NTPM: Earnings Plummeted

Result Update

For QE310/4/20187, NTPM's net profit dropped 88% q-o-q or 87% y-o-y to RM1.2 million while revenue was mixed - dropped by 9%  q-o-q but rose 3% y-o-y - to RM165 million. Revenue increased y-o-y mainly due to the increase in sales of Tissue and Personal Care Products, especially Personal Care products. The decrease in profit before taxation was mainly due to the higher raw material cost.

 
Table: NTPM's last 8 quarterly results


Graph: NTPM's last 51 quarterly results

Valuation

NTPM (closed at RM0.585 yesterday) is now trading  at a PE of 22 times (based on last 4 quarters' EPS of 2.7 sen). At this PER, NTPM is deemed overvalued.

Technical Outlook

NTPM broke its long-term uptrend line, with support at RM0.60 in January this year. Recent rally brought the share price above this uptrend line in May. However it has since dropped below the uptrend line again,


Chart 1: NTPM's monthly chart as at Jun 25, 2018 (Source: Shareinvestor.com)

In addition, we can see that the recent rally failed to surpass its immediate downtrend line, RR at RM0.65.


Chart 2: NTPM's weekly chart as at Jun 25, 2018 (Source: Shareinvestor.com)

Conclusion

Based on poor financial performance, demanding valuation and bearish technical outlook, I downgrading NTPM from a HOLD to a SELL.

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.