Thursday, June 25, 2020

Spritzr: Earnings Poised to Rise


Result Update

For QE31/3/2020Spritzer's net profit rose 35% q-o-q or 14% y-o-y to RM8.8 million while revenue rose 6% q-o-q but dropped by 2% y-o-y to RM93 million. The Group revenue rose q-o-q due to  increase sales volume. The Group recorded a profit before tax of RM13.2 million during the current quarter ended 31 March 2020, representing a 61% increase from the RM8.2 million recorded in the immediate preceding quarter ended 31 December 2019 mainly due to increase in sales revenue and decrease in cost of raw materials.


Table: Spritzer's last 8 quarterly results

Spritzr' top-line has been rising steadily for the past 14 years and its bottom-line looks poised to break into new high!


Graph: Spritzer's last 56 quarterly results

Financial Position

As at 31/3/2020, Spritzr's financial position is deemed very healthy with current ratio at 3.3 times and total liabilities to total equity at 0.2 time only.

Valuation

Spritzer (closed at RM2.00 yesterday) is now trading at a PE of 13.0 times (based on last 4 quarters' EPS of 15.39 sen). At this PER, Spritzer is still deemed fairly attractive for a consumer stock. Its dividend yield is on the low side at 2.25%.

Technical Outlook

Spritzr has been moving sideways for the past 4 years, between RM2.00 and RM2.50. In March, Spritzr broke below the RM2.00 support and went as low as RM1.70. It has since recovered back above the RM2.00 mark.


Chart : Spritzer's monthly chart as at Jun 24, 2020  (Source: Malaysiastock.biz)

Conclusion

Based on satisfactory financial performance, healthy financial position and attractive valuation, Spritzer is a good stock to consider 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.

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