Tomypak: Profit keeps sliding away

Results Update

For QE30/6/2014, Tomypak's NP dropped 46% q-o-q or 77% y-o-y to RM0.8 million while revenue eased back by 8% q-o-q or 11% yo-y to RM51.3 million.

For 1HFY14, Tomypak recorded a lower PBT of RM3.7 million against the PBT of RM9.7 million in the previous corresponding period, mainly due to lower sales in local market coupled with a decline in profit margin due to competition in the export market and also increased cost of production arising from higher energy and labour cost.


Table 1: Tomypak's last 8 quarterly results


Chart 2: Tomypak's last 27 quarterly results

Valuation

Tomypak (closed at RM1.30 yesterday) is now trading at a demanding PE of 15 times (based on last 4 quarters' EPS of 8.76 sen). Its dividend yield is quite attractive at 5.4%.

Technical Outlook

Tomypak has been trapped within a triangle for the past 1 year. At the time of writing this post, Tomypak was trading at RM1.23. This means that the stock has broken to the downside of the triangle- a bearish development.


  Chart 2: Tomypak's daily chart as at Aug 13, 2014 (Source: Tradesignum)

 
Chart 3: Tomypak's weekly chart as at Aug 13, 2014 (Source: Tradesignum)

Conclusion

Based on poor financial performance, full valuation & bearish technical outlook, Tomypak is now rated a SELL.

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, Tomypak.