NTPM financial result update

FY31/7/10
Financial Result
NTPM among the first announce its FY31/7/10(due 30/9/10) to announce its 1Q result.
For the quarter under review, its revenue stay flat at RM94.5m, however PBT drop slightly to RM16.6m from RM18.4m recorded 1Q09. The decrease of RM1.8m mainly due to increase in raw material cost.

To compare to preceding quarter, we can see a similarity where revenue rise a little bit but PBT decrease because of the same reason mention above.

I find it interesting to see its current assets and total liabilities increase at the same time. In further look, company has borrow another RM19.37m from the bank, but no explanation given  why they need more cash?

Technical Outlook
NTPM share price is trap between support(RM0.56) and resistance(RM0.63) line. This two line are very strong as i cannot see the price to go no-where then flat(like their earning) in the near future.

Stock Valuation
With today closing of RM0.595, it is trading at P/E 11.7x(eps RM0.051ttm). I think NTPM is fully value with this multiple.

Overall
Company top line has been remain stable but bottom line has drop slightly, due to increase of raw material cost. Over the short term, it is a bit hard for company to offset this additional cost to the customer. Unless it can explore some new market or product, company profit might stay flat. Therefore, it withdraw from my "Growth" list of company but remain a good company for long term investor.

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NTPM tissue product sales decline

FY30/4/10
Financial Result
Compare 4Q10 with 4Q09, NTPM recorded a marginally lower revenue(93.4mil vs 95.1mil), profit before tax(17.4mil vs 18.3mil) and net income also sees a drop from 15mil to 14.2mil this FY. The decline in the sales of tissue product lower down the revenue, subsequently affect the net income. Increase in cost of raw materials also affect net income.
However, FY10 results has continue to grow from FY09. Revenue growth 6.84% to 383.1mil from 358.6mil last FY. EPS also increase from 4.1cent preceding year to 5.3cent current year. Company continue to declare generous dividend as to award investors.
*Single digit revenue growth is the 1st time for the past five years.

   
Technical Outlook
Share price has been moving pretty consistently between support (RM0.54)and resistance line(RM0.61). For the past 9 months, we see retrenchment after every rally. Will it do the same this time?

Stock Valuation
With EPS of RM0.053, NTPM is trading at PE11x(today closing RM0.585). With this multiple, i think NTPM is fully value.

Overall
NTPM use to be a fundamentally strong company, and i think it is still be. It is a recession proof stock we can retain during economic tough time. However, FY10 growth of only 6.84% leave me wondering future of the company as growth company. Therefore, i will leave it alone for now.

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NTPM

Company Profile
NTPM Holdings Berhad  founded in 1975 and is headquartered in Pulau Pinang, Malaysia. It is an investment holding company, engages in manufacturing and trading paper and personal care products. It offers:
1.Tissue products >PREMIER, ROYAL GOLD, and CUTIE brands
2.Personal care products >INTIMATE, DIAPEX, and PREMIER COTTON brands.
3.Provide complete convenient and hygienic solution to companies and institutions including tissue products,
   soaps and dispensers with brands such as CONV. and ROYAL GOLD

Financial Result
Compare to corresponding quarter in preceding year, company revenue increase RM10.01m to RM101.58m, mainly contributed by the growth in sales of tissue, sanitary napkins and baby diapers. Profit before tax stands at RM21.08m, which translate into profit margin of 21%. Increase in revenue makes the net profit 35% better off with RM16.56m, compare to RM12.28m preceding year. EPS surged 50% to RM0.015
We can also see a steady growth of revenue and net profit from preceding quarter. RM93.63m being revenue and net profit of RM14.53 recorded for preceding quarter.

 
Technical Outlook

Strong resistant RM0.59 has been broken up, turn into immediate support.Next support is RM0.57 Today closing RM0.595 stays above MA14d, which is a good sign. My target price is RM0.67 within the next 3 months.


Stock Valuation
NTPM is trading at PE11x (based on ttm EPS RM0.054 and today's closing RM0.595). At this PE, it is fairly attractive. If we value using PE14x, its fair value is RM0.75

Overall
I think NTPM price will be pretty firm above RM0.59. With its good financial performance and very firm fundamental, one should take every chance to BUY on DIPS.

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