PC HOUSE (PCH) - Future Outlook

kpinvest wrote:Dear Academic
Thank you for putting down your facts and figures. If I look from your point of view I would also come to your conclusions.

However…

I am inviting you all to look at this at a different angle.

PCH’s core business is selling PC hardware. That’s a well known fact. What I see is..

They own more than half of showrooms at Unity Plaza. Unity Plaza is the main place that a person would go to buy PCs and PC related hardware. So I see more than 50% of revenue generated at Unity plaza will be going to PCH.

The hardware industry is expanding day by day. The technology is getting reinventing very fast. And we see a more youth are using PCs than it was before. As I understand less than 10% of our population owns a PC. Therefore there is a huge market where which is still not been catered. Hence, all hardware suppliers can easily double, tribal their revenue in coming years (provided they work towards that).

PCH is opening their outlets all over the island. And most of independent computer shops buy their parts from PCH.

PCH is the Dell Certified Partner for Enterprise Architecture 2010. And they are distributers for many HW and SW reputed brands. Ex Symantec

The company got listed very recently and we the expansions cannot happen overnight. The results of the money will get invested now and the results will be able see in coming quarters.

As you all know they are going to do BPO’s and that revenue is yet to be generated. The BPO is a very profitable business and it is a revenue generating method around the clock. So we may be able to see some decent profit generated from this in coming quarters.
So, we can expect an annual EPS around 2-3 in coming years…
And
Well known investor Dr Senthilerl has increased his share holding from 0.5% to 6.6%. I don’t think that he is putting his money in a losing business.

So with those facts I am looking at PCH as Mid to long term investment. To be frank I didn’t expect to PCH to touch 32 and I agree that I went up like that due to inexperienced traders who thought this might hit 50 in couple of days. That is not the case.
I also think that we cannot use same PE used in other sectors here. And I am strongly believe that this sector should have PE > 20. That’s because there is huge potential to grow!. And there is a risk, higher the risk, higher the reward!
If all market forces act normally I would say 22-23 will be the base price of PCH. And it may continue to increase in coming quarters.

FYI I started to collect PCH from the IPO and when it was around 9. And I will be holding on the PCH for another few quarters.

Please not that this is my perception and it is not a recommendation.

Problem in this analysis mainly is you are making PE ratios for a earnings that are over 2-3x higher than what they are (Pipe dreams) and multiplying by factors of over 20. In this method if I do calculations I can probably get SEMB share price worth over Rs100.
Secondly as you said PCH is a retailer and factors you said are true for all the retailers with the market cap like even Abans. Actually more people will be using more electronic goods than PCs and this way if we calculate all these retailers should have there current share price go over 10-20x more.
Thirdly how do you know what price Dr. Senthilerl bought those shares? His increase was on the last quarter so he probably bought the share when it was around Rs 9. So what essentially you saying is share is worth over Rs 9 ( say Rs 11-13) ?

kpinvest wrote:
The hardware industry is expanding day by day. The technology is getting reinventing very fast.

we can see the effects of that just by looking at PCH inventories

my broker always advised me to sell........the reason he was pointed was less supporting fundamentals.........at that time it was around 21,but i waited for sometime and sold the lot at 25,which i bought at 15Rs....after one or two days it shoot to 32...,I lost the chance........anyway i'm happy about my decision...

kpinvest wrote:Why you guys hate PCH this much? Did you miss the bus?

So called EXPERTS please put down some solid facts that go against PCH
Some facts where it shows that it’s not worth at current price and it won’t grow in the future?

Thank you..

Why don't you refer to mono's reply!

dineshfernando wrote:PCH is much better than ECL interms of future growth and earnings. Both are trading around the same price levels. People who don't have PCH and who wanted to buy it at cheaper price carried on negative publicity against PCH.

If you truly look at the market, there are many shares which is much worse than PCH being pused up. Many hotels still reporting negative or very little earnings. What do you tell for this? Remember, we have only 2 IT firms at CSE and PCH is the best out of two.

The fact, nobody is promoting those cracks like PCH
PCH apprently looks good business, but price is exorbitantly high and beyond any possible explanation.[/b]

@Academic

Current EPS is around (0.69/3)*4= 0.92
For 9 months ended 31 2009 PCH PAT 70.5Mn
For 9 months ended 31 2010 PCH PAT 140.6Mn--- 99% increase

We can expect 185mn PAT for the yr end 31.3.2011.

