POS- Top-line & bottom-line still rising

Result Update

For QE31/3/2013, POS's pre-tax profit
increased by 10% q-o-q or 13% y-o-y to RM50 million while revenue
increased by 10% q-o-q or 12% y-o-y to RM344 million. The increase in
pre-tax profit was due to a jump in profit contribution from the Mail
segment from RM33.4 million to RM54.7 million & fair value
adjustment to investment properties of RM1.1 million. This had more
than offset the losses incurred by the Courier & Other segments of
RM239k & RM2.2 million, respectively. Other Income also dropped
from RM12.4 million to RM6.2 million.

Net profit dropped 37%
q-o-q but increased by 21% y-o-y to RM32 million. The q-o-q decline in
net profit was due to tax credit of RM6.0 million- a result of
over-provision in tax in prior years.

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Table: POS's last 8 quarterly results

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Chart 1: POS's last 30 quarterly results

Valuation

POS
(closed at RM4.60 yesterday) is now trading at a PE of 16.3 times
(based on last 4 quarters' EPS of 28.3 sen). This PE multiple is deemed
reasonable due to its strong CAGR of its pre-tax profit of 25% last
year. If this growth rate can sustain, POS's PEG ratio is only 0.64
time.

Technical Outlook

POS has broken above the
line connecting its high for the past 5 years (at RM4.20). With this
breakout, POS's uptrend is likely to accelerate.

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Chart 2: POS's weekly chart as at May 21, 2013 (Source: quickcharts)

Conclusion

Based
on satisfactory financial performance, reasonable valuation &
positive technical outlook, POS is still rated a good stock for
long-term investment.

Note:
In
addition to the disclaimer in the preamble to my blog, I hereby confirm
that I do not have any relevant interest in, or any interest in the
acquisition or disposal of, POS.

Author: Alex Lu