The below expectation result in 3Q18 was due to a combination of both lower revenue (RM321mil vs RM374mil in 3Q17) and compression in profit margin where PBT margin for the quarter fell to 1.9% vs 4.6% a year ago. This was below some investors’ expectation given the group decision to disposed of the print consumable business in Europe and China back in 2Q17. With this investor was hoping that the company could start delivering consistent profit and growth. But after a year since the disposal, the growth has yet to be deliver.
Revenue was lower in the recent quarter due to lower contribution from German and other European countries. However, in terms of profit, these 2 segments actually deliver growth from an EBIT of RM11mil in 3Q17 to RM14.3mil for the quarter.
For Americas (Mexico, Colombia and Argentina) and Rest of the world (Japan China SEA and Middle East), both divisions recorded falling revenue, from a combined of RM69mil in 3Q17 to RM58 mil in the recent quarter. What is worst is that EBIT had fallen from RM13.1mil to only RM0.3mil wiping out any gains from the European market. The lower result was mainly due to the recession faces by Argentina where some outlet was forced to closed down in order to protect the group from the steep currency valuation faced by the Argentina peso.
4Q is expected to be a slow quarter for the group given that it’s a school holiday period in Europe. Europe should still record good performance for next year. Profit growth will mainly be driven by the forex exchange rate. The change of government for Mexico and Argentina will add into the political uncertainties of the countries. Outlook for the division in terms of profit might be affected for the near term.
That being said, Mr Loo has been adding his exposure in the company almost every day albeit at very low volume. Still that just show that he believes the company is currently undervalue. He has been adding his position little by little since April this year when the share price was at 70 sens. His position prior to the start of acquisition was 96.5mil. His current position now is at 96.2 mil. Why? Because he actually sold some 1.5mi shares in May at around 65 sens. But still from his last selling action he has acquired almost 1mil shares (price between 65sens to 30 sens).
If you are looking to diversify your portfolio outside of Pelikan (due to earnings uncertainty), I would recommend you to look at MBMR.
MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 5.5x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.
For FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19.
adeh ku q 305 Xdapat kikiki ku kenal tessa kat kaunter ni dulu, dia promo kat sini, masa tu Xsilap harga 40 sen naik sampai 80 sen and then 1.00 lebih . kaunter ini memang jenis kuat tido, kena promo kuat
Update:Cut loss at below 38 cents(in daily chart,end of the day) Michael Kwok A buy.Putting Pelikan on 44-50 cent value.Happy New Year 2020. 31/12/2019 8:05 PM
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....
moneykj
6,160 posts
Posted by moneykj > 2017-03-17 00:20 | Report Abuse
Sure no good boh?