A Brief Look at Tongher

2003 EPS 16.2 DPS 5.3
2004 EPS 35.4 DPS 14.0
2005 EPS 23.4 DPS 12.1
2006 EPS 43.7 DPS 13.0
2007 EPS 51.0 DPS 10.2
2008 EPS 14.4 DPS 13.9
2009 EPS 6.60 DPS 5.00
9M10 EPS 14.50 DPS 5.00

Price RM 2.73 (7.1.2011)
Estimated EPS for 2011 14.50*4/3 = 19.33
Projected PE for 2011 = 14.1 x

Historical
5 Yr
PE 10.7 - 17.4
DY% 5.8 - 3.1

10 Yr
PE 9.0 - 15.1
DY% 6.6 - 3.7

Capital Change

2007 1/2 Bonus

Comment:

Tongher is a cyclical stock.  Given the cyclical business that it is in, its share price has fluctuated wildly largely determined by its business cycle and the challenging environment.  It's share price has gone down a lot during the recent global financial crisis due to poor profits.  Its latest NTA per share was RM 2.29.

Since the company has remained profitable, its assets are generating profits and its balance sheet is not harmed or eaten away by toxic assets.  One can expect its profits to normalise and also its new investments to generate additional summative profits given time.

The high PE of Tongher during the early part of the global financial crisis was due to the fact that its profits fell faster than its share price.  With its profits recovering, its high PE is contracting, as its profits are growing at a faster rate than its share price.


Those holding this stock can expect to see real upside in the share price of Tongher over time.


Related:

Are Cyclical stocks also Value stocks? Value stocks usually earn money, turnaround stocks may not.