ADVENTA dont have much surprise this time

FY 31/10/09

Financial Result
For the 4Q ending 31/10/09, Adventa recorded 15% improved in revenue to RM74.75m. PBT was 48% better off but net profit down 1% to RM5.38m, compared to same quarter last year. On y-o-y basis, Revenue rose 52% to RM282.87. Net profit also saw a 24% increase from RM13.58m last year, which convert into EPS 11.72sen.

Stock Valuation
With P/E 24X (EPS 11.32sen, closing 2.83) Adventa is bit expensive. To compare with other player in glove sector, they are trading at average P/E 14X (ttm EPS).

Technical Outlook
Alex Lu had tip a cup-with-handle breakout which is perfectly form, and beautiful completed(see here) . It  reach a high of RM3.02 yesterday, sales pressure drag it back to RM2.83 today closing. Stochastic start to show some retrenchment.

Future Prospect

• Order logs increase from 4.7 to 5.3 months reflecting market demand for its core product, full pandemic has insignificant impact on sales.
• Forex losses of RM14.9m are realized and booked in FY09, hence remove any impact on future earning.
• Credit and cash flow improve with faster transaction time between order received and financial confirmation.
• New high output factory in Kluang and Uruguay shall contribute to profit in FY10.
• Intent to increase investment into distributin and life science division, which will be strong contributor to the group.

Conclusion
After much research, i think ADVENTA is overprice at the moment and the fair value should be RM2.11 (18X EPS). Technical chart looks uncertain at the moment, stochastic has some negative indicator. Short term expectation, SELL.