Latitud: Earnings Continued to Rise28th February 2019
In QE31/12/2018, Latitud’s net profit rose 28% q-o-q or 120% y-o-y to RM17 million while revenue was mixed- down 5% q-o-q but rose 4% y-o-y to RM204 million. Revenue rose y-o-y mainly due to better orders received by furniture plants amounting to USD3.8 million offset with weakening of USD against RM. PBT rose y-o-y mainly due to increase in gross profit and foreign exchange gain of RM2.0 million in Q2FY2019 compared to foreign exchange loss of RM3.8 million in Q2FY2018.
Table: Latitud’s 8 quarterly results
Graph: Latitud‘s P&L for last 54 quarterly results
As at 31/12/2018, Latitud’s financial position is deemed healthy with current ratio at 2.5x and gearing ratio at 0.4x.
Latitud (closed at RM3.87 yesterday) is now trading at a trailing PER of 19 times (based on last 4 quarters’ EPS of 20 sen). If the exceptionally poor result for QE30/6/2018 were excluded, Latitud’s full-year EPS could be 33 sen, and its PER would be raised to 12 times. Based on this adjusted PER, Latitud is deemed fairly priced.
Latitud has been in a s downtrend line, RR since 2015. It has just broken above the downtrend line. Its immediate resistance is at RM3.90-4.00.
Chart: Latitud‘s weekly chart as at Feb 27, 2019 (Source: Malaysiastock.biz)
Based on good financial performance and position and fair valuation, Latitud is a good stock for long-term investment.
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