For QE31/3/2019, CMSB's net profit dropped 29% q-o-q but rose 5% y-o-y to RM41 million while revenue was mixed, down 16% q-o-q but up 18% y-o-y to RM418 million. All Divisions except the Strategic Investment Division reported higher revenue in PE2019 compared to PE2018. The Strategic Investment Division reported higher losses in PE2019 due to higher losses from the education subsidiary and losses from Malaysian Phosphate Additives (S) Sdn. Bhd. (MPAS). Previously, MPAS was classified under associates.
However, all Divisions except the Construction & Road Maintenance Divisions reported higher profits in PE2019 due to higher revenue and gross profit margin. The higher gross profit margin was attributable to a land sale by the Property Development Division. However, this has been partially negated by lower share of results of associates and joint ventures.
Table: CMSB's last 8 quarters' P&L
Graph: CMSB's last 23 quarters' P&L
CMSB (closed at RM3.30 yesterday) has a PER multiple of 13 times (based the last 4 quarters' EPS of 24.96 sen). At this PER, CMSB is deemed fairly attractive.
CMSB is moving in a downward channel, with resistance at RM3.60-3.70. Due to the presence of a rising intermediate uptrend line (within the downward channel), CMSB will have good support at RM3.00.
Chart: CMSB's weekly chart as at May 15, 2019(Source: Malaysiastock.biz)
Based on good financial performance, exciting prospect, fairly attractive valuation and positive technical outlook, CMSB could be a good stock for long-term investment.
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