PIE: Eat it while it's hot

Result Update

For QE31/12/2013, PIE's net profit rose by 19% q-o-q but dropped by 9% y-o-y to RM12.5 million while revenue rose by 23% q-o-q or 54% y-o-y to RM143 million.

The increased in revenue was mainly due to more demand on electronic manufacturing products from new and existing customers. However, it was partially offset by lower demand on other products, i.e raw wire, cables, wire harness and trading goods.

Last 4 quarters' profit before tax was increased by RM5.016 million or 11% if compared with preceding 4 quarters. This result was due to higher revenue achieved and higher gain from foreign currency exchange. However, the profit was limited by lower margin of products mix, lower reversal of slow moving inventory and doubtful debts provision, lower investment income and higher operating expenses


Table: PIE's last 8 quarterly results


Chart 1: PIE's last 23 quarterly results

Valuation

PIE (closed at RM8.11 yesterday) is now trading at a PE of 13.7 times (based on last 4 quarters' EPS of 59 sen). At this  multiple, PIE is deemed fairly valued.

Technical Outlook

PIE rallied after it broke above the line connecting the recent peak at RM5.30. A sharp rally like what we had seen can succumb to equally sharp profit-taking.


Chart 2: PIE's weekly chart as at Mar 3, 2014 (Source: Tradesignum)

Conclusion

Despite the improved financial performance & reasonable valuation, PIE may warrant a bit of profit-taking after its recent scorching rally.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, PIE.