Timecom- tested its uptrend line at RM0.67-0.68

Time Engineering Bhd ('Time') completed its Offer for Sale of its stake in Time Dotcom Bhd ('Timecom') with the crediting of the Timecom shares to the shareholders' account yesterday (here). To recap, Time offered its shareholder the right to buy its Timecom share on the basis of 8-for-10 at a price of RM0.53 each.

This means that the shareholders can sell the share today to realize their gain if so desired. And, what a day to sell after the equity markets everywhere took a sharp tumble. Timecom also dropped and hit a low of RM0.65 before it recovered to close at RM0.67. From the chart below (plotted on log scale), we can see that Timecom is still in an uptrend line with support at RM0.67-0.68. If this support is not violated, it could be a good entry level for a turnaround company.


Chart: Timecom's weekly chart as at August 2, 2011 (Source: Tradesignum)

For FY2010, Timecom reported a net profit of RM107 million on a turnover of RM321 million. For 1Q2011 (QE31/3/2011), it reported a net profit of RM23 million on a turnover of a RM70 million. Based on its existing operation, Timecom's EPS is about 5 sen. As such, the stock is curretnly trading at a PE of 13.4 times. It proposed to acquire a few more businesses from its shareholders which could boost its earning going forward (here).