3A: Testing Its Uptrend Line

Result Update

For QE30/6/2017, 3A's net profit dropped 11% q-o-q but rose marginally by 0.4% y-o-y to RM9.2 million while revenue dropped 0.8% q-o-q but rose by 5.6% y-o-y to RM102 million. Revenue dropped q-o-q due to lower sales. PBT dropped q-o-q due to forex loss this quarter and lower profit margins. (Note: The last quarterly result was announced on August 17, 2017.)


Table: 3A's last 8 quarters' P&L


Graph: 3A's last 16 quarters' P&L

Financial Position

As at 30/6/2017, 3A's financial position is deemed satisfactory with current ratio at 3.76x and gearing ratio at 0.24x.

Valuation

3A (closed at RM1.11 last Friday) is now trading at a PER of 13x (based on last 4 quarters' EPS of 8.66 sen). Its PEG ratio is 0.3x (based on last 3 years' earning CAGR of 45%). As such, 3A is deemed fairly attractive for a growth stock.

Technical Outlook

Over the past 2 years, 3A has risen gradual from RM0.70 in September 2015 to a high of RM1.45 in June 2016. The current correction has brought the share price down to the uptrend line. The support from the uptrend line is at RM1.10.

Chart: 3A's daily chart as at Oct 6, 2017 (Source: Malaysiastock.biz)

Conclusion

Based on good financial performance & financial position, attractive valuation and mildly bullish technical outlook, 3A remains a very good stock to consider 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.