PBA HOLDINGS BHD

KLSE (MYR): PBA (5041)

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Last Price

1.85

Today's Change

-0.04 (2.12%)

Day's Change

1.85 - 1.89

Trading Volume

100,500


6 people like this.

1,437 comment(s). Last comment by Justaboylearning 1 week ago

Posted by dollardollarbill > 2 months ago | Report Abuse

It's the Year of the Dragon328
YTLPOWR + PBA
Multibagger stocks

Posted by wallstreetrookieNEW > 2 months ago | Report Abuse

take some profits off the table, riding the bull with the rest 60%

Posted by wallstreetrookieNEW > 2 months ago | Report Abuse

PBA is supported by good fundamentals, but I don't think RM2.38 is a good entry point anymore.

Posted by wallstreetrookieNEW > 2 months ago | Report Abuse

Increasing domestic tariff has almost been fully priced in. Disagree with KingKKK's intrinsic value

Posted by wallstreetrookieNEW > 2 months ago | Report Abuse

Forecasted EPS 0.3622 so times 10 equal to RM3.60
Are you kidding me? KingKKK is def a smart investor but he could be wrong about PBA. Good call for YTLPower, Sunway and UEMS.

dragon328

1,876 posts

Posted by dragon328 > 2 months ago | Report Abuse

Capital expenditure will always be there for infrastructure companies like PBA.

For the contracted capex of RM107 million as of 31 Dec 2023, PBA will have no issue of funding it as its operating cashflows will be super strong post water tariff hike.

PBA had about RM88 million of operating cashflows for the 9 months to 30 Sept 2023, annualised to RM120 million thereabout. Post water tariff hikes, it will have another RM80 million of additional revenue / cashflows a year, making it almost RM200 million of operating cashflows a year.

PBA can afford to pay out up to half of this as dividend, i.e. RM100m or 30 sen a share, with still another RM100 million to fund capex.

Assuming capex is funded 65%-67% by debts, it can fund capex of RM100m/33% = RM300 million of capex each year.

Posted by wallstreetrookieNEW > 2 months ago | Report Abuse

Comparing PBA with Magnificent Seven in the US?
These US tech companies have innovative technology and IP. PBA is a traditional water treatment/supply company.

Posted by wallstreetrookieNEW > 2 months ago | Report Abuse

How can you compare a company like PBA against tech giants like Tesla and Apple? Haha

wendy76

57 posts

Posted by wendy76 > 2 months ago | Report Abuse

@wallstreetrookieNEW, then what is your intrinsic value for PBA? thanks.

KingKKK

339 posts

Posted by KingKKK > 2 months ago | Report Abuse

To clarify the meaning of the announcement below, it means the cost that PBA pay to Penang State Government is status quo at 3 sen per cubic metre of water treated.

This is a good news to PBA because revenue increase (from tariff hike) but cost more or less same (maintain at 3 sen per cubic metre to state government).

Water Intake Fee = Amount PBA pay to state, NOT the water tariff or revenue to PBA.

PBAHB wishes to announce that Perbadanan Bekalan Air Pulau Pinang Sdn. Bhd. (“PBAPP”), a subsidiary of the Company has on 19 December 2023 received a letter from the State Government of Penang informing that the Water Intake Fee for year 2024 to 2026 shall remain at the rate of 3 sen per cu.m based on the annual actual production volume.

https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3416062

Posted by Justaboylearning > 2 months ago | Report Abuse

wallstreetrookie should keep on complaining, then price will go higher to piss him off. gogogo

paperplane

21,540 posts

Posted by paperplane > 2 months ago | Report Abuse

100mil dividend might be too much. But 50mil might be more realistic. So div yield expected 5 to 6% to state govt, ok lah, stable good.business

Posted by Justaboylearning > 2 months ago | Report Abuse

Looks like it might not hit RM 3.00 this week.

Chong3710

180 posts

Posted by Chong3710 > 2 months ago | Report Abuse

Too many good news.

teknikal

171 posts

Posted by teknikal > 2 months ago | Report Abuse

Nice to bottom fish at 225 which is the support level. Uptrend intact with MA20 above MA50. Also MA50 above MA200.

dragon328

1,876 posts

Posted by dragon328 > 2 months ago | Report Abuse

@paperplane, yes RM100 million of dividend may not be realistic. I was just saying that PBA will have the financial capability to fund the capex and pay good dividends.

I would be happy with RM50 million or 15 sen per share of dividend every year, as it would yield me 7.5% p.a. at my entry cost of RM2.00.

At current price of 2.25, it will yield 6.7%

KingKKK

339 posts

Posted by KingKKK > 2 months ago | Report Abuse

I stick to my Intrinsic Value of RM3.60
The next catalyst will be the earnings in February, about 3-4 weeks from now.

