Stock Name: PEC
Company Name: PEC LTD.
AmFraser Research in a May 15 research report says: "Revenues down 18% q-o-q (+22% y-o-y) to $106.7 million. While we estimate a consistent $30 million in maintenance revenue, we note that project works revenue probably fell to $76 million. "Gross profit down 33% q-o-q (-36% y-o-y) to $17.4 million. Net profit down 57% q-o-q (-86% y-o-y) to $1.3 million as a result of the fall at the gross profit level going through the moderately high fixed costs. Pricing competition, cost pressures unlikely to go away in the near future, which clouds the outlook for the company. "We reduce our margin forecast for the project works segment from 20% to 16.5% in 2013F and 18% in 2014F. We do not see the share price recovering much beyond 0.9x of the blended FY2012F/2013F book value of 81 cents, leading to our fair value of 73 cents. DOWNGRADE TO HOLD."
Company Name: PEC LTD.
| Research House: AmFraser | Price Call: HOLD | Target Price: 0.73 |
AmFraser Research in a May 15 research report says: "Revenues down 18% q-o-q (+22% y-o-y) to $106.7 million. While we estimate a consistent $30 million in maintenance revenue, we note that project works revenue probably fell to $76 million. "Gross profit down 33% q-o-q (-36% y-o-y) to $17.4 million. Net profit down 57% q-o-q (-86% y-o-y) to $1.3 million as a result of the fall at the gross profit level going through the moderately high fixed costs. Pricing competition, cost pressures unlikely to go away in the near future, which clouds the outlook for the company. "We reduce our margin forecast for the project works segment from 20% to 16.5% in 2013F and 18% in 2014F. We do not see the share price recovering much beyond 0.9x of the blended FY2012F/2013F book value of 81 cents, leading to our fair value of 73 cents. DOWNGRADE TO HOLD."
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