PMB Tech on the uptrend after hitting a low in October
PMB Technology Bhd has been trending higher in the past 5 days, gaining 14.4% to close at RM1.98 on Nov 6. In terms of price/book value rating, the stock is currently trading at a ratio of 3.2x based on its book value per share of 60 sen as of end-Jun 2024.
Fundamentally, the company appears to be on a stronger footing. Its net profit rose 82% year-on-year to RM3.8 million in 2QFY24, bringing its 1HFY24’s bottom line to RM5 million, which was a 58% decline y-o-y. Consensus estimates PMB Tech to post net earnings of RM24.2 million in FY Dec 2024 and RM28.6 million in FY Dec 2025.
The producer of silicon metal and metal fabricator has been raising cash to reduce its borrowings. PMB Tech is raising money via a rights issue, with a bulk of the proceeds estimated at RM309.5 million to pare its bank borrowings. The exercise involves a 3-for-20 rights issue at an issue price of RM1.27 per rights share.
It is also proposing to procure irrevocable undertakings from its major shareholders to subscribe for their respective entitlements, amounting to RM144.6 million. This includes Press Metal Aluminium Holdings Bhd (with a 23.29% stake), its executive chairman Tan Sri Koon Poh Keong (10.78%), chief executive officer Koon Poh Ming (5.85%), and executive director Datuk Koon Poh Tat (5.27%).
For the remaining RM155.4 million entitled to other shareholders, PMB Tech also proposes to procure undertakings from the Koon family or their nominated parties to subscribe for any rights shares not taken up.
In July, PMB Tech said it is selling a parcel of leasehold land in Klang for RM79.3 million, primarily to fund its working capital. The sale of the 113,312 sq metre-land to Knauf Sdn Bhd is expected to result in a one-time gain of RM51 million, which will boost the group’s earnings for the financial year ending Dec 31, 2024.
The land had a net book value of RM15.4 million as of end-December 2023. The sale, which is expected to be completed by the fourth quarter of this year, will reduce its gearing ratio from 0.89 times to 0.84 times.
Understandably, investors may be concerned over its gearing level but the company’s results point to better days to come and will translate into higher share price.
Fundamentally, the company appears to be on a stronger footing. Its net profit rose 82% year-on-year to RM3.8 million in 2QFY24, bringing its 1HFY24’s bottom line to RM5 million, which was a 58% decline y-o-y. Consensus estimates PMB Tech to post net earnings of RM24.2 million in FY Dec 2024 and RM28.6 million in FY Dec 2025.
The producer of silicon metal and metal fabricator has been raising cash to reduce its borrowings. PMB Tech is raising money via a rights issue, with a bulk of the proceeds estimated at RM309.5 million to pare its bank borrowings. The exercise involves a 3-for-20 rights issue at an issue price of RM1.27 per rights share.
It is also proposing to procure irrevocable undertakings from its major shareholders to subscribe for their respective entitlements, amounting to RM144.6 million. This includes Press Metal Aluminium Holdings Bhd (with a 23.29% stake), its executive chairman Tan Sri Koon Poh Keong (10.78%), chief executive officer Koon Poh Ming (5.85%), and executive director Datuk Koon Poh Tat (5.27%).
For the remaining RM155.4 million entitled to other shareholders, PMB Tech also proposes to procure undertakings from the Koon family or their nominated parties to subscribe for any rights shares not taken up.
In July, PMB Tech said it is selling a parcel of leasehold land in Klang for RM79.3 million, primarily to fund its working capital. The sale of the 113,312 sq metre-land to Knauf Sdn Bhd is expected to result in a one-time gain of RM51 million, which will boost the group’s earnings for the financial year ending Dec 31, 2024.
The land had a net book value of RM15.4 million as of end-December 2023. The sale, which is expected to be completed by the fourth quarter of this year, will reduce its gearing ratio from 0.89 times to 0.84 times.
Understandably, investors may be concerned over its gearing level but the company’s results point to better days to come and will translate into higher share price.
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