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SKPRES (7155): Shocking Fall. Will there be more?

Effulgence
Publish date: Sat, 02 Dec 2023, 05:39 PM

SKPRES (7155) is a Main Market company in the Industrial Products & Services sector. SKPRES is in the Electronic Manufacturing Services (EMS) business. SKPRES's share price plunged from a peak around RM 2 in year 2021 to RM 0.77 now. Is SKPRES selling at cheap price now?


1. Share price you pay is higher than Price to Book.

SKPRES's share price is RM 0.70, whilst its net assets is about RM 0.59.


2. Best revenue in FY2023, Best Net Profit in FY2022.

SKPRES's best results are in the past. Past 2 quarters' earnings have been a disappointment. 


3. Financial Statements.

SKPRES usually has positive net cash from operations each quarter. SKPRES is a net debt company. SKPRES pays dividends, usually once in a year.


4. Insider dealings.

Managing Director Mr Gan Poh San bought 519600 shares this year. Major shareholder EPF have been buying shares recently. 


5. PE ratio is around 12.

SKPRES's trailing PE ratio is reasonable. 


I do not have SKPRES shares. SKPRES has done not too badly. 

SKPRES's slowdown in earnings could be due to slowing global demand for consumer goods, especially premium household goods. Current share price is showing fears of further earnings deterioration. 

Suppose SKPRES produces an average net profit to shareholders of 126mil./year, given PE ratio of 15, SKPRES should be worth around RM 1.20. Conservatively, an average net profit to shareholders of just 80mil./year, given PE ratio of 15, SKPRES should be trading at fair value of RM 0.77 currently. 

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