Stock With Momentum: Panasonic Manufacturing M'sia

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This article first appeared in The Edge Financial Daily, on March 25, 2016.


Panasonic Manufacturing M'sia Bhd (-ve)

SHARES of Panasonic Manufacturing Malaysia Bhd (fundamental: 3/3; valuation: 2.1/3) jumped as much as 5.04% or RM1.46 to RM30.02 yesterday, before paring some of its gains to close at RM29.40, still up 84 sen or 2.94%, after 38,200 shares changed hands. 

In comparison, it’s 200-days average volume is only around 13,951.

Panasonic has seen its share price on the rise since the announcement of its third quarter results, which grew 46.25%. It has risen 19.05% since its closing Feb 26's closing price of RM25.20. Year-to-date, Panasonic’s share price has gone up by 23.56%.

The group’s net profit for the third quarter for financial year 2016 (3QFY16) grew to RM38.60 million from RM26.39 million in 3QFY15. 

For the quarter under review, Panasonic saw a derivative gain of RM7.7 million as compared to a derivative loss of RM4.3 million in the previous year corresponding quarter. The gain was due to an adjustment of derivative loss of RM8.7 million in the last quarter, following the fluctuations in the currency exchange rates. 

The home appliance products saw an increase of 33.9% in profit before tax (PBT) to RM32 million as compared to the RM23.9 million recorded in 3QFY15. 

The fan and other products's PBT also rose 31.9% to RM18.2 million from RM13.8 million in the previous year’s corresponding quarter.

Panasonic's revenue gained 15.11% to RM289.13 million in 3QFY16 from RM251.18 million in 3QFY15, as fan sales in domestic markets grew by 18% from a year ago, mainly led by project-related sales in ceiling fan products as well as a favourable currency exchange condition.

On its outlook, the board expects Panasonic to deliver satisfactory results for the current financial year.

At its current price, Panasonic's shares are trading at a trailing P/E ratio of 13.27 times and is 2.4 times its book value, with a market capitalisation of RM1.82 billion.