QL (7084) : QL: Top-line & bottom-line continued to rise
For QE30/9/2014, QL's net profit increased by 19% q-o-q or 14% y-o-y to RM48 million. Revenue improved by 8% y-o-y but remained unchanged q-o-q at RM656 million. All 3 segments showed improved q-o-q performance. PBT from Marine product manufacturing increased 14% q-o-q against preceding quarter due to new contribution from shrimp farming as well as better fish catch in Peninsular East Coast. PBT from Palm Oil Activities increased 23% q-o-q due to lower losses from Indonesia plantation operations and higher contribution from Associate (Boilermech). PBT from Integrated Livestock Farming increased 39% q-o-q against preceding quarter due to improved farming margin from Malaysia and Vietnam units.
Table: QL's last 8 quarterly results
Again, it is good to note that the profit margin has inched up in the past 4-5 quarters. This, plus the rising revenue, would lead to higher bottom-line going forward.
Chart 1: QL's last 26 quarterly results
Valuation
QL (closed at RM3.46 yesterday) is now trading at a PE of 22 times (based on last 4 quarters' EPS of 15.7 sen). Based on the PE of 22times & last year's earning growth of 22%, QL's PEG ratio stood at 1 time. This means that QL is fairly valued.
Technical Outlook
QL continued its uptrend after it surpassed the resistance at RM2.60. There are signs of weakness in the share price movement.
Chart 2: QL's weekly chart as at Nov 21, 2014 (Source: ShareInvestor.com)
Conclusion
Based on improved financial performance, QL is a good stock for long-term investment. However, its upside is limited as it is fairly valued with signs of technical weakness emerging. As such, I would rate the stock as a HOLD for now.
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, QL.
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