TMCLIFE: Earning Continued to Impress

Result Update

For QE31/8/2018, TMCLife's PBT rose 34% q-o-q or 59% y-o-y to RM10.7 million while revenue was mixed- down 3% q-o-q but rose 10% y-o-y to RM43 million. Revenue rose 10% y-o-y due to higher patient load and higher intensity cases handled. PBT rose 59% y-o-y due to higher profit before tax margin of 25% as compared to 17% recorded in QE31/8/2017 which was mainly due to lower total operating expenditure during the current quarter.


Table: TMCLife's last 8 quarterly results


Graph: TMCLife's last 30 quarterly results

Financial Position

TMCLife's financial position is deemed healthy with current ratio at 5.4 times and gearing ratio is lower at only 0.1 time.

Valuation

TMCLife (closed at RM0.73 yesterday) is now trading at a PE of 46 times (based on annualized EPS of 1.6 sen). Based on PER, TMCLife is deemed overvalued.

Technical Outlook

TMCLife has been rising in a long-term uptrend line, SS up to June 2016. Since them, its uptrend has accelerated slightly to a new uptrend line, S1-S1. The support from the accelerated uptrend line is at RM0.73.


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

Conclusion

Based on improved financial performance, strong financial position and positive technical outlook, TMCLife could still a good stock for long-term investment. However, its valuation is deemed unattractive, which will cap its upside.

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.