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KCE Electronics Public Company Ltd. (SET:KCE), 25.64% stake owned by Mr. Pitharn Ongkosit, KCE Electronics President and CEO, and two other Ongkosit family members, is a Thailand-based company engaged in the manufacture and distribution of electric printed circuit board (PCB) products. The company operates three business segments: manufacture and distribution of prepreg and laminate segment, manufacture and distribution of printed circuit board products segment, which is manufactured from an epoxy glass copper lead laminate under the KCE trademark, and manufacture and distribution of chemical products segment, which are the chemical solutions used in the production of printed circuit board and chemical recycling operations.
Its subsidiaries include KCE Technology Co., Ltd., K.C.E. International Co., Ltd., Chemtronic Technology (Thailand) Co., Ltd., Thai Laminate Manufacturer Co., Ltd. and KCE (Thailand) Co., Ltd.
The KCE Electronics key customer base includes manufacturers of automotive electronic equipments, telecommunication devices, computer networks, industrial equipments, medical equipments and consumer products worldwide. Most of its products are exported to the United States and many countries in Europe and Asia. Therefore, earnings could be impacted by the global economic environment and foreign exchange rates. More important are the prices of commodities, including copper, one of the key materials used in PCB production. Copper price volatility could significantly affect the bottom-line of the company.
KCE Electronics said on August 9 that its second-quarter 2016 revenues were 3.58 billion baht, missing the 3.6 billion baht consensus estimate by four analysts, according to the Financial Times. The company posted second-quarter 2016 earnings of 1.38 baht per share, missing the 1.43 baht per share consensus estimate of four analysts.
A poll of 13 analysts are expecting a full-year 2016 EPS of 5.47 baht, or a 42.82% increase year-on-year, compared to an EPS of 3.83 baht reported in 2015, on revenues of 14.71 billion baht, or an 18.15% increase year-on-year, compared to 12.45 billion baht reported in 2015.
From our technical viewpoint, shares of KCE have been moving in a bullish ascending channel chart pattern since 2012. The stock hit an all-time high at 104.50 baht a share on August 8, and was rejected at the 104.50 baht resistance level the following day. Hence, KCE shares will most likely consolidate or trend lower, since the stock has run up over 50% year-to-date.
As of August 12, 2016, the consensus forecast amongst 13 investment analysts polled by the Financial Times advises investors that the company will outperform the market, with the median 12-month price target of 104 baht per share.
Disclosure: No position in KCE and no recommendation. |
