Global Testing Corp's net profit fell 5.2% to $4.5m

Here's why it is still headed for strong growth.

Global Testing GTC 9M16 posted revenue of US$23.4m (S$33.19m) which is 9.6% lower than last year while net profit registered at US$3.2m (S$4.5m) represents 5.2% decline.

Although GTC continued to maintain its cautious stance in its outlook statement, KGI Securities sensed, through its conversation with management that the company remains on course for a stronger 2H16 than 1H16.

" Although its business is not exactly booming, and growth outlook looks insipid, we believe GTC still makes a very attractive investment given its yield (backed by stable cash flows) and low stock valuation," it said.

According to the research house, 9M16 EBITDA of US$10.7m (79% of projections), continued to indicate strong cash flow generation, which is a key to its premise of a sustainable run of dividend/capital payouts that could bring outsized yields to investors.