GCB: Earnings Improved On Increased Sales Volume & Higher Profit Margins

Results Update

For QE31/12/2021, GCB's net profit rose 49% q-o-q or 8% y-o-y to RM51 million while revenue rose 9% q-o-q or 6% y-o-y to RM1.088 billion. Revenue rose y-o-y mainly due to increase in sales volume of cocoa products. Profits rose mainly due to improved margin.


Table: GCB's last 8 quarterly results


Graph: GCB's last 69 quarterly results

Financial Position

As at 31/12/2021, GCB's financial position is deemed fair while current ratio at 1.49 times and gearing ratio at 1.58 times. The high gearing was due to the suppliers' credit and bank borrowings taken to finance high inventory. The increase in inventory is attributable to weaker demand for cocoa butter in Europe and America. Cocoa butter is used in the production of chocolate, which has seen a drop in demand due to the pandemic. 

Valuation

GCB (closed at RM3.05 yesterday) is now trading at a trailing PER of 20 times (based on last 4 quarters' EPS of 15.03sen). At this PER, GCB is deemed fairly valued.

Technical Outlook

Since the start of 2021, GCB has been trading sideways between RM2.60 and RM3.20. Until a breakout is attained, GCB is expected to be range-bound.


Chart : GCB's weekly chart as at Feb 21, 2022 (Source: isaham.my)

Conclusion

Despite the improved financial performance, GCB will likely remain in a dull holding pattern until a technical breakout is attained. 

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. 

GCB: Earnings Continued to Rise

Results Update

For QE30/6/2019, GCB's net profit rose 15% q-o-q or 42% y-o-y to RM61 million while revenue rose 16% q-o-q or 53% y-o-y to RM753 million. Revenue increased y-o-y mainly due to increase in sales volume of cocoa products while profit before tax rose 42% y-o-y mainly due to higher sales volume achieved.


Table: GCB's last 8 quarterly results


Graph: GCB's last 59 quarterly results

Financial Position

As at 30/6/2019, GCB's financial position is deemed fair while current ratio at 1.4 times and gearing ratio at 1.3 times. The high gearing was due to the suppliers' credit taken to finance purchase of raw material.

Valuation

GCB (closed at RM3.53 yesterday) is now trading at a trailing PER of 7.6 times (based on last 4 quarters' EPS of 46.3 sen). At this PER, GCB is deemed fairly attractive.

Technical Outlook

GCB made a temporary top in April at RM4.24. It then dropped back to find support at the horizontal line at RM3.30. The next support will be from the uptrend line, SS at RM3.10.


Chart : GCB's weekly chart as at Aug 19, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on good financial performance, attractive valuation and positive technical outlook, GCB is 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. 

GCB: Strong Earning Maintained

Results Update

For QE310/6/2018, GCB's net profit rose 9% q-o-q or 88% y-o-y to RM43 million while revenue was mixed - down 5% q-o-q but up 2% y-o-y - to RM492 million. Revenue increased y-o-y mainly due to increase in sales volume of cocoa products. The profit before tax rose y-o-y mainly due to improved margin.


Table: GCB's last 8 quarterly results


Graph: GCB's last 55 quarterly results

Valuation

GCB (closed at RM2.06 yesterday) is now trading at a trailing PER of 6.9 times (based on last 4 quarters' EPS of 29.9 sen). At this PER, GCB is deemed attractively valued.

Technical Outlook

GCB is likely to test the January high at RM2.20. If it can break above RM2.20, GCB may reach RM3.00-3.50 (depending on the time frame) based on a 1-to-1 extension.


Chart 1: GCB's weekly chart as at Aug 13, 2018(Source: Shareinvestor.com)


Chart 2: GCB's monthly chart as at Aug 13, 2018(Source: Malaysiastock.biz)

Conclusion

Based on good financial performance, attractive valuation & positive technical outlook, GCB is 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.

GCB: Strong Earnings from Lower Material Costs

Results Update

For QE31/12/2017, GCB's net profit rose 10-fold y-o-y to RM31 million on the back of a 9%-decline in revenue to RM494 million. Compared to the immediate preceding quarter (QE30/9/2017), net profit rose 4% while revenue was lowered by 9%.

Revenue dropped y-o-y mainly due to decrease in sales volume of cocoa solids and overall selling price of cocoa products. The profit before tax rose y-o-y mainly due to improved margin (due to lower bean purchase price) and also unrealized gain derived from commodity future contract.


Table: GCB's last 8 quarterly results


Graph: GCB's last 53 quarterly results

Valuation

GCB (closed at RM1.99 yesterday) is now trading at a trailing PER of 10.7 times (based on last 4 quarters' EPS of 18.65 sen). At this PER, GCB is deemed fairly valued.

Technical Outlook

GCB has broken below its uptrend line, SS at RM2.10 on January 17. In addition it has gone below the 10-week SMA line which has guided the share price higher since June 2017. The technical outlook for GCB is mildly bearish.


Chart 1: GCB's weekly chart as at Feb 12, 2017(Source: Malaysiastock.biz)


Chart 1: GCB's weekly chart as at Feb 12, 2017(Source: Malaysiastock.biz)

Conclusion

Based on good financial performance and reasonable valuation, GCB is a good stock for long-term investment. However we should be careful not to over-invest in GCB as its  technical outlook is mildly negative.

