Good morning.
Today, we feature a note on Pantech Group Holdings Berhad in our FundTech Radar – 26th February 2019. PANTECH is principally engaged in trading and manufacturing of pipes, valves, and fittings (PVF). As at FY17, PANTECH’s sales were made up of 93% local sales.
Fundamental Stance
· A healthy 3-year (FYE16-18) revenue and core PATAMI CAGR of circa 5.4% and 6.5% respectively.
· Its core PATAMI margin rose to 8.5% (vs. 6.1% in FY17).
· Its net gearing ratio increased slightly to 0.27x in its 3QFY19 (vs. 0.24x in 2QFY19).
· It has been paying dividend consistently since FY07, with 4.2% div. yield and 35.7% div. payout in FY18.
· According to Malaysia CIMB’s O&G analyst, oil prices could potentially be supported by IMO2020 and steady oil prices bode well for PANTECH.
· Upon the completion of RAPID by end-2019, maintenance contracts from RAPID will be a good avenue of income for PANTECH.
· Capital has been allocated to procure additional machines to increase the plant’s capacity by approximately another 15% per annum in FY19-20.
· Currently trading at 9.3x 12-month trailing P/E, which is a 4% discount to its 3-year historical average P/E of 9.7x.
Technical Front
Any weaknesses would present opportunities.
Resistances: 0.60/0.64/0.71
Supports: 0.56/0.53/0.50
The above information is extracted from CIMB Research Report. For the full research reports, outlook and disclaimers, please logon to your account on www.itradecimb.com.my and click on Tab under Malaysia.
This FundTech Radar report is intended for educational purposes only. It represents a preliminary assessment of the subject company, and does not represent initiation into CIMB's coverage universe. It does not carry investment ratings and CIMB does not commit to regular updates on an ongoing basis.
26th Feb 2019
Disclaimers: This distribution is by CIMB Investment Bank Berhad (“CIMB”) in Malaysia only. The views are our own as of this date and subject to change. No further distribution is allowed without our prior written consent. CIMB, its related corporations, affiliates and business partners make no recommendation, offer or invitation to transact in any securities, futures contracts or other instruments. Please make your independent evaluation, consider your own investment objectives and financial situation and consult your own professional advisers before participating in any transaction.
