Tek Seng's 3Q net profit almost triples on solar contribution

by **Cals** Thu 05 Nov 2015, 18:40

Tek Seng's 3Q net profit almost triples on solar contribution

By Ahmad Naqib Idris / theedgemarkets.com | November 5, 2015 : 6:08 PM MYT

KUALA LUMPUR (Nov 5): [size=16]Tek Seng Holdings Bhd ([You must be registered and logged in to see this image.] Valuation: 0.80, Fundamental: 0.60)'s net profit rose almost threefold or 183% year-on-year to RM5.04 million or 2.01 sen per share for the third quarter ended Sept 30, 2015, on higher revenue, primarily from its solar segment.

Its net profit was RM1.78 million or 0.74 sen per share in the same period last year, its filing to Bursa Malaysia today showed.

Its latest quarterly revenue was 64% higher at RM99.33 million, from RM60.75 million a year earlier.

Tek Seng said its solar segment contributed to the majority of its performance for the quarter due to higher sales volume, accounting for 56% of the group's revenue.

The solar business was the only segment recording growth in profit before tax (PBT) for the quarter, while its sheeting, PP non-woven, PVC leather and other segments all reported lower PBT on lower sales and unrealised foreign exchange (forex) loss.

For the nine months ended Sept 30, net profit was lower at RM10.86 million, down 14% on-year from RM12.59 million, despite revenue jumping 30% to RM237.16 million, from RM183.10 million.

This was because of higher realised forex loss and lower other operating income, it said.

Going forward, the group expects to maintain its PVC business' performance to remain stable in 2016 — though it was mindful that this may be affected by fluctuations in the prices of raw materials and the weakening ringgit.

"The group will be taking cautious approach to mitigate the [risk] exposures by improving its operational efficiency, product quality and product innovation as a positive step forward to sustain the group's business growth and success. The group will also look into exploring new market share globally," it added.

Meanwhile, it expects its solar segment — TS Solartech Sdn Bhd — to continue as the major contributor to its earnings.

Tek Seng was last traded at 70.5 sen, with market capitalisation of RM178 million.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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