Tasco's top-line & bottom-line improved q-o-q

Tasco has just announced its results for 2Q2009 ended 30/6/2009. Its net profit increased by 5-fold q-o-q to RM2.4 million on the back of a 16%-increase in turnover to RM61.6 million. Compared to 2Q2008, net profit was lower by 27.5% as was its turnover which dropped by 29.2%. Tasco's performance reflects a sharp recovery in trade in the 2nd quarter as compared to the 1st quarter but was still lower than the same quarter last year.


Table: Tasco's last 8 quarterly results


Chart 1: Tasco's 10 quarterly results

Tasco (closed at RM0.795 yesterday) is now trading at a trailing PE of 8.5 times (based on annualized EPS of 9.4 sen) but at only 0.4 times its book value of RM1.83 as at 30/6/2009. With further improvement in trade, Tasco's financial performance could potentially rebound back to its FY2008 level.

Tasco fell back yesterday in line with the market-wide correction. Before the correction, Tasco appeared to have broke above the strong horizontal resistance of RM0.80-0.82. A successful breakout above this level could be the start of a slow uptrend for this stock which has been in downtrend since its listing, with clear sign of a bottom being made in Oct 2008 to Mar 2009.


Chart 2: Tasco's weekly chart as at August 12, 2009 (Source: Quickchart)

Based on fairly undemanding valuation, improving financial performance & potential technical breakout, Tasco is a stock worth tracking closely. A break above the RM0.80-82 could be a trigger for a small rally to RM1.00.