And revenue from new ventures will come into play in coming quarters
There is plenty of room to sell PCs.
Therefore PCH can easily maintain its growth rate in coming years. In fact they can have a much higher growth rate than 100%.

If we take 100% growth rate, EPS become 1.84. But this can easily become 2+ with other ventures.
If the company work really well they can have 3+ EPS

PE is the perception of the market for a particular stock. If the company performs well PE will be high. There are companies in CSE where they have –ve EPS and I don’t know how to apply PE for those companies.

This is just my view. Not a recommendation.

sooo.........


nine month EPS= .69

12/31/2010 EPS= .22
9/31/2010 EPS= .21
6/31/2010 EPS= .26

i don't see any magic growth this year. growing companies grow from one quarter to another through the year. for example BFL 6.51, 7.15 , 10.24 . If anything the December quarter is disappointing for PCH considering this should have been their most lucrative quarter. If their bussiness is really on the way up we should have seen a .26+ eps for the quarter. Instead all we saw was a build up of inventories and an increase in short term loans

the 100% growth you see from last year was because they were getting epically screwed with finance cost earlier and this year that problem is sorted out. The core business hasn't improved in any considerable way.

So my suggestion is to stop having wet dreams about this stock

mono, academic, rajitha, salt et al,

It's very clear that some people already know deep down that they are holding the bag and they are desperately looking for a greater fool to pass that bag. The burned hand teaches best (Tolkien I believe). Let the moths fly to the flame, it's part of the 21st century natural selection process.

Guys i was just going at these posts,

If you study the asian market sri lanka was depending on tea and rubber since it obtained it freedom 1948, where the plantation sector performed well, and had good revenue and growth with good profits,

further towards the millennium it brought us revenue trough it overseas recruitment market from the working capital from countries like dubai and qatar,

Still we couldn't beat Singapore and Malaysia even though they were behind us in 1982.

the main reason for this was not only the war factor but the governments not making clear decisions towards the future,

If you look at Malaysia today it has reached it highest price for its oil palm,(http://www.palmoilhq.com/PalmOilNews/malaysias-palm-oil-industry-contributed-export-revenue-of-rm49-6-billion-last-year/)
49.5 billion market value with highest price paid for it palm oil shares,

When people started growing palm trees instead of rubber and tea even when the global market paid well for tea and rubber still Malaysia was growing palm tress,then the world was laughing at malaysia at that time when there was a good market for tea and rubber saying whats wrong with this people?

If you look at India it has reached its highest revenue trough IT sector,(www.thaindian.com/.../indian-it-exports-to-touch-50-billion-despite-meltdown_100314786.htm) where it is almost to touch 50 billion dollars during its last year,

This was a similar story too, when the government identified Bangalore as Indian IT HUB people started laughing saying what IT that Indians know when they don't have money to eat?
But today The world’s largest software products company Microsoft Corp. wants India to be among its top five revenue generators globally within the next three-five years.while Indian software market grows 18%
today ,
http://www.ft.lk/2011/02/07/india%E2%80%99s-software-exports-seen-up-16-18-in-fy12/

we were looking at what we had those days such as tea and rubber,

change your selfs and look at the future potentials, avoid fighting for a stock just because its coming down by 4 to 5 rupees look at the future, think of the future so that we could beat Malaysia one day,

think of your investment for the future not short time profit, when Malaysians planted oil palms they had to stay for 5 years to gain profit not like tea which had a yield in two ears but still they waited and they won finally while we lost at looking at quick profits,

today we have started IPO business after all and even palm oil sites could be seen in nakiyadeniya areas around galle and two palm oil factories in sri lanka finally,

BPO and software industry is coming up finally in sri lanka with so much of difficulties, and now we can hear the BPO word at-least and Software word finally in some news papers and in some articles

government (ICTA) has been making revolution with time in sri lanka such as bringing in IT industry to the country now
http://www.ft.lk/2011/02/04/live-icta-projects-at-buttala-‘dayata-kirula-2011’/

