Don't worry, PBA will deliver good profit next qtr, see Velesto also always say good, announced few qtr dissapointed result but finally deliver good profit recently.
The deferred tax asset is expensed to PL upon utilisation of reinvestment allowance to offset current year taxable profits. They should at least compute it each quarter instead of charging it all in one quarter.
In my opinion, PBA won't face any financial problem at all bcs it is belong ot Penang government. But the Penang government won't allow this company to earn too much money bcs PBA is equal to Penang People vote.
@dragon328, I agreed with your conclusion that PBA is worth RM5.80. It could be worth more if you use Ranhill PE of 25x.
There were many haters when you recommended YTL Power below RM1. Look where is YTL Power today! Your track record is proven! Not sure about anyone who will listen to his remisier. 2024 surely a record year for PBA and YTL Power. HODL!
Posted by dragon328 > 1 day ago | Report Abuse
@Bullstock888, yes I concur with your view above.
PBA's Q4 was dragged down by negative deferred tax, a 180 degree change from positive deferred tax in Q3. This is non cash, and I will just ignore them.
PBA recorded PBT of RM68.4m in 2023, this would have been higher if the ICPT surcharge rate was reduced for the whole year, but it came into effect only from July 2023.
Operating cashflows before working capital changes and capex amounted to RM112 million in 2023, which was very strong.
Post water tariff hike from 1st Feb 2024, PBA expects revenue to increase by RM86 million a year. Assuming operating costs remain unchanged, PBT will increase by RM86m.
I take a more conversative approach and assume operating costs to increase by 10% or RM27m in 2024, and so I expect PBT to jump by about RM60m to RM128 million.
Ignoring deferred tax effect, the normal income tax should be minimal as PBA has got enough capital allowance to offset against future taxable profit, so net profit will come to also about RM128 million or EPS of 39 sen.
PBA is a well run utility company and should enjoy PER of 15x (note Tenaga at 23x PER, PetGas at PER 20x), so PBA may be worth RM5.80 a share post water tariff hike.
@dollardolarbill, thanks for your good insights! PBA cash flows are so much higher than earnings. Dividends also increase to 3.5 sen. Hopefully PBA can pay higher dividend next year with higher earnings.
Posted by dollardollarbill > 1 day ago | Report Abuse
@Bullstocks888
The income statement can mask/hide the real earnings of PBA, but not in the Cash Flow statement. Operating cash flow before working capital changes is RM128.5m in 2023 vs. RM87.4m in 2022. Net OCF RM179m in 2023 vs. RM103m in 2022.
The deferred tax expense of RM25.7m is a non-cash item and might potentially be reversed in the upcoming quarters.
The tariff hike for domestic users (and other categories) was just implemented on 1 Feb 2024, not in 4Q23. So, the RM86m increase in revenue that PBA mentioned will only be reflected from 1Q24 onwards.
While costs may have increased a bit in 4Q, these cost increases can be passed on in the next tariff adjustments in 2026 and 2027 for non-domestic and domestic users. Consequently, earnings are expected to continue rising after the adjustments.
I will continue to hold PBA as I believe in my long-term thesis, rather than focusing on the next quarter or two. In investing, one shouldn't feel pressured to chase returns for the next few months. Taking the longer-term view and focusing on the bigger picture is how great returns are generated.
I don't know why, based on all your points. We should sell PBA and come back 12 weeks later..... That's why I said cut loss. Buy when nearing the QR 1 for 2024....
Another weird thing in this forum is someone trapped high in this stock still claiming that he is able to offer his "words of wisdom." Hold for another month, six months, one year or three years? 🤣
Glad to learn that Voyager Assets Limited is one of PBA's top shareholders.
Voyager Assets Ltd is an investment vehicle of savvy value investor Mark Chang, the founder of JobStreet.
Based on PBA's latest annual reports, Voyager Assets have been increasing its stake in PBA year by year.
AR 2020: 1,359,100 AR 2021: 2,099,100 AR 2022: 3,219,600
Voyager Assets is also a top 10 shareholder of VITROX with 10.16 mil shares.
Mark Chang is one of the most iconic entrepreneurs in Asia. He is the founder of JobStreet.com, which he led to become the largest online employment firm in Southeast Asia, and which was eventually acquired by SEEK in 2014 for US$582 million.
the strategies are quite rigorous for the regular-Joe. As a matter of fact, they are mostly successfully carried out by pros who have had a great deal of skill set/knowledge to pull such trades off.
On Sunday (17.3.2024), water consumption in Penang was estimated to have reached a high of 927 million litres per day (MLD) as compared to the daily average of 877 MLD recorded in 2023.
This represents a sudden 50 MLD surge in water consumption year-on-year.
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....
EatCoconutCanWin
6,324 posts
Posted by EatCoconutCanWin > 4 weeks ago | Report Abuse
pba should mou with nvidia, AI to use robot repair pipe