GCB: Strong Earning Maintained

Results Update

For QE310/6/2018, GCB's net profit rose 9% q-o-q or 88% y-o-y to RM43 million while revenue was mixed - down 5% q-o-q but up 2% y-o-y - to RM492 million. Revenue increased y-o-y mainly due to increase in sales volume of cocoa products. The profit before tax rose y-o-y mainly due to improved margin.


Table: GCB's last 8 quarterly results


Graph: GCB's last 55 quarterly results

Valuation

GCB (closed at RM2.06 yesterday) is now trading at a trailing PER of 6.9 times (based on last 4 quarters' EPS of 29.9 sen). At this PER, GCB is deemed attractively valued.

Technical Outlook

GCB is likely to test the January high at RM2.20. If it can break above RM2.20, GCB may reach RM3.00-3.50 (depending on the time frame) based on a 1-to-1 extension.


Chart 1: GCB's weekly chart as at Aug 13, 2018(Source: Shareinvestor.com)


Chart 2: GCB's monthly chart as at Aug 13, 2018(Source: Malaysiastock.biz)

Conclusion

Based on good financial performance, attractive valuation & positive technical outlook, GCB is 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.