DLady: Earnings Dropped Sharply

Result Update

For QE30/6/2019, DLady's net profit dropped 49% q-o-q or 44% y-o-y to RM17 million while its revenue dropped 8% q-o-q or 4% y-o-y to RM244 million. PBT dropped 42% q-o-q due to lower revenue, category product mix changes, coupled with strategic pricing, increase in raw material prices, negative forex changes and investment in advertising and promotional spend.


Table: DLady's last 8 quarterly results


Chart: DLady's last 45 quarterly results

Valuation

DLady (closed at RM63.90 yesterday) is now trading at a PE of 236 times (based on last 4 quarters' EPS of 181 sen). At this PER, DLady is deemed fully valued.

Technical Outlook

DLady is in a long-term uptrend line (SS), with support at RM63.00. This uptrend line will be severely tested today. A breakdown of the uptrend line would easily send the share prices to RM60.00.


Chart: DLady's monthly chart as at Aug 27, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on weaker financial performance and fully valued proposition, the possibility of a reversal in the price uptrend must not be discounted. I think it is a good idea to take profit on DLady.

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.