TChong- cruising along just fine

Result Update

For QE31/3/2013, TChong's net profit soared 67% q-o-q or 166% y-o-y to RM84 million while revenue increased by 22% q-o-q or 46% y-o-y to RM1.44 billion. The strong performance was driven by its best-selling model, the all-new Nissan Almera in the “B” segment (previously absent).


Table: TChong's last 8 quarterly results


Chart 1: TChong's last 25 quarterly results

Valuation

TChong (closed at RM6.65 yesterday) is now trading at a PE of 21 times (based on last 4 quarters' EPS of 32.2 sen). However, if we assumed that the next 3 quarters' EPS are similar to QE31/3/2013, then TChong's full-year EPS could be 48 sen. On that assumption, TChong's PE would be only 14 times. At this PE, TChong is deemed fully valued.

Technical Outlook

As noted in an earlier post, TChong had a breakout above its recent high of RM5.70. I expect TChong to move to the target price of RM7.50.


Chart 2: TChong's weekly chart as at May 15, 2013 (Source: quickcharts)

Conclusion

Based on strong financial performance & positive technical outlook, TChong is a good stock for long-term investment.

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, TChong.