EVERGRN (5101) : Evergrn: Poised for reversal?
For QE30/9/2014, Evergrn returned to profitability with a net profit of RM10 million from anet loss of RM8 million in the same quarter last year (or a net loss of RM22 million from the immediate preceding quarter). Revenue inched higher by 9% q-o-q or less than 1% y-o-y to RM234 million.
Revenue increased q-o-q mainly due to higher sales volume and average selling prices while net profit increased q-o-q mainly due to higher revenue & lower log & glue costs.
Table: Evergrn's last 8 quarterly results
Chart 1: Evergrn's last 39 quarterly results
Valuation
Evergrn (currently at RM0.54 last Friday) is trading at a PB of 0.35 times (based on NTA of RM1.56 as at 30/9/2014). As the company was a loss-making concern, we could not compute its PE. Based on attractive PB, the stock could rise steady once it has returned to profitability.
Technical Outlook
Evergrn is a trending stock; it is in either an uptrend or a downtrend. When reversal happens, the trend would change from uptrend to downtrend or vice versa.
Chart 2: Evergrn's monthly chart as at Nov 21, 2014 (Source: Share Investors)
Evergrn was in a steady downtrend for the past 4 years. It looks poised for a change to an uptrend. The good support is at RM0.55.
Chart 3: Evergrn's weekly chart as at Nov 21, 2014 (Source: Tradesignum)
Conclusion
Based on improved financial performance (albeit only one-quarter) and mildly positive technical outlook, Evergrn is worth close tracking for potential medium-term investment.
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, Evergrn.
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