For QE30/6/2012, Panamy's net profit increased by 141% q-o-q but declined 4% y-o-y to RM18 million while revenue was up 33% q-o-q but declined by 5% y-o-y to RM210 million. The jump in the top-line & bottom-line on q-o-q basis was due to lower sales & profit in the preceding quarter as a result of fierce competition in the fan segment in the Middle East region which impact sales then. For QE30/6/2012, revenue rebounded due to higher domestic sales and this had resulted in higher profit. Bottom-line had also been boosted by increase in the share of profit from an associated company of RM4.6 million (compared to only RM400k in QE31/3/2012).
Table: Panamy's last 8 quarterly results
Chart 1: Panamy's last 22 quarterly results
Valuation
Panamy (at RM23.54 as at 12.15pm) is trading at a PE of 22 times (based on last 4 quarters' EPS of 108 sen). At this PE, Panamy is deemed fully value.
Please note that Panamy had subsequently announced its Special & Final Dividend for FY2011 totaling RM1.05. The slight decline in dividend may reflect the decline in earning for the period. Despite the lower dividend payout, Panamy's dividend yield is still attractive at 5.1%.
Chart 2: Panamy's dividend record for last 22 quarterly results
Technical Outlook
Panamy is well-supported by its 10 & 20-week SMA line at RM22.70 & RM23.20. Its strong resistance will be the recent high at RM25.00.
Chart 3: Panamy's weekly chart as at Aug 15, 2012 (Source: Tradesignum)
Conclusion
Based on valuation, I would maintain my earlier rating for this stock, which is to sell into strength (especially if it approached the recent high of RM25.00).
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