well Satha44, have to wait till they spot this counter. Fundamentally not bad and the plus point is small share base and market cap. easily push up if there are willing operators and willing owners who wish to increase their networth. The ques is just.... when
Pensonic Stock Code: 9997 Review of Q3 (FY 31 May 21)
Opportunity to buy into a valued stock with strong profit growth reported in recent 2 quarters.
Using our estimated FY 2021 EPS of 13.5 Sen to 15.5 Sen, the valuation using PE 9 could range from RM1.22 to RM 1.40 with an upside of 48.8% to 70.7% compared to today closing at 82 Sen.
At 82 Sen, it is trading at PE 9.64 based on 4 rolling qtrs EPS of 8.51 Sen. We understand from industry sources that demand is strong for household appliances, cookware and whiteware. The Group recent successful launches of new products with better margin are driving its top and bottom line. Its peer Khind is also seeing similar growth in revenue and profit.
Based on FY 2021 9 mths YTD Pensonic Group delivered its best performing year to date result, with revenue of RM247.9 mil and record PBT of RM13.9 mil and a net profit after tax of RM11.4 mil compared to FY 2020 9 mths revenue of RM217.7 mil with PBT of RM4.5 mil and net profit after tax of RM3.3 mil respectively. The 9 mths YTD EPS was 8.97 Sen.
The Q1, Q2 and Q3 EPS were 1.2 Sen, 3.91 Sen and 3.86 Sen respectively. The quantum leap improvements were due to higher revenue, better margin and lower expenses after cost improvement programmes were implemented during the MCO period
The Group registered revenue of RM83.7 million for the current financial quarter Q3 compared to RM79.2 million reported in the preceding financial quarter Q2 ended 30 November 2020. The Group recorded a profit before tax of RM6.2 million compared with profit before tax of RM5.7 million in the preceding financial period due to higher revenue in the current quarter.
We are expecting Q4 to be better than Q3 given the Raya Festive is in May which had traditionally been a strong quarter during the festive season. We have accordingly projected Q4 EPS to be 4.5 Sen to 5.5 Sen. Based on our analysis with a projected FY 2021 EPS of 13.5 Sen to 14.5 Sen. We see a realistic valuation of RM1.21 to RM1.35 using forward PE range 9 to 10 with EPS of 13.5 Sen. However, if EPS is 14.5 Sen, the valuation could range from RM1.30 to RM1.45.
We are inclined to use a lower PE 9 for the valuation as the Group has just commenced a quantum leap in delivering record high profit for Q2 and Q3 FY 2021. A higher PE valuation will be accorded if the profit growth is sustained moving forward.
Thus, using the FY 2021 estimated EPS of 13.5 Sen to 15.5 Sen, the valuation using PE 9 could range from RM1.22 to RM 1.40 with an upside of 48.8% to 70.7% compared to today closing at 82 Sen.
Company has commenced share buyback in Oct 2020. In April 2021, Co has been aggressively doing share buyback and also in recent months prior to April. Today the Co had acquired 2,924,900 shares. The recent share buyback in 2021 were:
28 April 200k share at 74 Sen 27 April 37.9k shares at 74.9 Sen 26 April 172.7k shares at 75.6 Sen 15 April to 23 April 312.7k share from 70.5 Sen to 73.5 Sen
The buyback could mean that the share is undervalued.
Pensonic is a thinly traded share with 41.9 mil (32.3%) “Free Float Shares” – Number of issued shares less treasury shares, less Chew Family, less other top 30 major shareholders where most have been shareholders since FY2019. The availability of shares in the market is small number and any strong buying could push share price up by 10 Sen to 20 Sen.
Share Price: 82 Sen Market Capital (RM): 106.33 m Number of Share: 129.67m EPS (cent): 8.5 * (4 rolling qtrs) P/E Ratio: 9.65 ROE (%): 8.59
Net Asset/share: 99.0 Sen Dividend Yield: 1.52% (1.25 Sen)
Merits of investment
• Low risk investment with strong financial
Given its business model with a wide spectrum of products of various reputable brands for household appliances and serving a diversified customer locally (about 70%) and abroad (30%) with 10% of revenue coming from Philippines, business risks are well managed with no single customer contributing close to 10% of revenue.
In December I sold off all, first round for 30% gain. Then in March I bought back @ average price of 64 sen. On Thursday I sold off half, second round for 32.5% gain.
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....
Sebastian Power
3,429 posts
Posted by Sebastian Power > 2021-04-01 18:31 | Report Abuse
coming QR confirm hebat. A lot of items out of stock.