Results Update
Tienwah's net profit soared by 198% q-o-q or 129% y-o-y to RM8.0 million while its turnover increased by 8% q0o0q or 14% y-o-y to RM98 million. The company attributed the sharp jump in its bottom-line to higher turnover, better operating margin and an exceptional gain of RM1.4 million from the sale of a piece of land in Klang.
Table: Tienwah's last 8 quarterly results
Chart 1: Tienwah's last 14 quarterly results
Valuation
Tienwah (closed at RM1.64 yesterday) is now trading at a PE of 8.6 times (based on annualized EPS of 19 sen, after adjusting for the gain from property disposal). Given the huge jump in the earning in the last result, Tienwah could surprise on the upside in term of earning for FY2011. If so, its PE multiple would drop further; thus making the stock even more attractive.
Technical Outlook
Tienwah seems to be tracing out a 3-fan uptrend line, with the third trend line still intact. A downside breakout of the third trend line at RM1.40 could be bearish for the stock. For noe, Tienwah is supported by uptrend line (S1-S1b) at RM1.65.
Chart 2: Tienwah's weekly chart as at August 12, 2011 (Source: Quickcharts)
Conclusion
Based on the significant jump in earning, attractive valuation & positive technical outlook, Tienwah is considered a good stock for long-term investment.
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