For QE30/6/2015, Penta's net profit increased by 86% q-o-q or 102% y-o-y to RM3.3 million while revenue was mixed- up 24% q-o-q but down 10% y-o-y to RM24 million. The higher sequential revenue recorded was due to the increase in sales from the automated equipment operating segment which was partially offset by the drop in revenue contribution from the automated manufacturing solution operating segment. Consequently, the Group achieved a higher profit before tax of RM4.0 million as compared to RM1.4 million in the preceding quarter.
Table: Penta's last 11 quarterly results (Source: ShareInvestor.com)
Chart 1: Penta's last 11 quarterly results (Source: ShareInvestor.com)
Valuation
Penta (closed at RM0.865 yesterday) is now trading at a PER of 12.7 times (based on last 4 quarters' EPS of 6.8 sen). At this PER, Penta is deemed fully valued. However, if Penta can sustain its earning based on latest quarterly EPS, then its full year EPS could be 9.8 sen. This will push down PER to 8.8 times; giving room for a potential 20-30% price gain.
Technical Outlook
Penta broke above its horizontal line at RM0.85. Its next resistance will be at the psychological RM1.00 mark and beyond that, at RM1.40.
Chart 2: Penta's monthly chart as at July 30, 2015 (Source: ShareInvestor)
Conclusion
Based on good financial performance, reasonable valuation and positive technical outlook, Penta could be a good stock for a medium-term investment. (For more on Penta, go here)
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, Penta.
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