ZHULIAN weather the storm well

31/8/2011
Financial Result
Zhulian has just announced its FY2011 third quarter result. To compare with 3Q2010, company's revenue jump 25% to RM91.8m. Following the top line, company's bottom line also sees a 23% increase to RM24.3m. This translate into a EPS of RM0.053.

For the 9 months period, company recorded net profit of RM67.3m. Base on the consistent performance for the past few quarter, Zhulian net profit for FY2011 should exceed RM87m, it achieve for FY2010.

Technical Outlook
Zhulian share price is in a medium downturn since Jun 2010. It recorded a high of RM2.09(adjusted) on 21/6/2010, then all the way south to a low of RM1.50 on 26/9/2011. However, it manage to hold its ground and climbing slowly. MACD positive, ADX positive, MA(14d) to cross over MA(50d) is crucial.

Today, share price (RM1.70) is sitting on the fence of the downtrend line. Can it fall to the right site? Let's keep that in the watch list.

Stock Valuation
For the past twelve month, Zhulian recorded EPS of RM0.198. Base on current share price, it is trading at P/E 8.6x. Being a high yield counter, it should demand 10xPER. Fair price should be RM1.98.

Overall
Zhulian has been declare dividend every quarter. For the last couple of years, company has declare more than 60% of its earning. Despite the generosity, Zhulian's piggy bank worth RM0.29 per share. I think Zhulian is a good dividend stock to hold, providing cash flow in the bull or bear.