Pentamaster

Pentamaster

Postby winston » Thu Oct 10, 2019 10:31 am

Pentamaster International(1665 HK)
Initiate Coverage With BUY; Master Of Smart Solutions


Pentamaster is a fast-growing automated testing equipment and factory automation solutions provider of renowned smart electronic devices brands globally.

In the face of rising prevalence of smart components inside electronic devices, we expect
demand for Pentamaster’s ATE to surge in the next few years.

Current valuation underestimates its 2018-21F net profit CAGR of 25%.

Initiate coverage with BUY and target price of HK$2.95.

VALUATION/RECOMMENDATION

Decent earnings growth ahead; initiate coverage with BUY. For 2018-21, we forecast Pentamaster’s revenue CAGR at 20%, mainly on rising demand for its ATE solutions.

Net profit CAGR is forecasted at 25% as the company will enjoy mild margin expansion on
operating leverage and product mix improvement.

Our target price of HK$2.95 is based on 15x 2020F PE, still a deep discount to Malaysian peers whose forward PE are >+1SD of their five-year mean.

RISKS
Risks include:
a) Uncertainty and instability in the global supply chain;
b) loss of key management and experienced personnel, and inability to hire enough engineering talents;
c) technology obsolescence;
d) keener-than-expected competition;
e) customer concentration risk; and
f) unfavourable forex rate fluctuations.


Source: UOBKH

https://research.uobkayhian.com/content ... 6459b675a9
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Re: Pentamaster

Postby winston » Fri Nov 08, 2019 7:12 am

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Strong sales lifts Pentamaster Q3 earnings

KUALA LUMPUR: Automated test equipment maker Pentamaster Corp Bhd, posted one of its best quarterly earnings in the three-month ended Sept 30 on higher sales and better margin.

Net profit in the third quarter jumped 25% to RM21.48mil compared with RM17.1mil made a year ago.

Revenue rose 15% to RM124.6mil.

The higher profit, Pentamaster said in a filing with Bursa Malaysia today, was driven by improved gross margin to 36% from 32.3% in the same quarter last year.

Nine-month net profit surged to RM60.6mil, or 12.76 sen a share compared with RM38.3mil, or 8 sen a share previously.

"The group expects to end its financial year 2019 commendably despite the current challenging and volatile market situation in which the Group operates in," it said.

The company increasing complexity and wider adoption of smart sensors to drive demand for its business going forward.

Also the prevalence of 3D sensing technology and the group’s broadening exposure in the optical and optoelectronics segments, as well as diversification into automotive and medical industries, will translate into positive growth.

"The group’s recent announcement on its acquisition of TP Concept Sdn Bhd, a medical equipment provider, is a clear indication of the group’s proactive plan in broadening its exposure in the growing medical device segment," it said.

Source: The Star

https://www.thestar.com.my/business/bus ... zZREC0G.99
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Re: Pentamaster

Postby winston » Fri Nov 08, 2019 10:39 am

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Pentamaster International (1665 HK)
3Q19: In Line; Robust Growth


COMPANY DESCRIPTION
Pentamaster International designs, manufactures and installs automated equipment in the semiconductor, pharmaceutical, medical devices, automotive, food and beverages, and consumer goods industries globally.

Pentamaster International reported in-line 3Q19 results, with net profit rising 29% yoy, thanks to the strong demand for ATE solutions from smartphone and wearable devices customers.

Gross margin expansion is the main bright spot, reflecting rising operating efficiency and better product mix.

We expect TWS and wearable devices to contribute to growth in the future.

Maintain BUY and target price at HK$2.95.

Gross margin continued to expand to 37.1% in 3Q19 from 32.9% in 3Q18 and from 36.4% in 2Q19.

Pentamaster attributed the margin expansion to:
a) securing of better-margin projects over a broadened industry base
b) higher output efficiency per engineer and
c) project scalability with the increase in volume of repeat orders.


Secured orders did not rebound as guided. As of end-Sep 19, Pentamaster’s orderbook
was RM241m, down 16% yoy and missed our forecast that orderbook would rebound in
2H19.


Source: UOBKH

https://research.uobkayhian.com/content ... dccaa4044e
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Re: Pentamaster

Postby winston » Fri Nov 08, 2019 11:10 am

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Pentamaster Corp Bhd
Masterful margin performance


9M19 core net profit beat our/consensus’ expectations at 74%/75% of FY19F net profit forecasts as we expect a stronger earnings delivery in 4Q19.

Core net profit in 9M19 surged 70% yoy, driven by margin expansion from better economies of scale and resilient demand in ATE and FAS segments.

We raise our FY19-21F EPS by 3-5%.

Maintain Add with a higher RM5.40 TP, still based 19.6x CY21F P/E.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... CB49E38802
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Re: Pentamaster

Postby winston » Mon Dec 02, 2019 8:00 pm

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PCB wishes to strongly iterate that it is not involved in any Shariah non-compliant activities such as gambling, gaming or entertainment activities and / or manufacture or sale of non-halal (non-Islamic) products or related activities.

