Astino: Earnings Improved Sequentially

Result Update

In QE30/4/2019, Astino's net profit rose 35% q-o-q but dropped 2% y-o-y to RM8.6 million while its revenue dropped 6% q-o-q but rose 4% y-o-y to RM141 million. Revenue dropped q-o-q primarily due to decrease in local demand from RM130.1 million in preceding quarter to this quarter RM120.8 million. The Group’s profit before taxation rose to RM10.9million from RM9.6 million recorded in the preceding quarter- mainly due to decrease of allowance for diminution in value of inventories.


Table: Astino's last 8 quarters' results


Graph: Astino's last 48 quarters' results

Financial Position

Astino's financial position as at 30/4/2019 is deemed healthy with current ratio at 2.3x and gearing ratio at 0.4x.

Valuation

Astino (closed at RM0.685 last Friday) is now trading at a trailing PER of 9.1x (based on last 4 quarters' EPS of 7.55 sen). At this PER, Astino is deemed fairly valued.

Technical Outlook

Astino is still in a long-term uptrend (see Chart 1). It peaked at RM1.26 in July 2017 and thereafter the share prices have been in a slow decline due to poorer financial performance. An upswing can only begin if Astino can surpass its intermediate downtrend line, RR at RM0.70 (see Chart 2).


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


Chart 2: Astino's daily chart as at Jun 28, 2018 (Source: Malaysiastock.biz)

Conclusion

Based on improved financial performance, satisfactory financial position, fair valuation and mildly bullish technical outlook, Astino could be 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.