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PC HOUSE (PCH) - Future Outlook

+37
topgear
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51PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sat Feb 12, 2011 9:16 am

tubal


Vice President - Equity Analytics
Vice President - Equity Analytics

kpinvest wrote:
we all talk about IT boom
we also should talk bout on changing requirements of existing customers

For last 5 year I bought 2 computer and 2 laptops

Time to time we change our computer hardware. The fastest computer today will be obsolete within next 2-3yrs

Also there is a increasing population in Gaming community

These gaming freaks need fastest hardware and multi-core graphic modules. they basically ready to spend at least 25k -50k each year to upgrade their PCs. And yes PCs... they don't use laptops ... they use PCs because laptops are not that fast enough and cannot meet their performance requirements.

Also, as the BPO start to increase companies buy lot of PCs, and few Laptops.

Even in all developed countries PCs still in high demand. Laptops can't meet the PC performance (at least for another 4-5 yrs).

So overall when the disposable income increase the people use improved computers and hitech parts will get good demand.


And
PCH now selling DELL.. so softlogic is not the only DELL dealer!!


how many guys knows FRYS in CA? http://www.frys.com/

PCH 9to9 store is our version of frys.

KPI Invest, it's the exact same market that you are talking about that knows PCH best. If you are part of that market, I think you wrote this post against your conscience.

52PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sat Feb 12, 2011 9:41 am

kpinvest


Equity Analytic
Equity Analytic

Great... another -ve rep for me for talking about PCH!

tubal

I know PCH service not good... but its not terrible....

There are two aspects here 1) Making profit 2) giving a good service

Personally I still didn't have bad experience with PCH. That maybe because I bought the items after looking it well enough.

anyway.. not all profitable companies are providing good service.
ex Dialog is terrible with DTV,
SLT is terrible with PEO TV,
HSBC - always have to see front counter person's GAS!!,
Cathey pacific - arrogant air hostess


But all these companies make excellent profits!

53PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sat Feb 12, 2011 9:48 am

Academic


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Here is a myth to be clarified. Share prices going down does not mean company is making loses or not doing business well. Every share has its own intrinsic value determined by its risk-return characteristics and also fundamental variables associated with it (like EPS, Book value, Size etc).

1. If current price is above its intrinsic value, price come down, at least in long-run.
2. Similarly if price is below the intrinsic value price go up, at least in long-run.

In case of PCH, I think it is the first scenario that has occurred. You can understand this if you refer to wealth of discussions on this forum about valuation of PCH. So market is correcting its price.

Now you may understand even well-performing company's price may go down if the intrinsic value is less than current price.

54PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sat Feb 12, 2011 12:25 pm

Academic


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

kpinvest wrote:Great... another -ve rep for me for talking about PCH!


It is fundamentally wrong to give -ve reps for someone who doesn't have voting right.

This is like shooting at an un-armed thief by an armed person for stealing a loaf of bread.

It is Okay to do so by a pure-white character/username.

If you want to know how pure-white a character (username) is, follow following steps.

1. Go to Home page
2. Click Memberlist tab
3. Type the user-name of which you want to find about, under "Find a user or modify list order" and click OK
4. If you spell the username correctly, the searched username appears under searched results.
4. Click on the username. Then you will be in that person's profile.
5. Then go to "Statistics" tab
6. Under the topic "Posts" click "Find all posts by [username]"
7. Now you can see all posts by that particular username.
7. Read and understand if they have repeatedly promoted any stock/s. Also have they being consistent on every post or have changed their comments as market change (in Sinhalese whether s/he is a "Katussek").
8. Then decide whether the username is pure-white.
9. Then decide whether you can believe that person's comments.

A sound counter arguments counts more than a -ve rep.






Last edited by Academic on Sat Feb 12, 2011 12:40 pm; edited 2 times in total (Reason for editing : typo steeling corrected to stealing)

55PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: * Are you losing confidence over PCH Sat Feb 12, 2011 12:36 pm

morros


Equity Analytic
Equity Analytic

I feel that this share will stabilize around 20.
Then start another run

56PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sat Feb 12, 2011 12:48 pm

Rocky

Rocky
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Buying PCH shares is like getting cheated with forged currency notes! Suspect

57PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sat Feb 12, 2011 12:51 pm

kpinvest

kpinvest
Equity Analytic
Equity Analytic

If anyone talk for PCH, there is a high probability that they will get -ve rep.

I really cant understand the mentality of these people...

soon I will get lot of -ve rep for saying that too.....



