MKH: Earnings Soared (Updated)

Result Update

For QE30/9/2016, MKH's net profit rose 34% q-o-q or 107% y-o-y to RM50 million while revenue rose 43% q-o-q or 16% y-o-y to RM404 million. Profit before taxation rose y-o-y mainly contributed by the property and construction division from its on-going and new development projects and the turnaround in the plantation division from a loss before tax of RM31.1 million (included unrealized foreign exchange losses of RM17.7 million) in QE30/9/2015 to a profit before tax of RM12.7 million (included unrealized foreign exchange gains of RM7.4 million). PBT improved q-o-q mainly due to

mainly due higher profit contribution from property and construction division.

Table: MKH's last 10 quarterly results


Graph: MKH's last 15 quarterly results

Valuation

MKH (closed at RM2.82 last Friday) is now trading at a trailing PER of 5.8x (based on last 4 quarters' EPS of 48.9 sen). In addition to being very attractively priced at a low PER, MKH has a high growth - with earnings CAGR of 36% in the past 2 years. This gives the stock a PEG ratio of less than 1 time. This makes MKH an exceptional growth stock, trading like a cheap value stock.

(Updated: MKH has announced a dividend of 7 sen which will go ex on December 16. For more, go here)

Technical Outlook 

MKH is in an intermediate uptrend line with support at RM2.70. Immediate resistance will come from the overhead horizontal line at RM2.98-3.00.


Chart: MKH's weekly chart as at Nov 25, 2016 (Source: Chartnexus)

Conclusion

Based on satisfactory financial performance, attractive valuation and positive technical outlook, MKH is rate a STRONG BUY as a growth/value stock.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.