Padini: Steady Earnings is Enough!

Result Update

In QE31/12/2018, Padini's net profit rose 196% q-o-q or 6.5% y-o-y to RM53 million while revenue rose 40% q-o-q or 0.5% y-o-y to RM462 million. Revenues and profit before taxation for this quarter rose sharply due to Christmas season, year-end school holidays and the nationwide 5 days special sales promotion held during the current quarter under review.


Table: Padini's 8 quarterly results


Graph: Padini's P&L  for last 26 quarterly results

Financial Position

Padini's financial position is deemed healthy as at 31/12/2018 with current ratio at 2.9x and gearing ratio at 0.45x.

Valuation

Padini (closed at RM3.51 yesterday) is now trading at a trailing PER of 13.5x (based on last 4 quarters' EPS of 26 sen). At this PER, Padini is deemed fairly attractive.

Technical Outlook

Padini dropped sharply after its reported its poor result for QE30/9/2018. It has found support at the horizontal line at RM3.30. Its resistance levels are at RM3.70 and RM3.90.

Chart 1: Padini's weekly chart as at Feb 27, 2019 (Source: Malaysiastock.biz)


Chart 2: Padini's daily chart as at Feb 27, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on better financial performance, good financial position and fairly attractive valuation, Padini is still a good stock to buy 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.