TienWah's net profit jumped

Tien Wah Press Holdings Berhad ('TienWah') is involved in printing- specializing in cigarette carton, consumer goods packaging and advertising materials. Its manufacturing operations are presently sited at factories located at Petaling Jaya, and Puchong in Malaysia, Vietnam Singapore Industrial park in Ho Chi Minh City and Smithfield, New South Wales Australia.

The operation in Vietnam & Australia were acquired as follows:
1) On 21 December 2007, TienWah acquired a wholly-owned subsidiary, New Toyo Investments Pte Ltd (“NTIV”) from New Toyo International Holdings Ltd ("NTIH"), the ultimate shareholder of TienWah. NTIV is an investment holding company which owns 100 % of Alliance Print Technologies Co.Ltd. (“APT”) in Vietnam; and
2) On the 31st Oct 2008, TienWah (together with NTIH) acquired the entire equity interest in Anzpac Services(Australia) Pty. Ltd. ("Anzpac"), a printing packaging and paper board converting for the Australiasia and overseas market. TienWah controls 51% of the JV that owns Anzpac, while NTIH owns the remaining 49%.

The acquisition of Anzpac has enabled TienWah to secure a contract for [7+3] years from British American Tobacco ('BAT') to supply its printing requirement for the Asia Pacific region. This contract will help TienWah in periods of uncertainty ahead.

TienWah has just announced results its 4Q2008. Net profit jumped 76.6% q-o-q or 82.2% y-o-y to RM6.9 million, while turnover increased by 52.4% q-o-q or 103% y-o-y to RM64.5 million. The improvement in both turnover & net profit is attributable to better performance from all subsidiaries, including the newly-acquired Anzpac.



If TienWah can repeat its 4Q2008, then its full-year earning will amount to 40 sen. Based on its closing price of RM1.45 yesterday, TienWah is now trading at a PE of 3.6 times. That's very attractive.

From the monthly chart below, we can see that TienWah is in a very gradual long-term uptrend line, with support at RM1.15-20.


Chart: TienWah's monthly chart as at Feb 24, 2009 (source: Quickcharts)

Based on the good financial performance & attractive valuation, TienWah is a very good stock for long-term investment.