Pico Far East 0752.HK

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Pico Far East is a Hong Kong listed Singaporean run company. They are one of largest mice related service provider. There are 3 big players in Asia under P.C.K. First been Pico, Citineon and Kingsmen creative. Amid the covid 19 pandemic. All companies which are in the mice services sector are hit badly. The main reason why i like about Pico is due to its market leading position which give them economic of scale. They are also the chosen provider for World expo and Tokyo Olympic which speak record of their leadership position to deliver world class events across Asia and beyond.

One of the main reason for my preference for Pico is due to their China focus business with close to 50 percent of revenue coming from China. I am predicting China to recover the earliest among all major economies. Channel check has shown life is returning back to normal in China with concerts,events and trade shows been held. This bodes well for Pico. The closest competitor Kingsmen recently suffer a 11m loss in the latest result announcement vs Pico profit of 60m hkd in FY 2020. Kingsmen has 40 percent of their business coming from Southeast Asia which might be slower in recovery from covid 19 pandemic impact.

Pico Far East has cash close to 600m hkd. It is a net cash company which provide good stability to their financial position. The current share price of $1.25 HKD is 45 percent back by cash. I estimated the company to earn close to 10c hkd EPS FY 2021 and 15c hkd EPS for FY 2022 which put it at a p/e of 12x and 8x respectively. Dividend wise it should have no problem paying 8-10c hkd yearly over the next 2 years. Which put the yield at close to 6-8 percent per annual.



Is Pico the right one for you? You decide.


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Disclaimers 

All investments is highly speculative in nature and involves substantial risk of loss. We encourage our reader to invest very carefully. We also encourage reader to get personal advice from your professional investment advisor and to make independent investigations before acting on information that we publish. Much of our information is derived directly from information published by companies or submitted to governmental agencies on which we believe are reliable but are without our independent verification. Therefore, we cannot assure you that the information is accurate or complete. We do not in any way whatsoever warrant or guarantee the success of any action you take in reliance on our statements. All information provided are for information only. Buyer beware,do you own due diligence.

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