Last edited by kpinvest on Sat Feb 12, 2011 12:52 pm; edited 1 time in total (Reason for editing : typo errors)

morros

morros
Equity Analytic
Equity Analytic

hybrid_OS wrote:Buying PCH shares is like getting cheated with forged currency notes! Suspect

There r worse shares in the market. Lets not be naive now. Rolling Eyes

59PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sat Feb 12, 2011 3:17 pm

StocksWatch


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

morros wrote:I feel that this share will stabilize around 20.
Then start another run

How much it will reach according to your guess?

60PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: * Are you losing confidence over PCH Sat Feb 12, 2011 3:39 pm

morros

morros
Equity Analytic
Equity Analytic

I would think 28-30

61PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sat Feb 12, 2011 5:53 pm

tubal


Vice President - Equity Analytics
Vice President - Equity Analytics

morros wrote:I would think 28-30
lol!

62PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sat Feb 12, 2011 6:10 pm

mono

mono
Vice President - Equity Analytics
Vice President - Equity Analytics

lol.

This shit keeps getting funnier



maybe someone can make a really good black comedy out of all this?

Rolling Eyes

63PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sat Feb 12, 2011 6:14 pm

Fresher


Moderator
Moderator

mono wrote:lol.

This shit keeps getting funnier

Rolling Eyes

ur avatar too! awesome! Laughing

64PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sat Feb 12, 2011 6:23 pm

Academic


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

tubal wrote:
morros wrote:I would think 28-30
lol!

mono wrote:lol.

This shit keeps getting funnier

maybe someone can make a really good black comedy out of all this?

Rolling Eyes

Agree with both.

Rescue operations are being started.

Those who are touching this share again may have to look at a mirror and see their head looks like rendeer .

65PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sat Feb 12, 2011 6:42 pm

dineshfernando


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

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.

66PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sat Feb 12, 2011 6:50 pm

Rajitha

Rajitha
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

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.

Are you kidding or really serious ?
In case your are serious I would urge you to really look at the core business of these two companies and not jsut the one CSE put them under. Also ECL got maybe the biggest deal a Sri Lanka firm got abroad in recent times. ( Online medical booking for Maldives I think and the talk about finalizing a deal with Quarter is going on ATM ). OFC I also agree now as it drops near Rs. 20 or so this is definitely not the worst price you can see for a share in CSE and there are ofc way worse. That does not make it a good price to buy the share still. Why did you think the share was trading below the IPO price even for months after entering in to the market? Suck a huge bull market at that when they enter!

67PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sat Feb 12, 2011 6:57 pm

tubal


Vice President - Equity Analytics
Vice President - Equity Analytics

Rajitha wrote:
dineshfernando wrote: Remember, we have only 2 IT firms at CSE and PCH is the best out of two.

Are you kidding or really serious ?
In case your are serious I would urge you to really look at the core business of these two companies and not jsut the one CSE put them under.

I suspect that the listing application has a small tick box where a company can suggest to the CSE which sector an IPO applicant would like to be listed in. Besides, there isn't a category called retail.



68PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sat Feb 12, 2011 9:15 pm

UKboy

UKboy
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

hybrid_OS wrote:Buying PCH shares is like getting cheated with forged currency notes! Suspect

Hahaha very true..! PCH & GREG all on a same boat.Just one simple answer to all these companies. DODGY Smile

I'm so suprised to see people gamble their hard earn money on these companies

69PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: * Are you losing confidence over PCH Sat Feb 12, 2011 9:18 pm

morros

morros
Equity Analytic
Equity Analytic

Hey Guys, u can give me all the negative reps u like regarding PCH, but u cannot change the facts
I'm out of PCH shares now, but it gave me more than 100% profit.
If we r into trading for any other reason than to make profits, u tell me about it.

70PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sat Feb 12, 2011 10:11 pm

mono

mono
Vice President - Equity Analytics
Vice President - Equity Analytics

I'm sure morros will be kind enough to share some of his profits with the people who bought at 32, if in the unlikely scenario PeeCee house crashes down to 15 and gets stuck there

71PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sat Feb 12, 2011 10:32 pm

Rocky

Rocky
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

well said mono.
Not all r gullible.

72PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sat Feb 12, 2011 10:40 pm

kpinvest

kpinvest
Equity Analytic
Equity Analytic

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..

73PC HOUSE (PCH) - Future Outlook - Page 3 Empty A Theoretical Explanation of PCH Scenario Sun Feb 13, 2011 9:42 am

Academic


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Since you are inviting for a serious talk and also I have contributed to this thread against your points, I thought of writing here again. However, I do not call myself an expert.

If you take current status of PCH , its annualized EPS is 0.69/3*4=0.92. Considering the fact that still their core-business activity is selling computer hardware or/and related items, it is not questionable to say they are in retail business than IT business.

