Kotra: Earnings Improved on Better Cost Control20th May 2019
In QE31/3/2019, Kotra’s net profit rose 7% q-o-q or 41% y-o-y to RM5.2 million while its revenue dropped 10% q-o-q or 9% y-o-y to RM41 million. The Group’s revenue dropped q-o-q mainly due to lower sales of health supplement products to both the local and export markets and decrease in tender supply to local markets in current quarter. The Group’s profit before tax rose q-o-q mainly due to rationalization of selling and administration expenses and lower advertisement & promotional expenses incurred in current quarter.
Table: Kotra’s last 8 quarters’ P&L
Graph: Kotra’s last 49 quarters’ P&L
Latest Financial Position
As at 31/3/2019, N2N’s financial position is satisfactory, with current ratio of 2.4x and gearing ratio of 0.48x.
Kotra (closed at RM1.71 last Friday) is now trading at a PER of 11x (based on last 4 quarterly EPS of 15.62 sen). At this PER, Kotra is deemed fairly attractive.
Kotra has been range-bound between RM1.60 & RM1.80 for the past 2 years. An upside breakout of the range at RM1.80 could set the stage for an upswing in the share price. Alas, there is no sign yet that this is about to happen.
Chart: Kotra’s monthly chart as at May 17, 2019 (Source: Malaysiastock.biz)
Based on satisfactory financial performance, satisfactory financial position and fairly attractive valuation, Kotra could be a good stock for long-term investment.
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