Astino: Earnings dropped q-o-q

Result Update

In QE31/7/2019, Astino's net profit dropped 35% q-o-q but rose 131% y-o-y to RM5.5 million while its revenue rose 8% q-o-q or 19% y-o-y to RM153 million. Revenue increased q-o-q primarily due to increase in local market demand. The Group registered a profit before taxation of RM7.3 million, a decrease of RM3.6 million as compared to QE3/4/2019, which was recorded at RM10.9 million, mainly due to allowance for diminution in value of inventories was RM5.0 million higher than the immediate preceding quarter.


Table: Astino's last 8 quarters' results


Graph: Astino's last 49 quarters' results

Financial Position

Astino's financial position as at 31/7/2019 is deemed healthy with current ratio at 2.1x and gearing ratio at 0.4x.

Valuation

Astino (closed at RM0.71 last Friday) is now trading at a trailing PER of 8.2x (based on last 4 quarters' EPS of 8.7 sen). At this PER, Astino is deemed fairly valued.

Technical Outlook

Astino has broken above its downtrend line at RM0.65 in early September.


Chart: Astino's weekly chart as at Sep 27, 2018 (Source: Malaysiastock.biz)

Conclusion

Despite the weaker financial performance, Astino could be a good stock for long-term investment based on satisfactory financial position and fair valuation. The stock has a mildly bullish technical outlook after it broke above its downtrend line.

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.