POS – MYR3.78 (Stock Code: 4634) Bloomberg Code : POSM MK Equity
POS made a major weekly Wave 4 low of MYR2.88 (Mar 2012) with grossly oversold and bullish signals. Its positive indicators above suggest a strong upside move. It is likely break into higher territory, as it breached its key resistance areas recently in a Symmetrical Triangle upside breakout move.
SHORT-TERM BUY (TECHNICAL) on dips for POS, with firmer support areas at MYR3.44 and MYR3.78. The upside target areas for the stock are at MYR3.93, MYR4.00 and MYR4.78. Stop-loss is at MYR3.42.
Pos Malaysia Berhad (POS) is an investment holding company. The company, through its subsidiaries, provides postal and related services, printing and insertion services and sells digital certificates.
POS registered a 3QFY3/13 growth in profit from operations of 18.7% YoY to MYR117.4m, supported by increased revenue of MYR55.9m, which was up 6.4% YoY from MYR869.1m although expenses increased by MYR37.4m compared with the corresponding period last year. It recorded a 3QFY3/13 pre-tax profit of MYR141.8m, up MYR34.6m or 32.3% YoY, due to higher profit from operations coupled with a 66.6% (MYR9m) YoY increase in other income. Last year, the group recorded an impairment loss of MYR2.8m on its investment in Transmile Group Berhad.
The Malaysian economy saw consistently robust growth of 6.4% YoY in 4Q12 amid an uncertain global economic outlook. For 2012 as a whole, the Malaysian economy grew 5.6%, higher than 5.1% recorded in 2011, underpinned by the government’s Economic Transformation Program (ETP) and other stimulus measures. The continued strong expansion in the broad economy has led to higher demand for POS’s offerings, in particular the courier segment, where volume increased. Going forward, POS will continue to explore further productivity enhancements via new strategic initiatives, and implement cost optimisation strategies at various business units in order to drive future growth.
below: POS earning summary (click to enlarge)
Maybank-IB currently does not have fundamental coverage on POS. A check on Bloomberg consensus reveals that there are six houses that have coverage on the stock, of which five have Buy calls and one a Sell call. POS is currently trading at a PER of 13.9x with an indicative dividend yield of 6.76%.
by Maybank IB