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Sunday, June 04, 2017

Panamy: Earnings Dropped

Results Update

For QE31/3/2017, Panamy's net profit dropped by 14% q-o-q or 26% y-o-y to RM27 million while revenue dropped by 13% q-o-q or 1% y-o-y to RM247 million. Revenue dropped q-o-q due to slower demand for Home Appliances products for both domestic and export market. The slowdown in market demand was mainly due to volatility of Middle East region, shortfall from Thailand sales and stiffer competition. PBT decreased by 33.6% or RM13.4 million as compared to combined profit before tax of RM39.7 million in the preceding quarter. (Panamy's latest result was announced on May 30.)


Table: Panamy's last 8 quarterly results


Graph: Panamy's last 48 quarterly results

Valuation

Panamy (at RM35.04 last Friday) is trading at a PE of 16.8 times (based on last 4 quarters' EPS of 209 sen). Notwithstanding a drop in dividend, Panamy still pays a decent DY of 3.3%.

Technical Outlook

Panamy is a long-term upward channel, with support at RM26.00.


Chart 1: Panamy's monthly chart as at Jun 2, 2017 (Source: ShareInvestor)

Panamy is now hanging onto the horizontal line at RM35.00.



Chart 2: Panamy's daily chart as at Jun 2, 2017 (Source: ShareInvestor) 

Conclusion

Despite the weaker financial performance, Panamy is still a good stock for long-term investment based on attractive valuation and positive technical outlook.

Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

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