What i wanted to say is when there was opportunity we never looked at the future like Malaysia and India,
But today the government is setting up or coming up with a vision and that is the tourist industry in Asia and the IT hub in sri lanka,

We know that out of the five hubs, it is the knowledge hub that has progressed the most so far,
(http://www.ft.lk/2010/11/24/sri-lanka-in-forefront-of-development-on-path-to-become-regional-knowledge-hub-icta-ceo/)

The 5 hubs would be

Infrastructure (IT) HUB
tourism/travel HUB
aviation/shipping HUB
finance HUB
Investment HUB (the Colombo stock market)

if you look at the future of our country we should not be fighting towards a stock, or for a variation of a price or a manipulation its all identifying the future potential and the value of a stock and educating each other the value of that share,

Remember Malaysia, Singapore and most of the Asian countries such as even Maldives were behind us, but today we are behind them since we did not identify the value of future demand and growth sectors, its not our fault but there were no people to educate us to look at the future

Today trough this forums we see ideas coming up and people looking at the future and educating us yet we seems to put them down and under estimate, well i don't say to avoid your opinion or your comments but don't take the other person as a manipulator or a betrayer since we have to respect others, people who looked at the future potential won such as japan identifying the value of transportation india the value of
IT Malaysia the value of palm oil, etc.....

We as a country the young generation we should look at the future and invest and not fight or ague due to a slight price change or a poor performance report, let us work as a team as one country one community and let us identify the future potential value stocks may be it could be IT sector Hotel Sector etc.......

when we do fight and put the momentum and the moral down of people they intent to trow there shares for dirt cheap price so that the foreign buyers who see the potential of share grabs it and we as sri lankans lose our profits while they be rich

this what happen to our country we always tried to ague and put some one down look at the politics today a nice example, instead of them working together they keep on arguing finding faults and putting each other to there trash bin

We as sri lankans let us change our attitudes as a community let us identify the value stocks, let manupilators be there and day traders be there we as investors should learn the future value of our shares that we have invested,

Remember TAFL was 17/- six months ago, today 250+ Did any one Identify?
Remember GRAN was 65, glass was 2/- while bfl was 40 when i entered to the market just one year back and today almost all the shares gone up by 10 times and more

at that time no one was there to teach us how to identify a value stock how to identify a good report we just went behind the crowd and invested in greg and dpl but today the community is much educated and much advance, those days we never heard of EPS, we never heard of assets , ratios, trends , growth rates etc,,,,,

but let not this happen to our future investors since they our the people who takes our country to the world and let us be an example to our young investors,

all the best guys
Have a great trading week
Regards,

Just my thought correct me if im wrong,

Guys i was just going at these posts,

If you study the asian market sri lanka was depending on tea and rubber since it obtained it freedom 1948, where the plantation sector performed well, and had good revenue and growth with good profits,

further towards the millennium it brought us revenue trough it overseas recruitment market from the working capital from countries like dubai and qatar,

Still we couldn't beat Singapore and Malaysia even though they were behind us in 1982.

the main reason for this was not only the war factor but the governments not making clear decisions towards the future,

If you look at Malaysia today it has reached it highest price for its oil palm,(http://www.palmoilhq.com/PalmOilNews/malaysias-palm-oil-industry-contributed-export-revenue-of-rm49-6-billion-last-year/)
49.5 billion market value with highest price paid for it palm oil shares,

When people started growing palm trees instead of rubber and tea even when the global market paid well for tea and rubber still Malaysia was growing palm tress,then the world was laughing at malaysia at that time when there was a good market for tea and rubber saying whats wrong with this people?

If you look at India it has reached its highest revenue trough IT sector,(www.thaindian.com/.../indian-it-exports-to-touch-50-billion-despite-meltdown_100314786.htm) where it is almost to touch 50 billion dollars during its last year,

