Thursday, May 31, 2012
Panamy- profit dropped & dividend disappeared?
Panamy had just announced its results for QE31/3/2012. Its net profit dropped 62% q-o-q or 49% y-o-y to RM7.5 million while its revenue dropped 29% q-o-q but rose 5% y-o-y to RM158 million. Profit dropped y-o-y due to competition in the fan segment in the Middle East region, which resulted in a drop in pre-tax profit for that segment (from RM46.9 mil for FYE31/3/2011 to RM30.6 mil to FYE31/3/2012). Turnover dropped q-o-q due to the festive season, which led to lower net profit.
Table: Panamy's last 8 quarterly results
Chart 1: Panamy's last 21 quarterly results
Panamy, which had in the past announced its hefty special dividend in calender quarter ending March, failed to do so in the latest quarter. Is the company considering a reduction in the dividend payout?
Chart 2: Panamy's dividend record for last 21 quarterly results
Panamy (currently at RM21.54) is now trading at a PE of 19.8 times (based on last 4 quarters' EPS of 109 sen). At this PE multiple, Panamy is deemed fully valued.
Panamy is in a long-term uptrend, with strong resistance at the horizontal line at RM23.40.. Its immediate support is at the horizontal line at RM21.20 and thereafter the uptrend line (SS) support at RM19.80-20.00.
Chart 3: Panamy's daily chart as at May 30, 2012 (Source: Quickcharts)
Based on limited upside from valuation angle, I would maintain my earlier rating for this stock, which is to sell into strength.For those who fancy a trading BUY, you can do so if the stock were to test its uptrend line at about RM20.00.