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.

GCB: Earnings Improved

Results Update
For QE31/3/2016, GCB's NP rose 15-fold q-o-q to RM14 million on the back of a mere 2%-increase in revenue to RM591 million. Revenue rose 34% y-o-y, which help to bring GCB back into the black compared to a net loss of RM1.9 million last year.

Profits increased q-o-q  mainly  due  to  increased  sales  volume  and  selling price  of cocoa  butter  and  cocoa  solids as well as higher  net  gain on  foreign  exchange.


Table: GCB's last 8 quarterly results


Chart 1: GCB's last 46 quarterly results

Valuation

GCB (closed at RM1.00 yesterday) is now trading at a trailing PER of 12.5 times (based on last 4 quarters' EPS of 8.01 sen). At this PER, GCB is deemed fairly valued.

Technical Outlook

GCB had a sharp rally after breaking above its long-term downtrend. The current pullback has found support coming from the horizontal line at RM1.00.


Chart 2: GCB's monthly chart as at June 2, 2016 (Source: ShareInvestor)


Chart 3: GCB's monthly chart as at June 2, 2016 (Source: ShareInvestor)
 
Conclusion

Based on good financial performance, reasonable valuation & mildly positive technical outlook, GCB is still rated a BUY.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, GCB.

GCB: The taxman took everything!

Results Update

For QE31/12/2015, GCB's PBT dropped 36% q-o-q to RM15 million on the back of a 18%-drop in revenue to RM581 million. Its net profit took an even bigger knock; plunging 96% to a mere RM859k!

Revenue dropped mainly due to lower sales volume of cocoa cake and powder as compared to QE30/9/2015. Lower sales plus higher forex losses contributed to lower profit before tax. Net profit took a double whammy; a higher tax charge as a result of under provision in prior year of RM5.8 million and deferred tax charge for temporary differences of RM6.1 million. [The under provision of tax could be attributable to the exceeding low provision for tax in the immediate preceding quarter.]


Table: GCB's last 8 quarterly results


Chart 1: GCB's last 45 quarterly results

Valuation

GCB (closed at RM1.02 at the end of the morning session) is now trading at a trailing PER of 21.5 times (based on last 4 quarters' EPS of 4.75 sen).  If we put aside the lumpy deferred tax charge booked in this quarter and apportion the current year tax between QE30/9/2015 & QE31/12/2015, we can make a case for GCB chalking up a quarterly net profit of RM15 million. This would translate to its earning would be about 12 sen. Thus its PER could be 8.5 times.

Technical Outlook

GCB had a sharp rally after breaking above its long-term downtrend. The current pullback is likely to find support at RM1.00. If that fails, then it may go down to RM0.90.


Chart 2: GCB's monthly chart as at Mar 1, 2016_12.30pm (Source: ShareInvestor)


Chart 3: GCB's monthly chart as at Mar 1, 2016_4.30pm (Source: ShareInvestor)
 
Conclusion

Despite a sharp drop in the financial performance for the last quarter, GCB is still rated a BUY based on positive technical outlook and fairly attractive valuation.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, GCB.

GCB: The recovery may begin

Results Update

For QE30/9/2015, GCB reported a net profit of RM22 million as compared to a net loss of RM13 million in the same quarter last year. Revenue soared 72% y-o-y. When compared to the immediate preceding quarter, its net profit increased 10-fold while revenue increased by 23%.

GCB returned to profitability due to the increased sales volume and selling price of cocoa cake and powder. The higher net gain on commodity future contract and lower inventory write-down also contributed to the increase in profit before tax for current quarter.


Table: GCB's last 8 quarterly results

As pointed out in the last post, GCB's profit & profit margin seems to have bottomed and are poised for recovery. This expectation panned out nicely and it could herald many quarters of better results ahead.


Chart 1: GCB's last 44 quarterly results

Financial Position

As at 30/9/2015, GCB's financial position is fairly tight with current ratio at 1.03 time and gearing ratio at 3.4 times. The high gearing is the result of high borrowings to finance its inventory & trade receivable. Inventory holding period had improved from 160 days in 31/3/2015 to 104 days while debtors' turnover period had deteriorated from 43 to 73 days over the same period. 

Valuation

GCB (closed at RM0.85 yesterday) is now trading at a trailing PER of 31 times (based on last 4 qaurters' EPS of 2.75 sen). If GCB can continue to chalk up results similar to QE30/9/2015, its PER would reduce to less than 5 times. This plus its PBR of 1.1 times its NTA (of 80 sen @30/9/2015) means that GCB is probably fairly valued today. 

Technical Outlook

GCB has finanlly broken above its downtrend in early September. However, the stock failed to rally given the uncertainty in the commodity sector in general.


Chart 2: GCB's weekly chart as at Nov 24, 2015 (Source: ShareInvestor)

From the next chart, we can see how far this stock has declined. Any recovery - however gradual - would be very rewarding.


Chart 3: GCB's monthly chart as at Nov 25, 2015 (Source: ShareInvestor)

Conclusion

Based on recovery in its financial performance and mildly positive technical outlook, GCB is now rated a BUY. However, it must noted that the commodity sector in general is still weak and the company's financial position is fairly tight. Thus, any exposure to the stock should be carried out cautiously.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, GCB.