CEPAT: Too Slow For Comfort

Result Update

For QE30/6/2017, Cepat's net profit increased by 56% q-o-q or 91% y-o-y to RM9.7 million while turnover rose 19% q-o-q or 37% y-o-y to RM70 million. Profits rose q-o-q due mainly to an increase in FFB production and export of electricity by 27% and 21% respectively while the oil mill also contributed by giving a higher milling margin. CPO and PK selling price decreased by 14% and 39% respectively.

 

Table: Cepat's last 8 quarterly results

Graph: Cepat's last 43 quarterly results

Valuation

Cepat (at RM0.84 yesterday) is trading at a PE of 8 times (based on adjusted last 4 quarters' EPS of 10.48 sen) as well as trading at only 0.5x its book value (based on NTA of RM1.57 per share as at 30/6/2017).At these multiples, Cepat is deemed fairly attractive.

Technical Outlook

Cepat is still in an intermediate downtrend line. If it can break above this downtrend line at RM0.94, Cepat may begin its next upleg.

Chart: Cepat's monthy chart as at November 16, 2016 (Source: Malaysiastock.biz)

Conclusion

Based on improving financial performance & attractive valuation, Cepat could be 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.