TGuan to lower its net profit figure for FY2007 due to errors

TGuan's auditors had discovered a few accounting errors in respect to TGuan's accounts for FY2007. The errors are:

1. Foreign currency translation error of RM4.965 million;
2. Overstatement of inventory of a subsidiary based in China for amount of M2.851 million;
3. Underprovision of tax of RM947k; and
4. Others amount of RM79k

Due to these errors & subsequent adjustment, TGuan's net profit will be lowered from RM20.85 million to RM12.01 million. As a result, TGuan's net profit for FY2007 had actually declined by 44% from RM21.57 million to RM12.01 million. EPS for FY2007 had dropped by 56% from 20.5 sen to 11.4 sen. Based on the share price of RM1.04 as at yesterday, TGuan is now trading at a PE of 9.1 times. With fresh doubt raised as to TGuan's turnaround, its share price performance will likely to be depressed for sometime.