Results Update
For QE31/3/2016, Huayang's net profit dropped 29% q-o-q or 28% y-o-y to RM21 million while revenue dropped 18% q-o-q or 16% y-o-y to RM128 million. Revenue and profits dropped due to weaker sales- as a result of subdued consumer sentiments.
Table: Huayang's last 8 quarterly results
Chart 1: Huayang's last 29 quarterly results
We can see from the chart below that Huayang's unbilled sales has dropped back sharply last quarter. In QE31/3/2016, unbilled sales stood at slightly over 3.5 quarters.
Chart 2: Huayang's last 5 years of 4Q's sales book
Valuation
Huayang (at RM1.82 yesterday) is trading at a PE of 4.3 times (based on last 4 quarters' EPS of 41.7 sen). At this PE, Huayang is still deemed fairly attractive.
Technical Outlook
Huayang is hanging onto to the horizontal line at RM1.75-1.80 very well.
Chart 2: Huayang's monthly chart as at May 18, 2016 (Source: ShareInvestor.com)
Conclusion
Despite weaker financial performance & thinner sales book, Huayang is still a good stock for long-term investment based on 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, Huayang.
HUAYANG (5062) - Huayang: Earnings Dropped
http://nexttrade.blogspot.my/2016/05/huayang-earnings-dropped.html
