FY2018 EPS is expected to be at record low 9 cents. Fair price downgraded to 0.90 at forward P/E of 10.0x inline with peers LYSAGHT (9.7X) & SUCCESS (6.4x)
Even though the company managed to grow its revenue by a small percentage of 1.8% in 2018, profit fell by a whopping 85% to only RM2.9mil vs RM19mil a year ago. Main reasons for the deteriorating margins were due to higher raw material, financing, labour and depreciation costs. Expect the depressing profit margin to continue into FY19.
At the current price, the company is being valued at 34x PE which is high for a company with limited potential growth in the near future.
If you are looking to diversify your portfolio outside of Ulicorp (due to its weak earnings outlook and relatively high valuation), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)
MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.1x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.
FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).
MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.0x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.
ULICORP (7133) - Technical and Fundamental Analysis March 10, 2019, | HONG WEI GIET
Technical Analysis =========== - ULICORP achieved record high at RM4.502 on June 26, 2016, and it drops significantly (-49.89%) after 27 trading days.. Forever...Never See The Highest again... It is a good study case for investment. - After 7 months, it bounced +42.65% from bottom RM2.306 to top RM3.271 within 3.5 months. U will supper happy with this return. But... - Ironically, it dropped -22.81% with 3.5 months and bounced +17.94% with 9 days. Roller coaster shares movement.
Ayah...You all talk too much lar. Price drop from very highs..just buy and keep lar. Or else make 2c, u all cabut lar. Investor or short term up to you..kikikikk.. Talk 3, talk 4..hmmmm
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KLCI King
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Posted by KLCI King > 2018-02-27 23:22 | Report Abuse
PER20 times for these kinds of results? Goreng stock & collapse is unavoidable.