Results Update
For QE31/12/2018, QL's net profit increased by 14% q-o-q or 16% y-o-y to RM69 million while revenue increased by 6% q-o-q and 10% y-o-y to RM979 million.
Table 1: QL's last 8 quarterly results
When compared to the result for QE31/12/2017, the higher revenue was mainly due to a 21%-increase in revenue from Integrated Livestock Farming (from RM522 million to RM629 million) while higher PBT was mainly due to a 32%-increase in PBT from Marine Product Manufacturing (from RM39 million to RM52 million).
Table 2: QL's Segmental Results
From the graph below, we can see that QL's quarterly revenue is fast approaching the RM1 billion mark while quarterly profits are at the new high!!
Graph: QL's last 43 quarterly results
Valuation
QL (closed at RM6.90 yesterday) is now trading at a PE of 50 times (based on last 4 quarters' EPS of 13.55 sen). Like Nestle, QL's overvaluation is simply mind-boggling. Some investors are probably waiting for the Family Mart's profits to show up in QL's books. We will have to wait and see.
Technical Outlook
QL is hanging onto its uptrend line, SS at RM6.90.
Chart: QL's weekly chart as at Feb 28, 2019 (Source: Malaysiastock.biz)
Conclusion
Based on satisfactory financial performance, QL can be a good stock for long-term investment if its valuation is not so demanding. It is tough but I have to say I just could not rate QL any batter than a HOLD if you have the stock. If you don't have the stock, you should wait for the price to retreat.
