Tongher: Earnings Rose Sharply

Result Update

For QE31/12/2016, Tongher's net profit increased by 144%% q-o-q on the back of a 8%-increase in rvenue to RM154 million. Compared to same quarter last year, Tongher has now returned to the black. In 4Q2015, Tingher incurred a net loss of RM10.6 million on a revenue of RM153 million. Tongher's revenue rose q-o-q mainly due to higher selling volume for aluminium segment, which led to higher profits.


Table: Tongher's last 8 quarterly results


Graph: Tongher's last 49 quarterly results 

Valuation

Tongher (closed at RM2.34 at the close of the morning session) is trading at a PE of 6.6x (based on last 4 quarters' EPS of 35.7 sen). At this PE, Tongher is deemed fairly attractive.

Technical Outlook

Tongher has been consolidating in a large triangle for the past 8 years. A breakout of the triangle could lead to point the way forward for the stock. Since it closed at RM2.35 this morning, Tongher has now achieved an upside breakout. This is likely to go into its next upleg.


Chart: Tongher's monthly chart as at Feb 28, 2017 (Source: Shareinvestor.com)

Conclusion

Based on improved financial performance, attractive valuation & bullish technical outlook, Tongher is rated a BUY for long-term investment.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.