TONGHER / 5010 - 2009 Q4

TONG HERR RESOURCES BERHAD

Listing Date: 03.11.1999
IPO Price: 4.800
Market: MAIN
Sector: INDUSTRIAL
Par Value: 1.00
Major Industry: Machinery & Equipment
Sub Industry: Miscellaneous Machinery & Equipment

Tong Herr Resources Berhad is a Malaysia-based investment holding company. The Company’s subsidiaries include Tong Heer Fasteners Co. Sdn. Bhd. engaged in the manufacturing and selling of stainless steel fasteners, including nuts, bolts, screws and all other threaded items, and Tong Heer Fasteners (Thailand) Co., Ltd. engaged in the manufacturing and selling of stainless steel fasteners including, bolts, screws and all other threaded items.

My TP: 2.25+0.05=2.3 (PE 12, EPS 0.1876, DPS 0.05), 16.75% increase from current price 1.97
My decison: BUY
Reason: Undervalue, revenue increased

My study based on 2009 Q4 report (number in '000):
- The higher profit before income tax in this reporting quarter as compared to the results in corresponding period last year are due to lower cost of raw materials purchased in the preceding quarters
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0469*4 = 0.1876, estimate PE on current price 1.97 = 10.23(DPS 0.05)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0278*4 = 0.1112, estimate highest/lowest PE = 16.19/14.39 (DPS 0.05)