services, mooring services that secures marine vessels and constructed fixtures as well as dockside mooring services. In addition, it is involved in shipbuilding activities and minor fabrication of steel structures primarily for marine vessels, as well as offers engineering and consultancy services.

EATECH is a subsidiary of Sindora Berhad.

 
Recent Results

For QE30/6/2015, EATECH's net profit increased by 106% q-o-q or 564% y-o-y to RM15.2 million while revenue rose 188% q-o-q or 431% y-o-y to RM209 million. EATECH reported higher revenue and PBT due to the Company been awarded EPCIC of  a  Floating  Storage  Offloading (“FSO”) facility for Full Field Development (“FFD”) project, North Malay Basin. The FSO contract is valued at RM690 million and lasting for 20 months (with handover by Aug 22, 2016). 


Table: EATECH's last 8 quarterly results (Source: ShareInvestor.com)
 
 
Chart 1: EATECH's last 8 quarterly results (Source: ShareInvestor.com)

Valuation

EATECH (closed at RM1.14 last Friday) is now trading at a PER of 2.2 times (based on last 4 quarters' EPS of 51 sen).  At this PER, EATECH is deemed very attractive.    

Technical Outlook

EATECH is in an uptrend line, SS. This uptrend picked up in April but the accelerated uptrend (S1-S1) could not sustain. The uptrend downshifted to S1-S2 where it remained until early August. The current selldown caused the share price to break below the uptrend line, S1-S2. With the good set of result, we may see the share price recovers back to the uptrend line, S1-S2.


Chart 2: EATECH's daily chart as at Aug 14, 2015 (Source: ShareInvestor)

Conclusion

Based on good financial performance, attractivevaluation and positive technical outlook, EATECH could be a good stock for a medium-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, EATECH.