Results Update

Uchitec has just announced its results for QE30/6/2010. Its net profit increased by 40% q-o-q or 198% y-o-y to RM13.9 million while turnover increased by 4% q-o-q or 12% y-o-y to RM25 million. The company attributed the improved performance to increased demand for its products as well as increase in R&D projects.


Table: Uchitec's last 8 quarterly results

From Chart 1 below, we can see that Uchitec is slowly recovering after the steep drop in sales in 2007 & 2008.


Chart 1: Uchitec's last 18 quarterly results

Valuation

Uchitec (closed at RM1.41) is now trading at a trailing PER of 12 times (based on last 4 quarters' ESP of 11.69 sen). Uchitec, known for its high dividend payout, has seen its dividend yield sliding in the past 2 years. Today, its dividend yield stood at 4.3% only.

Technical Outlook

Uchitec may have broken to the upside of its symmetrical triangle at RM1.38-1.40. If it can recruit sufficient buying interest, it may test its horizontal resistance at RM1.60 & then at RM1.90.


Chart 2: Uchitec's weekly chart as at Aug 19, 2010 (Source: Quickcharts)

Conclusion

Based on steady improvement in financial performance & possible technical breakout, Uchitec could be a trading BUY or even a medium-term investment.