Phillip Capital Research projected core net profit of RM24mil to RM27mil in 1Q25 from RM23mil previously.
PETALING JAYA: Higher export sales and the recent rally in nickel prices may lead to Pantech Group Holdings Bhd
reporting stronger year-on-year earnings in the first quarter of financial year 2025 (1Q25) by the end of the month.
Going forward, it has planned to expand its manufacturing capacity and further broaden its export footprint.
Phillip Capital Research projected core net profit of RM24mil to RM27mil in 1Q25 from RM23mil previously.
The research house reiterated its “buy’’ call rating on the stock and raised its target price to RM1.42 a share from RM1.35 a share after rolling forward its valuation to FY26, based on unchanged nine times price earnings ratio multiple.
The key risks cited to its “buy’’ call include lower-than-expected demand for pipes, valves and fittings, unforeseen project delays and higher-than-expected operating costs.
It said the improvement in earnings can be attributed to higher export sales volume, bolstered by the recent rally in nickel prices, which has risen above US$21,000, the highest since August 2023 at US$22,000.
This has led customers to hasten their restocking efforts in anticipation of further potential price increases.
Nickel prices saw a 30% increase from March to May 2024 due to concerns over supply disruptions from New Caledonia, the world’s third largest nickel producer, coupled with sanctions being imposed by Russia.
Pantech plans to expand its manufacturing capacity by additional 20% to 25% following the listing of its two manufacturing units, as part of its strategy to boost export volumes.
This reinforces the research house’s positive view on Pantech’s earnings growth prospects.
The expansion reflects the anticipated increase in export volume as the group aims to broaden its presence in the United States, Europe and North African markets, including potential interests in Tunisia and Egypt.
Phillip Capital Research gathers that Pantech has acquired a new factory, which will be converted into a warehouse for storing its manufacturing products.
