Proton announced its results for QE30/9/2009 where its net profit increased by 50.4% q-o-q or 87.3% y-o-y to RM82.1 million. Its turnover increased by 13.6% q-o-q or 14.0% y-o-y to RM2.104 billion. The improved performance was due to sales of higher margin products. Sales volume was higher than the immediately preceding quarter, QE30/6/2009 but lower than the previous corresponding quarter, QE30/9/2008.
Table: Proton's 8 quarterly results
Chart 1: Proton's 14 quarterly results
Valuation
If Proton can maintain the performance of 1H2009, its EPS for FY2009 would be about 49.6 sen. Based on this & its closing price yesterday of RM3.71, Proton is now trading at a PE of 7.5 times. This compared quite favorably to Tan Chong's PE of about 10.8 times for FY2009 (based on its closing price of RM2.42 & 9-month EPS of 16.88 sen). However, Tan Chong's share price may have factor in potential income from its development of its Segambut land.
Technical Outlook
Proton may have formed a medium-term uptrend line, with support at RM3.65. A bullish breakout above a short-term downtrend line is noted at RM3.70-72, with slight increased in volume traded.
Chart 2: Proton's weekly chart as at Nov 24, 2009_2.40pm (Source: Quickcharts)
Conclusion
Based on improving financial performance & relatively attractive valuation, Proton could be a good stock for medium-term investment. The technical outlook is positive, with support from the medium-term uptrend line & a possible breakout of its short-term downtrend line.
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