This was a similar story too, when the government identified Bangalore as Indian IT HUB people started laughing saying what IT that Indians know when they don't have money to eat?
But today The world’s largest software products company Microsoft Corp. wants India to be among its top five revenue generators globally within the next three-five years.while Indian software market grows 18%
today ,
http://www.ft.lk/2011/02/07/india%E2%80%99s-software-exports-seen-up-16-18-in-fy12/

we were looking at what we had those days such as tea and rubber,

change your selfs and look at the future potentials, avoid fighting for a stock just because its coming down by 4 to 5 rupees look at the future, think of the future so that we could beat Malaysia one day,

think of your investment for the future not short time profit, when Malaysians planted oil palms they had to stay for 5 years to gain profit not like tea which had a yield in two ears but still they waited and they won finally while we lost at looking at quick profits,

today we have started IPO business after all and even palm oil sites could be seen in nakiyadeniya areas around galle and two palm oil factories in sri lanka finally,

BPO and software industry is coming up finally in sri lanka with so much of difficulties, and now we can hear the BPO word at-least and Software word finally in some news papers and in some articles

government (ICTA) has been making revolution with time in sri lanka such as bringing in IT industry to the country now
http://www.ft.lk/2011/02/04/live-icta-projects-at-buttala-‘dayata-kirula-2011’/

What i wanted to say is when there was opportunity we never looked at the future like Malaysia and India,
But today the government is setting up or coming up with a vision and that is the tourist industry in Asia and the IT hub in sri lanka,

We know that out of the five hubs, it is the knowledge hub that has progressed the most so far,
(http://www.ft.lk/2010/11/24/sri-lanka-in-forefront-of-development-on-path-to-become-regional-knowledge-hub-icta-ceo/)

The 5 hubs would be

Infrastructure (IT) HUB
tourism/travel HUB
aviation/shipping HUB
finance HUB
Investment HUB (the Colombo stock market)

if you look at the future of our country we should not be fighting towards a stock, or for a variation of a price or a manipulation its all identifying the future potential and the value of a stock and educating each other the value of that share,

Remember Malaysia, Singapore and most of the Asian countries such as even Maldives were behind us, but today we are behind them since we did not identify the value of future demand and growth sectors, its not our fault but there were no people to educate us to look at the future

Today trough this forums we see ideas coming up and people looking at the future and educating us yet we seems to put them down and under estimate, well i don't say to avoid your opinion or your comments but don't take the other person as a manipulator or a betrayer since we have to respect others, people who looked at the future potential won such as japan identifying the value of transportation india the value of
IT Malaysia the value of palm oil, etc.....

We as a country the young generation we should look at the future and invest and not fight or ague due to a slight price change or a poor performance report, let us work as a team as one country one community and let us identify the future potential value stocks may be it could be IT sector Hotel Sector etc.......

when we do fight and put the momentum and the moral down of people they intent to trow there shares for dirt cheap price so that the foreign buyers who see the potential of share grabs it and we as sri lankans lose our profits while they be rich

this what happen to our country we always tried to ague and put some one down look at the politics today a nice example, instead of them working together they keep on arguing finding faults and putting each other to there trash bin

We as sri lankans let us change our attitudes as a community let us identify the value stocks, let manupilators be there and day traders be there we as investors should learn the future value of our shares that we have invested,

Remember TAFL was 17/- six months ago, today 250+ Did any one Identify?
Remember GRAN was 65, glass was 2/- while bfl was 40 when i entered to the market just one year back and today almost all the shares gone up by 10 times and more

at that time no one was there to teach us how to identify a value stock how to identify a good report we just went behind the crowd and invested in greg and dpl but today the community is much educated and much advance, those days we never heard of EPS, we never heard of assets , ratios, trends , growth rates etc,,,,,

but let not this happen to our future investors since they our the people who takes our country to the world and let us be an example to our young investors,

all the best guys
Have a great trading week
Regards,

Just my thought correct me if im wrong,

Dear Sirimewan,

Very interesting article.
I can read it get the cream but I do not think I can write a
professional reply to you.Although I am in your position and point of
view.(Then no need a big reply).

We had person called "MarketWatch" and I think he is the only person who can reply you with logical comments.But he was in your point views.

We need more articles from you.

Thanks.

