Sector. Industrials - Transportation USD41.10 & Logistics - 31 May 2018

Transcription

1 Name of Company KNIGHTSWIFT TRANSPORTATION HOLDINGS INC COMPANY PROFILE Country of Origin/ Exchange Traded US/NYSE Sector Stock Price Industrials Transportation USD41.10 & Logistics 31 May Target Price USD55.69 KnightSwift Transportation Holdings Inc through its subsidiaries, operates the largest truckload fleet in North America as well as extensive rail intermodal and nonasset based freight brokerage and logistics management services. KnightSwift Transportation Holdings Inc ranks as the largest assetbased fulltruckload carrier in the United States, with a fleet of about 23,000 tractors, including owner operators. Roughly 72% of revenue derives from forhire and dedicated truckload services, with an additional 10% coming from refrigerated truckload. The remainder stems from highway brokerage and other assetlight logistics services (11%), as well as intermodal (7%), which uses the ClassI railroads for the underlying movement of the firm's shipping containers. Stock Code Annual Dividend Yield Market Capitalization SUMMARY Valuation Growth Financial Condition Quality of Earnings Operational Efficiency KNX 0.6% USD7.32 billion Based on the Composite Valuation Indicator, the stock has a Target Price of USD Our Target Price represents upside of 35.5% based on stock price of USD41.1 as at 31 May. EPS Growth for the company is moderately negative. The company's financial condition is neutral. The quality of the company's earnings is low and there may be a possibility that profits are inflated. The company's operational efficiency is neutral. Valuation 75 Operational Efficiency Growth Quality of Earnings Financial Condition Stock Report from ProThinker Page 1 of 29

2 Valuation ProThinker believes in using a combination of valuation methods to arrive at a suitable valuation for the stock. This is because while each valuation method has its benefits, it also has its shortcomings. Price to Earnings and Price to Cash Flow Ratios are meaningless when the comany has negative earnings or cash flows. Price to Sales Ratio is more stable because sales are never negative. However, this does not tell us whether the company is able to sell profitably. Price to Book Ratio gives us an indication as to how much we are paying for the company's assets but it is not directly related to the company's profitability. While it is important to value stocks based on multiple indicators, they sometimes lead to differing views on valuation. That is why we use our proprietary Composite Valuation Indicator, which gives you one conclusion based on the best combination of the different indicators, to tell you whether a stock is under or over valued. The graphical format allows you to determine whether or not the composite valuation accurately values the stock and gives you confidence to act on the decision. In addition, we go all the way back 20 years (or as much as information is available) to give you a meaning "average" valuation of the company that takes extreme periods of the dot.com bubble and global financial crisis. Without this long a period, you won't know the extreme highs and lows and therefore will not be able to determine the norm. Price to Earnings Ratio Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec , Logarithmic Scale Stock Price (Price as at 31 May was USD41.10) Stock prices at 0.5x average Price to Earnings ratio Stock prices at average Price to Earnings ratio of 21.2 times Stock prices at 1.5x average Price to Earnings ratio The Price Earnings (PE) Ratio is the most frequently used valuation indicator for a stock. However, there are times when this ratio cannot be used e.g. when the company reports a loss or profit is so minimal that it results in an abnormally high PE Ratio. We use the PE Band to show whether a stock is overvalued or undevalued based on its historical PE. The low, medium and high PE Band have been calculated after analyzing the stock's PE history as far back as 20 years. We don't assume a stock will continue to trade at its average PE but make adjustments to the future PE appropriately if the growth of the company is slowing down. At the price of USD41.10 as at 31 May, KnightSwift Transportation Holdings Inc is trading at a PE Ratio of 11.8 times last 12 months earnings. This is a 44.2% discount to its historical average Price to Earnings Ratio of 21.2 times. (Price based on the historical average PE of the company is indicated by the red line.) Stock Report from ProThinker Page 2 of 29

3 Price to Sales Ratio 1, Stock Price (Price as at 31 May was USD41.10) Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Logarithmic Scale Stock prices at 0.5x average Price to Sales ratio Stock prices at historical average Price to Sales ratio of 2.0 times Stock prices at 1.5x average Price to Sales ratio The Price to Sales Ratio is another commonly used valuation indicator for a stock. It overcomes some of the limitations of the Price Earnings Ratio in that it can be used even when the company is not making a profit or only making minimal profits. However, it should not be used by itself because a company may be achieving sales but not profits. At the price of USD41.10 as at 31 May, KnightSwift Transportation Holdings Inc is trading at a Price to Sales Ratio of 2.0 times last 12 months sales. This is a 2.0% discount to its historical average Price to Sales Ratio of 2.0 times. Stock Report from ProThinker Page 3 of 29

