TAS: The recovery begins...

Results Update

For QE31/8/2015, TAS's net profit jumped by 285% q-o-q or 60% y-o-y to RM8.7 million on the back of relatively unchanged reve nue of RM76 million. The sharp jump in bottom-line was attributed to gain from foreign exchange due to the strengthening of the USD & SGD against the MYR.


Table 1: TAS's last 8 quarterly results


Chart 1: TAS's last 25 quarterly results 

Valuation

TAS (closed at RM0.51 yesterday) is now trading at a current PE of 6 times (based on annualized EPS of 9 sen). We do not know how much of the earning of QE31/8/2015 will recur as it includes a substantial forex gain. Assuming the recurring earnings accounted for 2 sen EPS out of 5 sen reported EPS, then its recurring annualized EPS would be 8 sen. At this "adjusted" EPS, TAS's PER would be 6.4 times. Thus, TAS is deemed fairly attractive.

Technical Outlook

TAS had a sharp drop from a high of RM1.50 in July 2014 to a low of RM0.40 in August this year. It was at this time that it cracked below the long-term uptrend line, SS at RM0.40. Since then, the share price has recovered above its strong resistance of RM0.50. To rise further, TAS needs to break above the intermediate downtrend line, RR at RM0.52-0.54.


Chart 2: TAS's weekly chart as at Oct 22, 2015 (Source: ShareInvestor.com)

Conclusion

Based on imporved financial performance, relatively attractive valuation & mildly positive technical outlook, TAS is considered a good stock for a recovery play.

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, TAS.