For QE31/122014, RCECap's net profit increased 45% q-o-q to RM3.1 million after deduction of preference share dividends of RM9.4 million paid for FY31/3/2014. PBT increased from RM7.5 million to RM30.4 million due to RM4.7 million loss on early redemption of ABS bonds in the preceding quarter.
Table: RCECap's last 8 quarterly results
Looking at the Chart 1 & Diagram below, we can see that RCECap's financial performance, which had been sliding for the past 3 years, had made a bottom. There are early signs that its financial performance may improve going forward.
Chart 1: RCECap's last 31 quarterly results
Daigram: RCECap's last 10-Y P&L & 6-Y CF (Powered by ShareInvestor.com)
Valuation
RCECap (closed at RM0.31 yesterday) is now trading at a PE of 11.7 times, a Price to Book of 0.62 time and has a dividend yield of 4.8%. At these multiples & DY, RCECap is deemed fairly valued.
Technical Outlook
RCECap broke above its downtrend line, RR at RM0.28 in early part of 2014. A short-term uptrend has begun with support at RM0.31.
Chart 2: RCECap's monthly chart as at Feb 9, 2015 (Powered by ShareInvestor.com)
Conclusion
Based on improved financial performance, fair valuation & mildly positive technical outlook, RCECap is 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, RCECap.
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