Astino: Uptrend May Continue

Result Update

In QE31/10/2017, Astino's net profit rose by 88% q-o-q or 71% y-o-y to RM9.5 million while its revenue rose by 12% q-o-q or 22% y-o-y to RM139 million. Revenue rose q-o-q primarily due to increase in local and oversea market demand.  PBT rose q-o-q mainly due to increase in sales and profit margin.

Astino's financial performance recovered from the sharp q-o-q drop in both revenue & profits in QE31/7/2017. In that quarter, revenue dropped q-o-q due to decrease in local market demand. PBT dropped q-o-q mainly due to allowance for diminution in value of inventories amounted to RM5.2 million and decrease in gross profit margin.

(Note: The results for QE31/10/2017 was announced on Dec 28, 2017.)


Table: Astino's last 8 quarters' results


Graph: Astino's last 42 quarters' results

Financial Position

Astino's financial position as at 31/10/2017 is deemed healthy with current ratio at 3.1x and gearing ratio at 0.3x.

Valuation

Astino (closed at RM1.10 last Friday) is now trading at a trailing PER of 7.9x (based on last 4 quarters' EPS of 14.03 sen). At this PER, Astino is deemed reasonably valued.

Technical Outlook

Astino is in a long-term uptrend. Its recent peak was in July 2017 and thereafter the share price dropped due to poorer financial performance. See the monthly chart below.


Chart 1: Astino's monthly chart as at Jan 26, 2018 (Source: Malaysiastock.biz)

In early January, Astino broke above its intermediate downtrend line, RR at RM1.00-1.02. This may signal the start of its recovery. See the daily chart below.


Chart 2: Astino's daily chart as at Jan 26, 2018 (Source: Malaysiastock.biz)

Conclusion

Based on improved financial performance, reasonable valuation and mildly bullish technical outlook, Astino 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.