For QE30/6/2015, TChong's net profit plummeted by 46% q-o-q or 73% y-o-y to RM14 million while revenue was mixed- down 19% q-o-q but up 16% y-o-y to RM1.264 billion.
EBITDA for the Automotive & Financial Services divisions dropped sequentially by 25% to RM55 million & 8% to RM6.0 million, respectively. Revenue for the Automotive & Financial Services divisions dropped sequentially by 20% to RM1248 million & 9% to RM13 million, respectively. The drop in the performance of both divisions was attributed to weaker consumer spending as a result of GST implementation. Other Operation division enjoyed a sequential 46%-increase in EBITDA to RM8 million on the back of a 47%-drop in revenue to RM2.3 million.
Table: TChong's last 8 quarterly results
Chart 1: TChong's last 35 quarterly results
Valuation
TChong (closed at RM2.43 yesterday) is now trading at a PER of 31 times (based on last 4 quarters' EPS of 7.8 sen). At this PER, TChong is deemed over valued.
Technical Outlook
TChong is in now resting on the line, AB at RM2.40. If this support falters, then the stock may drop to the psychological RM2.00 mark and below that, to the horizontal lines RM1.80 & RM1.50.
Chart 2: TChong's monthly chart as at Sep 1, 2015 (Source: ShareInvestor.com)
Conclusion
Due to poor financial performance, TChong's valuation appears unattractive. It is resting on a fairly strong support, which could set the stage for the bottoming-out phase for the stock at RM2.40. For now, the stock is rated a HOLD.
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, TChong.
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