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Tuesday, July 01, 2014

TAGB: Bottom-line jumped!

Results Update

For QE30/4/2014, TAGB's net profit rose 34% q-o-q or 72% y-o-y to RM81.5 million while revenue was mixed- down 32% q-o-q & unchanged y-o-y at RM158 million. Bottom-line improved y-o-y due to sharp rise in pre-tax profit in two divisions:
  • Investment holding division, which reported profit before tax of RM22.2 million in the current first quarter as compared to profit before tax of RM6.6 million previously, and 
  • Finance & related services division, which reported profit before tax of RM35.4 million as compared to profit before tax of RM10.4 million in QE30/4/2013. 

Table: TAGB's last 8 quarterly results

Bottom-line soared as profit margin crossed the 40% mark!


Chart 1: TAGB's last 27 quarterly results

Valuation

TAGB (trading at RM0.355 yesterday) has a trailing PE of 12 times (based on last 4 quarters' EPS of 2.97 sen). At this PE, TAGB's valuation is deemed fairly valued.

Technical Outlook

TAGB broke above its long-term downtrend line, RR at RM0.30 in April. Only in early part of June did TAGB pulled away from the sticky downtrend line and tested its strong horizontal line at RM0.35. A convincing upside breakout of this horizontal resistance may send the stock to the next resistance at RM0.40 and beyond that to RM0.48.


Chart 2: TAGB's weekly chart as at Jun 30, 2014 (Source: Tradesignum)

Conclusion

Despite the improved financial performance & mildly bullish technical outlook, TAGB is a stock good for medium-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, TAGB.

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