PEC 2017Q1 Result Review

PEC released its result on 10 November. Lets take a closer look at the report.

To be honest, the result is much worse than 2015Q1 result, as the company recorded a 4 million total comprehensive income attributed to shareholders in that report. However, I found that the result is still better than 2016Q1 report.

The total comprehensive income attributed to the owners increased 94% yoy from 439,000 to 850,000 in 2017Q1. When we compare 2017Q1 balance sheet and 2016Q1 balance sheet they actually look similar, where cash increased from 107 millions to 111 millions. The company recorded operating cash inflow and also the net cash inflow in 2017Q1, even though the operating cash inflow is much less than previous year.

The thing I am more worried about is the order book. The company's order book stood at 315 million in 2015Q1, excluding maintenance contracts, and the order book decreased to 139.7 million in 2016Q1 and decreased further to 65.2 million in the latest report. I guess that the company is having more maintenance contracts, as the company's revenue in 2017Q1 only drop 2% yoy when their order book's value drops more than 50%. I hope that the company can collect their trade receivable faster as the value of the trade receivable is more than 107 million in 2017Q1. The company should be able to use these funds to invest and generate more returns for the shareholders.

Good news is that the profit margin of the maintenance contracts are higher, so the gross profit margin increased from 20.4% to 24.1% yoy.

The NAV increased from 89 cents to 89.4 cents, so the share is currently trading at PB0.76. I realised that most of my successful investments got two common characteristics - low PE and PB. I will talk more about it when I do my yearly portfolio review.

Thanks for reading. Take note that the company's dividend ex date is on 13 Nov according to the information found on investingnote. (sorry but im just kinda lazy to check the company announcement lol)

Still got no internet at home and sitting in a coffee bar forever to check the results of my investments.

Thank you and have a nice day.

Cheers!