A Quick Look At Tong Herr's Earnings

Here's another stock which I need to make a couple of comments.

2nd Sep 2009, I wrote How Now For Tong Herr? which was follow up to the posting A Warning From Tong Herr?

Tong Herr announced its earnings last night.

I was interested. What was I expecting? What were you expecting? Here's a past screen shot of past Tong Herr's earnings (click here ).

I was expecting profits to be around 1 million or less. Tong Herr had lost some 800k the previously.

Here's Tong Herr's earnings.

Well again it's better than I had expected. (LOL! Do understand that I am merely stating things as it is. And if you like to make assumptions and ass-u-me that I now have my bull horns on, well that ass is yours, not mine. )

And it's exactly like Uchi's earnings comments posted earlier, Tong Herr had done extremely well if you compare to what it did the previous quarter.

However, like Uchi also, Tong Herr's current earnings pale in comparison if you compare to what it did the previous year.

Some would also point out that based on 'current' earnings, Tong Herr's current market prices are rather so rich.

But some would discount that and argue that it's pointless to look at current earnings and if the earnings turnaround sustains, then based on what Tong Herr had achieved in the past then Tong Herr price is not rich at all. In fact based on historical stock prices, the current price is a bargain.

Hey stop your stop and stare. LOL!

But isn't this how it is? A coin does have two sides, no?

Anyway, some comments from the company.

• The Group recorded revenue of RM48.47 million and profit before income tax of RM3.92 million in this reporting quarter compared to revenue of RM44.89million and loss before tax of RM381 thousand respectively, as recorded in the preceding quarter. The higher profit before income tax in this reporting quarter as compared to the results in preceding quarter are due to lower raw material cost.

So lower raw material cost is the huge helping hand.

How?

No matter which side of the coin you are at, surely you have to ask if the current 'lower raw material' scenario can sustain.

What if it doesn't?

Well on the other hand, some would bring out the low revenue, which again have two sides, in my flawed opinion.

On one side, one would say, the extreme low revenue compared to previous period last fiscal year shows how tough the business economics is for Tong Herr. Business is simply poor and not helping out is the anti-dumping warning mentioned by Tong Herr!

On the other side, some would argue that things can only get better.

Yeah, why so pessimistic? LOL! Sun will always rise and tomorrow is always a better day. (so true) and if things get better, then any improve in revenue should mitigate any rising material cost.

Well, that's a rather justifable reasoning.

But will it happen?

How?

Which side of the coin do you like?

Me?

All I have to say is "And as usual... how?Oh.. this again is not a tipsy. Please lah. The only way I know how to make anyone tipsy is to whip out my bottle of whisky or perhaps a bottle of wine. :)So if you like to ass-u-me, go ahead, your ass not mine. :D "