Tuesday, November 30, 2010

A short commentary on EPIC results

I just glanced through EPIC results. Looks good.

EPIC results were good. Earnings remain resilient with net profit of RM13.4 mil or EPS of 7.9 sen for 3QFY2010. 9MFY2010 net profit reached RM38 mil or EPS of 22.8 sen. Give it another EPS of about 8.0 sen for 4QFY2010 will push EPS to about 31 sen for the whole year of 2010. PER 2010 will be around 7.5x. It's rather difficult to understand a company like this trading at PER of 7.5x. I would rate it at least PER of 10x, looking at its resilient business and earnings coupled with strong balance sheet with net cash of RM74 mil (Though strong net cash might not be the optimum capital structure for the company). This stock should worth at least RM3.00. Thus, Terengganu Inc was quite right to buy EPIC's shares from AZRB at RM3.10 per share.

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