4 Price to Cash Flow 1, Stock Price (Price as at 31 May was USD41.10) Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Logarithmic Scale Stock prices at 0.5x average Price to Cash Flow ratio Stock prices at historical average Price to Cash Flow ratio of 11.6 times Stock prices at 1.5x average Price to Cash Flow ratio Accounting profits can be subject to manipulation. Therefore, some investors prefer to value a company based on cash flows generated by the operating activities of the company. Furthermore, a company that generates high sales but not operating cash flows could be heading for trouble because it is cash that pays the operating expenses. The Price to Cash Flow ratio of most firms are volatile and should not be used in isolation to determine the valuation of the stock. At the price of USD41.10 as at 31 May, KnightSwift Transportation Holdings Inc is trading at a Price to Cash Flow Ratio of 14.6 times last 12 months cash flow. This is a 26% premium to its historical average Price to Cash Flow Ratio of 11.6 times. Stock Report from ProThinker Page 4 of 29

5 Price to Book Ratio 1, Stock Price (Price as at 31 May was USD41.10) Logarithmic Scale Stock prices at 0.5x average Price to Book ratio Stock prices at historical average Price to Book ratio of 2.8 times Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Stock prices at 1.5x average Price to Book ratio While the above three indicators value a company based on what it is generating (i.e. profits, sales or cash flow), Price to Book ratio values a company based on what it owns (i.e. its net tangible assets). At the price of USD41.10 as at 31 May, KnightSwift Transportation Holdings Inc is trading at a Price to Book Ratio of 1.4 times current book value. This is a 52% discount to its historical average Price to Book Ratio of 2.8 times. Stock Report from ProThinker Page 5 of 29

6 Dividend Yield Stock Price (Price as at 31 May was USD41.10) Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Logarithmic Scale Stock Prices at 150% of Average Dividend Yield Stock Prices at Average Dividend Yield of 1.0% Stock Prices at 75% of Average Dividend Yield For stocks that has a history of paying meaningful dividends, the stock price is dependent on how much dividend the investor expects to get from the company. At the price of USD41.10 as at 31 May, KnightSwift Transportation Holdings Inc is trading at a Dividend Yield of 0.6%. This is a 36.9% premium to its historical average Dividend Yield of 1.0%. (Note: The lower/higher the dividend yield, the more expensive/cheaper the stock is.) Stock Report from ProThinker Page 6 of 29

7 Composite Valuation Indicator Stock Price (Price as at May was USD41.10) Lower Band Logarithmic Scale Normal Band Higher Band Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Target Price of USD55.69 (based on Composite Valuation Indicator) Analysts Target Price of USD52.50 The Composite Valuation Indicator is derived using our proprietary method to put all the valuation indicators in a way that explains the stock price best. It recognizes that looking at a single indicator is dangerous and inadequate. It also overcomes the difficulty of different indicators pointing giving different signals and difficult to act upon if you do not have a composite valuation. Our Composite Valuation Indicator does not assume that valuation stays constant at the average level. If the growth of the company slows down, it will adjust the valuation downwards to reflect the slower growth. Based on the Composite Valuation Indicator, the stock has a Target Price of USD Our Target Price represents upside of 35.5% based on stock price of USD41.1 as at 31 May. Stock Report from ProThinker Page 7 of 29

8 Growth 140.0% 120.0% 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% 20.0% 40.0% Revenue ,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 In USD Revenue (historical) RHS Revenue (forecasted) RHS YoY % (historical) LHS YoY % (forecasted) LHS Revenue has been on an uptrend since. Revenue growth has been erratic. Below are analysts' forecasts of revenue for the next few years. Total Revenue YoY growth 5,389, % 5,762, % ,053, % Stock Report from ProThinker Page 8 of 29

9 Earnings per Share In USD Earnings per Share (historical) Earnings per Share (forecasted) Earnings per Share has been erratic. Below are analysts' forecasts of the growth in EPS for the next few years. Earnings per Share YoY growth 2.28 USD 47.5% 2.77 USD 21.5% USD 13.7% Stock Report from ProThinker Page 9 of 29

