DLADY (3026) : DLady: Improved performance but demanding valuation persists
For QE30/9/2014, DLady's net profit increased by 18% q-o-q but dropped by 32% y-o-y to RM28.5 million while its revenue dropped by 10% q-o-q or 9% y-o-y to RM240 million. Revenue dropped q-o-q mainly contributed by lower volume sales. Nevertheless the profit before taxation for increased by RM5.8 million mainly due to cost management and favorable movement in raw material purchases
Table: DLady's last 8 quarterly results
Chart 1: DLady's last 26 quarterly results
Valuation
DLady (closed at RM45.90 yesterday) is now trading at a PE of 27 times (based on last 4 quarters' EPS of 169 sen). At this PE, DLady is deemed fully valued.
Technical Outlook
Since October 2012, DLady has been moving sideways around RM46-48. Its indicators have weakened steadily, with monthly MACD hooked down & William %R at the 50-mark. A breakout of the trading range of RM46-48 will point the way forward for the stock.
Chart 2: DLady's weekly chart as at Nov 25, 2014 (Source: Share Investor)
Conclusion
Based on demanding valuation & technical weakness, I would rate DLady as a REDUCE.
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, DLady.
http://nexttrade.blogspot.com
