Results Update

Century has just announced its results for QE30/6/2010. Its net profit jumped 14% q-o-q or 79% y-o-y to RM7.5 million while its turnover increased by 26% q-o-q or 60 % y-o-y RM75 million. The better performance is simply attributed to increased business from new & existing customers.


Table: Century's last 8 quarters' results


Chart 1: Century's last 17 quarters' results

Valuation

Century (closed at RM1.66 yesterday) is now trading at a PER of 4.3 times based on last 4 quarters' EPS of 38 sen. Before we get too excited about this low PER, we must remember that the stock has traded at equally low trailing PER in the past (such as 3-4 times in the middle of 2008). Notwithstanding this, I believe that Century is very attractive.

Technical Outlook

The stock is trapped between a long term downtrend line and an intermediate term uptrend line; forming a triangle (ABC). The upside breakout level is at RM1.65-67. A few indicators seem to point towards that possibility.


Chart 2: Century's daily chart as at August 12, 2010 (Source: Quickcharts)

Conclusion

Based on good financial performance and attractive valuation, Century could be a good stock for long-term investment. However, those who are technical inclined would like to wait for an upside breakout at RM1.65-67 before venturing in for a trade.