This core-business is supported by their specialization in acquiring such items from foreign suppliers and distributing them with reasonable profit (their key success factors). So to me PCH is not an IT company. Thus applicable PE ratio is not that of IT sector. Therefore traditional conservative market PE (15) would serve the purpose well and it lead us to more conservative estimate of PCH value (this is my rationalized opinion not a fact).

If we assume PCH keep current profit level next year also. The value of a share would be around 0.92*15= 13.8.

Now we start the critical part of the discussion.

As many of you point out PCH is expanding business activities by starting data warehousing etc. Well, if those businesses will bring some profit, above conservative figure of profit (0.92) should be increased. Thus current value of PCH share should be higher than 13.8.
Now you may understand, to decide how much PCH is worth now we have to forecast future profitability of PCH’s new projects (new businesses).

Can any of you come up with concrete answer to the question that what would be the profit contribution by those new projects exactly? Since some of their new projects are beyond their core-competencies , I do not have confidence to say they will contribute positively on the profit. Even some of their projects reported profit , others may go other way around making it zero-sum.

Very essence of above paragraph is not to say PCH will fail their future projects, at least to show that there is an ambiguity on their impact on future profit.

Though I cannot remember the exact reference, it is human nature (at least me) that if there is an ambiguity (risk) we try to avoid that situation thinking the worse can happen. Do you agree with me? Thus, people put little weight on profit of PCH’s new business.

Then you may ask me why PCH went up to 32. It was simply on speculation that PCH will continue to appreciate as it started a steady (manipulated?) trend on its price. However it is arguable, people do not go after PCH just seeing a price appreciation. So I should give more solid explanation for that.

We like lotteries, why? They have a chance of giving us very large reward. However with very small probability. If you calculate expected value of a lottery (that is in long-run your average gain in purchasing lotteries), you find it negative. Then why we buy them? The reason is people overvalue small probabilities associated with large gains (gambling mentality). This was theorized by Prospect Theory (Kahneman and Tversky, 1979) for which they were awarded Nobel prize.

It is my thinking that who ever manipulated the PCH was able to conceive the idea that PCH will have huge profit in recent future thorough news paper articles and flashes on websites. The huge expected profit figure was strong enough to forget small probabilities of occurring such a event. Thus became subjects of Prospect Theory with gambling mentality. That is why PCH continued to appreciate with the backup of manipulators (that is, both price and volume manipulation).

Once who ever pumped started dumping together with disappointing quarterly results (which broke the gambling mentality), price started to decline. Then only, people realized what happened to them. This is not losing confidence. This is about realizing what happened to them.

Further, my heart says many posters who are promoting PCH here are not manipulators. They may be the victims of this scenario who are trying to get-ride of the trap. So I really feel sympathy, brothers! It is too late now.

If I were you I realize the fact that I have been misleaded and take necessary actions avoid further loses.

My figure 13.8 for PCH is too conservative and I don’t think it would touch that price. However, anything possible in this market. This is not a prediction of future price behavior of PCH.

THIS IS NOT AN ADVICE OR INVESTMENT RECOMMENDATION.

Reference
Kahneman, D. and A. Tversky (1979). Prospect theory: an analysis of decision under risk , Econometrica,47, 263-291.



Last edited by Academic on Sun Feb 13, 2011 7:57 pm; edited 2 times in total (Reason for editing : corrected typo and improved readability)

74PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sun Feb 13, 2011 11:21 am

kpinvest

kpinvest
Equity Analytic
Equity Analytic

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.



75PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sun Feb 13, 2011 12:34 pm

Academic


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

@kpinvest

For valuation purposes what is important from your reply is EPS, 2-3 and sector PE, 20>.

Two fundamental questions are there

1. How did you arrive at 2-3 for EPS. That is, what is your forecasting methodology?
2. Accuracy of your sector PE (I have different conception about sector PE reported in www.cse.lk, I'll write on this as time permits).

Of these two question, your justification on first question would count more on your argument.

76PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sun Feb 13, 2011 12:37 pm

Rajitha

Rajitha
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

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) ?

77PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sun Feb 13, 2011 12:38 pm

mono

mono
Vice President - Equity Analytics
Vice President - Equity Analytics

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 Wink

78PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sun Feb 13, 2011 12:39 pm

mark

mark
Expert
Expert

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...

79PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sun Feb 13, 2011 1:11 pm

salt

salt
Vice President - Equity Analytics
Vice President - Equity Analytics

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!

80PC HOUSE (PCH) - Future Outlook - Page 3 Empty Re: PC HOUSE (PCH) - Future Outlook Sun Feb 13, 2011 1:14 pm

salt

salt
Vice President - Equity Analytics
Vice President - Equity Analytics

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]

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