KESM (9334): Minor Hiccup in Earnings
For QE31/1/2015, KESM's pre-tax profit dropped by 28% q-o-q but rose 192% y-o-y to RM4.2 million while revenue dropped by 10% q-o-q but rose by a marginal 0.5% y-o-y to RM62 million.
Table: KESM's last 8 quarterly results
Chart 1: KESM's last 40 quarterly results
Valuation
KESM (closed at RM2.68 yesterday) is now trading at a PE of 9 times (based on last 4 quarters' EPS of 30 sen). At this PE, KESM is deemed fairly valued.
Technical Outlook
From the daily chart, we can see that KESM has broken above its medium-term downtrend line at RM2.50 in mid-February.
Chart 2: KESM's weekly chart as at Mar 11, 2015_11.00am (Source: ShareInvestor.com)
The monthly chart shows the stock had broken out of a large symmetrical triangle at RM2.30 in February 2014. With the exception of the overshooting in 1998 & 2000, this triangle had checked all upside & downside move for this stock. The 2014 breakout might still have some room to go- bearing in mind the NTA of RM5.87 per share!! Let's wait & see.
Chart: KESM's weekly chart as at Mar 11, 2015_11.00am (Source: ShareInvestor.com)
Conclusion
Based on decent financial performance, fair valuation & positive technical outlook, KESM remains a good stock for long-term investment.
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, KESM.
http://nexttrade.blogspot.com/2015/03/kesm-minor-hiccup-in-earnings.html
