You see, in regards to QL’s P/E, on pure quantitative valuation, you’ll come to find its EPS is a mere 0.0983 based on trailing 4Qs, dividend pun chicken figure 0.045

NP margin for the poultry sector has been narrowing from approx.7% 3 years ago (correct me if wrong cuz I just vaguely recall only) to 5.6% as of 2020. It would be really depressing if I were to look at these metrics only..
What’s reassuring is, we can see their revenue and net profit has always been increasing for the past 10! years, during March selldown, their business still remained relatively strong compared to other companies across all sectors, share price only took a small dip, then they continued to March forward with share price driven up to almost rm10 before announcing a 1:2 bonus issue..
I mentioned in the past that company valuation is more of an art than science,or combination of both. If you have a rigid criteria to judge if a company is worth investing, you might end up missing a lot of potential growth companies or multi bagger..think apple,alphabet,amazon..their PE are all driven up so high due to expectation on future earnings.
Some people argue that in the current stock market it’s really hard to find a company that fits all the selection criteria of Benjamin Graham, because of all readily info available to everyone on internet. You and I are just one click away from obtaining the same info about a company, so what gives me an edge in discovering a great company earlier than everyone else? You can see it this way, a relatively high PE of a company signifies acknowledgement of people towards the company growth potential. You can invest in a low PE company but if it has no future earning potential, you won’t yield a good return as well.
Having said that, does that mean we should buy into high PE stocks? IMO it really depends...as Howard Mark puts it...it’s not about what we buy, but buying things well.. if you believe a company is worth investing no matter the price to pay for, you might end up not making money even if the company has a strong fundamental.
If i may add, QL is Agricultural Products sector, which has a median 4QPE of 12.7, or median CPE of 10.4.
At 4QPE of 59.5 it's already 5.7x of the sector median, with ROE only 7.4 if i have to guess the technical support of 5.74 might not hold.
you picked QL probably due to it's the only one with YoY rev and profit growth.
i do not invest in this sector because this particular sector only about ROE 1.55, implying it's not having a great time compared to other profitable sectors.
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