( I do not think so called "Experts" can post a proper reply for this.If can please do so.We are interested to see that also)

sirimevan wrote: Guys i was just going at these posts,

If you study the asian market sri lanka was depending on tea and rubber since it obtained it freedom 1948, where the plantation sector performed well, and had good revenue and growth with good profits,

further towards the millennium it brought us revenue trough it overseas recruitment market from the working capital from countries like dubai and qatar,

Still we couldn't beat Singapore and Malaysia even though they were behind us in 1982.

the main reason for this was not only the war factor but the governments not making clear decisions towards the future,

If you look at Malaysia today it has reached it highest price for its oil palm,(http://www.palmoilhq.com/PalmOilNews/malaysias-palm-oil-industry-contributed-export-revenue-of-rm49-6-billion-last-year/)
49.5 billion market value with highest price paid for it palm oil shares,

When people started growing palm trees instead of rubber and tea even when the global market paid well for tea and rubber still Malaysia was growing palm tress,then the world was laughing at malaysia at that time when there was a good market for tea and rubber saying whats wrong with this people?

If you look at India it has reached its highest revenue trough IT sector,(www.thaindian.com/.../indian-it-exports-to-touch-50-billion-despite-meltdown_100314786.htm) where it is almost to touch 50 billion dollars during its last year,

This was a similar story too, when the government identified Bangalore as Indian IT HUB people started laughing saying what IT that Indians know when they don't have money to eat?
But today The world’s largest software products company Microsoft Corp. wants India to be among its top five revenue generators globally within the next three-five years.while Indian software market grows 18%
today ,
http://www.ft.lk/2011/02/07/india%E2%80%99s-software-exports-seen-up-16-18-in-fy12/

we were looking at what we had those days such as tea and rubber,

change your selfs and look at the future potentials, avoid fighting for a stock just because its coming down by 4 to 5 rupees look at the future, think of the future so that we could beat Malaysia one day,

think of your investment for the future not short time profit, when Malaysians planted oil palms they had to stay for 5 years to gain profit not like tea which had a yield in two ears but still they waited and they won finally while we lost at looking at quick profits,

today we have started IPO business after all and even palm oil sites could be seen in nakiyadeniya areas around galle and two palm oil factories in sri lanka finally,

BPO and software industry is coming up finally in sri lanka with so much of difficulties, and now we can hear the BPO word at-least and Software word finally in some news papers and in some articles

government (ICTA) has been making revolution with time in sri lanka such as bringing in IT industry to the country now
http://www.ft.lk/2011/02/04/live-icta-projects-at-buttala-‘dayata-kirula-2011’/

What i wanted to say is when there was opportunity we never looked at the future like Malaysia and India,
But today the government is setting up or coming up with a vision and that is the tourist industry in Asia and the IT hub in sri lanka,

We know that out of the five hubs, it is the knowledge hub that has progressed the most so far,
(http://www.ft.lk/2010/11/24/sri-lanka-in-forefront-of-development-on-path-to-become-regional-knowledge-hub-icta-ceo/)

The 5 hubs would be

Infrastructure (IT) HUB
tourism/travel HUB
aviation/shipping HUB
finance HUB
Investment HUB (the Colombo stock market)

if you look at the future of our country we should not be fighting towards a stock, or for a variation of a price or a manipulation its all identifying the future potential and the value of a stock and educating each other the value of that share,

Remember Malaysia, Singapore and most of the Asian countries such as even Maldives were behind us, but today we are behind them since we did not identify the value of future demand and growth sectors, its not our fault but there were no people to educate us to look at the future

Today trough this forums we see ideas coming up and people looking at the future and educating us yet we seems to put them down and under estimate, well i don't say to avoid your opinion or your comments but don't take the other person as a manipulator or a betrayer since we have to respect others, people who looked at the future potential won such as japan identifying the value of transportation india the value of
IT Malaysia the value of palm oil, etc.....

We as a country the young generation we should look at the future and invest and not fight or ague due to a slight price change or a poor performance report, let us work as a team as one country one community and let us identify the future potential value stocks may be it could be IT sector Hotel Sector etc.......

when we do fight and put the momentum and the moral down of people they intent to trow there shares for dirt cheap price so that the foreign buyers who see the potential of share grabs it and we as sri lankans lose our profits while they be rich

this what happen to our country we always tried to ague and put some one down look at the politics today a nice example, instead of them working together they keep on arguing finding faults and putting each other to there trash bin

We as sri lankans let us change our attitudes as a community let us identify the value stocks, let manupilators be there and day traders be there we as investors should learn the future value of our shares that we have invested,

