Results Update
In QE30/9/201, Evergrn's net profit rose 144% q-o-q but dropped 11% y-o-y to RM15.1 million while revenue rose 0.4% q-o-q or 7% y-o-y to RM260 million. Its revenue increased q-o-q mainly due to commercial run of new Particle Board Plant in Segamat. Its profit before tax increased q-o-q mainly due to production efficiency and effective cost measures of new Particle Board Plant in Segamat.
Table: Evergrn's last 8 quarters' financial performance
Graph: Evergrn's last 51 quarters' financial performance
Financial Position
As at 30/9/2017, Evergrn's financial position is deemed satisfactory with current ratio at 2.05 times and gearing ratio at 0.34 time.
Valuation
Evergrn (closed at RM0.69 last Friday) is now trading at a trailing PER of 12 times (based on last 4 quarters' EPS of 5.87 sen. At this PER, Evergrn is still deemed fairly valued.
Technical Outlook
Evergrn has been in a slow decline after it peaked at RM1.68 in January 2016. The decline takes the form of a downward channel, with the lower line at RM0.65 providing support.
Chart: Evergrn's weekly chart as at Jan 5, 2017 (Source: Malaysiastock.biz)
Conclusion
Based on satisfactory financial performance & position and reasonable valuation, Evergrn is a good stock for long-term investment. However, its share price recovery will only begin once earnings begin to improve noticeably.
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.
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.
http://nexttrade.blogspot.my/2018/01/evergrn-awaiting-earnings-recovery.html
