WTHorse's bottomline improved again

WTHorse announced its results for 3Q2008 ended 30/9/2008 on November 19, 2008. Its net profit increased by 21.0% q-o-q or 37.0% y-o-y to RM16.4 million. Turnover increased marginally by 1.8% q-o-q or 24.1% y-o-y to RM134.5 million. For 4 quarters to 30/9/2008, WTHorse's net profit increased by 31.0% from RM42.5 million to RM55.7 million, while its turnover has increased by 16.3% from RM412 million to RM479 million.



WTHorse's financial position as at 30/9/2008 is deemed satisfactory. Its current ratio has improved from 2.2 times as at 31/12/2007 to 2.7 times as at 30/9/2008. Gearing ratio (i.e. borrowings to shareholders' funds) has dropped from 0.34 to 0.25 during the same periods.

WTHorse (closed at RM1.05 yesterday) is now trading at a PE of 4.4 times (based on last 4 quarters' EPS of 24 sen) or at a Price to Book of 0.5 times (based on NTA per share of RM2.32 as at 30/9/2008). At these multiples, WTHorse is deemed very attractive.

WTHorse is still in a downtrend, with resistance at RM1.05. While the share price had surpassed the downtrend line on a few occasions in the past 2 weeks, the thin volume does not support a conclusion that a bullish breakout was in-hand. At best, WTHorse may move sideway & begin its bottoming phase.


Chart: WTHorse's weekly chart as at Jan 20, 2009 (source: Quickcharts)

Based on attractive valuation, WTHorse could be a good stock for long-term investment.