Posted by necro > 2013-06-01 22:28 | Report Abuse

Sunway,Mahsing,Pantech,Maybank,Gamuda...

Posted by KC Loh > 2013-06-02 09:11 | Report Abuse

Gadang, daya, gkent, skpres.....

Posted by KC Loh > 2013-06-02 09:14 | Report Abuse

I should write "maybe even daya still especially after impressive 1Q13"

Posted by kcfan > 2013-06-02 09:47 | Report Abuse

My target after Q213 focus stocks are Annjoo,Coastal,Maybulk,Unimech,P&O,Weida,Unisem,Pantech,Skpetro,YTL,Benalec,Gadang and Trop.More homework and patient are needed...

Posted by Joyce Xavier > 2013-06-02 09:47 | Report Abuse

PANTECH GROUP Holdings Bhd (80 sen) remains firmly on track to achieve double digit earnings growth for the next few years. Currently trading at well below average valuations for the broader market, at only 6.4 times our estimated earnings for 2014 financial year ending February (FY14), we believe there is good potential for handsome gains.

The company’s recently released earnings results for FY13 were right in line with our expectations. Top line sales were up 46% to RM637.2 million, with growth reported from both the trading and manufacturing arms.

Trading sales grew 24% year-on-year, spurred by the rise in spending in the local oil and gas sector. Importantly, sales for the manufacturing arm doubled over the past year, boosted by contributions from UK-based Nautic Steels (acquired in March 2012) as well as rising capacity and utilisation at its local carbon and stainless steel manufacturing plants. As a result, manufacturing now accounts for 40% of total sales, up from 29% in FY12.

In line with the higher sales and improved margins, net profit increased to RM55 million in FY13, up 59% from the RM34.5 million reported in the previous financial year. Pantech also raised its dividends for the year to 4.6 sen per share reflecting the stronger earnings.

On track for double digit growth
We are confident the company will continue to grow going forward, albeit at a more tempered pace due to the larger base effect.

Growth for the manufacturing arm is expected to continue to outpace its trading business. Export demand for the company’s pipe, fittings and flow control (PFF) products has remained robust, especially from the US and Latin America and even Europe. Order books for the stainless steel product range run up to July and for carbon steel products, August.

Nautic Steels’ sales have been gaining steam since Pantech’s takeover. The company is finalising the purchase of a second plot of land near the existing factory, which would give it extra space for additional equipment and warehouse storage.

Pantech has been re-jigging the production process and building up inventory to improve efficiency and support rising demand.

Meanwhile, demand for PFF in the domestic market (for the trading arm) is also expected to expand on the back of strong spending in the oil and gas sector, led by Petroliam Nasional Bhd.

Sales weakened in April/May, due mainly to uncertainties related to the general election. With the government returned to power, activities will regain traction — the sector is the biggest beneficiary under the Economic Transformation Programme.

In all, we forecast sales and net profit to grow by some 15% to 16% in FY14/FY15.





6.4 times PER with 6.9% net yield
The stainless steel plant broke even in the fourth quarter (4Q) of FY13, although it remained in the red for the whole of FY13. Pantech is upbeat this plant will turn around and contribute positively in the current financial year and in the future. Utilisation at the stainless steel plant is now reaching full capacity on a single shift.

At the current price of 80 sen, Pantech’s shares are very attractively valued at only 6.4 our forecast earnings for FY14 and 5.6 times for FY15, relative to both its projected growth and the average valuation for the broader market. As such, we are upbeat on handsome returns for investors.

In addition to strong double digit earnings growth, Pantech also gives higher than market average yields. As mentioned above, dividends totaled 4.6 sen per share in FY13. Assuming a similar payout level of about 43%, dividends will increase to 5.5 sen to 6 sen per share in FY14/FY15. This will earn shareholders very attractive net yields of 6.9% to 7.5% for the two years.

Still on the lookout for expansion opportunities
Having already spent the majority of planned capital expenditure (capex) for the acquisition of Nautic Steels and construction of the stainless steel plant, capex will drop sharply this year to an estimated RM15 million. Hence, gearing will lower on the back of improved cash flow from operations, from the current 47% to about 39% by end-FY14.

That said, Pantech is still exploring opportunities for future expansion, including potential acquisitions along the same lines as Nautic Steels — established manufacturers of complementary products focused on the oil and gas sector. Over the longer term, the company targets a 60:40 ratio for the manufacturing and trading businesses.


Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.

Posted by kcfan > 2013-06-02 10:10 | Report Abuse

Pantech is such a good investment stock for mid to long term since from bottom up since below 50 cents on their timing of outlook change to bright.Same will focus especially on Annjoo and Maybulk.Wait for right timing so....How about PPB ?

Posted by necro > 2013-06-02 12:23 | Report Abuse

Ppb itupon kasi tgu dulu...
Shall performing in 1month..