Tienwah- bottom-line jumped

Result Update

For QE31/3/2013, net profit rose 28% q-o-q or 90% y-o-y to RM7.6 million while revenue was hardly changed at RM95 million  (up 1% q-o-q but dropped 3% y-o-y). The company attributed its increased profit to continuous improvement in operational efficiencies.


Table: Tienwah's last 8 quarterly results


Chart 1: Tienwah's last 25 quarterly results

Valuation

Tienwah (at RM2.50 as at 3.15pm) is trading at a PE of 7.8 times (based on last 4 quarters' EPS of 31.9 sen). At this PE, Tienwah is deemed very attractive when compared to another packaging stock, Daiboci which commands a PE of 14-15 times.

Technical Outlook

Tienwah's gradual uptrend began in 2009 aftre the stock broke above its horizontal line RM1.30. The stock moves in an upward channel. In April, it broke above the upper boundary at RM2.20. With this breakout, Tienwah's uptrend could pick up pace.


 Chart 2: Tienwah's monthly chart as at May 10, 2013_12.30pm (Source: quickcharts)

Conclusion

Based on improving financial performance, cheap valuation & positive technical outlook, Tienwah is a good stock for long-term investment.

Note: 
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Tienwah.