Remember TAFL was 17/- six months ago, today 250+ Did any one Identify?
Remember GRAN was 65, glass was 2/- while bfl was 40 when i entered to the market just one year back and today almost all the shares gone up by 10 times and more

at that time no one was there to teach us how to identify a value stock how to identify a good report we just went behind the crowd and invested in greg and dpl but today the community is much educated and much advance, those days we never heard of EPS, we never heard of assets , ratios, trends , growth rates etc,,,,,

but let not this happen to our future investors since they our the people who takes our country to the world and let us be an example to our young investors,

all the best guys
Have a great trading week
Regards,

Just my thought correct me if im wrong,

What the hell does this have to do with PCH . Only illiterate idiots would think this has anything to do with PCH price justification. I'll write in a way you would understand. PCH is a HARDWARE RETAILER OF PERSONAL COMPUTERS! THEY HAVE THE WORST CUSTOMER CARE I HAVE SEEN TO TOP IT OFF!
The stocks mentioned by you had really low PE ratios and ran mainly because of BFL which had such a low PE ratio backed up by huge promotion.
This is like saying SEMB should hit Rs 150 in 2 weeks time because government want to make Sri Lanka a financial Hub. And growing number of people and companies using banks and finance sector .

How come Nizam / MarketWatch was not charged with market manipulation? If the criminal investigation unit take the site owner into custody and cease the content of the investnow.lk site they could easily track the criminals. If this has happened in a mature stock market we would have seen the criminals dragged into courts in the TV news. Is Nizam a nephew of the head of SEC or something?

I dont know why PCH so popularbut lot of ppl talking negative but trading every day almost more than 1 million shares can some one explain

Hey Guys,

There have been too many repeated posts in respect of PC House (PCH). Hence we have decided to merge all posts together and make one Topic under "PC HOUSE" for the balanced evaluation of the comments and easy access for the readers. We request all members to avoid repeated posts in respect of PCH.

Appreciate your assistance.

Rgds
Quibi

madu1977 wrote:I dont know why PCH so popularbut lot of ppl talking negative but trading every day almost more than 1 million shares can some one explain

Price manipulation go together with volume manipulation. Both are punishable offrences in developed markets.

@Quibi - Hey change ur prof pic. Wanna see more!

Regarding PC House, I've been going through this forum and had it with all these fights to either justify or condemn the share. What I personally feel is this.
On the short to medium term, people who buy at even current levels will be able to earn as the share price will keep fluctuating on speculation.
On the long term, nobody can really tell. Their drastic management changes and moving into newer areas of business may or may not workout for them. I honestly hope it does, but there needs to be huge changes within the organization itself. I'd like to iterate the fact that others mentioned above, which is, their customer service just sucks! Big time! This one reason alone is enough to bring the company down, if no corrective measures are taken.

So, in my opinion, PCH is a gamble. Invest wisely. Invest like Warren Buffet. If you see a good company with potential, run by good people (management and staff), go for it!

Keeping my fingers crossed!

Happy investing!

I hope it is enough praising/bashing PCH. It is still a novice in CSE. Investors with high risk appetite can take a dip and others can easily wait for 3 - 6 months to see the direction.

Hope there are 250 other stocks to mull over.

I have read most of the posts regarding PCH, the importance of Unity Plaza has been pointed out by a few of the promoters of the share.
I have had first hand experience on customer service in computer shops at Unity Plaza, and it is the worst I have experienced in my whole life.... (And that is saying something.)
To the people who see the long term profitability of PCH increasing by triple digit growth... Pleasse go and meet a customer at Unity Plaza who has come to get the computer repaired , and just speak with him regarding the level of customer service he is getting and what he thinks about the company...
A PC retailer should have a superb customer service if they are to create some value in their business, but PCH is not interested in that.
Just an observation for those who look at the numbers, Please try to factor in the non-quantifiable data when building on your analysis....
Thanks.

Check this: http://www.lbo.lk/fullstory.php?nid=692153271

on the same heading another 2 posted within 10 minutes break

PC house closed their Nugegoda branch 2 years ago.

Thought of bumping this thread due to renewed 'interest'

Will be worth a read for the newbies to get to know a share before getting into it.

Take it in the right spirit