PECCA

Re: PECCA

Postby winston » Mon Jun 11, 2018 2:04 pm

not vested

Trading Buy: PECCA - 5271
(Last price: RM0.870, Potential upside +37.9%)

Company Profile
• PECCA is involved in the leather upholstery of passenger car seats covers for OEM, pre-delivery inspection (PDI) and replacement equipment manufacturing (REM) market segments, as well as the supply of leather cut pieces and others to the automotive leather upholstery industry.

Trading Catalyst
• Pecca’s top client Perodua has shown monthly production units and monthly TIV sales growing steadily in 1Q18, which may benefit Pecca in the upcoming results.
• Also, Pecca is trading at 8.5x FY19 P/E (49% lower than average 16.6x P/E since listed), supported by net cash of 50 sen per share (ex-cash P/E of 3.6x).
• We think the recent selling pressure was overdone as investors perceived Pecca as BN-linked (Independent Non-Exec Chairman was previously political secretary of ex-PM).
• Anticipating a technical rebound towards RM0.90-1.00. Support at RM0.75-0.78, with a cut loss set at RM0.74.

Technical View
• Resistance: RM0.920 / RM1.00 / RM1.20
• Support: RM0.780 / RM0.750
• Cut loss: RM0.740

Key Financial Stats
• 8.5x FY19 P/E (49% lower than avg 16.6x P/E)
• Net cash: 50 sen per share (ex-cash P/E at 3.6x)

Source: Bloomberg, HLIB
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Re: PECCA

Postby winston » Fri Jun 21, 2019 9:31 am

not vested

Trading Buy: PECCA - 5271
(Last price: RM1.08, Potential upside +18.5%)


Company Profile

PECCA is involved in the leather upholstery of passenger car seats covers for OEM, pre-delivery inspection (PDI) and replacement equipment manufacturing (REM) market segments, as well as the supply of leather cut pieces and others to the automotive leather upholstery industry. PECCA also continues its effort to penetrate into the aviation segment.


Trading Catalyst

Pecca’s share prices rallied 47% YTD following a 65% surge in 9MFY19 earnings to RM13.8m, mainly attributed to higher sales volume (driven by higher Perodua demand) and improved operational scale.

HLIB maintains a BUY rating with a RM1.40 TP (+29.6% upside) based on 13x P/E on FY20 EPS, given its strong operational cash flow of RM17-25m per annum (FY19-21) with current net cash position of RM94.0m (51sen/share). Valuation is undemanding at 10.5x FY20E (34% lower than average 16x P/E since listed), supported attractive DY of 5.6-7.4% for FY19-21.

Technically, the rounding bottom pattern signals potential long term downtrend reversal, with upside targets at RM1.13-1.28 levels.

Technical View
Resistance: RM1.13 / RM1.17 / RM1.28
Support: RM1.04 / RM1.00
Cut loss: RM0.990

Key Financial Stats
Trading at 10.5x FY20E P/E, supported by a 6.5% DY.

Source: Bloomberg, HLIB
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Re: PECCA

Postby winston » Fri Aug 02, 2019 3:42 pm

not vested

02-Aug-19
Technical Tracker - HLIB Retail Research

Trading Buy: PECCA - 5271
Strong earnings visibility and solid balance sheet to cushion adversity
(Last price: RM1.15, Potential upside +23.5%)

Company Profile
PECCA is involved in the leather upholstery of passenger car seats covers for OEM, pre-delivery inspection (PDI) and replacement equipment manufacturing (REM) market segments, as well as the supply of leather cut pieces and others to the automotive leather upholstery industry. PECCA also continues its effort to penetrate into the aviation segment.

Trading Catalyst

HLIB maintains a BUY rating with a RM1.40 TP (+21.7% upside) based on 13.3x P/E on FY20 EPS, given its strong operational cash flow of RM17-25m per annum (FY19-21) and net cash position of RM94.0m (51sen/share or 45% to share price).

