Recommended Stocks
PLABS - A bright future awaits!
BASIC INFORMATION
Exchange: KLSE
Current Price: RM 0.205
Diluted Shares Outstanding: 188,000,000
Market Capitalization: RM 38.5 million
Public Float: 28%
Industry: Pharmaceuticals
QUANTITATIVE ANALYSIS
| Previous FY | TTM | MRQ | Criteria (Annualised) | |
|---|---|---|---|---|
| Valuation | ||||
| Historical P(EBITDA)R | 5.56 | 7.85 | - | <10 |
| Trailing PTBV | - | 1.21 | - | |
| Dividend Yield | - | 2.4% | - | |
| Capital Structure | - | - | - | |
| Long Term Debt/Total Asset | 7.4% | 5.7% | - | <30% |
| Total Debt/Total Asset | 23.6% | 27.4% | - | <60% |
| Management Effectiveness | - | - | - | |
| ROE (use EBITDA) | 15.9% | 16.8% | 2.9% | >15% |
| ROA (use EBITDA) | 12.0% | 12.4% | 2.1% | >6% |
| ROIC (use EBITDA) | 10.7% | 23.8% | 12.4% | >4% |
| Liquidity | - | - | - | |
| Cash Ratio | 0.50 | 0.48 | - | |
| Quick Ratio | 2.93 | 2.57 | - | >0.8 |
| Profitability | - | - | - | |
| EBITDA Margin | 9.5% | 8.2% | 5.5% | >5% |
| EBITDA (cents) | 2.79 | 2.66 | 0.49 | |
| Cash Flow | - | - | - | |
| Operating Cash Flow/Net Profit | 0.84 | 0.43 | 2.96 | >0.5 |
| Free Cash Flow/Net Profit | 0.77 | 0.36 | 2.94 | >0.2 |
| YoY | QoQ | Criteria | ||
|---|---|---|---|---|
| Growth | ||||
| Revenue | 9.2% | 51.8% | >10% | |
| EBITDA | 31.1% | 193.4% | >5% | |
| EBITDA/Equity | 21.3% | 172.2% | >0% |
Comments: ROE for the previous FY is 15.9%, which is near the lower bound. The annualized ROE for the MRQ also falls short at 11.6% only. Operating cash flow per net profit in TTM stood at 0.43, below the 0.5 criteria. Finally, revenue growth YoY comes short at 9.2%.
QUALITATIVE ANALYSIS
Advantages: Pharmaceutical companies are generally defensive. Hence, PLABS has limited downside risk, but a good upside potential. A high risk-reward ratio.
Risks: Subjected to higher COGS due to weakening RM/USD.
RESULTS
Target Price: RM 0.345
Potential Upside: 68%
Margin of Safety: 41%
Maximum Entry Price (Fundamental): RM 0.240
Recommended Entry Price (Technical): RM 0.205
Cut Loss: RM 0.195
Holding Period: Until Feb 2016 - May 2016
Email me at equitywhiz@outlook.com for more analysis like this.
DISCLAIMER
Financial data is mostly obtained from Morningstar.com and i*Trade@CIMB. Should you have any doubts in the accuracy of this data source, kindly refrain from using this analysis for your investment decisions. The analysis has a buy/sell recommendation, however EquityWhiz will not be liable for any losses as a result of this analysis.