Pantech’s 1HFY10 bottomline were slightly above our expectation with a slight q-o-q
improvement in 2Q net profit. This was partially dragged down by profit from its
manufacturing arm, which slipped 21.6% q-o-q. Nonetheless, we believe demand for
manufacturing products will gradually recover in 2HFY10 as stock levels at stockists
deplete while demand at its trading division remain firm. Hence, we maintain our
FY10 and FY11 forecasts but downgrade to Neutral with an unchanged TP of RM0.88.
Maintain forecast. We maintain our FY10 and FY11 forecasts as we are cautious over the performance of the company’s manufacturing division. Hence, we retain our previous TP of RM0.88 based on 6x PER on FY11 EPS, as we ascribe a 20% premium over the 5x steel sector PER for its O&G exposure. In spite of the stock’s recent price appreciation, we are downgrading to a Neutral recommendation from Buy.
improvement in 2Q net profit. This was partially dragged down by profit from its
manufacturing arm, which slipped 21.6% q-o-q. Nonetheless, we believe demand for
manufacturing products will gradually recover in 2HFY10 as stock levels at stockists
deplete while demand at its trading division remain firm. Hence, we maintain our
FY10 and FY11 forecasts but downgrade to Neutral with an unchanged TP of RM0.88.
Maintain forecast. We maintain our FY10 and FY11 forecasts as we are cautious over the performance of the company’s manufacturing division. Hence, we retain our previous TP of RM0.88 based on 6x PER on FY11 EPS, as we ascribe a 20% premium over the 5x steel sector PER for its O&G exposure. In spite of the stock’s recent price appreciation, we are downgrading to a Neutral recommendation from Buy.
