TMCLife: Earnings Continued to Rise

Background

TMCLife Sciences Bhd ("TMCLife') is essentially involved in the operation of the Tropicana Medical Centre, Kota Damansara, a 180-bedded medical centre that provides complete services for fertility, women & children health.


Source: hospitals-malaysia.org

Result Update

For QE30/11/2017, TMCLife's PBT rose 23% q-o-q or 36% y-o-y to RM8.3 million while revenue rose 6% q-o-q or 15% y-oy- to RM42 million. PBT rose q-o-q mainly due to higher revenue achieved and higher EBITDA margin 23% as compared to 20% in QE31/8/2017.


Table: TMCLife's last 9 quarterly results


Graph: TMCLife's last 9 quarterly results

Valuation

TMCLife (closed at RM0.84 yesterday) is now trading at a PE of 53 times (based on annualized EPS of 1.6 sen). Based on an earning CAGR of 58% last year, TMCLife's PEG ratio is marginally below 1x. That makes TMCLife a fairly attractive growth stock.

Technical Outlook

TMCLife is in a long-term uptrend line, SS with support at RM0.77. It peaked at RM0.99 in late 2016 and early 2017 and dropped back to test its uptrend line, SS in at RM0.73 in September 2017. With the share price below the 10-month SMA line and MACD below the MACD signal line, TMCLife share price may continue to drift lower.


Chart: TMCLIfe's monthly chart as at Jan 29, 2018 (Source: Malaysiastock.biz)

Conclusion

Based on improving financial performance, fairly attractive valuation for a growth stock and mildly positive technical outlook, TMCLife could still a good stock for long-term investment. Good entry will be below RM0.80.

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.