Tuesday, September 29, 2015

Just 'READ' - Pensonic (Revaluation Play) !!!

Its NTA currently (Sept 2015) stood at rm0.85. However the NTA is said to be understated due to its accounting policy to carry properties at cost model instead of revaluation model.

The company adopted "cost less depreciation model" to value its land and building. This has reflected an unfairly low valuation of the assets that it presently (Sept 2015) has. For example, the property that it isowning in Section 51A Petaling Jaya is carried at rm200 per square feet while the market value is around rm750-850 psf. Valuing it even on a conservative amount of rm600 psf, this would translate it into a gain of RM18million and if the high side of RM800 is taken, then the gain would reach RM25million - on this one property alone.

If were to revalue all … a rm25million of gain is translating into about NTA of RM0.20 per share. In the event if all properties are revalued to the current (Sept 2015) market value, we can see a substantial increase in its NTA and of course the present stock price (26 Sept 2015) is traded at discount below the more realistic NTA.

It returns to the black with a net profit of RM12.6million for the fourth quarter ended May 31,2015 (4QFY15), compared with a net loss of RM1.64million a year earlier, on higher export sales and property disposal gains.

Revenue increased to RM92.9million from RM89.65million.The increase in revenue was mainly contributed by the export market, as its local business was facing a slight drop in revenue, due to the Goods and Services Tax (GST) implementation.

Furthermore, the group has posted a profit before tax of RM12.9million, [as] compared to loss before tax of RM2.7million in the corresponding periodlast year. This gain were mainly came from recognition of financial gain on disposal of property RM8.4million.

For the full year, Pensonic registered higher net profit of RM17.58million, from RM2.87million a year earlier. Revenue increased to RM388.37million from RM373.73million.

Looking ahead, Pensonic anticipated intense competition, but will continue to explore new markets and product innovation.

At rm0.59 it is trading at a 12 month trailing PER of 4.42 times.


JiaYeo said...

hmm there are many companies that haven't revalued their lands for decades, and it is not something unusual. Even if Pensonic revalued the land and book a one-off profit, it has no affect on the cash flow, it is just an accounting method.

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