10 2020 For plotting purposes, axis limits set at 1 to +1. Return on Equity (ROE) 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% Return on Equity ROE (historical) Return on Equity ROE (forecasted) Return on Equity (ROE) measures the amount of profit a company makes with the money that shareholders have invested. A rising ROE is an indication of improving management efficiency. It is also an indication of how fast the company can grow in future through profits that are retained and not distributed as dividends. When analyzing ROE trends, it is important to know why ROE is going up or down. There are three main ways ROE can improve. 1. If the company is able to generate more sales per dollar of assets (what we call Asset Turnover) 2. When the company is able to improve its Net Profit Margin 3. When the company borrows more (what we call Equity Multiplier) The first two ways are healthy ways to grow its ROE but it may be undesirable for a company to grow its ROE by borrowing more if the company's financial condition is already weak. This is why it is so important to beyond determining whether a company's ROE is improving to determining what the company did to improve its ROE. If the company grew its ROE by borrowing more, it is important to gauge the company's financial condition to see if it is still healthy. The ROE of the company has been erratic. The latest ROE of the company is 9.3% for financial year ending Dec. Stock Report from ProThinker Page 10 of 29

11 Asset Turnover (Revenue/Assets) Asset Turnover measures the amount of revenue a company is generating from its assets. Uptrend/downtrend indicates that the company is becoming more/less efficient in the use of its assets. The company's Asset Turnover has been deteriorating since % 120.0% 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% Equity Multiplier (Asset/Equity) For plotting purposes, axis limits set at 10 to +10. Equity Multiplier measures the extend of borrowings the company has vs. its assets. Uptrend/downtrend indicates that the company is borrowing more/less. Companies borrow more to help them to leverage their operations and improve ROE. On the other hand, companies may choose to reduce their leverage and have lower ROE. The Earnings Multiplier of the company has been erratic (2.00) (4.00) (6.00) (8.00) (10.00) Net Profit Margin (Net Income/Revenue) 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Net Profit Margin measures the amount of money the company makes after it deducts all expenses. Uptrend/downtrend indicates that the company is more/less profitable. The company's Net Profit Margin has been on an uptrend since A company may be growing at a fast rate historically but how do I know this rapid growth rate is sustainable? Is the company inflating its earnings through suspicious accounting practices. These questions requires that we look in greater detail at the Quality of Earnings. Stock Report from ProThinker Page 11 of 29

12 Stock Report from ProThinker Page 12 of 29

13 Quality of Earnings Beneish MScore MScore (2.0) (4.0) (6.0) (8.0) (10.0) Below this line suggests company is not profit manipulator The Beneish Mscore is a measure the likelihood of a company manipulating its earnings. Based on this formula, a company is more likely to manipulate earnings if: * Sales is not translating to cash and receivables are growing * Gross profit margin is declining giving the company pressure to manipulate earnings * The company is growing its nontangible assets which may be used to manipulate earnings * High sales growth puts pressure on the company to continue to report high growth by manipulating earnings * A lower rate of depreciation may be a sign that the company wants to boost its earnings * Lower selling and admin expenses as a percentage of sales may point to the fact that some sales may not be real A score of less than 2.22 suggests that the company is not a profit manipulator and a score above 2.22 suggests that the company might be manipulating its profits. The company's Mscore has been erratic. The latest MScore of the company as at Dec was 2.01, which suggests that the company might have been manipulating its profits. Stock Report from ProThinker Page 13 of 29

14 Sloan Accrual Ratio 25.0% 20.0% 15.0% 10.0% 5.0% Sloan Ratio Below this line profit high quality profits Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec % 5.0% 10.0% The Sloan Accrual Ratio measures the extent to which a firm's earnings comprise of accrual (i.e. noncash) items. In other words, the company makes profit but they do not translate to cash because of some of these reasons: * Sales are made on credit to customers and not yet paid * Money is spent on buying more inventory * Increased earnings comes from reducing depreciation expense, which is noncash Earnings with high accrual (or noncash) component are more likely to be reversed in future resulting in The latest Sloan Accrual Ratio is neutral. Stock Report from ProThinker Page 14 of 29

15 Quality of Earnings Quality of Earnings Score Below this point low quality earnings Since it is not possible for one indicator to capture all instances of earnings manipulation, ProThinker employs both methods to arrive at a Composite Score of the company's earnings quality. A score of 25 and below (the red line) indicates a higher probability that earnings may have been manipulated. Stock Report from ProThinker Page 15 of 29

