For QE30/9/2012, Tongher's net profit dropped 82% q-o-q or 83% y-o-y to RM695k while revenue declined by 7% q-o-q or 24% y-o-y to RM112 million. Tongher's profit dropped due to lower revenue (due to weaker demand from Europe) and share of losses from associates of RM2.8 million.
Table 1: Tongher's last 8 quarterly results
Chart 1: Tingher's last 32 quarterly results
Valuation
Tongher (closed at RM1.80 at the end if morning session) is trading at a PE of 12 times (based on last 4 quarters' EPS of 15.38 sen). At this PE, Tongher- a medium-size stock- is deemed fully valued.
Technical Outlook
Tongher has corrected back to its long-term uptrend line, support at RM1.80. If this level is violated, the next support is the horizontal line at RM1.70. I think the stock could trade between these support levels for sometimes- awaiting better results or other catalysts for a rise.
Chart 2: Tongher's weekly chart as at Nov 27, 2012 (Source: Tradesignum)
Conclusion
Based on poor financial performance, full valuation & unexciting technical outlook, Tongher is rated as a HOLD or REDUCE.
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, Tongher.
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