Goodbye To Pantech & Hope To See You Again

Pantech FY14Q3 Financial Result

PANTECH	FY14Q3	FY14Q2	FY14Q1	FY13Q4	FY13Q3
Revenue	131.1	153.8	162.2	156.3	171.5
PBT	16.3	21.9	18.5	18.8	20.9
PBT%	12.4	14.2	11.4	12.0	12.2
PAT	12.1	15.3	13.8	12.6	15.6
Manu Rev	56.0	76.8	82.5	65.5	70.7
Manu PBT	10.1	13.0	12.6	7.6	7.5
Trade Rev	75.1	77.0	79.8	90.8	100.8
Trade PBT	7.0	9.9	8.9	12.4	14.8
Total Equity	417.7	411.4	393.2	376.7	396.7
Total Assets	698.8	722.2	687.6	695.8	732.8
T/Receivables	120.8	128.5	125.1	111.2	122.3
Inventories	235.7	245.1	246.9	258.5	277.6
Cash	99.7	97.6	78.3	79.3	94.2
Total Liab	281.1	310.7	294.4	319.0	363.1
T/ Payables	36.9	56.3	46.2	36.5	49.8
ST Borrow	144.2	148.9	151.0	181.1	208.6
LT Borrow	78.8	75.1	79.1	75.4	71.7
Net CF	15.5	13.9	0.5	-22.9	-9.6
Operation	41.2	29.5	4.6	38.6	47.1
Investment	-24.3	-16.7	-5.8	-82.2	-75.5
Financing	-1.3	1.2	1.7	20.8	18.8
EPS	2.24	2.91	2.70	2.64	3.33
NAS	0.74	0.73	0.77	0.74	0.74
Net D/E Ratio	0.30	0.31	0.39	0.47	0.47

To me, Pantech latest FY14Q3 result is quite disappointing. Its revenue and net profit drops 14.8% and 20.9% respectively compared to preceding quarter FY14Q2.

Its manufacturing arm shows sign of significant slow down and could not compensate the continuous slide in trading arm this time.

The lower top & bottom lines are mainly due to weaker sales demand from the oil & gas sector with slower project execution.

I expect Pantech to benefit from anticipated Oil & Gas boom but it seems like it is still too early at the moment.

Balance sheet remain stable with slight increase in cash and reduction in total debt. Thus net debt/equity ratio drops slightly to 0.30.

Cash flow from operation remains good thus Pantech continues to pay dividend every quarter. This time 3rd interim single tier dividend of 1.0sen will be ex-ed in 17 Mac 2014. This is lower than 1.2sen I predict.

Though it is not a too bad result, I decided to offload all my Pantech shares after holding it for 6 months. 

I bought at 98sen and sold at 94sen, which is a 5% loss including transaction fees. However, with three 1.2sen dividends during the period, the net loss is actually 1.7%.

Undoubtedly Pantech is a bad & failed investment for me as many counters gain a lot during the second half of 2013. However, I have learnt an important lesson from Pantech.

Actually I'm ready to sell some shares in January as I'm over spending since December and need to keep some cash. If not, I'm afraid I have no cash to wrap ang pow! 

I've been targeting to sell either Pantech, Scientex or YOCB. If Pantech result is within my expectation, then I'd probably keep it. However, it is not.

After selling Pantech, I have no exposure to Oil & Gas sector in my portfolio.

I'll keep Pantech in my watch list and continue to monitor it. Wish to have this stock that pays dividend quarterly back in the future.