WWE reported a loss for QE30/9/2006

WWE has recently announced its result for QE30/9/2006. The results is disappointing as WWE reported a net loss of RM4.7 mil as compared to a net profit of RM6.0 mil achieved in the immediately preceding quarter. The change of fortune is attributable to a 90%-drop in pre-tax profit from RM7.9 mil to a mere RM0.8 mil (with no reason given) and a transfer from deferred tax to current tax amounting to RM5.4 mil (as certain expenses are not deductible for tax purposes and the absence of Group relief for losses suffered by certain subsidiaries). For more detail, see the table below.



WWE's share price had a very good run in last Sep & Oct following the good performance in the previous quarter, which I have posted on earlier. In mid-Nov, WWE's share price had weakened significantly & broken below its 10- & 20-day SMA. I expect the stock to have good support at the psychological RM1.00 level, failing which it may test the horizontal support of RM0.90 & thereafter, its short-term uptrend line support of RM0.80.



Given the poor performance & the ongoing correction/consolidation of its recent sharp rise, I believe that it is best to avoid this stock for a while. Nonetheless, if the share price were to drop below the RM0.90 level, I think this stock will again be an attractive investment as its projects in hands are fairly substantial.