16 Dividends Dividend per Share Dividend per Share (historical) Dividend per Share (forecasted) Dividend per share has been on an uptrend since. Forecasted future dividend per share growth are as follows: 4.2% 4.0% % Dividends vs. Free Cash Flows , , , , , , , ,000 0 Total dividends (historical) Free Cash Flows The company always pays less dividends than its free cash flow, which is very good. Stock Report from ProThinker Page 16 of 29

17 Dividends & Share Buybacks 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% Total Shareholder's Yield Buyback Yield Dividend Yield % 1.0% 0.0% Dividend is not the only way that a company returns money back to shareholders. Any way it could do so is via share buybacks. Dividend Yield has been erratic. Buyback Yield has been on a downtrend since. Total Shareholder Yield has been on a downtrend since. Stock Report from ProThinker Page 17 of 29

18 Operational Efficiency Piotroski Score Piotroski Score Above this line, quality of company is strong Below this line, quality of company is weak 2 1 The Piotroski score measures the operational efficiency of a company. It is a wellrounded indicator that measures profitability, quality of earnings, financial condition and operating efficient. Research has show that companies with high Piotroski scores outperform those with low scores. Piotroski scores range from a low of zero to a high of nine based on whether the company passes or fails a criteria. Return on Asset measures a company's ability to generate profits from the use of its assets. Cash Flow Return on Assets goes one step further to ensure that it is not just paper profits but cash flow that the company is generating. Current Ratio is a measure of a company's liquidity position and determines whether it has sufficient liquid assets to meet shortterm liabilities. The number of shares is compared with the previous year as a company that is not generating healthy cash flow may end up raising new equity and this is indicative of the health of the company. Gross Profit Margin is a measure of whether the company is selling its products/services at a high enough margin to cover its operating expenses. Asset Turnover is a measure of how well a company uses its assets to generate sales. Criteria Return on Asset (Net Income / Asset) is positive Cash Flow Return on Asset (Cash from Operations / Asset) is Change in Return on Asset is positive over previous year Cash Flow Return on Asset higher than Return on Asset Change in longterm debt / Asset is positive (i.e. borrowing less) Change in Current Ratio (Current Assets / Current Liabilities) is Number of shares this year less than last year Change in Gross Profit Margin is positive Change in Asset Turnover (Sales/ Assets) is positive Total (Piotroski Score) Score The company's Piotroski score has been erratic. The latest Piotroski score is 5, which is in the moderate zone. Stock Report from ProThinker Page 18 of 29

19 Financial Condition It is important to analyze the financial condition of the company you want to invest in because if a company goes bankrupt, the chances are high that you will lose all your investment. Even if the company does not go bankrupt, the deterioration in financial condition will cause more and more investors to avoid the company and valuation will drop. Weak financial condition also limits the opportunities that a company has to grow its business. In order to determine the financial condition of the company, we usually use the Z score, which was introduced by Edward Altman, a Professor of Finance at New York University. This score is a composite measure of a firm's financial condition and has been proven to be able to predict with high accuracy whether a firm will go into bankruptcy within the next two years. Altman ZScore Altman ZScore Below this Distress Zone Above this Safe Zone 1.00 Zscore has been deteriorating since. The main reasons for this are: * lower working capital * lower retained earnings as a proportion of total assets * lower EBIT as a proportion of total assets * higher level of borrowings * lower revenue as a proportion of total assets The latest ZScore of the company as at Dec was 2.5, which is near the safe zone. Stock Report from ProThinker Page 19 of 29

20 The various components that go into the ZScore are shown below: Revenue/Total Assets 140.0% 120.0% 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% Retained Earnings/Total Assets 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% This is the Revenue Turnover ratio and it reflects the amount of revenue the company is able to generate from the use of its assets. Companies that have difficulty generating revenue cannot generate consistent cash flow to pay its bills. The amount of revenue generated from assets has been on a downtrend since. The more profits are retained within the firm, the greater the buffer of reserves for the company to weather difficult times. The level of retained earnings relative to assets has been on a downtrend since. Currently, retained earnings are at 13.2% of total assets. Return on Asset Market Cap/Total Liabilities 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 0.0% 200.0% 400.0% 600.0% 800.0% Plotted in reverse scale % % % % This measures the ability of the company to generate EBIT (earnings before interest and taxes) from its assets. EBIT as a % of assets has been erratic. Currently, EBIT is at 2.6% of total assets. This is an indication of the level of borrowings of the firm. A high level of borrowings will affect survivability as it may not have enough cash flows to meet its debt obligations. The level of borrowings has been on an uptrend since. Stock Report from ProThinker Page 20 of 29

