Some Comments On Pelikan Holdings

Pelikan Holdings.

A rather branded corporate listed in Malaysia.

This is how the stock would have looked on March 10th 2009.

Yes sir, the stock had a high of 5.80 in July 2007 and in March 2009, this stock could be purchased for under 65 sen!

I was curious.

Monday February 9, 2009: Slower sales for Pelikan this year

• PETALING JAYA: Pelikan International Corp Bhd expects slower sales this year owing to the global economic turmoil which would inevitably erode demand.
  
  It does not help matters that its largest market, accounting for close to 40% of total group sales is Germany, which slipped into recession in November.
  
  Despite this, senior vice-president (corporate planning) Ng Cheong Seng remains cautiously optimistic.....

27th Feb 2009. Pelikan reported its earnings: Quarterly rpt on consolidated results for the financial period ended 31/12/2008

Pelikan lost 43.420 million!

Company said the following.

On the 16th March CIMB wrote some bullish notes on Pelikan and it was published on the Edge, CIMB upgrades Pelikan to trading buy

• CIMB upgrades Pelikan to trading buy
  Written by Financial Daily
  Tuesday, 17 March 2009 11:14
  
  PELIKAN’S recent fourth-quarter (4Q08) results came as a shocker and raised the spectre of worse to come, said CIMB Research in a note yesterday.
  
  While the RM43.4 million net loss for the quarter was a worry, the bigger concern is the 29% year-on-year (y-o-y) top line compression, which is a sign of just how bad the recession in Europe is, particularly in Germany, CIMB Research added.
  
  “The dismal results clearly show that we had underestimated the economic downturn in Europe. A few months back, we had sliced 10%-12% off our FY09-FY10 revenue forecasts in anticipation of weaker sales growth. Clearly, it was not enough. There is no sign of relief on the horizon as IMF projects a 2% economic contraction in Europe in 2009, after 0.7% growth in 2008. More than 80% of Pelikan’ revenue comes from Europe,” it explained.
  
  Pelikan’s share price has lost 90% of its value from the 2007 peak and it looked like the market is pricing Pelikan to go bust. However, CIMB felt that this was unlikely. “Net gearing as at end-08 is 0.5 times and with no major capex plans this year, net gearing should fall to 0.3 times. Valuation is at distressed levels, at only 0.4 times price-to-book value (P/BV).”
  
  CIMB maintained its earnings forecast for Pelikan but slashed its target price to 78 sen from 92 sen as it widened the discount to the 13 times sector target price earnings (PE) to 40% from 30%. However, it upgraded the stock to a trading buy from an underperform.
  
  “The wider discount reflects earnings worries for Pelikan if European economies lose more ground in the next few quarters. However, after the stock’s sharp 38% price decline this month, we believe most of the bad news has already been reflected in its share price,” said the research house.
  
  Pelikan was flat at 59.5 sen yesterday.

However if one looks at the shareholder transactions, one is likely to be confused on what's happening.

Changes in Sub. S-hldr's Int. (29B) - PBS Office Supplies Holding Sdn Bhd

And look at the following transactions from Executive Chairman Loo Hoo Keat.

Changes in Director's Interest (S135) - Loo Hooi Keat

Look at all the buy and sell transactions on the same days!!!

What's up doc???

And then there are share buybacks done on 3rd March to 11th March which lapse with some of Mr. Loo's transactions!!

How doc?

But CIMB has a trading buy!!!

See the Edge article again. Stock was flat at 59.5 sen on 16th March 2009.

Today? Pelikan last traded at 70 sen!