DUFU: Earnings Soared

Result Update

For QE30/9/2018, Dufu's net profit rose 64% q-o-q or 201% y-o-y to RM19 million while revenue rose 14% q-o-q or 54% y-o-y to RM67 million. Revenue rose strongly q-o-q due to the continued strong demand in the HDD segment, economies of scale and together with the favorable USD exchange rates against MYR also attributed to the increase in profit before tax.


Table: Dufu's last 8 quarterly result


Graph: Dufu's last 21 quarterly result

Financial Position

Dufu's financial position as at 30/9/2018 is deemed healthy. Its current ratio and gearing ratio stood at 3.3 times and 0.3 times respectively.

Valuation

Dufu (closed at RM3.01 last Friday) is now trading at a trailing PER of 11.4x (based on last 4 quarters' EPS of 26.5 sen). At this PER, Dufu is deemed fairly attractive.

Technical Outlook

Dufu closed at a new all-time high of RM3.01 last Friday. This surpassed the previous closing high of RM2.81 on October 5. Since it is trading in all-time high territory, Dufu may go even higher in the next few weeks. On weakness, it may find support at RM3.00 & RM2.80. A break below RM2.80-2.81 could be a warning that the uptrend will be ending. We watch out for that.


Chart 1: Dufu's daily chart as at Nov 9, 2018 (Source: Malaysiastock.biz)


Chart 2: Dufu's monthly chart as at Nov 9, 2018 (Source: Malaysiastock.biz)

Conclusion

Based on good financial performance, healthy financial position and fairly attractive valuation, Dufu 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.