Tunepro: Playing Catch-up

Results Update

For QE31/12/2015, Tunepro's net profit rose by 83% q-o-q or 4% y-o-y to RM24 million while revenue increased by 10% q-o-q or 5% y-o-y to RM133 million. Revenue increased q-o-q by RM11.6 million due to increase of RM7.1 million in gross earned premiums ("GEP") and RM4.5 million increase in investment income. Segmental profit increased by RM13.9 million q-o-q  due to a RM9.2 million in pre-tax profits in general insurance segment and RM3.6 million increase in general reinsurance segment

(Note: This quarterly result was announced on Feb 23. The next quarterly result was probably be announced next week.)


Table: Tunepro's last 8 quarterly results


Chart 1: Tunepro's last 16 quarterly results

Valuation

Tunepro (closed at RM1.48 as at 4:15pm today) is now trading at a PER of 16 times (based on last 4 quarters' EPS of 9.2 sen). At this PER, Tunepro is deemed fairly valued.

Technical Outlook

Tunepro broke above its downtrend line, RR at RM1.25 in late February. Since then, it has been trapped in a "flag formation" with resistance at RM1.48-1.50 and support at RM1.29-1.31. An upside breakout of this pattern - the resistance from the horizontal line at RM1.50 -  could signal the start of its uptrend. When the breakout happens, Tunepro will finally catch up with its "siblings"-- Airasia and AAX. Until then, the good level to buy into this stock is around RM1.30-1.35.


Chart 2: Tunepro's weekly chart as at Oct 5, 2015 (Source: ShareInvestor.com) 

Conclusion

Based on improved financial performance, reasonable valuation & mildly bullish technical outlook, Tuneins is a good stock for long-term investment. An upside breakout above RM1.50 could be the start of better days ahead for this stock.

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, Tunepro.