Results Update
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
Dividend delayed?
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
Valuation
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.
Technical Outlook
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)
Conclusion
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.
4 comments:
From its quarter report, it stated the following:
Note 23. Dividends
The Board will make an announcement on the dividend at a later date
Hi Alex,
What is your view on RCECAP after released Financial year end net profit 101.355 million (decreased 2.78%) ?
Thanks.
Hi Kai-Foong Kok 郭继锋
I read that comment. If you check on its past few reports for the March quarter, you will see that you always make the announcement for dividend together with the financial results. I think they are thinking of cutting the dividend payout this year.
Hi Jimmy Yeoh
RCECAP's bottom-line has been sliding. It is hanging onto the horizontal support of RM0.44-0.45. The next support is at the horizontal line RM0.40.
Its EPS dropped to 2.11 sen for QE31/3/2012. Its PE is still low at 5.6 times.
The stock may see a bit of excitement when it has finally fixed the entitlement dates for the following:
- 1-for-2 Bonus Issue; and
- 2-for-5 RCPS Rights Issue.
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