Superln: Earnings Continued to Rise

Result Update

In QE31/10/2018, Superln's net profit rose 48% q-o-q or 16% y-o-y to RM4.2 million while its revenue rose 5% q-o-q but declined 12% y-o-y to RM27 million. The higher revenue coupled with an increase in gross profit to about 36% as compared to 30% in the preceding quarter (due to more favorable exchange rate environment and better efficiency) led to an increase of 46% in profit before tax to RM5.7 million. Correspondingly, profit after tax for the group increased by RM1.4 million to RM4.2 million as compared to the preceding quarter.

Table: Superln's last 8 quarters' results

Graph: Superln's last 23 quarters' results

Financial Position

As at 31/10/2018, Superln's financial position is deemed healthy with current ratio at 3.4 times and gearing ratio at 0.26 time.

Valuation

Superln (closed at RM1.26 yesterday) is now trading at a trailing PER of 16x (based on last 4 quarters' EPS of 7.7 sen). At this PER, Superln is deemed fully valued. Superln paid out dividend totaling 3.5 sen for FYE30/4/2018. I think it may do the same for FYE30/4/2019. This will give the stock a dividend yield of 2.8%.

Technical Outlook

Superln has been moving sideways for the past 9 months. If the share price can go above RM1.50, the next upleg may begin.


Chart: Superln's weekly chart as at Dec 12, 2018 (Source: Malaysiastock.biz)

Conclusion

Based on improved financial performance, healthy financial position and fair valuation, Superln 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.

Superln: Earning Rebounded

Result Update

In QE1/7/2018, Superln's net profit rose 106% q-o-q but dropped 20% y-o-y to RM2.8 million while its revenue rose 1.4% q-o-q but declined 2.3% y-o-y to RM26 million. Despite a relatively stagnant revenue, Superln registered a recovery in its gross profit to about 30% as compared to 23% in the preceding quarter as a result of a more favorable exchange rate environment and better efficiency. On the back of a better gross profit margin, the group registered an increase of 178% in profit before tax to RM3.9 million in the current quarter as compared to RM1.4 million in the preceding quarter. Correspondingly, its profit after tax for the group increased by RM1.4 million to RM2.8 million as compared to the preceding quarter.

Table: Superln's last 10 quarters' results

Graph: Superln's last 22 quarters' results

Financial Position

As at 31/7/2018, Superln's financial position is deemed healthy with current ratio at 3.9 times and gearing ratio at 0.25 time.

Valuation

Superln (closed at RM1.20 yesterday) is now trading at a trailing PER of 16x (based on last 4 quarters' EPS of 7.3 sen). At this PER, Superln is deemed fully valued.

Technical Outlook

Superln has been moving sideways for the past 6 months. If the share price can go above RM1.50, the next upleg may begin.


Chart: Superln's weekly chart as at Sep 18, 2018 (Source: Malaysiastock.biz)

Conclusion

Based on improved financial performance, healthy financial position and fair valuation, I revise my rating for Superln from a SELL to a HOLD.

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.

Superln: Earning Failed to Back Up Recent Price Rally

Result Update

In QE30/4/2018, Superln's net profit dropped 63% q-o-q or 78% y-o-y to RM1.4 million while its revenue dropped 7% q-o-q or 22% y-o-y to RM25 million. Revenue dropped q-o-q mainly attributable to lower insulation sales volume and competitive pricing environment in the current quarter.  The drop in the sales volume was mainly attributed to the fewer workdays resulting from festive holidays, weak local market sentiment prior to the Malaysian General Election and competitive global market. The competitive pricing environment, lower sales volume, coupled with higher cost in production resulting from installation and commissioning of machinery in the production process led to the group registering profit before tax of RM1.4 million in the current quarter as compared to RM5 million in the preceding quarter. Profit after tax of the Group has decreased by RM2.3 million to RM1.4 million as compared to preceding quarter.

Table: Superln's last 8 quarters' results

Graph: Superln's last 21 quarters' results

Valuation

Superln (closed at RM1.52 yesterday) is now trading at a trailing PER of 20x (based on last 4 quarters' EPS of 7.7 sen). At this PER, Superln is deemed fully valued.

