Highlights

Intelligent Research report

Author: intelligenttrade   |   Latest post: Thu, 3 Jun 2021, 6:28 PM

 

Pecca Group - Expecting a Strong FY21

Author:   |    Publish date:


Pecca reported 4QFY20 PATMI at RM1.6m (+678.0% QoQ; -65.7% YoY) and FY20 at RM10.7m (-39.7% YoY), above both HLIB expectation (220.0%) and consensus (136.4%) due to drastic cost control measures in 4QFY20. For FY21, we expect Pecca to leverage on the strong automotive demand during SST exemption period. Pecca is also fast ramping up its PPE production in FY21. Maintain BUY recommendation with unchanged TP of RM1.28 based on unchanged 12x P/E on CY21 profit. The group has high net cash position of RM78.4m (44.2sen/share).

Above expectations. Reported a core PATMI of RM1.6m for 4QFY20 (+678% QoQ, -65.7% YoY) and RM10.7m for FY20 (-39.7% YoY), above both HLIB expectation (220.0%) and consensus (136.4%), mainly due to higher-than-expected sales volume and drastic cut in operational, administration and distributional expenses during the quarter.

Dividend. Declared second interim dividend 1.64sen/share (ex-date: 15 Sep), making full year dividend of 4.64sen/share or dividend yield of 4.1% for FY20.

QoQ. Core earnings improved to RM1.6m in 4QFY20 (vs. RM0.2m in 3QFY20), mainly driven by substantial cost cutting measures implemented, which saw gross margin improved while administrative and distributional costs dropped to RM0.8m (from RM4.2m).

YoY & YTD. Core earnings dropped by 65.7% YoY and 39.7% YTD, mainly affected by lower sales volume due to: (i) implementation of MCO by end of the 3QFY20; and (ii) production disruption of Perodua at the earlier part of the financial year.

Outlook. We expect strong earnings rebound in FY21 with the implementation of SST exemptions as well as strong demand for its new PPE segment. Its major client Perodua announced increasing production rate to 25k units per month (from usual 20k units) for the period of Aug to Dec months. Pecca will also leverage on the upcoming attractive model launches: Proton X50 (4QCY20), Mitsubishi Expander (4QCY20) and Perodua D55L model (1QCY21).

Forecast. Unchanged.

Maintain BUY, TP: RM1.28. Maintain BUY recommendation on Pecca with unchanged TP of RM1.28 based on PE of 12x of CY21 profits. We are positive on Pecca’s strong leverage onto the strong automotive demand during SST exemption period as well as its new PPE venture as Pecca continues to maximise its resource allocation. Pecca boasts a strong net cash position of RM78.4m (translating into 44.2 sen/share).

 

Source: Hong Leong Investment Bank Research - 1 Sept 2020

Share this
Labels: PECCA

Related Stocks

Chart Stock Name Last Change Volume 
PECCA 4.45 -0.02 (0.45%) 143,800 

  Be the first to like this.
 


APPS
I3 Messenger
Individual or Group chat with anyone on I3investor
MQ Trader
Earn MQ Points while trading with MQ Traders Group
MQ Affiliate
Earn side income from MQ Affiliate Program
 
 

390  289  627  1209 

ActiveGainersLosers
Top 10 Active Counters
 NameLastChange 
 MMAG 0.185-0.005 
 EURO 1.06-0.15 
 VSOLAR 0.02+0.005 
 SERBADK 0.630.00 
 HHHCORP 0.215+0.025 
 MTOUCHE 0.095+0.005 
 EDARAN 1.01+0.105 
 SCNWOLF 0.41+0.05 
 MESTRON 0.435+0.005 
 YGL 0.305+0.025 

FEATURED POSTS

1. MQ Trader - Introduction to MQ Trader Affiliate Program MQ Trader Announcement!

TOP ARTICLES

1. Why China is excluded in G7 summit? Koon Yew Yin Koon Yew Yin's Blog
2. AT Current Share Price: RM0.07. 1st Target Price: RM0.134, 2nd Target Price: RM0.28, 3rd Target Price: RM0.80 Fundamental Analysis of AT(0072) as at June 17 2021
3. Why Parliament should reconvene - Koon Yew Yin Koon Yew Yin's Blog
4. Poh Kong’s profit shot through the roof - Koon Yew Yin Koon Yew Yin's Blog
5. [转贴] [Video:浅谈KOBAY TECHNOLOGY BHD, KOBAY, 6971] - James的股票投资James Share Investing James的股票投资James Share Investing
6. 下跌股:优乐 99仙支撑 南洋行家论股
7. [转贴] [Video:浅谈CENSOF HOLDINGS BHD, CENSOF, 5195] - James的股票投资James Share Investing James的股票投资James Share Investing
8. SMetric (0203): A secured technical buy? - 17 June 2021 - Sujibaby Sujibaby Stock-Talk
PARTNERS & BROKERS