Lately, I have been searching for a company which has good profit margins, a business model which is non-conventional (i.e., not manufacturing, banking, plantation, and trading in nature), and resilient to external market shocks. I hope I have found the right company! This week I will be looking at Cypark Resources Berhad (5184). Cypark is a company that is involved with the provision of environmental solutions. It has 4 main business segments which are: 1. Environmental engineering: Provision of nature conservation and environmental improvement services. 2. Landscaping and infrastructure: Provision of landscape services, project management services, and infrastructure development. 3. Maintenance: Provision of specialist maintenance works on leachate treatment plants, landscape services for parks, and maintenance of public amenities. 4. Green technology & renewable energy: Solar panel, biogas, biomass, waste-to-energy, and other renewable energy project
Today I will be reviewing Zhulian Corporation. This company is a multi-level-marketing (MLM) company dealing with a host of beverages, health products, jewellery, home products and appliances, personal care products, beauty apparels and skin care products.
This review is not a detailed review, rather an analysis of its quarterly results and its technical price action.
Zhulian’s past 4 quarters cumulative earnings per share (EPS) was 11.50 cents and it is trading at a price-earnings ratio of approximately 14.4 times as of February 1, 2018.
Chart 1: Price chart of Zhulian
Based on its price chart, price rallied from a low of RM1.20 on January 3, 2017, to its highest point of RM2.15 on January 24, 2018, an appreciation of 180%. However, prices dipped on January 25, 2018, after the announcement of its latest Q4 2017 financial results. I guess expectations were running high on whether Zhulian could sustain the growth in its share price.
At this point, prices have retraced about 50%, from a low of RM1.20 to a high of RM2.15. Considering the sharp drop in its share price, price action is currently oversold in technical terms. In addition, at its current price of RM1.66, it is trading at its immediate support. I would expect some rebound in its share price at this point; subsequently, consolidating until further positive news.
Quarterly trend in financial results
Despite recording its highest revenue for the past 8 quarters (from Q1 2016) in Q4 2017 of about RM59 million, its profitability has been trending lower. The lower revenue recorded in Q4 2017 was partially due to a foreign exchange loss of about RM10 million.
Correspondingly, it is not surprising its profit after tax (PAT) margin and its earnings per share (EPS) trended lower. However, it should be noted that on average EPS for 2017 was higher than 2016. EPS for 2017 was 11.50 cents while EPS in 2016 was 9 cents.
Chart 2: Quarterly Revenue and Profit After Tax (PAT) trend
Chart 3: Quarterly trend of basic earnings per share (cents)
Final thoughts
Based on its quarterly results, especially its EPS performance in 2017 which was on average better than 2016, I would expect its share price to not trade lower RM1.30. RM1.30 was the highest point its share price reached in 2016.
Its share price, however, should be subject to further consolidation and its upside is capped until there is further positive development.
Currently, the FBMKLCI has been on a bullish rally. Do check out this article on a technical review of the FBMKLCI to get an idea of its potential trend HERE.
If you like my posts and this blog please SUBSCRIBE in the link above or follow me on Google+ !!! THANKS
Note: This is not a recommendation to buy or sell this stock by the writer. The writer does not own shares in this company. The writer intends to share his view point on this stock’s potential investment value, any decision to invest or sell shares in this company is entirely at the reader’s own risk.
This review is not a detailed review, rather an analysis of its quarterly results and its technical price action.
Zhulian’s past 4 quarters cumulative earnings per share (EPS) was 11.50 cents and it is trading at a price-earnings ratio of approximately 14.4 times as of February 1, 2018.
Chart 1: Price chart of Zhulian
Based on its price chart, price rallied from a low of RM1.20 on January 3, 2017, to its highest point of RM2.15 on January 24, 2018, an appreciation of 180%. However, prices dipped on January 25, 2018, after the announcement of its latest Q4 2017 financial results. I guess expectations were running high on whether Zhulian could sustain the growth in its share price.
At this point, prices have retraced about 50%, from a low of RM1.20 to a high of RM2.15. Considering the sharp drop in its share price, price action is currently oversold in technical terms. In addition, at its current price of RM1.66, it is trading at its immediate support. I would expect some rebound in its share price at this point; subsequently, consolidating until further positive news.
Quarterly trend in financial results
Despite recording its highest revenue for the past 8 quarters (from Q1 2016) in Q4 2017 of about RM59 million, its profitability has been trending lower. The lower revenue recorded in Q4 2017 was partially due to a foreign exchange loss of about RM10 million.
Correspondingly, it is not surprising its profit after tax (PAT) margin and its earnings per share (EPS) trended lower. However, it should be noted that on average EPS for 2017 was higher than 2016. EPS for 2017 was 11.50 cents while EPS in 2016 was 9 cents.
Chart 2: Quarterly Revenue and Profit After Tax (PAT) trend
Chart 3: Quarterly trend of basic earnings per share (cents)
Final thoughts
Based on its quarterly results, especially its EPS performance in 2017 which was on average better than 2016, I would expect its share price to not trade lower RM1.30. RM1.30 was the highest point its share price reached in 2016.
Its share price, however, should be subject to further consolidation and its upside is capped until there is further positive development.
Currently, the FBMKLCI has been on a bullish rally. Do check out this article on a technical review of the FBMKLCI to get an idea of its potential trend HERE.
If you like my posts and this blog please SUBSCRIBE in the link above or follow me on Google+ !!! THANKS
Note: This is not a recommendation to buy or sell this stock by the writer. The writer does not own shares in this company. The writer intends to share his view point on this stock’s potential investment value, any decision to invest or sell shares in this company is entirely at the reader’s own risk.
I agree. The sell off is due to panic selling. But at current pe.. they are consider trading at lower end compare to their peers. Amway is trading at pe of 24, hai o is trading at 22, etc.
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