Highlights

This stock is going to the moon! >300% return

Author: lifeisajourney   |   Latest post: Sat, 10 Apr 2021, 7:48 PM

 

A hidden gem with huge upside

Author:   |    Publish date:


I've previously missed the boat when the stock was price at 0.90 in July. Upon my revisit in July, the share price of this counter has went up RM1.22 within 2 months. 

Currently i'm checking in again to this stock. To my surprise, it has already shoot up to 3.94, an all time high. For those who has follow me in July, the gain would have already been roughly 222%. 

Yes, the counter i'm talking about is Pecca. 

 

Buying interest is surging

It seems that there is a lot of buying interest in this stock. Last Year, Pecca has recorded one of the company that performs the most share buyback. (One might question, what is the point of buying back your company shares? Does the company has too much free cash flow? Or the company would like to have bonus issue to reward the shareholders?). 

Overall, it seems that even in adverse market condition, the counter is still sustaining the price and even shoot up higher. It seems that the company has garner a strong following behind and buyer has been sustaining the price point. 

 

Outlook for the company

1) Contribution from DRBHICOM

https://www.klsescreener.com/v2/news/view/801529/cgs-cimb-positive-on-drb-hicom-as-proton-transformation-shifts-into-higher-gear

https://www.proton.com/en/press-release/2021/march/proton-market-share-hits-seven-year-high

Based on CGS's recommendation, DRBHicom are looking to ramp up its production even further for X50 and X70.  Based on the article, Proton has ended 2020 with 5.9% market share, a remarkable jump from 3.8% in 2019. 

At the same time, Proton has also delivered it's best February Month in over a decade (10 years). They've delivered 11,873 units and this is roughly equivalent to 27.1% of the market share. 

Coupling all the above news with the vehicle sales tax exemption (extended until June 30), we would definitely expect a very positive cash flow into Pecca's financials. With that much cash sitting in Pecca's book, we might see chances of M&A very soon as they'll begin to utilise the cash to strengthen their business operations.  

2) PPE Segment 

As per Intelligenttrade's post QR briefing previously, Pecca has secured new PPE contract with the goverment with 2 months rolling orders. With that, management has decided to ramp up production to c. 60% level as compared 30%-40% previously. 

With the previous revenue set at RM4.8m (assumming 30% utilisation), we would see the contribution to Pecca books to be double to RM9.6mil this QR with this contract. 

 

Given the car sales figure and the PPE's positive contribution to the company, the company would definitely be achieving another record high revenue in the coming QR. 

 

Analyst's Target Price 

HLIB given Pecca a TP of RM2.12 on Mar 08 and a downgrade to HOLD. 

AMinvest has given a TP of RM1.77 on Mar 01 and a downgrade to HOLD. 

With both the analyst given such a low TP, the price has already long soar above the TP of both analyst and for those who have missed the train, it is obvious that you can no longer get into the boat at such low prices. 

 

With such bright financials contributing to Pecca's book, it'll definitely be interesting to see what will become of Pecca's future.

For those of you who have entered at RM1.22 as per my previous post, i have nothing but envy for you, as you've already achieve 200+% in 8 months. 

 

*I'm just a newbie in this field and this is just my thoughts. My views does not constitute as a buy/sell call. This is just my 2 cents on this counter.

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Labels: DRBHCOM

Related Stocks

Chart Stock Name Last Change Volume 
DRBHCOM 1.90 0.00 (0.00%) 1,387,000 

  Be the first to like this.
 
shareking1 Compare with high pe 68% pecca, drbhcom still low pe 6% and it a hidden gem with huge upside.
11/04/2021 2:57 PM
OnTime pecca is way overvalued, drb is very much undervalued.
12/04/2021 8:35 AM
Inspivest how much did DRB contribute to pecca ? are you aware of the percentage contribution ? you should look at MBMR's contribution

cashflow has been positive for the longest time so that point is null, not going into PPE if you know whats the corporate arrangement is like
12/04/2021 9:52 AM


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