21 Working Capital/Total Assets 25% 20% 15% 10% 5% 0% Working capital is essential to the operations of the company and a low level of working capital may result in liquidity problems. Working capital relative to total assets has been on a downtrend since. Stock Report from ProThinker Page 21 of 29

22 Cash Flow Analysis Cash is the lifeline of a business. The company needs cash, not profits to pay salaries, suppliers etc. Profits may not translate to cash if a company is not efficient in managing its Cash Conversion Cycle (more of that below). For example, when a company sells a product at a price higher than costs, it makes a profit. But until he collects payment from the customer, the profit does not translate into cash. Cash Flow Analysis is about analyzing whether a company is able to generate healthy cash flows, which are essential not only to grow the business but also to remain in business. 400, , , ,000 Cash Flow Analysis Cash Flow from Operations Cash Flow from Financing (100,000) (200,000) (300,000) (400,000) Cash Flow from Investing Net Change in Cash In the last 5 years, the company's cash increased cash by USD70,965. Cash from Operations increased cash by USD1,083,393, Cash from Investing Activities decreased cash by USD865,916 while Cash from Financing Activities decreased cash by USD146,512. The most important contributor to cash is Cash from Operations, which is a heathy sign. 600, , , , , , (100,000.00) (200,000.00) Cash from Operations Funds from Operations Change In Working Capital Cash Flow from Discontinued Operations Cash Flow from Other Operating Activities In the last 5 years, the company's Cash from Operations increased cash by USD1,083,393. The biggest item affecting Cash from Operations is Funds from Operations (Net Income plus Noncash expenses), which increased cash by USD1,486,475. This is followed by Cash Flow from Other Operating Activities, which decreased cash by USD331,682. Stock Report from ProThinker Page 22 of 29

23 150, ,000 Cash from Financing Activities Payment of Dividends 50,000 (50,000) (100,000) (150,000) Net Issuance/(Repurchase) of Stock Net Issuance/(Repayment) of Debt Other Financing (200,000) In the last 5 years, the company's Cash from Financing Activities decreased cash by USD146,512. The biggest item affecting Cash from Financing Activities is Payment of Dividends, which decreased cash by USD104,029. This is followed by Net Issuance/(Repurchase) of Stock, which decreased cash by USD54, ,000 (50,000) (100,000) (150,000) (200,000) (250,000) (300,000) Cash from Investing Activities Net Sale/(Purchase) Of Property, Plant, Equipment Net Sale/(Purchase) of Business Net Sale/(Purchase) of Investment Cash From Other Investing Activities (350,000) In the last 5 years, the company's Cash from Investing Activities decreased cash by USD865,916. The biggest item affecting this is (Purchase)/Sale Of Property, Plant, Equipment, which decreased cash by USD85,368. This is followed by (Purchase)/Sale Of Business, which decreased cash by USD2,734. Stock Report from ProThinker Page 23 of 29

24 Cash Conversion Cycle A company that is in the business of producing and selling physical goods typically goes through this cycle: purchase inventory, work on the product, sell on credit and collect from customers. The period taken from the time it pays for the inventory in cash to the time it collects back cash from its customers is called the Cash Conversion Cycle. The Cash Conversion Cycle comprises the time the inventory remains in your factory (production and selling cycle) and the time it takes for your customers to pay you (customer credit), less the time you take to pay your suppliers (supplier credit). The company's Cash Conversion Cycle is depicted graphically below. Generally, the shorter the cash conversion cycle the better Cash Conversion Cycle (50.0) (100.0) (150.0) Inventory Days Receivables Days Payables Days Cash Conversion Cycle Cash Conversion Cycle has been lengthening (deteriorating) since. The latest Cash Conversion Cycle of the company as at Dec was 65.0 days. During this period * Receivables Days contributed negatively to the Cash Conversion Cycle. * Payables Days contributed negatively to the Cash Conversion Cycle. Stock Report from ProThinker Page 24 of 29

