Penta: Earning Stayed Strong

Results Update

For QE30/6/2018, Penta's PBT increased by 46% q-o-q or 105% y-o-y to RM24.1 million while revenue rose 2.9% q-o-q or 87% y-o-y to RM102 million. Revenue rose q-o-q mainly due to increase in sales from automated manufacturing solution operating segment. The Group recorded a higher profit before taxation of RM24.1 million in the current quarter as compared to the profit before taxation of RM16.5 million in the immediate preceding quarter- the latter does not include the non-recurring expenses of RM7.1 million. If the non-recurring expenses were included, profit before taxation recorded an increase of 2.1% which was in tandem with the increase in revenue of 2.9%.


Table: Penta's last 8 quarterly results

 
Graph: Penta's last 22 quarterly results 

Valuation

Penta (closed at RM3.10 last Friday) is now trading at a PER of 25 times (based on last 4 quarters' EPS of 12.4 sen). At this PER, Penta is deemed fully valued.

Technical Outlook

Last week, Penta surpassed its January high of RM3.14, and made a new all-time high of RM3.26. However this breakout could not sustain and the share price corrected on Friday. This could lead to further correction in the days ahead.


Chart 1: Penta's weekly chart as at Aug 17, 2018 (Source: ShareInvestor.com)


Chart 2: Penta's monthly chart as at Aug 17, 2018 (Source: ShareInvestor.com)

Conclusion

Despite the good financial performance, it is advisable to take some profit on Penta after the sharp rally in the past few weeks. Thus I revised my rating from a BUY to a TAKE PROFIT.

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.