Details on RM3.60 Intrinsic Value:
https://klse.i3investor.com/web/blog/detail/bestStocks/2024-01-18-story-h-210403941-PBA_New_Intrinsic_Value_is_RM3_60

My track record is as below:
https://klse.i3investor.com/web/portfolio/mypf/193571

+19% to +20% at the portfolio level...

troy88

2,537 posts

Posted by troy88 > 2 months ago | Report Abuse

Should rise up again after heavy profit taking..

paperplane

21,540 posts

Posted by paperplane > 2 months ago | Report Abuse

King KKK, utilities normally PE not tht high, be cautious on pe assumption

dragon328

1,876 posts

Posted by dragon328 > 2 months ago | Report Abuse

Utilities stocks typically enjoy high PE ratio, as the business is defensive, as show below:

Tenaga 15x
PetGas 19x
Ranhill 25x
Malakoff loss making for FY2023, 12x PER on FY2024 earnings (in doubt)
Gas Malaysia 12x
Dialog 20x
YTL Power 10x

Posted by dollardollarbill > 2 months ago | Report Abuse

Historical high P/B was abt 1.1x in 2004 when ROE was abt 9%

Posted by dollardollarbill > 2 months ago | Report Abuse

With 15% ROE moving forward...

cgtan2020

640 posts

Posted by cgtan2020 > 2 months ago | Report Abuse

https://www.freemalaysiatoday.com/category/nation/2024/01/17/domestic-water-tariffs-in-penang-to-double/
@dragon328 @KingKKK your projection based on this figure?

hhhiii123

672 posts

Posted by hhhiii123 > 2 months ago | Report Abuse

Run first, too much profit taking lol

dragon328

1,876 posts

Posted by dragon328 > 2 months ago | Report Abuse

@cgtan2020, no, not based on this news link

KingKKK has his own calculations

cgtan2020

640 posts

Posted by cgtan2020 > 2 months ago | Report Abuse

@dragon328 thank you again!!!

Posted by Justaboylearning > 2 months ago | Report Abuse

Wonder if it’s too late

teknikal

171 posts

Posted by teknikal > 2 months ago | Report Abuse

BREAKOUT Analysis:
Next BREAKOUT estimate date = 2-February to 16-February.

The previous three consolidation before the next surge took 8, 9 and 19 trading days.

The current consolidation has taken 4 days, so the next move up is 1 week to 3 weeks away...

3-Jan to 15-Jan: 9 trading days followed by BREAKOUT above RM1.75 to RM2.25 level
12-Dec to 28-Dec: 12 trading days followed by BREAKOUT above RM1.30 to RM1.75 level
15-Nov to 8-Dec: 19 trading days followed by BREAKOUT above RM1.10 to RM1.30 level

Posted by Bullstocks888 > 2 months ago | Report Abuse

@dollardollarbill, your projection of 150mil earnings based on new water tariff? Tariff hike will add RM80mil additional revenue. May I know how you derive the balance RM70mil? Thanks in advance.

Posted by dollardollarbill > 6 days ago | Report Abuse

If the market values PBA at a reasonable 10x PE on RM150m earnings, we're looking at RM4.50.

Warren Buffett and Charlie Munger always tried to buy companies that have monopoly-like status. Ideally an unregulated toll bridge.

PBA's issue of low water tariffs has now been resolved, and water tariffs can now be increased every 3 years. The new tariff rate adjustment also requires water consumers to pay the Imbalance Cost Pass-Through (ICPT) rates; for Penang it will be +7 sen for every cubic metre of water consumption for now. So the new effective 'water' tariff rates are actually higher.

Posted by Bullstocks888 > 2 months ago | Report Abuse

@dollardollarbill Thanks.

150mil seems fair to me. Should be valued at higher PE ratio. Ranhill is valued at 25x despite making less earnings than PBA!

Posted by dollardollarbill > 2 months ago | Report Abuse

@Bullstocks888

Exactly. Not to forget that PBA is also in a strong net cash position of RM193m as of 30 Sep 2023 (cash of RM213m vs. total borrowings of RM20m).

On the other hand, Ranhill is in net Debt position (RM1.04 Billion total borrowings vs. cash RM264m)

So PBA is very attractive from an Enterprise Value standpoint too.

Posted by EatCoconutCanWin > 2 months ago | Report Abuse

service punya teruk , saham naik!! bontot punya syarikat

Posted by Bullstocks888 > 2 months ago | Report Abuse

A matter of time before PBA catch up to Ranhill's valuation as PBA is a pure water utility stock and more efficient!


