Hupseng: Earnings Didn't Disappoint In Seasonally Strong 4Q

Result Update

For QE31/12/2016, Hupseng's net profit rose by 55% q-o-q to RM15.4 million while revenue increased by 28% q-o-q to RM83 million. Profit before tax rose q-o-q due to significant sales volume recorded in the domestic market. Compared to the corresponding quarter last year, net profit was practically unchanged while revenue rose 3%.

  
Table: Hupseng's last 8 quarters result


Graph: Hupseng's last 38 quarters' P&L  

Valuation

Hupseng (closed at RM1.18 yesterday) is now trading at a PER of 19 times (based on last 4 quarters' EPS of 6.17 sen). Hupseng has cash balances of RM105.7 million as at 31/12/2016. This translates to cash per share of RM0.13. If the cash in hand is deducted from the share price, the PER would be lowered to 17 times. At this PER, Hupseng is deemed fairly valued.

Technical Outlook

Hupseng nearly tested its long-term uptrend line support at RM1.15.
 

Chart: Hupseng's weekly chart as at Feb 14, 2017 (Source: MalaysiaStock.Biz)

Conclusion

Based on good financial performance, healthy financial position & positive technical outlook, Hupseng is a good stock for long-term investment.

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.