Tasek: Darkest Before Dawn?2nd May 2019
For QE31/3/2019, Tasek’s net loss rose 55% q-o-q and 135% y-o-y to RM10.4 million while revenue was flat- up 1.7% q-o-q or 0.7% y-o-y to RM137 million. Revenue rose marginally q-o-q due to higher sales volume in both the cement and ready-mixed concrete segments. However the prolonged intense pricing competition continued to affect the contribution margin of both the cement and ready-mixed concrete segments last quarter. Lower interest income resulting from lower fund placements in term deposits also affected the Group’s performance last quarter.
Table: Tasek’s last 8 quarterly results
Graph: Tasek’s last 44 quarterly results & dividend payout
As at 31/3/2019, Tasek’s financial position is deemed healthy with current ratio at 2.8 times and gearing ratio at 0.25 time.
Tasek (closed at RM6.12 yesterday) is now trading a Price to Book of 1.4 times. We can’t compute the PER as the company reported a loss per share of 22.96 sen. Due to the hefty losses, Tasek has cancelled its dividend in last year.
Tasek rebounded off its low of RM4.02 in December last year and went into a gradual rally over the past 4 months. Last 2 weeks, the rally picked up pace and the share price hit a high of RM6.80 on April 25. With the substantial losses for last quarter, Tasek will likely correct further next few weeks. Immediate support will be at the 200-day SMA line at RM5.60.
Chart 1: Tasek’s daily chart as at Apr 30, 2019 (Source: Malaysiastock.biz)
Chart 2: Tasek’s monthly chart as at Apr 30, 2019 (Source: Malaysiastock.biz)
Based on poorer financial performance, demanding valuation and challenging operating environment, I am keeping my rating for Tasek to a SELL.
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