AJI: New High for Quarterly Recurring Pre-tax Profit!

Result Update

In QE31/12/2018, Aji's net profit rose 16% q-o-q or 5% y-o-y to RM18.1 million while revenue was mixed- down 2% q-o-q but up 5% y-o-y to RM115 million. Revenue dropped q-o-q due to higher sale volume in the preceding quarter as a result of the tax holiday prior to the implementation of Sales
and Service Tax on 1 September 2018. However, the operating profit in the current quarter increased to RM20.1 million from RM17.5 million in the immediate preceding quarter mainly contributed by lower purchase cost of a key raw material and advertising and sales promotion expenses in the current quarter.


Table: AJI's last 8 quarterly results

Below, I tabulated the financial performance & dividend payment as reported as well as adjusted for extraordinary gain & special dividend, as the case maybe. In QE31/12/2018, AJI's recurring PBT made an all-time high! (Note: AJI reported a pre-tax profit of RM161 million in QE31/3/2017 which includes an extraordinary gain of RM145 million from the disposal of a piece of land.)

Graph: AJI's last 53 quarterly results

Valuation

AJI (closed at RM18.62 yesterday) is trading at a trailing PER of 19x (based on adjusted 4 quarters' EPS of 98 sen). At this PE, AJI is deemed fairly attractive.

Technical Outlook

AJI has been hovering at the horizontal line at RM18.00 for the past 6 months. Its immediate resistance is at the psychological RM20.00 mark and thereafter at the line connecting its high for the past 18 months (AB) at RM22.30.


Chart: AJI's weekly chart as at Feb 27, 2018 (Source: Malaysiastock.biz)

Conclusion

Based on satisfactory financial performance and attractive valuation, AJI 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.