FIGURE 1: PBA HOLDINGS BHD LAST 5 YEARS SHARE PRICE TREND
**analysis based on 2018 annual report.
1. GENERAL INTRO: PBA is engaged in the
abstraction of raw water, treatment of water, and supply and sale of
treated water to consumers in the State of Penang.
2. NOTABLE POINTS:
a. In 2018 report, PBA’s revenue from the sale of water
amounted to RM311.09 million, as compared to RM295.46 million in 2017.
As such, it recorded a revenue growth of 5.29% year-on-year.
Nevertheless, the single item that generated the strongest impact in it
books is the recognition of RM137.60 million in unabsorbed RA as a tax
liability. As a result, PBAHB is compelled to record a loss after tax of
RM103.43 million for the first time in its 18-year history.
3. IS THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE RANGE (RM million): 334.7 million as reported in 2018 annual report, this is a medium revenue company.
b. SHARE PRICE: from 2015-2020, share price ranged from ~ RM1.00 to RM1.40.
c. EARNING PER SHARE (EPS): earning per share in last 5 years was overall fluctuating, ranging from -31.25 to 18.66 sen
d. FUTURE POTENTIAL/PROSPECTS: share price expect to be stable in the next few years
e. CAPITAL EXPENDITURE (CAPEX): spending on purchase of new fixed assets is RM 53 million, around 4% of total assets.
4. IS THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND YIELD: in 2018 financial year, PBA declared a
dividend payout of 4 sen per share to shareholders, which amounts to a
dividend yield of 3.67%.
b. DIVIDEND PAYOUT RATIO: N/A.
c. CONSISTENCY: the dividend payout was consistent, the
dividend paid to shareholders in the last five years ranged from 3.5 to 4
sen.
5. IS THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN ON EQUITY (ROE): in 2018 financial year, PBA reported a poor return of shareholders’ equity, at -14.86%.
b. COST-TO-INCOME RATIO: cost-to-income ratio is high, at 827%.
6. OTHER INDICATORS:
a. CASH FLOW: cash flow is positive, around RM 182.3 million, equivalent to RM 0.55 per share.
b. SUPPORT BY INSTITUTIONAL INVESTORS: this counter is not well
supported by institutional investors, there are only 8 institutional
investors at top 30 major shareholders list, not including insurance
companies/investment funds. Its major shareholders are State Secretary,
Penang (55%) and Perbadanan Pembangunan Pulau Pinang (10%).
Disclaimer: The content of the blog posts are for sharing purpose
only. Readers are encouraged to carry out further research and analysis
as well as follow up latest update information before making any
investment decisions.
https://louisesinvesting.blogspot.com/2020/01/comments-on-pba-holdings-bhd-5041.html