Technical Outlook

Superln peaked in August 2017 and went into a steady decline that's captured by the downtrend line, RR. That decline caused the stock to break its long-term uptrend line, SS at RM1.65 in March. In May, the continuous price decline has formed a bottom when the share price managed to climb back above the intermediate downtrend line, RR. From here, Superln will form a base to launch its next upleg. Until then, it is likely to move sideways.


Chart: Superln's weekly chart as at Jun 21, 2018 (Source: Malaysiastock.biz)

Conclusion

Based on weaker financial performance and mildly negative technical outlook, Superln is rated as a SELL until earning has improved or technical outlook has changed.

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.

Superln: Earnings Dropped q-o-q

Result Update

In QE31/7/2017, Superln's net profit dropped by 44% q-o-q or 42% y-o-y to RM3.6 million while its revenue dropped 19% q-o-q but rose 3% y-o-y to RM26 million. Revenue decreased q-o-q due to lower export demand and less favorable exchange rate movement. Profits dropped q-o-q mainly due to the decrease in total gross profit generated from lower volume of sales and higher cost of materials. The lower other income recorded and higher other operating expenses also contributed to decrease in net profit before tax.

Table: Superln's last 8 quarters' results

Graph: Superln's last 18 quarters' results

Valuation

Superln (closed at RM2.76 yesterday) is now trading at a trailing PER of 20.7x (based on last 4 quarters' EPS of 13.36 sen). At this PER, Superln is deemed fairly valued.

Technical Outlook

Superln is in an uptrend since 2014. With the MACD hooked down, Superln is likely to consolidate its price gain.


Chart 1: Superln's weekly chart as at Sep 26, 2017 (Source: Malaysiastock.biz)

If we compare the share price movement & the profit trend, it appears that share price is running ahead of earning. Superln is likely to experience a price reversal unless earning quickly rebounds back. Unfortunately we will have to wait for the next quarterly result to find out whether this will happen.


Chart 2: Superln's weekly price chart and profits trend for the past 4 years

Conclusion

Based on weaker financial performance and substantial price rally, it is advisable to take some profit for your investment in Superln. Thus, I rate Superln as a SELL INTO STRENGTH.

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.

Superln: Earnings Remained Healthy

Result Update

In QE30/4/2017, Superln's net profit rose by 2% q-o-q or 72% y-o-y to RM6.4 million while its revenue rose by 26% q-o-q or 37% y-o-y to RM32.5 million. Revenue rose y-o-y due to increased revenue for both the manufacturing & trading divisions.

The manufacturing division recorded higher revenue of RM28.4 million (FY 2016 : RM22.2 million) due to higher sales volume while PBT rose to RM7.9 million (FY 2016 : RM4.9 million) mainly due to the increase in total gross profit generated from higher volume of sales and favourable exchange rate.

Revenue for the trading division of RM4.1 million (FY 2016 : RM1.4 million) was mainly due to the increased sales of copper pipes to local customers. As a result, that division PBT increased to RM0.2 million compared to RM0.01 million previously.

Table: Superln's last 8 quarters' results


Graph: Superln's last 17 quarters' results

Valuation

Superln (closed at RM1.92 yesterday) is now trading at a trailing PER of 13x (based on last 4 quarters' EPS of 14.94 sen). Based on an earning CAGR of 60% over the past 3 years, Superln's PEG ratio is only 0.2x. As per the notes to its accounts, the company plans to invest approximately USD 4 million for the expansion plans and is targeting for Factory 4 to commence production in the FY2019. The new factory would enable Superln to strengthen its presence and support its customers in Vietnam and neighboring countries. Hence, Superln will continue to be a growth stock trading at attractive earnings multiple.

Note: Superln has completed its 1-for-2 share split in early June. This exercise may explain the strong rally in the share price for the past 3 months. It is not unusual that the stock may consolidate its recent gain before it continues with its upward trajectory.

Technical Outlook

Superln is in an uptrend line, which accelerated after it broke above the line, AB at RM1.30-1.33.


Chart 1: Superln's weekly chart as at Jun 20, 2017 (Source: Shareinvestor.com)


Chart 2: Superln's monthly chart as at Jun 20, 2017 (Source: Shareinvestor.com)

Conclusion

Based on good financial performance, attractive valuation & positive technical outlook, Superln could be a good stock for trading BUY.long-term investment. If you want to get into this stock, I think any price below RM2.00 will be a good entry.

