QL: Earning continued to trend higher

Results Update

For QE30/9/2015, QL's net profit increased by 35% q-o-q or 15% y-o-y to RM55 million while revenue increased by 5% q-o-q & y-o-y to RM690 million.


Table 1: QL's last 8 quarterly results

PBT increased q-o-q due to higher PBT & revenue from both the Marine Products Manufacturing & Integrated Livestock Farming divisions. The increased PBT from these divisions had more than offset the drop in PBT in the Palm Oil Activities division.


Table 2: QL's Segmental Results

It is good to note that the profit margin has inched up in the past 5 quarters. This, plus the rising revenue, would lead to higher bottom-line going forward.


Chart 1: QL's last 30 quarterly results

Valuation

QL (closed at RM4.20 last Friday) is now trading at a PE of 26 times (based on last 4 quarters' EPS of 15.90 sen). Based on the PE of 26 times & last year's earning growth of 12%, QL's PEG ratio stood at 2.2 times. This means that QL is overvalued.

Technical Outlook

QL continued its uptrend line with support at RM4.00. Immediate resistance is the recent high of RM4.20.


Chart 2: QL's weekly chart as at Nov 20, 2015(Source: ShareInvestor.com)

Conclusion

Based on satisfactory financial performance & positive technical outlook, QL is still a good stock for long-term investment. However, its upside is limited as it is fairly valued with signs of technical weakness emerging. 

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, QL.