25 Inventory Days Receivables Days Inventory Days refers to the average number of days inventory stays in the company before being sold. Lengthening Inventory Days could be due to prolonged production or sales cycle. Inventory Days has been shorterning (improving) since. The latest Inventory Days as at Dec was 4.8 days. Payables Days Receivables Days reflect the average time it takes for the company to collect cash from its customers. If the company is increasingly collecting cash later than its credit terms, this may be an indication of potential bad debts. Receivables Days has been lengthening (deteriorating) since. The latest Receivables Days as at Dec was 86.4 days This measures the average length of time company takes to pay supplers. A lengtheneing period could mean company is able to extend credit term from suppliers but may also be symptomatic of payment problems. Payables Days has been lengthening since. The latest Payables Days as at Dec was 21.4 days. Stock Report from ProThinker Page 25 of 29

26 Stock Price & Technical Indicators Stock Price & Volatility Jan Jun Nov Apr Sep Feb Jul Dec May Oct Mar Aug Jan Jun Nov Apr Sep Feb Jul Dec Right Axis 3 month rolling standard deviation Left Axis Stock Price If the standard deviation of stock prices (as represented by the red bars) get higher (lower), it means that stock prices have become more (less) volatile. Stock Report from ProThinker Page 26 of 29

27 Stock Prices & Moving Averages Stock Price 50day/7week Moving Average 200day/29week Moving Average Apr 24 Jun 24 Aug 24 Oct 24 Dec 24 Feb 24 Apr 24 Jun 24 Aug 24 Oct 24 Dec 24 Feb 24 Apr 24 Jun 24 Aug 24 Oct 24 Dec 24 Feb The 50day moving average line crossed the 200day moving average line from the bottom in Jun, which is a bullish sign Relative Strength Index Stock Price Apr 24 Jun 24 Aug 24 Oct 24 Dec 24 Feb 24 Apr 24 Jun 24 Aug 24 Oct 24 Dec 24 Feb 24 Apr 24 Jun 24 Aug 24 Oct 24 Dec 24 Feb Relative Strength Index (14 weeks) Below this RSI oversold level Above this RSI overbought level The Relative Strength Index is a momentum indicator that measures the speed and magnitude of price changes to detect whether the stock has reached overbought or oversold levels. Based on the 14week Relative Strength Index, the stock is in the neutral territory since 6 Apr. Stock Report from ProThinker Page 27 of 29

28 60.00 Bollinger Bands Stock Price Upper Bollinger Band Lower Bollinger Band 24 Apr 24 Jun 24 Aug 24 Oct 24 Dec 24 Feb 24 Apr 24 Jun 24 Aug 24 Oct 24 Dec 24 Feb 24 Apr 24 Jun 24 Aug 24 Oct 24 Dec 24 Feb This Bollinger Band is a plot of two standard deviations (a measure of stock volatility) above and under the stock price. Based on this technical indicator, the closer the stock price is to the upper band, the more overvalued it is and the closer it is to the lower band, the more undervalued. As at 6 Apr, the stock is nearer to the lower band, which is an oversold situation Moving Average Convergence/Divergence (MACD) Fast EMA Slow EMA Stock Price Histogram MACD Signal 15 Apr 13 May 10 Jun 8 Jul 5 Aug 2 Sep 30 Sep 28 Oct 25 Nov 23 Dec 20 Jan 17 Feb 17 Mar 14 Apr 12 May 9 Jun 7 Jul 4 Aug 1 Sep 29 Sep 27 Oct 24 Nov 22 Dec 19 Jan 16 Feb 16 Mar 13 Apr (1.00) (2.00) Stock Report from ProThinker Page 28 of 29

29 The MACD is a momentum indicator that shows the difference between two moving averages of stock prices, a longer one for 26 periods and a shorter one for 12 periods. This "difference" is then smoothened out to trigger buy and sell signals as indicated by the histograms. If the histogram turns positive, it is a bullish signal and if it turns negative it is a bearish indicator. As at 30 Mar, the histogram has turned negative, which is a bearish indicator Stock Price vs. 52week high and low Stock Price 52week high 52week low Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb This is a technical indicator whereby a stock that is trading near its 52week high is bought and a stock that is trading near its 52week low is sold. The stock, which is trading at USD41.10 as at 31 May, is nearer to its 52week high, which is a bullish indicator. Source of Data Company description, historical financial statements data and price data are from gurufocus.com. Estimates are from gurufocus and/or 4traders.com Thomson Reuters. Disclaimer This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither ProThinker nor any other party guarantees its accuracy or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of ProThinker. Copyright(c). All rights Stock Report from ProThinker Page 29 of 29