PA - Net income growth of 5,099.2%, Net Cash RM88.8 million is a good sign!
PA is an aluminum product manufacturer with the ability to produce aluminum ingots and stamping terminal products. The major customer is First Solar from the USA. Some investors are concerned about PA's excessive reliance on a single major customer, which poses potential risks, similar to MAGNI.
However, since obtaining First Solar in 2018, the company has extended it for the third time, and each time the contract has been larger than the previous one. In January of this year, the company obtained a contract extension from First Solar for RM1,076 million for 18 months. Therefore, it is expected that the earnings will steadily increase in the next 5-6 quarters.
Due to the company's profit of only RM239k in the same period last year, the latest quarter's profit of RM12.436 million has led to a growth of 5,099.2%. Although there was a foreign exchange profit of RM2.9 million, there was also an ESOS expense of RM1.8 million, but after deducting, there is still a PAT of over RM11.5 million.
The company's new production capacity has been upgraded in March, mainly to cope with the historically high contract obtained in January. It is expected that in the next quarter, with the contribution of the new production capacity, the turnover and profit will increase.
The company's net cash in the latest quarter has reached a new high of RM88.8 million, mainly due to profit growth, reduced inventory, and collection of accounts receivable.
The company's stock price has been flat for the past 3 months, and this time's performance is also good. Let's see what the market reaction will be tomorrow.
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