P.I.E - PRICE IS ESCALATING!!
BUSINESS HIGHLIGHTS:
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P.I.E main business segments are manufacturing segments, trading segment & others.
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Manufacturing segments comprised of EMS activities, raw cable & wire and wire harness.
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EMS activities contributes almost 83.6% of overall company revenue.
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Strong revenue growth of EMS activities compared to previous quarter, improvement of 27%.
FINANCIAL STRENGTH:
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P.I.E is a net cash company with cash+ short-term deposits of 155.7million.
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Current ratio of 2.4, whereby the company is able to pay back all the short term liabilities.
GROWTH CATALYST & FUTURE PROSPECT:
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EMS activities (78%) orders are
expected to increase in the long run from existing customers. Therefore,
no disruption of supply issue.
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Beneficial effect of USA-China trade war, receive more orders from new overseas customers.
RISKS:
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Global spread of COVID-19, P.I.E will face production and shipment issue.
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Fluctuation of Ringgit Malaysia against USD.
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Political uncertainties in Malaysia will create panic selling.
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Coming US presidential election will create short term ad hoc to the market.
VALUATION:
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P.I.E is trading at P/E 27.9X.
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EMS competitors such as VS & ATAIMS are trading at P/E of 38X. SKP at P/E 35X.
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Conservatively, assume P.I.E fair valuation at P/E of 35X, the share price is worth RM2.30. (24% upside)
TECHNICAL VIEW:
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Cup and handle pattern formed & break through the recent resistance of RM1.75 with big volume.
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First support: RM1.75, second support: RM1.63.
- First resistance: RM2.00, second resistance: RM2.20.
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Disclamer: Nothing contained in this article should be construed as investment advice. Any reference to an investment's past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.
https://klse.i3investor.com/blogs/Wolf/2020-10-29-story-h1535535636-P_I_E_7095_PRICE_IS_ESCALATING.jsp
