RCECap: Earnings Growth Intact

Result Update

For QE31/3/2017, RCECap's net profit rose marginally by 0.5% q-o-q or 8% y-o-y to RM23 million. Its revenue is mixed - down 2% q-o-q but rose 10% y-o-y to RM63 million. Revenue rose y-o-y primarily led by higher interest and fee income backed by the expanded loan base from its consumer financing segment. Correspondingly, this led to a higher pre-tax profit of RM30.1 million in the current quarter as compared to RM28.9 million in the corresponding quarter.


Table: RCECap's last 8 quarterly results

RCECap's financial performance continued to crawl up after bottoming in last 2013.


Graph: RCECap's last 44 quarterly results

Valuation

RCECap (closed at RM1.33 on May 28, 2018) has a trailing PE of 5.1 times (based on last 4 quarters' EPS of 26.02 sen). Starting this financial year, it is paying out dividend twice yearly totaling 7 sen. Dividend yield is 5.3%. Based on this PER & DY, RCECap is deemed fairly attractive.

Technical Outlook

RCECap is in a medium-term downtrend with resistance at RM1.45.


Chart 1: RCECap's weekly chart as at May 28, 2018 (Powered by ShareInvestor.com)

However, RCECap is still in a long-term uptrend.


Chart 2: RCECap's monthly chart as at May 28, 2018 (Powered by ShareInvestor.com)

Conclusion

Based on continued good financial performance, and attractive valuation, RCECap is good stock for long-term investment. However it's medium-term outlook is still neutral as it is still in a downtrend line.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

RCECAP: Earnings Soared

Result Update

For QE30/6/2016, RCECap's net profit soared 153% q-o-q or 86% y-o-y to RM17.5 million. Its revenue rose 17% q-o-q or 39% y-o-y to RM52 million. Profits increased q-o-q mainly due to higher fee-based income by RM5.9 million and lower loan impairment by RM4.8 million.


Table: RCECap's last 8 quarterly results

Looking at the Chart 1, we can see that RCECap's financial performance continued to crawl up after bottoming in last 2013.


Chart 1: RCECap's last 37 quarterly results

Valuation

RCECap (traded at RM1.02 as at 9.30am) has a trailing PE of 7.0 times (based on last 4 quarters' EPS of 14.76 sen). However, its last 4 quarters' EPS includes exceptional gain on disposal of investment property and fee-based income totaling RM10.8 million. If we were to exclude these items, its EPS would be lowered to 11.42 sen while bumping up its PER to 8.8 times. This would put RCECAp nearly at par with AEONCR (closed at RM13.90 yesterday). AEONCR has a trailing PER of 9.2 times (based on its last 4 quarters' EPS of 152 sen). Thus, at the current price of about RM1.02, RCECAP is fairly valued.
(Note: RCECAP had a 4-to-1 share consolidation in April this year.)

Technical Outlook

RCECap is in an upward channel with support at the lower line at RM0.70 and resistance at the upper line at RM1.20.


Chart 2: RCECap's monthly chart as at Aug 10, 2016 (Powered by ShareInvestor.com)

Conclusion

Based on improved financial performance, fair valuation & positive technical outlook, RCECap is good stock for long-term investment.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

RCECap: Recovery continued

Result Update

For QE31/12/2015, RCECap's bottom-line continued to improve. Its net profit rose 27% q-o-q or 315% y-o-y to RM13.0 million on the back of higher revenue (up 6.4% q-o-q or 23.9% y-o-y to RM42 million). Net profit increased q-o-q mainly due to higher interest income by RM2.5 million


Table: RCECap's last 8 quarterly results

Looking at the Chart 1, we can see that RCECap's financial performance continued to crawl up after bottoming in last 2013.


Chart 1: RCECap's last 35 quarterly results

Valuation
RCECap (closed at RM0.255 yesterday) is now trading at a PE of 7.5 times (based on last 4 quarters' EPS of 3.42 sen). Price to book ratio stood at 0.7 time (based on NTA of RM0.35 per share).

Technical Outlook

RCECap is now rising in an upward channel with support at the lower line at RM0.25 and resistance at the upper line at RM0.35.


Chart 2: RCECap's monthly chart as at Feb 3, 2016 (Powered by ShareInvestor.com)

Conclusion

Based on improved financial performance, fair valuation & positive technical outlook, RCECap is 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, RCECap.