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Sunday, May 29, 2016

Tunepro: Earnings Rose y-o-y

Results Update

For QE31/3/2016, Tunepro's net profit rose by 37% q-o-q to RM23 million on the back of a 16%-increase in revenue to RM130 million. Compared to the preceding quarter, net profit dropped 4% while revenue dropped 2%. Revenue dropped q-o-q by RM3.1 million due to decrease of RM3.7 million in investment income of general insurance, offset by increase of RM0.6 million in gross earned premium. PBT dropped mainly due to increase in marketing costs in relation to digital marketing campaign in line with the Group's vision on being a leading digital insurer and unrealized foreign exchange loss.


Table: Tunepro's last 8 quarterly results

While profits in the last quarter are weaker than the preceding quarter, the drop was minimal when compared to previous years. This - coupled with higher dividend (a reflection of management's confidence) - seems to suggest that the company could be on a growth path.


Chart 1: Tunepro's last 18 quarterly results
 
Valuation

Tunepro (closed at RM1.51 last Friday) is now trading at a PER of 15 times (based on last 4 quarters' EPS of 10.0 sen). At this PER, Tunepro is deemed fairly valued.

Technical Outlook

Tunepro broke above its downtrend line, RR at RM1.25 in late February. Tunepro has just surpassed the strong resistance from the horizontal line at RM1.50. With MACD above the zero line, uptrend will commence soon. The only thing lacking is the ADX is still below the 20-mark.


Chart 2: Tunepro's weekly chart as at May 27, 2016(Source: ShareInvestor.com) 

Conclusion

Based on improved financial performance, reasonable valuation & bullish technical outlook, Tunepro 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, Tunepro.

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