For QE31/3/2017, Dufu's net profit was mixed - dropped 58% q-o-q but rose 38% y-o-y - to RM6 million while revenue was mixed- down 3% q-o-q but up 13% y-o-y - to RM46 million.PBT dropped q-o-q due to the presence in the preceding quarter of gain on dissolution of subsidiary amounting to RM3.71 million; reversal of receivable and inventories amounting to RM1.16 million and RM1.22 million respectively; unrealized forex gain of RM0.5 as compared to unrealized forex loss of RM0.7 in current quarter. Excluding these favorable items, PBT for QE31/12/2016 would be RM12.17 million while for current quarter would be RM8.7 million. It is still a decline of 34% q-o-q. (Dufu's result for QE31/3/2017 was announced on May 24.)
Table: Dufu's last 8 quarterly result
Graph: Dufu's last 15 quarterly result
Valuation
Dufu (closed at RM1.47 last Friday) is now trading at a trailing PER of 8.6x (based on last 4 quarters' EPS of 17.02 sen). At this PER, Dufu is still attractive.
Technical Outlook
Dufu is in an uptrend, supported by the 30-day EMA line at RM1.40.
Chart 1: Dufu's daily chart as at 1un 2, 2017(Source: ShareInvestor)
Dufu's strong rally saw the share price pulling way ahead of its weekly moving average lines. With weaker financial performance, the share price may move sideways to consolidate for a while.
Chart 2: Dufu's weekly chart as at Jun 2, 2017(Source: ShareInvestor)
Conclusion
Despite the attractive valuation & positive technical outlook, I would recommend some profit-taking due to the recent sharp rally as well as some weakness in its financial performance.
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.
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