MISC (3816) - MISC: Bottom-line ebbed due to exceptional gain in previous quarter
For QE31/3/2015, MISC's net profit dropped 49% q-o-q but remained unchanged y-o-y at RM486 million while revenue was up 9% q-o-q & y-o-y to RM2.49 billion. Revenue increased q-o-q due to improved freight rates in Petroleum business and higher revenue from different phases of project construction in Heavy Engineering. PBT dropped 50% q-o-q due to exceptional gain of RM654.5 million from disposal of assets through finance lease recorded in QE31/12/2014 and higher share of profit from JVs & Associated Companies of RM319.9 million recorded in QE31/12/2014 (compared to only RM98.7 million in latest quarter). However the latest quarterly result was not weighed down by impairment charges (unlike QE31/12/2014 which included net impairment reversal of RM358.9 million).
Table: MISC's last 8 quarterly results
Chart 1: MISC's last 36 quarterly results
Valuation
MISC (RM9.00 as at 10:00am) is now trading at a PE of 18.4 times (based on last 4 quarterly EPS of 49 sen). At this PE, MISC is deemed fully valued.
Technical Outlook
MISC's uptrend has accelerated in the past 6 months (see Chart 2). It is fast approaching the strong overhead resistance posed by the horizontal line at RM9.50 (see Chart 3).
Chart 2: MISC's weekly chart as at April 30, 2015(Source: ShareInvestor.com)
Chart 3: MISC's monthly chart as at April 30, 2015(Source: ShareInvestor.com)
Conclusion
Based on satisfactory financial performance & positive technical
outlook, MISC is a good stock for long-term investment. However, its
steady rise in the past 2 years has pushed its valuation significantly.
With high PE multiple and strong resistance not far away, MISC's rating
should be revised from HOLD to SELL INTO STRENGTH.
Note:
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, MISC.
