TPC Plus Bhd (+ve)

SHARES in TPC Plus Bhd (fundamental: 1.4/3, valuation: 0.5/3) closed up half a sen or 0.95% at 53 sen yesterday, with 1.2 million shares traded, surpassing its 200-day average trading volume of 273,096 shares.

It was the fourth time this year the stock has triggered our momentum algorithm. On the same day, the group announced it had submitted a letter to the regulator to apply for the upliftment of its Practice Note 17 (PN17) status.

TPC Plus fell under PN17 status on March 28, 2014 after its auditors expressed concern over the company, which posted a net loss of RM4.1 million in the financial year ended December 31, 2013, and as its shareholders’ equity was less than 50% of its issued and paid-up capital.

The company is in the business of investment holding and the provision of management services, while its subsidiaries are in poultry farming and palm oil production.

In the third financial quarter ended Sept 30, 2016 (3QFY16), it saw a 17.3% drop in net profit to RM1.2 million from RM1.4 million, as revenue slid 2.6% to RM21.3 million from RM21.8 million on lower selling prices of eggs.

It said despite the lower revenue, improvement in the profit margin was achieved as it registered a pre-tax profit of RM1.8 million compared with a pre-tax profit of RM1.4 million in the corresponding quarter last year, on lower operating expenses.

For the cumulative nine months (9MFY16), net profit dropped 5.3% to RM3.1 million from RM3.3 million, while revenue fell 6.1% to RM62.5 million from RM66.5 million.

Moving forward, the directors expect the next quarter to be challenging due to increasing competition and volatile market conditions.

TPC Plus is now trading at 1.5 times its book value with a 12-month trailing price-earnings ratio of 33.54 times.