KUALA LUMPUR (Nov 20): Shares in Palette Multimedia Bhd continued with their decline and fell 13.7% at the midday break today, on the back of recent negative news flow.

Last week, the shares in Palette slipped after MyEG Services Bhd (MyEG) group managing director (MD) Wong Thean Soon said he had disposed of holdings in Palette and will refrain from making any passive investments in listed equities in the future.

“Although momentum is bearish, it is still not oversold yet. If there is no buying support, then it will go down to 28 sen,” TA Securities technical analyst Steven Soo told theedgemarkets.com, adding that the stock may fall as low as 20 sen.

At noon break, the stock was down five sen or 13.7% to 33.5 sen, with 17.33 million shares traded, for a market capitalisation of RM117.22 million.

Since 2008, the stock had been hovering below 10 sen. However, it was on an upward trajectory since Aug 24, 2017 and had reached to a 15-year high of 49 sen on Nov 10. At the current level, Palette’s share price has seen a one-year return of 346.67%.

It is also interesting to note that the company recorded a second consecutive profitable quarter in its first quarter ended Aug 31, 2017 (1QFY18), as its recent Russian venture provided a huge boost in revenue.

It reported a net profit of RM3.03 million compared with a net loss of RM516,000 last year, while its quarterly revenue in 1QFY18 rose 34 times to RM7.84 million, from RM222,000 a year ago.

Meanwhile, the stock is currently trading at trailing 12-month price-earnings (TTM P/E) of 36 times.

When asked if the stock is worth the premium, Soo said: “I believe that it is a bit over-stretched or overvalued.”