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Thursday, August 07, 2014

Tasco: Top-line & Bottom-line at record high

Result Update

For QE30/6/2014, TASCO's net profit increased by 95% q-o-q or 74% y-o-y to RM10 million while revenue increased by 16% q-o-q or 29% y-o-y to RM135 million.


Revenue increased q-o-q due to better performance in both International Business Solutions ('IBS') and Domestic Business Solutions ('DBS'), which recorded increased revenue of RM4.7 million (10.6%) and RM14.0 million (19.5%) respectively.

Within the IBS, the Air Freight Forwarding division posted revenue increase of RM4.4 million (13.4%), from RM32.9 million to RM37.3 million. The increase was driven by a surge in export volume by handling urgent shipments by air arrangement compared to last preceding quarter.

Within the DBS, the Contract Logistics ('CL') division posted an increase of RM7.3 million (12.5%) and Trucking division also posted an increase of RM6.8 million (48.9%). Seasonal increase in shipments of E&E goods coupled with a new FMCG customer contributed significant increase in warehouse, in-plant and haulage business in this quarter.

PBT increased by RM4.8 million (57.2%),  from RM8.5 million to RM13.3 millions. This came mainly from the CL division (under DBS) which registered an increase of PBT of RM4.1 million (49.4%).


Table: TASCO's last 8 quarterly results


Chart 1: TASCO's last 30 quarterly results

Valuation

TASCO (closed at RM2.57 yesterday) is now trading at a PE of 8.6 times (based on last 4 quarters' EPS of 30 sen). At this multiple, TASCO is deemed attractively valued for a mid-cap stock with strong growth of 20% in the past 1 year.

Technical Outlook

TASCO is in an uptrend line (see Chart 2). Tasco has been trapped within a symmetrical triangle, ABC for the past 4 months (see Chart 3). Recently, it broke below that triable at RM2.60. This negative development (a bearish breakout of a triangle) must be rectified soon. At the time of writing this post (9:15am), Tasco recovered to RM2.76. That's a positive development (a bullish breakout of a triangle at RM2.70).


Chart 2: TASCO's weekly chart as at Aug 6, 2014 (Source: Tradesignum) 

 
Chart 3: TASCO's daily chart as at Aug 6, 2014 (Source: Tradesignum)

Conclusion

Based on good financial performance, fairly attractive valuation & still positive technical outlook, TASCO's rating is revised from HOLD to a BUY.

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, TASCO.

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