SINGAPORE (Jan 16): CIMB likes PCI, the electronics manufacturing company, as the group’s management is positive on its outlook for the next three to six months.
PCI is headquartered in Singapore, but its major manufacturing facilities are located in Batam, Indonesia and Kunshan, China. Its specialities include networking, wireless communications, home appliances, display modules for mobile communications, medical, industrial and automotive products.
In an unrated report on Monday, analyst William Tng says, “The company is able to handle low- to high-volume projects.”
According to the analyst, the group has complete control over its development process with its engineering design and development centres in Singapore, Manila, the Philippines and Bandung, Indonesia.
Its centres are capable of producing global positioning systems, radio frequency, liquid crystal display modules, control panels, printed circuit boards and mechanical design.
The group stated in its 1Q18 results commentary that the electronics industry is experiencing a pickup due to the year-end seasonal demand and optimism about economic growth.
Hence, the group’s business could benefit from this positive sentiment in the coming three to six months. The group’s directors are also cautiously optimistic about its business outlook in the next six months.
As at end Sept 2017, the group had a net cash of $45.5 million on its balance sheet or 24.7% of its market cap on Jan 12, 2018.
PCI endeavours to pay up to 50% of its net profit as dividends and has been paying dividends since FY13.
As at 10.30am, shares in PCI are trading at 93 cents or 13 times FY17 earnings with a dividend yield of 6.49%.
