Stock Name: PANTECH
Company Name: PANTECH GROUP HOLDINGS BHD
Research House: OSK
Pantech Group Holdings Bhd
(Jan 24, 66 sen)
Upgrade to trading buy at 64 sen with target price revised to 79 sen (from 78 sen): We recently visited Pantech Steel Industries, the manufacturing arm of Pantech Group, in Klang. Adrian Tan, group executive director, updated us on the group's current undertakings and future plans.
Pantech is expected to release its results this week. We suspect the sluggishness in O&G activity could possibly drag its second half numbers lower than they were in the the first half. We believe that the expenses arising from its Esos as well as costs incurred from its bonus issue and rights issue of Iculs with free detachable warrants dragged down earnings in 3Q. We revise downwards our full-year bottomline estimates by 26.4% to RM31.1 million for FY11 after adjusting our earnings for a possibly weaker third quarter.
While we remain cautious on the near-term outlook, the company's medium- and longer-term prospects look brighter on anticipation of healthy news flows and contract announcements in the O&G sector for 2HFY11.
Pantech, being strategically positioned as a one-stop-solution supplier of pipes, fittings and flow controls for the O&G sector, stands to benefit from these developments. Pantech's new plant in Pasir Gudang is slated for initial commissioning in March or April this year to produce stainless steel pipes and fittings, with an initial output of 500 to 600 tonnes a month in FY12. In view of these positive developments, we have bumped up our FY12 profit after tax estimates by a slight 2.6% to RM50.9 million.
From this, we derive our target price of 79 sen from seven times FY12 EPS, and upgrade Pantech to a 'trading buy' from 'neutral'. ' OSK Investment Research, Jan 24
This article appeared in The Edge Financial Daily, January 25, 2011.
Company Name: PANTECH GROUP HOLDINGS BHD
Research House: OSK
Pantech Group Holdings Bhd
(Jan 24, 66 sen)
Upgrade to trading buy at 64 sen with target price revised to 79 sen (from 78 sen): We recently visited Pantech Steel Industries, the manufacturing arm of Pantech Group, in Klang. Adrian Tan, group executive director, updated us on the group's current undertakings and future plans.
Pantech is expected to release its results this week. We suspect the sluggishness in O&G activity could possibly drag its second half numbers lower than they were in the the first half. We believe that the expenses arising from its Esos as well as costs incurred from its bonus issue and rights issue of Iculs with free detachable warrants dragged down earnings in 3Q. We revise downwards our full-year bottomline estimates by 26.4% to RM31.1 million for FY11 after adjusting our earnings for a possibly weaker third quarter.
While we remain cautious on the near-term outlook, the company's medium- and longer-term prospects look brighter on anticipation of healthy news flows and contract announcements in the O&G sector for 2HFY11.
Pantech, being strategically positioned as a one-stop-solution supplier of pipes, fittings and flow controls for the O&G sector, stands to benefit from these developments. Pantech's new plant in Pasir Gudang is slated for initial commissioning in March or April this year to produce stainless steel pipes and fittings, with an initial output of 500 to 600 tonnes a month in FY12. In view of these positive developments, we have bumped up our FY12 profit after tax estimates by a slight 2.6% to RM50.9 million.
From this, we derive our target price of 79 sen from seven times FY12 EPS, and upgrade Pantech to a 'trading buy' from 'neutral'. ' OSK Investment Research, Jan 24
This article appeared in The Edge Financial Daily, January 25, 2011.
No comments:
Post a Comment