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Tuesday, August 14, 2012

Tienwah's bottom-line jumped

Results Update

For QE30/6/2012, Tienwah's net profit increased by 126% q-o-q or 14% y-o-y to RM9.1 million on the back of increased revenue, which rose 8.6% q-o-q or 7.7% y-o-y to RM106 million. The company attributed the improved bpottom-line to increase in the top-line as well as higher profit margin (due to greater operating efficiency).


Table: Tienwah's last 8 quarterly results


Chart 1: Tienwah's last 22 quarterly results

Valuation

Tienwah (at RM2.06 as at 9.30am) is trading at a PE of 7.3 times (based on last 4 quarters' EPS of 28.23 sen). At this PE, Tienwah is deemed attractive.

Technical Outlook

Tienwah is in a long-term uptrend, with 'uptrend line' support at RM1.75. Its upside is capped by the line connecting its previous peaks for the past 12 years at RM2.15. An upside breakout above this level would be very bullish for the stock.


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

Conclusion

Based on good financial performance and attractive valuation, Tienwah is a good stock for long-term investment. Its next upleg would only begin once it has broken above the resistance of RM2.15.

5 comments:

zhouyu44 said...

The structural bull market of 2012 is about to take off. All the signs point to this. Trade wisely and fearlessly to profit. Do you agree?

Ethan Lee said...

Hi Alex,

How you think about SKPRES? TA securities give its target price of RM0.54, and also said that SKPRES may be privatised.

Please comment.

Thank you.

富升 said...

Good morning Alex,

Beside Tienwah, another printing company also might doing well -> is Tomypak.

You have any opinion on Tomypak?

Alex Lu said...

Hi Ethan Lee


SKPRES is profitable contract manufacturer, making Audio Accessories, Computer Accessories, Video Accessories, etc.

Its net profit for FYMar2012 was RM38 million [or EPS of 4 sen]. Based on current price of RM0.37, it is trading at a PE of 9 times. With its aggressive growth target, it may command a higher PE of 10-12 times.

Chartwie, it is now in a slight downtrend line since March this year. That downtrend line resistance is at RM0.37. If it can surpass that level, it may continue with its prior uptrend.

Alex Lu said...

Hi zhouyu44

FBMKLCI is capped by the line connecting its peak at 1650 since January 2011. A break above that level could be positive.

However, the market breadth is rather poor. This damper calls for very selective buying.