Posted by dollardollarbill > 3 hours ago | Report Abuse

@Bullstocks888

Exactly. Not to forget that PBA is also in a strong net cash position of RM193m as of 30 Sep 2023 (cash of RM213m vs. total borrowings of RM20m).

On the other hand, Ranhill is in net Debt position (RM1.04 Billion total borrowings vs. cash RM264m)

So PBA is very attractive from an Enterprise Value standpoint too

dragon328

1,876 posts

Posted by dragon328 > 2 months ago | Report Abuse

Correct @Bullstocks888.

PBA is still grossly undervalued at current prices. Though no analyst covers this stock now, the only entity that gives a fair value to PBA currently is SimmmplyWallSt that gives a fair value of RM4.17.

It used a DCF valuation method and actual data of company free cashflows extrapolated forward. It assumed FCF of RM69.53 million for FY2024, obviously it has not taken into account the recent water tariff hike from 1st Feb 2024.

Nonetheless, the valuation of RM4.17 already gives a good upside of over 80% from current share price of RM2.28, even after it used a relatively high discount rate of 9.01%.

By early next year, once this institution has the more updated financial data of PBA post water tariff hike, the fair value will get a further boost from RM4.17.

MrFox

992 posts

Posted by MrFox > 2 months ago | Report Abuse

be patient! as this is a long term investment!
just enjoy the ride and occasionally peep thro the window to see any side dishes ard!!
haha

wendy76

57 posts

Posted by wendy76 > 2 months ago | Report Abuse

yes will rise...just the matter of time.. Rock and roll :)

teknikal

171 posts

Posted by teknikal > 2 months ago | Report Abuse

Today is the 6th day of consolidation.


BREAKOUT Analysis:
Next BREAKOUT estimate date = 2-February to 16-February.

The previous three consolidation before the next surge took 8, 9 and 19 trading days.

The current consolidation has taken 6 days, so the next move up is 1 week to 3 weeks away...

3-Jan to 15-Jan: 9 trading days followed by BREAKOUT above RM1.75 to RM2.25 level
12-Dec to 28-Dec: 12 trading days followed by BREAKOUT above RM1.30 to RM1.75 level
15-Nov to 8-Dec: 19 trading days followed by BREAKOUT above RM1.10 to RM1.30 level

Posted by Justaboylearning > 2 months ago | Report Abuse

i hope it gets to RM 3 before end of february.

But I dont think so

KingKKK

339 posts

Posted by KingKKK > 2 months ago | Report Abuse

The big money is not in the buying and the selling, but in the waiting. - Charlie Munger

Posted by StartOfTheBull > 2 months ago | Report Abuse

Burst pipes and possible El Nino dry season coming. How would Penang solve the problem of water supply in the near future?

Posted by Justaboylearning > 2 months ago | Report Abuse

Cut loss . I was late

MrFox

992 posts

Posted by MrFox > 2 months ago | Report Abuse

buy @ ard2.25 n keep in the freezer!!!
it will expand when frozen!!!
you dun believe words of wisdon!!!????
haha

Posted by aceofbursa > 2 months ago | Report Abuse

Tradeview Capital CEO Ng Zhu Hann recommends PBA Holdings as his top pick for 2024. His comments:

We have had this stock in our portfolio for the longest time and it started to move probably about one or two months ago. We believe the company is SEVERELY UNDERVALUED.

PBA is a very well-run company and as the licensed water-supply operator that serves Penang, it manages the water resources very well.

It is a dividend yielding stock with a consistent dividend yield of 3% to 4% per year.

PBA's earnings are EXPECTED TO COME IN STRONG once the water tariffs are revised. When the company's earnings are strong, it will have the ability to pay out HIGHER DIVIDENDS.

Additionally, PBA is an ESG stock. As such, PBA will likely attract a lot more fund flows from investors who are interested in putting their money into ESG stocks.

With regard to target price, while it is hard to say at this juncture, we believe it should be worth AT LEAST DOUBLE its current share price.

dragon328

1,876 posts

Posted by dragon328 > 2 months ago | Report Abuse

@AceofBursa, can you pls share the article or research report on PBA from Tradeview Capital CEO?

Posted by aceofbursa > 2 months ago | Report Abuse

@dragon328, are you a subscriber of The Star? You have to be a paid subscriber to view the article.

Posted by Justaboylearning > 2 months ago | Report Abuse

@aceofbursa, capital ceo said that when the price was only RM 1.50

dragon328

1,876 posts

Posted by dragon328 > 2 months ago | Report Abuse

@aceofbursa, no I am not a paid subscriber to The Star premium online. Is it possible for you to copy and paste the content somewhere and share with us?

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