MAMEE net profit down due to higher comodities?

FY31/12/2010
Financial Result
For the quarter under review, MAMEE revenue increase 21% to RM125.17m, compare to RM103.21m in 4Q09. Higher sales were recorded from local and foreign markets, due to effective advertising and promotion activities, as well as new product launch(Mr. Potato Rice Crisps).
However, PBT drop 35% to RM7.83m, compare to RM12.22m in 4Q09. Higher expenditure in selling and distribution, foreign exchange loss and higher provision for doubtful debts are to blame.

Commodities price had gone up so much during the past 12 months. Chart below are the price movement of the main ingredient of Mamee F&B products.

Wheat gone up 62%

Sugar gone up 46%

Palm Oil up 66%

With this, no further explanation needed why company's net profit are 30% lower despite higher revenue.

Technical Outlook
Mamee share price broke above RM3.59 with a good volume, deem to be bullish. However, it doesn't sustain for long as the crisis in Libya heat up. Follow by a disappointing financial result announcement. 
Support at RM3.42, Resistance RM3.60. Friday(25/2/11) closing at RM3.50, just under MA(50d).

Stock Valuation
Mamee EPS for current FY is RM0.294, is trading at P/E11.9x. With this multiple, i think downside is limited. Target price RM4.10(P/E14x).

Overall 
4Q10 financial result do not effect my impression of the company, which has good track record for the past 6 years(i only have 6 yrs data). With its average ROE of 14%, good balance sheet with piles of cash( RM52.9m) and growing shareholder equity, its a ACCUMULATE for me.