Topglov: Gangbuster Quarter!

Results Update

For QE31/8/2017, Topglov's net profit rose 27% q-o-q or 51% y-o-y to RM99 million while revenue rose 4% q-o-q or 25% y-o-y to RM902 million. Sales Volume (quantity sold) was exceptionally high with double-digit growth of 14.0% as compared to QE31/5/2017. This led to an all-round improvement on its profits. The improved performance was attributed to improvements in product quality and manufacturing efficiency, coupled with new capacity coming on-stream and strong demand growth.

 
Table: Topglov's last 8 quarterly results


Graph: Topglov's last 45 quarterly results

Valuation

Topglov (closed at RM6.01 last Friday) is now trading at a trailing PE of 22.6X (based on last 4 quarters' EPS of 26.55 sen). At this PER, Topglov is deemed fully valued.

Technical Outlook

Since it made a high of RM7.00 in December 2015, Topglov has not traded above the RM6.00. Last Thursday & Friday, it did just that. This may signal a re-test of the all-time high of RM7.00 in the next few months.


Chart 1: Topglov's monthly chart as at Oct 13, 2017 (Source: Malaysiastock.biz)


Chart 2: Topglov's monthly chart as at Oct 13, 2017 (Source: Malaysiastock.biz)

Conclusion

Based on improved financial performance and positive technical outlook, I think Topglov is poised to go higher. I hereby revise my rating from REDUCE to HOLD.

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.