PIE- powered higher by electronic manufacturing activities

Result Update

For QE30/9/2013, PIE's net profit dropped 10% q-o-q or 62% y-o-y to RM10.5 million while revenue was rose 7% q-o-q or 37% y-o-y to RM116 million. Revenue increased q-o-q due to higher revenue from manufacturing activities especially from electronic manufacturing activities. Net profit improved q-o-q due to the higher revenue achieved and higher gain from foreign currency exchange transactions. However, the profit was partly limited by higher operating expenses, higher provision of doubtful debts and lower proceeds from scrap sales.


Table: PIE's last 8 quarterly results


Chart 1: PIE's last 22 quarterly results

Valuation

PIE (closed at RM5.96 at lunch time) is now trading at a PE of 10.5 times (based on last 4 quarters' EPS of 57 sen). At this  multiple, PIE is deemed fairly valued.

Technical Outlook

PIE continued with its uptrend after it broke above its horizontal line at RM4.35. If we assume that the current rally can travel the same distance as its retracement in October 2008 of RM2.20, then the target for the rally is RM6.55.


Chart 2: PIE's weekly chart as at Nov 14, 2013_12.30pm (Source: Quickcharts)

Conclusion

Due to improved financial performance & positive technical outlook, PIE is now rated as a HOLD. If the share price advanced further or approaches the potential target price of RM6.55, we should sell into strength.

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.