Padini: Steady Earnings is Enough!28th February 2019
In QE31/12/2018, Padini’s net profit rose 196% q-o-q or 6.5% y-o-y to RM53 million while revenue rose 40% q-o-q or 0.5% y-o-y to RM462 million. Revenues and profit before taxation for this quarter rose sharply due to Christmas season, year-end school holidays and the nationwide 5 days special sales promotion held during the current quarter under review.
Table: Padini’s 8 quarterly results
Graph: Padini‘s P&L for last 26 quarterly results
Padini’s financial position is deemed healthy as at 31/12/2018 with current ratio at 2.9x and gearing ratio at 0.45x.
Padini (closed at RM3.51 yesterday) is now trading at a trailing PER of 13.5x (based on last 4 quarters’ EPS of 26 sen). At this PER, Padini is deemed fairly attractive.
Padini dropped sharply after its reported its poor result for QE30/9/2018. It has found support at the horizontal line at RM3.30. Its resistance levels are at RM3.70 and RM3.90.
Chart 1: Padini‘s weekly chart as at Feb 27, 2019 (Source: Malaysiastock.biz)
Chart 2: Padini‘s daily chart as at Feb 27, 2019 (Source: Malaysiastock.biz)
Based on better financial performance, good financial position and fairly attractive valuation, Padini is still a good stock to buy for long-term investment.
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