Good morning.
Today, we feature a note on P.I.E. Industrial Berhad in our FundTech Radar – 26th June 2018. The company with its subsidiaries is primarily involved in manufacturing of industrial electronic products. In FY17, PIE’s total revenue was made up of 43% local market vs. 57% export markets.
Fundamental Stance
· A benign 3-year (FYE15-17) revenue and core PATAMI CAGR of 6.5% and 8% respectively.
· Its FY17E core PATAMI margin inched up to 7% (vs. 6.2% in FY16A)
· Net cash position of RM109.9m (28.6 sen per share) as at 31 Dec 2017.
· Consistent div. payment since FY07, with div. yield of about 4-5%. Its div. payout ratios in FY14-17 were at least 45% and above.
· The ultimate holding company of PIE is Foxconn Technology Group (also known as Hon Hai Precision Industry Co), the world's largest contract electronics manufacture by revenue.
· The current expansion exercise may increase the number of surface mount technology production lines to 25 from 14.
· Is embarking on its biggest expansion exercise ever and expects the initial spending to be around RM30m.
· Nevertheless, the continuous shortage of certain electronics component as well as any drastic fluctuation of Ringgit against USD will be the main factors that may affect its performance in the near future.
· Currently trading at 11.4x 12-month trailing P/E (8.9x if excludes 28.6 sen net cash per share), a 23.9% discount compared to its peer.
Technical Front
Appears to be breaking out of its falling wedge-liked formation.
Resistances: 1.46/1.60/1.90
Supports: 1.19/1.00/0.90
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.
26th June 2018
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