Valuation is undemanding at 10.9x FY20E, 27% lower than average 15x P/E since listed, while ex-cash PECCA’s PE is more compelling at 6x, supported attractive DY of 5.2-7.0% for FY19-21.

Overall, PECCA is expected to continue leveraging on major client Perodua sales growth (strong demand for Myvi and newly launched Aruz models). Management is also strategizing to increase export sales (revenue grew 11% in 9MFY19), which fetches higher margin.

Technically, the positive Cup & Handle formation may signals a potential upside targets around RM1.24-1.42 zones.

Technical View
Resistance: RM1.24 / RM1.28 / RM1.42
Support: RM1.10 / RM1.05
Cut loss: RM1.04

Key Financial Stats
Trading at 10.9x FY20E P/E, supported by a 6.1% DY and RM94m or 51sen net cash/share.

Source: HLIB, Bloomberg
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Re: PECCA

Postby winston » Fri Aug 02, 2019 3:42 pm

not vested

02-Aug-19
Technical Tracker - HLIB Retail Research

Trading Buy: PECCA - 5271
Strong earnings visibility and solid balance sheet to cushion adversity
(Last price: RM1.15, Potential upside +23.5%)

Company Profile
PECCA is involved in the leather upholstery of passenger car seats covers for OEM, pre-delivery inspection (PDI) and replacement equipment manufacturing (REM) market segments, as well as the supply of leather cut pieces and others to the automotive leather upholstery industry. PECCA also continues its effort to penetrate into the aviation segment.

Trading Catalyst

HLIB maintains a BUY rating with a RM1.40 TP (+21.7% upside) based on 13.3x P/E on FY20 EPS, given its strong operational cash flow of RM17-25m per annum (FY19-21) and net cash position of RM94.0m (51sen/share or 45% to share price).

Valuation is undemanding at 10.9x FY20E, 27% lower than average 15x P/E since listed, while ex-cash PECCA’s PE is more compelling at 6x, supported attractive DY of 5.2-7.0% for FY19-21.

Overall, PECCA is expected to continue leveraging on major client Perodua sales growth (strong demand for Myvi and newly launched Aruz models). Management is also strategizing to increase export sales (revenue grew 11% in 9MFY19), which fetches higher margin.

Technically, the positive Cup & Handle formation may signals a potential upside targets around RM1.24-1.42 zones.

Technical View
Resistance: RM1.24 / RM1.28 / RM1.42
Support: RM1.10 / RM1.05
Cut loss: RM1.04

Key Financial Stats
Trading at 10.9x FY20E P/E, supported by a 6.1% DY and RM94m or 51sen net cash/share.

Source: HLIB, Bloomberg
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Re: PECCA

Postby winston » Wed Sep 25, 2019 3:05 pm

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Affin Hwang Capital upgrades Pecca, target price RM1.10

KUALA LUMPUR (Sept 25): Affin Hwang Capital Research has upgraded Pecca Group Bhd to “Hold” at RM1.11 with an unchanged target price of RM1.10 and said although Pecca’s share price has corrected by 13% since it announced disappointing 4QFY19 results.

It's revenue base looks modest, and a dip in margins and EPS will likely limit any bullish sentiment towards Pecca in the near term.

In a note today, the research house said at 13x FY20E PER, Pecca now trades close to the stock’s average 2-year forward PER, which looks to be fair, reflecting Pecca’s softer earnings projections.

Source: The Edge

https://www.theedgemarkets.com/article/ ... rice-rm110
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Re: PECCA

Postby winston » Wed Sep 25, 2019 3:05 pm

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Affin Hwang Capital upgrades Pecca, target price RM1.10

KUALA LUMPUR (Sept 25): Affin Hwang Capital Research has upgraded Pecca Group Bhd to “Hold” at RM1.11 with an unchanged target price of RM1.10 and said although Pecca’s share price has corrected by 13% since it announced disappointing 4QFY19 results.

It's revenue base looks modest, and a dip in margins and EPS will likely limit any bullish sentiment towards Pecca in the near term.

In a note today, the research house said at 13x FY20E PER, Pecca now trades close to the stock’s average 2-year forward PER, which looks to be fair, reflecting Pecca’s softer earnings projections.