The reason for the Company’s exclusion from the Shariah-compliant list published by SC was because PCB and its subsidiaries’ (“PCB Group”) Cash/Total Assets exceeded 33% as at 31 December 2018 and more than 5% of the interest earned from the cash deposits were not derived from interest earned under Islamic law with the deposits placed in Islamic accounts or Islamic instruments.

The above situation occurred as the Company’s cash position grew tremendously from its operations as well as the listing of its subsidiary, Pentamaster International Limited on The Stock Exchange of Hong Kong Limited in 2018.

The Company has since rectified the situation in the first half of 2019 and the next updated list is expected to be made available in May 2020 by SC, based on the review of the audited financial statements released for financial year ending 31 December 2019.

The SC publishes the listing twice a year based on historical audited financial statements.

https://www.bursamalaysia.com/market_in ... id=3006150
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Re: Pentamaster

Postby winston » Sun Jan 05, 2020 1:27 pm

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Pentamaster Corp Bhd
Price: 4.52

We see the recent pullback in Pentamaster’s share price due to its exclusion from the Securities Commission’s shariah list as a good opportunity for investors to accumulate the stock.

The exclusion will not alter the company’s fundamentals and growth prospects.

We maintain an “Add” on the stock with a RM5.40 target price based on an estimated 19.6 times FY20 price-to-earnings (P/E). This is a 10% premium over the semiconductor equipment sector at about 17.8 times.

Pentamaster is also expected to deliver strong revenue growth in FY20 driven by higher contributions from the automotive and medical segments following its acquisition of medical equipment provider, TP Concept Sdn Bhd in September 2019.

Higher sales contributions from the automotive and medical segments will provide better earnings stability due to long-term demand visibility and higher margin portfolio.

Overall, we project an impressive three-year (2018-2021) net profit compounded annual growth rate (CAGR) of 27% that will be driven by automated test equipment and factory automated solution segments on the back of capacity expansion at Batu Kawan plant and potential new customer wins in North Asia.

Hence, we see higher contribution from auto and medical device segments to provide Pentamaster better earnings stability, thanks to their long-term demand visibility and higher margin portfolio.

Pentamaster is also a beneficiary to the government push towards IR4.0 initiative among domestic SMEs in Budget 2020. This bodes well for the group, which is a key player in the domestic Factory Automation Solution market.

CGS-CIMB also believe that the move will help equipment makers such as Pentamaster to diversify beyond the semiconductor market.

The earnings accretive acquisitions such as TP Concept, new customer wins and a weaker ringgit versus the US dollar are potential re-rating catalysts for Pentamaster.

Source: CIMB
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Re: Pentamaster

Postby winston » Fri Feb 28, 2020 7:04 pm

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Record-breaking profit delivery in FY19

FY19 core net profit was in line at 98%/104% of our/consensus estimates.

We are positively surprised by the 1.5 sen final DPS declared in 4Q19.

Pentamaster posted another record-breaking net profit in FY19, driven by robust demand and margin expansion in the ATE and FAS segments.

We cut our FY20-21F EPS by 4-7% to account for softer demand in 1H20 amidst the Covid-19 outbreak.

Reiterate Add with a lower RM5.20 TP

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 6A9579BE78
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Re: Pentamaster

Postby winston » Mon Mar 09, 2020 8:09 am

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Chips sector hard hit by Covid-19

By DAVID TAN

Pentamaster Corp Bhd chairman C.B. Chuah said this is the worst raw material shortage to hit the local electronic manufacturing sector.

“Our engineers are also having difficulties travelling to countries that have been seriously affected by the outbreak to install test equipment for customers, ” Chuah said.

“Our sales of test equipment for the first quarter have declined by 20% to 30%.

Some 50% of our raw materials come from Japan, and the remaining from the United States and China.

“Because of the severity of the outbreak in Japan, we have to delay shipment to our customers in Singapore, China, and the United States.

Chuah expects the material shortage situation to ease as the spring and summer months approach.

“Against the 2019 financial year, we expect the performance of our group to be flat for this financial year, ” he said.


Source: The Star

https://www.thestar.com.my/business/bus ... y-covid-19
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Re: Pentamaster

Postby winston » Tue May 19, 2020 11:40 am

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Impacted by MCO and Covid-19 outbreak

1Q20 results fell below expectations at 16% of our FY20F due to weaker than-expected sales from telecommunications, but in line with consensus.

We cut our FY20-22F EPS by 5-19%, but expect a stronger 2H20, driven by higher projects delivery and improving supply chain situation. Reiterate Add.

We see re-inclusion into Securities Commission’s shariah list, bonus issue exercise and 3D-sensing proliferation in smartphones as potential catalysts.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 8E1A10CFE7
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