Friday, May 11, 2012

Tienwah- an attractive stock

Results update

Tienwah announced its results for QE31/3/2012. Its net profit dropped 34% q-o-q but rose 26% y-o-y to RM4 million while its revenue was unchanged q-o-q but rose 7% y-o-y to RM97 million. If you were to exclude the exceptional items, such as forex gain, provision for impairment loss on property owned & provision for retirement benefit to its CEO, Tienwah's pre-tax profit is quite steady at RM10-11 million.

Table: Tienwah's last 8 quarterly results

Chart 1: Tienwah's last 21 quarterly results


Tienwah (closed at RM2.13 yesterday) is now at a PE of 7.9 times (based on last 4 quarters' EPS of 27 sen). At this PE, Tienwah is deemed quite attractive. It could trade up to a PE of 10 times.

Technical Outlook

Tienwah has broken above the psychological RM2.00 level since February. Its next resistance is at RM2.70 & then at RM3.20.

Chart 2: Tienwah's weekly chart as at May 10, 2012 (Source: Tradesignum)


Based on attractive valuation & positive technical outlook, I believe Tienwah is a good stock for long-term investment.

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