Panasonic’s outlook will be challenging on volatile demand

KUALA LUMPUR: Panasonic Manufacturing Malaysia Bhd’s (Panasonic) outlook has been projected by analysts to be challenging as export demand is expected to remain volatile.

Due to the slowdown in export demand from overseas market such as the Middle Eastern market which contributed historically about 24 per cent to total revenue, the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) expected that the outlook for the group will be challenging.

“While the export market remains the main driver of the company’s earning growth, the export demand is expected to remain volatile,” MIDF Research said.

“In addition, the demand in the domestic market is expected to slow down post tax holiday period.”

However, MIDF Research noted that this will be partially mitigated by the higher translation gain for export revenue as ringgit is now weaker against the US dollar, prudent cost management and estimated annual tax savings of RM8.5 million as a result of double tax deduction in regards to research and development expenditure.

“In addition, dividend yield for the stock remains attractive at approximately four per cent.”

With a strong cash position, the research arm expected Panasonic to be able to maintain the group’s historical dividend payout policy of 60 per cent.

With a strong cash position, the research arm expected Panasonic to be able to maintain the group’s historical dividend payout policy of 60 per cent.