Higher earnings – Pantech’s 4QFY17 net profit jumped 43% YoY and 70% QoQ to RM10.4m on the back of higher trading revenue as quarterly sales gained 40% YoY and 54%QoQ to RM152.6m due to improved sales RAPID, Pengerang.
Improved revenue– Revenue from the Trading division surged 64% YoY and 81% QoQ to RM106.7m mainly due to RAPID while sales from the Manufacturing division improved 4% YoY and 15% QoQ to RM45.8m due to contribution from its stainless steel plant.
Margins slightly higher – Operating margin improved to 11.6% from 10.1% in 3QFY17. Similarly, net margin climbed to 6.8% from 6.2% in 3QFY17 due to higher tax rate.
Inflection point? - Despite the improvement in 4QFY17, full year net profit of RM29.6m dropped 22% YoY while twelve months’ revenue declined 6.6% YoY to RM479.4m. 4QFY17’s sterling performance could be an inflection point after 5 years of declining profits.
Final interim dividend declared – Pantech has declared a final interim dividend of 0.5 sen, taking total dividend so far to 1.8 sen. This implies a payout ratio of 45% and yield of 3%.
Earnings Outlook/Revision
Earnings above expectation – Twelve months’ net profit accounted for 108% of our full year estimate while full year revenue achieved 113% of FY17 forecast.
Earnings estimates maintained – We are keeping our FY18 and FY19 forecasts with expectation that earnings will continue to be boosted by RAPID and recovery in oil prices but capped by start-up losses in its new galvanising plant.
Valuation & Recommendation
Maintain Hold call with a higher target price of RM0.61. Our target price is based on FY18 EPS forecast and PER of 12x times after applying +2 standard deviation over its mean PER due to the improved conditions in the oil and gas sector
Be the first to like this. Showing 0 of 0 comments
Post a Comment
People who like this
Featured Posts
MQ Trader
Introducing MY's First IPO Fund for Sophisticated Investors!
MQ Chat
New Update. Discover investment communities that resonate with your ideas
MQ Trader
M & A Value Partners IPO Equity Fund has been launched - Targeted 13% Return p.a
Latest Videos
0:17
New IPO: The onshore and offshore support services provider for the O&G industry, Steel Hawk Bhd aims to list on the Ace Market!
MQ Trader 3395 views | 3 d ago
0:17
New IPO: The largest mini-market player and a leading groceries retailer in Malaysia, 99 Speed Mart Retail Holdings Bhd aims to list on the Main Market!
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....