Tuneins: Earnings Continue to Grow

Recent Financial Results

For QE31/12/2014, Tuneins's net profit increased by 41% q-o-q or 9% y-o-y to RM23 million while revenue increased by 8% q-o-q or 12% y-o-y to RM119 million. Revenue increased q-o-q due to increase of RM8.2 million in Gross Earned Premium ('GEP') and RM0.8 million in investment income. GEP increase came from RM3.7 million increase in GEP from the general reinsurance business in M'sia & Thailand and RM7.5 million increase in GEP from the general insurance business from M'sia & Thailand (partially offset by drop in investment income of RM0.6 million). PBT increased q-o-q due to increase in PBT of RM5.4 million & RM5.6 million for the general reinsurance & general insurance business, respectively.


Table: Tuneins's last 8 quarterly results


Chart 1: Tuneins's last 8 quarterly results

Valuation

Based on closing price of RM1.97 this morning), Tuneins is now trading at a PE of 20.4 times (based on last 4 quarters' EPS of 9.66 sen). At this PER, Tuneins has priced in earnings growth of more than 20%. To-date, its earnings growth is short of expectation. We can only hope that this will change in the near future.

Technical Outlook

Tuneins has broken above its intermediate downtrend line, R1-R1 at RM1.85 last week. Its next resistance will be at RM2.00 and beyond that, RM2.20.


Chart 2: Tuneins's weekly chart as at Feb 26, 2015_10.00am (Source: ShareInvestor.com) 

Conclusion

Based on the good financial performance, reasonable valuation & bullish t4echnical outlook, Tuneins is a good stock for medium to 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, Tuneins.