Hot Stock Thong Guan's shares continue to climb after 3Q profit more than doubles

by **Cals** Mon 23 Nov 2015, 22:17

Hot Stock

[size=28]Thong Guan's shares continue to climb after 3Q profit more than doubles

By Gho Chee Yuan / theedgemarkets.com | November 23, 2015 : 4:16 PM MYT
KUALA LUMPUR (Nov 23): Shares in Thong Guan Industries Bhd ([You must be registered and logged in to see this image.] Valuation: 1.40, Fundamental: 2.50), which reported a 129% net profit hike in its latest financial quarter, extended their gains today to touch as high as RM2.57, up 17 sen or 7.08%, as the US dollar stays strong against the ringgit.
As at 3.36pm, the stock was trading at RM2.52, still up 11 sen or 4.58%, making it one of the top gainers across the local bourse, after some 2.5 million shares changed hands.
Last Thursday, the plastic packaging manufacturer announced that its net profit for the third quarter ended Sept 30, 2015 (3QFY15) had risen to RM11.3 million from RM4.9 million in 3QFY14, on higher margin from export sales that are mostly denominated in US dollar.
This is despite its revenue for the quarter falling 5% to RM182.3 million from RM191.9 million in the same period last year, largely because of lower selling prices due to lower prices of raw materials.
Thong Guan is also one of Insider Asia's Top 10 picks for 2015 and was picked as a Stocks With Momentum today. It has risen by 34.8% year to date.
In a report published in The Edge Financial Daily today, The Edge Research said the Kedah-based Thong Guan is a beneficiary of the stronger US dollar as export accounted for 78.4% of its sales in 2014.
"The stock trades at a steep 33% discount to its book value. Dividends distribution has been consistent since 2004.
"For 2014, dividends totalled 7 sen per share, giving a net yield of 2.9%," the report added.
As at point of writing, the greenback had strengthened 0.26% against the local note to trade at 4.2968, compared to last Friday's closing of 4.2855.
(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.)
[/size]