For QE30/6/2015, Kianjoo's net profit increased by 25% q-o-q or 28% y-o-y to RM35 million while revenue increased by 13% q-o-q or 18% y-o-y to RM392 million. The sequential rise in net profit was attributable to improved performance by all 3 divisions: can, carton & contract oackaging.
Table 1: Kianjoo's last 8 quarterly results
Table 2: Kianjoo's segmental results for 2Q2015 vs. 1Q2015
Chart 1: Kianjoo's last 35 quarterly results
Valuation
Kianjoo (closed at RM2.98 on Friday) is now trading at a PE of 9.6 times (based on last 4 quarters' EPS of 31 sen). At this multiple, Kianjoo is deemed attractively valued.
Outstanding Privatization Proposal
In 2013, Aspire Insight- a 60:40 JV between Kianjoo's former COO, Chee Kay Leong & EPF) made an offer to privatize Kianjoo at a price of RM3.30 per share. This offer faced legal challenges from substantial shareholders, such as Anthony See, which had since been resolved.
The offer made by Aspire Insight was based on FY2013 PER of 12.4 times & 1.4 times NTA. If the offeror wishes to secure an easier acceptance, it might want to revise its offer price after taking into consideration the improved financial performance of Kianjoo in Fy2014 & Fy2015. If so, the revised price could be RM3.80-3.84.
Technical Outlook
Kianjoo is in an "uptrend" line with support at RM2.90-3.00.
Chart 2: Kianjoo's monthly chart as at Aug 28, 2015 (Source: ShareInvestor.com)
Conclusion
Based on good financial performance, attractive valuation & positive technical outlook, Kianjoo is a good stock to consider for long-term investment. If Aspire Insight carries out its offer at the original price of RM3.30, you will get a decent return of 10% for a month holding period of 4-6 months.
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, Kianjoo.
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