Results Update

MPHB has just announced its results for QE31/3/2010. Its net profit increased by 51.5% y-o-y to RM68.2 million on the back of a 19.4%-increase in turnover to RM993 million. Compared to the immediate preceding quarter (QE31/12/2009), its net profit dropped by 40.3% while turnover increased by 13.4%. The q-o-q decline in net profit is attributable to gains on disposal of quoted securities of RM45 million previously as compared to a gain of RM3 million in QE31/3/2010.


Table 1: MPHB's last 8 quarterly results


Chart 1: MPHB's 16 quarterly results

Valuation

MPHB (closed at RM1.98 last Friday) is now trading at a PER of 8 times (based on annualized EPS of 6.3 sen recorded for QE31/3/2010). At that multiple, MPHB is deemed very attractive. Assuming a PER of 12 times, MPHB's fair value is about RM3.02.

Technical Outlook

MPHB has broken below its uptrend line at RM2.00 last Friday. A quick recovery is crucial, failing which the stock could drift lower.


Chart 2: MPHB's weekly chart as at May 17, 2010 (Source: Tradesignum)

Conclusion

Based on strong financial performance & attractive valuation, MPHB could be a good stock for long-term investment. However, its short-term outlook is clouded by the breakdown of its uptrend line at RM2.00.