PIE Industrial's earnings recovery expected to continue

KUALA LUMPUR: PIE Industrial Bhd's earnings recovery is expected to continue over the coming quarter following a a 9MFY19 result that came in within expectations, says Kenanga research.

The research house cited the seasonally strong final quarter of the year, steady growth from its existing customers and efficiency improvements as the company phases out its low-end communication device as positive catalysts for the coming quarter.

It maintained its market perform recommendation on the stock and kept its target price of RM1.40 as it believes the market has priced in the recovery expectation given the recent run-up in share price.

For the recently announced quarter, PIE recorded core net profit of RM16.8mil, which was 18% higher year-on-year (y-o-y).

This brought net profit for the first nine months of the year to RM25.4mil, or 14% higher y-o-y, to account for 65% and 68% of Kenanga's and consensus full-year estimates.

"We deem this to be inline as 4Q will usually see better results on the back of higher

seasonal production ramp-up for existing customer," said Kenanga.

Moving forward, PIE is still receiving enquiries from copmanies looking to shift their supply chain out of China, including one customers which is in preliminary discussions.

"We believe that this potential customer could contribute sales of >RM30m, assuming full ramp-up. If discussions are successful, meaningful contributions will likely kick in 2QFY20," said the research house.
Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3

Next In Business News

Pharmaniaga appointed sole distributor of Baraka in Malaysia
FBM KLCI likely to trade higher next week
Aramco agrees US$12.4bil deal to sell stake in pipelines
Solar in Malaysia - Challenges, and too much of a good thing?
CPO futures to see volatile trading next week, eyes on MPOB data
Pfizer, BioNTech seek US emergency nod for COVID-19 vaccine in adolescents
Eyes on next generation as Singapore succession is thrown into question
Oil price falls, ends week about 2% lower on supply increase, new lockdowns
BlackRock, Mustier's blank-check firm eye Credit Suisse fund management arm
GLOBAL MARKETS-S&P 500, Dow scale new heights, Treasury yields rise on strong inflation data

Stories You'll Enjoy