PESTECH (5219) : RHB Research upgrades Pestech to Buy
KUALA LUMPUR: RHB Research is upgrading Pestech International Bhd to Buy from Neutral, with the target price unchanged at RM4.16 for the stock, which closed yesterday at RM3.43.
It said the current share for the electric power technology company had become attractive price following the recent market selldown.
According to the research house, industry prospects remain intact, with TNB reportedly planning to spend RM23.3bil as capital expenditure in 2014-2017.
“It was reported that 63% of the capex has been allocated for distribution while the remaining 37% is for transmission. We believe that Pestech would benefit from higher capex from TNB,” RHB Research said.
As at end-Sep 2014, Pestech has a total orderbook of about RM546mil. Meanwhile, the company is focusing future growth by focusing on two new business segments.
“The transmission and distribution segment has been contributing over 80% of its total sales in the past few years since its listing in 2010. The company has recently reshuffled its focus to look into two relatively new business segments, namely: 1) embedded system software and product development and 2) power generation and rail.
“Earnings sustainability looks secure,” the research house said.
“We have raised our recommendation to BUY from Neutral, with an unchanged target price of MYR4.16, pegged to an unchanged FY15F target price-earnings ratio of 15 times,” it concluded.
http://www.thestar.com.my
KUALA LUMPUR: RHB Research is upgrading Pestech International Bhd to Buy from Neutral, with the target price unchanged at RM4.16 for the stock, which closed yesterday at RM3.43.
It said the current share for the electric power technology company had become attractive price following the recent market selldown.
According to the research house, industry prospects remain intact, with TNB reportedly planning to spend RM23.3bil as capital expenditure in 2014-2017.
“It was reported that 63% of the capex has been allocated for distribution while the remaining 37% is for transmission. We believe that Pestech would benefit from higher capex from TNB,” RHB Research said.
As at end-Sep 2014, Pestech has a total orderbook of about RM546mil. Meanwhile, the company is focusing future growth by focusing on two new business segments.
“The transmission and distribution segment has been contributing over 80% of its total sales in the past few years since its listing in 2010. The company has recently reshuffled its focus to look into two relatively new business segments, namely: 1) embedded system software and product development and 2) power generation and rail.
“Earnings sustainability looks secure,” the research house said.
“We have raised our recommendation to BUY from Neutral, with an unchanged target price of MYR4.16, pegged to an unchanged FY15F target price-earnings ratio of 15 times,” it concluded.
http://www.thestar.com.my
