Johotin: Profits Roared Back

Results Update

For QE30/9/2018, Johotin's net profit jumped 265% q-o-q or 56% y-o-y to RM12.6 million while revenue was mixed- up 7.7% q-o-q but down 6.4% y-o-y to RM124 million. Its PBT rose y-o-y mainly due to:

1) Higher PBT for the F&B Industry, which increased by RM7.69 million from RM4.95 million to RM12.64 million), mainly due to increase sales in higher margin products mix and no allowance for doubtful debts in the current quarter under review as compared to RM3.59 million in the preceding year corresponding quarter; and

2) Higher PBT for the Tin Manufacturing Industry which increased by RM0.28 million from RM3.80 million in the preceding year corresponding quarter to RM4.08 million as a result of higher sales in the edible oil industry, paint industry and the printing of tin-plate services.

Table: Johotin's last 8 quarterly results

From the graph below, you can see that Johotin's quarterly PBT is now at an all-time high. This may be the start of a period of higher profit. The cause of the higher profit is the weakening of our MYR.


Graph: Johotin's last 36 quarterly results 

Valuation

Johotin (closed at RM0.91 yesterday) is now trading at a trailing PE of 11.4 times (based on last 4 quarters' EPS of 8 sen). At this PER, Johotin is deemed fairly attractive.

Technical Outlook

Johotin peaked at RM1.70 in May 2017. It has dropped nearly to its long-term uptrend line. With the good result, the share price will likely rebound. Its immediate resistance is at RM0.95-1.00. Its immediate support is at RM0.85-0.90.


Chart 1: Johotin's weekly chart as at Nov 28, 2018  (Source: Malaysiastock.biz)


Chart 2: Johotin's weekly chart as at Nov 28, 2018  (Source: Malaysiastock.biz)

Conclusion

Based on improved financial performance, fairly attractive valuation and positive technical outlook, Johotin 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.