Technical Breakout notedGtronic may have broken above its long-term downtrend line resistance at RM1.12-13. Its next resistance is at RM1.25 & thereafter at RM1.50.
Chart 1: Gtronic's monthly chart as at Mar 11, 2010 (Source: Tradesignum)
Recent Financial ResultsGtronic had recently announced its results for FYE31/12/2009, which shows a drop in net profit of 26.7% from RM21.8 million to RM15.9 million. Turnover had similarly declined by 21.1% from RM275 million to RM217 million. The decline is mainly due to the global economy slowdown in 2009 & losses incurred due to the shutdown of its China operations (approximately RM8 million as of to-date) further eroded the net profit of the group.
Financial PositionGtronic's financial position is very satisfactory with little borrowings and a current ratio of 3 times as at 31/12/2009.
Table: Gtronic's last 8 quarterly results
Chart 2: Gtronic's last 27 quarterly resultsConclusionBased on technical breakout, Gtronic could be a trading BUY.