Company for this month is PNE Industries Ltd (current price $0.15). A bit of background : [ PNE Industries Ltd has three divisions namely Electronics Manufacturing Services (EMS), Emergency Lighting and Lithographic Supplies divisions. It is listed on the Main Board of Singapore Exchange since 2000.
PNE EMS not only designs innovative EMS products for its customers but also emphasizes on post-sales value-added services. This ensures customers receive the highest quality of services that are able to meet the needs of their organisations. In both Malaysia and China plants, products are manufactured according to international standard quality and regulatory requirements.
A leading brand name in Southeast Asia, PNE has penetrated the construction and building industry offering emergency lighting products. In Singapore and Malaysia, PNE is involved in the manufacturing and sales of lighting products. Its emergency lightings are certified and approved for used by the various independent certification test laboratories.]
For the past couple of years, PNE share price has not been doing much. It's share price spiked last year to 22cents after news of a possible buyer who offered 30cents for the owner's shares. We can speculate on why someone would propose an offer at such a premium but unless there are some undeclared hidden assets worth that much, the offer just didn't make much business sense. Unfortunately that got cancelled and the price dropped back to lows of 13-15cents. PNE Indus also pared down its stake in loss making subsidiary PNE PCB Bhd a listed company on the KLSE. PNE did not manage to completely sell off everything, so it now still has a much reduced stake. Recent quarters has seen PNE PCB's business turnaround into profit making, which will be good for PNE Indus.
Currently PNE Indus is going through the typical share consolidation which many small caps have done to be in line with new listing requirements of the SGX. Let's just use the old share price and numbers from the latest reports to see what value we can find...
Market cap : 50 million
NAV : $0.22
Price : $0.15 (32% discount to NAV)
Net cash : 30.1 million (59.79% of MCap)
Dividend yield : 3.33% (based on last final 0.05. Historically payout has been less but PNE Indus has been increasing its payout within its means past few years)
From what's been happening last year, it looks like the Tan family, who have operated the company for many decades and have a large interest in this company of around 80%, seem to be thinking of consolidating the assets in this company and wrapping things up. It is likely they are thinking of selling the company wholesale or going for privatisation.
In any case, the fundamentals look strong, business is still profitable and there is still a possibility of liquidation of residual stake in PNE PCB Bhd, possibility of another offer from 3rd party and of course, possibility of a general offer from the Tan family some time in the near future.
This stock is also trading very thinly at the moment which means interest is low and stock is unnoticed which bodes well for any catalyst which will bring it to the upside very quickly. Will be increasing my stake in the future on any significant dips.
[author holds shares in this company]
No comments:
Post a Comment