Source: The Edge

https://www.theedgemarkets.com/article/ ... rice-rm110
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Re: PECCA

Postby winston » Mon Dec 09, 2019 3:49 pm

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HLIB Research expects Pecca to declare 6.5 sen dividend for FY20

by Nazuin Zulaikha Kamarulzaman

KUALA LUMPUR (Dec 9): Hong Leong Investment Bank Bhd Research (HLIB Research) has maintained its "buy" call on Pecca Group Bhd at RM1.17 with an unchanged target price of RM1.45.

And said it expects Pecca to distribute 6.5 sen dividend for FY20 as HLIB Research remains positive on the group's outlook from sustainable domestic sales, which were driven by Perodua and improving import markets.

It said in a note today post 1QFY20 briefing, "The strong earnings of RM4.8 million (+1% q-o-q, +49.3% y-o-y) for 1QFY20 [were] driven mainly by car seat sales to Perodua as well as leather cut pieces export to Subaru in China."

Pecca's management guided volume to sustain for FY20, supported by the continuous demand from Perodua for Myvi, Aruz and newly launched Axia models.

The research house noted that the management is also exploring new programs with both Perodua and Proton, given the expected new model launches in 2020.

The revenue from China's export market has shown strong growth following the commencement of leather cut pieces program to Subaru (China) since 4QFY19, while the Singapore and Europe markets have somewhat slowed down.

HLIB Research stated that Pecca can easily ramp up production in order to meet the potential demand growth.

In regard to the mergers and acquisitions (M&A) related to the automotive sector, the group is hopeful to conclude the exercise in 2HFY20.

"Management is likely to fund the acquisition via combination of internal fund[s] and debt. Its cash coffers stands at RM98.2 million as at end 1QFY20," HLIB Research said.

The group also targeted the application for EASA (European Aviation Safety Agency) licence to be fulfilled by end-FY20. The licence will allow Pecca to penetrate into the lucrative market of aviation leather seats.

It noted that Pecca expects incremental staff costs in FY20 following the increase in number of staff as well as implementation of higher minimum urban wage at RM1,200 (from RM1,100) by the government, effective Jan 1, 2020.

"We expect Pecca to distribute 6.5 sen for FY20 (translating into 5.6% dividend yield)," the research house said as the group assured that its dividend payout policy is still intact.

"We remain positive on Pecca's strong operating cash flow of RM23 million-RM24 million per annum (for FY20-FY22) on top of its current net cash position of RM98.2 million (translating into 53.5 sen/share)," HLIB Research said.

At 10.02am, Pecca shares were flat at RM1.17, giving it a market capitalisation of RM219.96 million.

Source: The Edge

https://www.theedgemarkets.com/article/ ... idend-fy20
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Re: PECCA

Postby winston » Wed Dec 11, 2019 8:48 am

not vested

Trading Buy: PECCA - 5271

Widening valuations and attractive yields
(Last price: RM1.17, Potential upside +19.7%)


Company Profile

PECCA is involved in the leather upholstery of passenger car seats covers for OEM, pre-delivery inspection (PDI) and replacement equipment manufacturing (REM) market segments, as well as the supply of leather cut pieces and others to the automotive leather upholstery industry. PECCA also continues its effort to penetrate the aviation segment.


Trading Catalyst

We remain positive on PECCA’s mid to long term outlook from sustainable domestic sales (driven by Perodua) and improving export markets (especially from China). Auto-related M&A exercise and European Aviation Safety Agency (EASA) licensing (to penetrate into the lucrative aircraft seat segment) will drive earnings growth post FY21

Valuation is undemanding at 11.4x FY20E (ex-cash P/E stood at 6.2x), 39% lower than peers’ 18.8x P/E and 15x historical P/E since listed, supported attractive DY of 5.6-6.0% for FY20-21, strong operational FY20-21 cash flow of RM23-24m p.a. and net cash position of RM98.2m (53.5sen/share or 45.7% to share price).

