$PANAMY / 3719 (PANASONIC MANUFACTURING MALAYSIA BERHAD)
Research by HLIB
Hold – TP of MYR 20.02

“Time is of the essence”

We expect muted growth from hereon due to suboptimal plant utilisation from the termination of kitchen appliances. From management guidance , the new water related products will take 3-5 years to ramp up. We view that this venture might not be able to fully offset the decline from the loss of sales of recently terminated kitchen appliances businesses as the group does not have a first mover advantage. Additionally, the price point for these products is set slightly higher than its competitors, which may further hinder efforts to gain market share. On a brighter note, we reckon that PMM could be potentially benefit from higher discretionary spending from the EPF Account 3 and civil servants pay hike. Apart from that, moderation of raw material prices would also help in cushioning the bottom line impact from lower sales. Maintain HOLD, with TP of RM20.02 based on 13x PE multiple on FY25 earnings.

Analyst(s):
Syifaa’ Mahsuri Ismail
syifaa@hlib.hongleong.com.my