Popular holdings reported a decent quarterly report this month. The revenue increase 6% to S$141 Million compared to corresponding period last year, with Profit attributable to owners of the company increased to 77% to S$9.4 Million from S$5.3 Million last year. The improvement is mainly due to the higher turnover achieved by the Retail and Distribution and Publishing and e-Learning Divisions offset by no revenue from property division.
The net profit margin was improved to 7% from 4% previous corresponding quarter, with annualized PE 5.19X and annualized PB 0.86X, I think it will gain more public awareness from investors once the net profit margin can be improved again.
With annualized ROE of about 15% - 20%, I believe it is a good company, but I think the consistency to maintain a good profit and business stream remains the main factor to allow the share price to appreciate in long run. Just to note that, the total debt to total asset ratio remains high at this moment.
With current property market remains soft, I believe that the property division may not be the main driver for next 1 - 2 years.
Company Comment on Outlook
The Group remains cautious of unexpected economic upheavals in the global economy which may adversely affect consumer sentiment and the continuing regulation of the property sector. Inflationary cost pressure on manpower and rental may not ease in the immediate term. The Group will continue to improve operational efficiency so as to negate the adverse effect of inflationary cost pressure. Being in a strong financial position, the Group is confident of weathering the uncertainties.
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