Kenanga says the pie is growing again for P.I.E. Industrial
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00:00 As result season gets into full swing, Kenanga has upgraded its target price on PIE Industrial
00:06 from RM3.61 to RM3.80 after fine-tuning its profit projections.
00:12 This implies a possible upside of 14% from current levels.
00:16 PIE's nine-month Cornette profit of RM45.6 million was within both Kenanga and The Street's
00:21 expectations as the research house anticipates a seasonally stronger fourth quarter.
00:27 Year-on-year, PIE's nine-month revenue grew 11.6%, driven by robust deliveries from its
00:32 bread-and-butter EMS segment, which more than offset the decline in the raw wire and cable
00:38 business.
00:39 Net profit grew at a more moderate rate of 5.1%, impacted by earlier temporary slowdowns
00:44 and adjustment to increased electricity tariffs.
00:47 Aligned with its seasonality, the group is looking forward to a stronger quarter ahead
00:50 based on higher demand for communication-related devices from Customer M for military use amid
00:56 the heightened geopolitical tension in the Middle East, the resumption of orders from
01:00 Customer A and the gradual ramp-up of a new model for Customer N.
01:04 Additionally, PIE has secured four new clients with products focusing on sensors, drones,
01:09 medical devices and smart home devices.
01:12 Kenanga raises its FY20 for earnings by 5% to account for higher contributions from the
01:17 four new customers.
01:18 Bloomberg's latest has two buy calls on PIE and that works out to an average target price
01:23 of RM3.85, which is 51 cent more than its last close.
01:27 [Music]