Technically, PECCA is poised for an oversold rebound towards RM1.30-1.40 levels after a brief sideways consolidation.

Technical View
Resistance: RM1.21 / RM1.30 / RM1.40
Support: RM1.14 / RM1.12
Cut loss: RM1.08

Key Financial Stats

Trading at 11.4x FY20E P/E (39% below peers), supported by RM0.54 net cash and 5.6-6.0% FY20-21 DY.

Source: Bloomberg, HLIB
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Re: PECCA

Postby winston » Tue Jun 30, 2020 9:10 am

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For stock pick, PECCA (RM0.895-BUY-RM1.28 TP) gained 2 sen yesterday amid news that it will venture into PPE business.

Technically, the stock will turn more positive to advance to RM1.03-1.13 zones if the stiff downtrend line resistance from RM1.27 (27 Nov 2019) is taken out decisively.

Key supports are situated at 0.80-0.865 with cut loss at RM0.78 levels.

Source: HLIB
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Re: PECCA

Postby winston » Fri Sep 04, 2020 2:49 pm

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HLIB Research expects Pecca's PPE venture to lift earnings prospects, raises target price to RM1.75

by Justin Lim

KUALA LUMPUR (Sept 4): Hong Leong Investment Bank (HLIB) Research has reaffirmed its "buy" call for Pecca Group Bhd at RM1.21 with a higher target price (TP) of RM1.75, from RM1.28, as it expects the car leather upholstery maker to post stronger earnings driven by its new personal protective equipment (PPE) venture.

"We adjusted our FY21 and FY22 earnings (forecasts for the financial years ending June 30, 2021 and 2022 respectively) by +32.3% and +33.4% mainly to account for the new PPE contribution," HLIB Research said in a note today.

Hence, it is anticipating the group to post a net profit of RM25 million for FY21 and RM26.5 million for FY22. The earnings projections are significantly higher than the RM8.39 million net profit posted for FY20 as Pecca suffered from production disruption and lower demand resulting from the Covid-19 pandemic outbreak and lockdown restrictions.

According to Pecca, it has started the production of three-ply masks at five million to six million units per month, and guided to ramp up production to 25 million per month (300 million per year) by the end of the first quarter ending Sept 30, 2020 (1QFY21) and 50 million per month (600 million per year) by end-2QFY21, which are significantly higher than the initial guidance of 18 million per year due to indicative strong demand orders in both the domestic and export markets.

HLIB Research also noted that Pecca had obtained the ISO 13485:2016 Quality Management System Certificate for the design, development and manufacturing of PPE, and is now awaiting an export permit from the government and certification from the US Food and Drug Administration (FDA) and CE Marking from the European Union (EU).

Meanwhile, its commercial production of N95 masks is expected to commence in October, while for other PPE items, it will start at a later stage.

For the PPE segment, Pecca's management had guided for the gross margin to be in double digits and that it will able to recoup its investment within the first year.

For the leather car seat segment, HLIB Research said Pecca will be able to leverage the strong total industry volume (TIV) during the sales and service tax (SST) exemption period.

It said the group's management had guided for the production rate to normalise back to 10,000 to 11,000 sets per month in September (from 9,000 to 10,000 sets per month in July and August) and expects the volume to be sustained until year end.

"We view there is [some] potential upside in the volume guidance, given the strong demand for new cars during the SST exemption period (with the delivery period up to end-January 2021) and upcoming attractive new launches of the Proton X50, Mitsubishi Xpander and Perodua D55L SUV.

"We note that Perodua has announced a production rate increase to average 25,000 per month in the August to December period (versus the usual 20,000 per month), while Toyota has confirmed to increase its production rate in the same period. At the same time, Pecca’s exports of leather cut pieces to China NJTC (Subaru) also recovered strongly in September," it added.

Pecca shares were one sen or 0.83% higher at RM1.22 at 10.20am today, with some 1.15 million shares done. For the past year, the stock has been trading between 68 sen and RM1.39.

Source: The Edge

https://www.theedgemarkets.com/node/530022
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