Johotin: Earnings Stayed Strong

Results Update

For QE31/12/2018, Johotin's net profit rose 21% q-o-q or 40-fold y-o-y to RM15 million while revenue rose 26% q-o-q or 35% y-o-y to RM157 million. Johotin's revenue and PBT rose y-o-y due to better performance by both tin manufacturing and F&B segments:

1) Revenue for tin manufacturing segment increased by RM6.04 million from RM27.26 million to RM33.30 million mainly due to higher sales in the edible oil industry and the printing of tinplates services. This led to a return to profitability, with report profit before tax of RM3.13 million as compared to a loss before tax of RM0.34 million in the preceding year corresponding quarter.
2) Revenue for F&B segment increased by RM34.52 million from RM89.33 million to RM123.85 million mainly due to higher sales from dairy products. The profit before tax increased by RM12.18 million from RM3.96 million to RM16.14 million, mainly due to higher sales and lower marketing and distribution expenses.

Table: Johotin's last 8 quarterly results


Graph: Johotin's last 36 quarterly results 

Financial Position

As at 31/12/2018, Johotin's financial position is deemed satisfactory with current ratio at 2.5 times and gearing ratio at 0.4 time.

Valuation

Johotin (closed at RM1.36 yesterday) is now trading at a trailing PE of 10.8 times (based on last 4 quarters' EPS of 12.58 sen). At this PER, Johotin is deemed fairly attractive.

Technical Outlook

Johotin continues with its long-term uptrend after it broke above the intermediate downtrend line at RM0.95 in November last year. Its sharp rally may send the share price to the next resistance at RM1.50 soon.


Chart: Johotin's weekly chart as at Feb 27, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on improved financial performance and healthy financial position, 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.