Monday, November 26, 2007

TGuan reported a good profit for QE30/9/2007

TGuan's results for QE30/9/2007 was fairly good. Its net profit increased by 114% q-o-q to RM5.3 million on the back of a 8.6%-increase in its turnover to RM137.5 million. The net profit is, however, lower than that reported in the same quarter last year due to higher raw material cost, higher operating expenses (such as freight cost & electricity charges), higher interest expenses and continuing losses incurred by a newly-established subsidiary in China.

Despite the improved financial performance, TGuan's share price has continued to slide. We will have to wait & see how the market receive this good set of results for TGuan.

Chart: TGuan's daily chart as at November 23 (courtesy of Quickcharts)

Based on the good results in the last quarter, TGuan is good contrarian BUY despite the poor technical outlook. At the current price of around RM1.00, the stock is trading at a PE of 5 times (if TGuan can continue to maintain an earning similar to its EPS achieved in the last quarter).

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