For QE30/8/2018, Gtronic's net profit rose 153% q-o-q or 64% y-o-y to RM24 million while revenue rose 23% q-o-q or 1% y-o-y to RM88 million. Revenue & profits dropped q-o-q due to higher volume loadings from certain customers in the Group as well as better utilization of our operational resources and facilities.
Table: Gtronic's last 8 quarterly results
Quarterly profits rose to the high achieved in QE31/12/2017, despite a lower revenue. This was due to higher profit margins which may not be sustainable.
Chart: Gtronic's last 51 quarterly results
Gtroni's financial position is healthy with current ratio at 2.7 times and gearing ratio at 0.3 time.
Gtronic (closed at RM2.27 yesterday) is now trading at a PE of 37 times (based on last 4 quarters' EPS of 8.98 sen). At this elevated PER, Gtronic is deemed fully valued.
Gtronic has been correcting in the past 2 months after it broke its intermediate line, S1-S1 at RM2.60. It is now resting on the horizontal line at RM2.15.
Chart 1: Gtronic's daily chart as at Oct 30, 2018 (Source: Malaysiastock.biz)
Despite the near-term weakness, Gtronic is still comfortably above its long-term uptrend line, SS.
Chart 2: Gtronic's weekly chart as at Oct 30, 2018 (Source: Malaysiastock.biz)
Based on satisfactory financial performance and strong financial position, Gtronic can be a good stock for long-term investment.
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