NTPM: Earnings Dropped Sharply

Result Update

For QE31/10/2017, NTPM's net profit dropped by 48% q-o-q or 60% y-o-y to RM6.4 million while revenue was mixed - dropped by 4%  q-o-q but rose 3% y-o-y - to RM169 million. Revenue increased y-o-y mainly due to the increase in sales of Tissue and Personal Care Products, especially Tissue segment. The Group’s profit before taxation dropped 54% y-o-y mainly due to the higher raw material cost and labor cost.

 
Table: NTPM's last 8 quarterly results


Graph: NTPM's last 49 quarterly results

Valuation

NTPM (closed at RM0.675 yesterday) is now trading  at a PE of 17 times (based on last 4 quarters' EPS of 3.9 sen). At this PER, NTPM is deemed fully valued.

Technical Outlook

NTPM is in a long-term uptrend line, with support at RM0.68.


Chart 1: NTPM's weekly chart as at Dec 14, 2017 (Source: Malaysiastock.biz)

NTPM is however in an intermediate downtrend line with resistance at RM0.77.


Chart 2: NTPM's chart as at Dec 14, 2017 (Source: Malaysiastock.biz)

Conclusion

Based on poor financial performance & full valuation, I rate NTPM as a HOLD. It is important that the share price remains above the long-term uptrend line at RM0.68.

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.