RCECap: Earnings Growth Intact

Result Update

For QE31/3/2017, RCECap's net profit rose marginally by 0.5% q-o-q or 8% y-o-y to RM23 million. Its revenue is mixed - down 2% q-o-q but rose 10% y-o-y to RM63 million. Revenue rose y-o-y primarily led by higher interest and fee income backed by the expanded loan base from its consumer financing segment. Correspondingly, this led to a higher pre-tax profit of RM30.1 million in the current quarter as compared to RM28.9 million in the corresponding quarter.


Table: RCECap's last 8 quarterly results

RCECap's financial performance continued to crawl up after bottoming in last 2013.


Graph: RCECap's last 44 quarterly results

Valuation

RCECap (closed at RM1.33 on May 28, 2018) has a trailing PE of 5.1 times (based on last 4 quarters' EPS of 26.02 sen). Starting this financial year, it is paying out dividend twice yearly totaling 7 sen. Dividend yield is 5.3%. Based on this PER & DY, RCECap is deemed fairly attractive.

Technical Outlook

RCECap is in a medium-term downtrend with resistance at RM1.45.


Chart 1: RCECap's weekly chart as at May 28, 2018 (Powered by ShareInvestor.com)

However, RCECap is still in a long-term uptrend.


Chart 2: RCECap's monthly chart as at May 28, 2018 (Powered by ShareInvestor.com)

Conclusion

Based on continued good financial performance, and attractive valuation, RCECap is good stock for long-term investment. However it's medium-term outlook is still neutral as it is still in a downtrend line.

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.