Result Update
For QE30/6/2019, F&N's net profit rose 10% q-o-q and y-o-y to RM115 million on the back of a 4%-increase in revenue by q-o-q and y-o-y to RM1.07 billion. Both F&B Malaysia & F&B Thailand revenue improved by 5.5% to RM571.5 million and by 2.1% (0.3% in local currency) to RM493.9 million, respectively. F&B Malaysia rose mainly due to higher Hari Raya festive sales while F&B Thailand revenue increased- driven by higher export revenue.
F&B Malaysia operating profit improved by 87.2% to RM52.7 million from higher revenue, favourable input and packaging material costs and timing of marketing spend for the festive season. However, F&B Thailand operating profit declined by 3.7% (3.9% in local currency) to RM99.1 million due to net unfavourable input and packaging material costs and higher operational expenses in the current quarter.
Table: F&N's last 8 quarterly results
Graph: F&N's last 51 quarterly results
Financial Position
As at 30/6/2019, F&N's financial position is deemed healthy with current ratio at 2.13 times and gearing ratio at 0.39 time.
Valuation
F&N (closed at RM33.90 yesterday) is now trading at a PER of 29 times (based on last 4 quarters' EPS of 115.5 sen). At this PER, F&N is deemed fully valued.
Technical Outlook
F&N is in an uptrend line, with support at RM33.00.
Chart 1: F&N's daily chart as at Aug 6, 2019 (Source: Malaysiastock.biz)
Chart 2: F&N's monthly chart as at Aug 6, 2019 (Source: Malaysiastock.biz)
Based on improved financial performance and healthy financial position, I rate F&N as a HOLD. Upside is limited as it is trading at a fairly valuation.
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.
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