For QE31/5/2015, Topglov's net profit rose by 29% q-o-q or 71% y-o-y to RM72 million while revenue rose by 16% q-o-q or 15% y-o-y at RM661 million. Profit Before Tax rose sequentially due to higher sales volume, ongoing efficiency and quality enhancement initiatives, low raw material prices and a stronger US Dollar.
Table: Topglov's last 8 quarterly results
Chart 1: Topglov's last 36 quarterly results
Valuation
Topglov (closed at RM5.87 yesterday) is now trading at a PE of 16.3
Technical Outlook
From Chart 2 below, we can see that Topglov share price broke above the 3-month trading range of RM5.40-5.60. It is likely to test the large triangle (ABC) at RM6.40. See Chart 3 below.
Chart 2: Topglov's daily chart as at Jun 17, 2015 (Source: ShareInvestor.com)
Chart 3: Topglov's monthly chart as at Jun 17, 2015(Source: ShareInvestor.com)
Conclusion
Based on better financial performance, attractive valuation & mildly positive technical outlook, Topglov is rated a BUY. While the RM6.40 resistance may cap the stock's upside for a while, a breakout is very likely as the stock is trading at lower PE multiple than its peers.
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, Topglov.
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