Good morning.
Today, we feature a note on PRG Holdings Berhad in our FundTech Radar – 20th Mar 2018. The company is engaged in manufacturing of elastic yarn, elastic fabric and webbing, which are supplied to a list of customers whose businesses include apparel manufacturing, health care, food packaging, furniture and automotive. In FY16, total revenue were made up of 67% export market.
Fundamental Stance
· FY17 core PATAMI margin dropped to 0.6% (vs. 2.8% in FY16)
· Net cash position of RM13.4m (4 sen per share) as at 31 Dec 2017
· PRG has teamed up with Syarikat Perumahan Negara Bhd to jointly develop RM5bn worth of affordable housing, which will be able to sustain the developer for several years
· With the acquisition of Roopi Medical Centre, PRG is making an entry into the healthcare business, which is likely to generate an alternative revenue stream going forward
· The recent crude oil price surge may push up the prices of certain crude-oil based raw materials
· Furthermore, the strengthening Ringgit against USD may affect PRG negatively
· PRG’s 75%-owned manufacturing arm Furniweb Holdings Ltd made its debut on the Hong Kong stock exchange in Oct 2017
· Currently trading at an extremely high 12-month trailing P/E of 200.0x (208.5x if exclude 4sen net cash per share)
Technical Front
Consolidating with a downside bias amid LT uptrend
Resistances: 0.94/1.11/1.34
Supports: 0.84/0.68/0.58
The above information is extracted from CIMB Research Report. For the full research reports, outlook and disclaimers, please logon to your account on www.itradecimb.com.my and click on <Research> Tab under Malaysia.
This FundTech Radar report is intended for educational purposes only. It represents a preliminary assessment of the subject company, and does not represent initiation into CIMB's coverage universe. It does not carry investment ratings and CIMB does not commit to regular updates on an ongoing basis.
20th Mar 2018
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