EFORCE: Revenue & Earnings Continued to Grow
Result Update
For QE31/12/2020, EForce's net profit rose 48% q-o-q or 142% y-o-y to RM3.9 million while revenue rose 3% q-o-q or 59% y-o-y to RM9.2 million. Revenue grew steadily due to "continuing interest of retail investors in Bursa securities sustained the overall high daily trading volume in quarter 4. Hence the sustained growth in our increase in Application Services Providers (“ASP”) revenue. However, our Application Solution (AS) segment performance was flat to last year. System enhancement project implementations resumed earnestly in this quarter, and billings for work done expected next year."
Table: EForce's last 8 quarterly results
Graph: EForce's last 48 quarterly results
Financial Position
As
at 31/12/2020, EForce's financial position is deemed very healthy with
current ratio at 5.7 times. The company has cash balance of RM22.9
million (or equivalent to 3.7 sen per share). It has no borrowing.
Valuation
EForce
(closed at RM0.46 yesterday) is now trading at a PE of 24 times (based
on last 4 quarters' EPS of 1.90 sen). Based on this PE ratio, EForce is
deemed fairly valued.
Technical outlook
EForce is
trading not far from the line connecting the last 5 years' lows
(excluding the Mar 2020 extreme low) at RM0.40-0.42. If we drew a line
connecting all the lows (including the Mar 2020 extreme low), that
baseline will act as support at RM0.25. At this moment, there is no sign
that EForce share price is poised for an upside move.
Chart: EForce's monthly chart as at Feb 24, 2021 (Source: Malaysiastock.biz)
Based
on improved financial performance, good financial position &
reasonable valuation, EForce is a good stock for long term investment.
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.
http://nexttrade.blogspot.com/2021/02/eforce-revenue-earnings-continued-to.html