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.

Superln: Earnings Continue To Grow

Result Update

In QE31/1/2017, Superln's net profit rose by % q-o-q or 45% y-o-y to RM6.2 million while its revenue rose by 16% q-o-q or 15% y-o-y to RM25.8 million. Revenue rose q-o-q mainly due to increase in export sales volume. PBT rose to RM8.0 million from RM6.3 million in the preceding quarter due to higher revenue & profit margin (from 28.4% to 30.9%) 


Table: Superln's last 8 quarters' results


Graph: Superln's last 16 quarters' results

Valuation

Superln (closed at RM2.70 last Friday) is now trading at a trailing PER of 10x (based on last 4 quarters' EPS of 26.52 sen). Based on an earning CAGR of 70%, Superln's PEG ratio is only 0.14x. Thus Superln is deemed very attractive for a growth stock.

Technical Outlook

Superlnis in an uptrend line. Last Friday, it tested the line connecting its recent peaks at RM2.70. This week may see the share price breaking thru this resistance. If that were to happen, we may see an acceleration in the uptrend for Superln.


Chart 1: Superln's weekly chart as at Mar 24, 2017 (Source: Shareinvestor.com)


Chart 2: Superln's monthly chart as at Mar 24, 2017 (Source: Shareinvestor.com)

Conclusion

Based on good financial performance, fairly attractive valuation & positive technical outlook, Superln could be a good stock for trading BUY.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.

Superln: Earnings Stays Strong

Background

Superlon Holdings Berhad ('Suprtln') is involved in the design, test and manufacture of thermal insulation materials mainly for the heating, ventilation, air-conditioning and refrigeration (“HVAC&R”) industry and trading of HVAC&R parts and equipment.


 Superlon's products & factory in Malaysia

Historical Financial Performance

Superln's financial performance rose exponentially in FY2015 & this year. We can see its annual revenue breaking above the RM70 million mark & its pre-tax profit breaking above the RM10 million in FY2015.
 

Chart 1: Superln's last 10 years' results

The year 2015 happens to be the year when our MYR weakened substantially. This has boosted Superln's sales in the international market as the company exports to about 50 countries. If USD-MYR were to retrace back to 3.50, it is likely that Superln's profit margin may drop from the existing 20% to 10%. Its net profit could then be about RM9-10 million. Until then, Superln could enjoy hefty profit or expand its markets overseas.


Chart 2: Superln's last 10 years' profit margins & USD-MYR exchange rate

Recent Financial Results

In QE31/7/2016 Superln's net profit rose by 63% q-o-q or 57% y-o-y to RM6 million while its revenue rose by 9% q-o-q or 16% y-o-y to RM26 million. Profit after tax rose q-o-q mainly due to higher gross margin & exchange gain.


Table: Superln's last 8 quarters' results


Chart 2: Superln's last 14 quarters' results

Financial Position

Superln's financial position as at 31/7/2016 is deemed healthy with current ratio at 3.7x and gearing ratio at 0.21x. Return on Equity was good at 20%.

Valuation

Superln (closed at RM2.38 yesterday) is now trading at a trailing PER of 10x (based on last 4 quarters' EPS of 23.75 sen). For medium-cap stock, the PER is deemed fairly attractive. Dividend receivable rose from 6 sen in FY2015 to 9 sen in FY2016. 1Q2017 dividend receivable rose from 2 sen last year to 2.5 sen. Assuming dividend receivable is 9 sen, the stock has a DY of 3.8%.

Technical Outlook

Superln broke above the line connecting its recent peaks, AB at RM2.38 last Friday. After the upside breakout, the share price corrected back to the AB support at RM2.38. If this support can sustain, the stock may continue to go higher from hereon.


Chart 3: Superln's weekly chart as at Sep 27, 2016 9Source: Shareinvestor.com)


Chart 4: Superln's monthly chart as at Sep 27, 2016 9Source: Shareinvestor.com)

Conclusion

Based on good financial performance, fairly attractive valuation & mildly bullish technical outlook, Superln could be a good stock for trading BUY.

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.