How Expensive is Crown Asia Chemical Corp (CROWN) now fundamentally based on their June 2017 Quarterly Report?

Crown Asia Chemicals Corporation (CROWN) was incorporated and registered with the Securities and Exchange Commission (SEC) as Crown Asia Compounders Corporation on February 10, 1989 primarily to engage in, operate, conduct, and maintain the business of manufacturing, importing, exporting, buying, selling or otherwise dealing in, at wholesale and retail such goods as plastic and/or synthetic resins and compounds and other allied or related products of similar nature. On September 29, 2014, the SEC approved the change of the Company’s name to the present one.

In 1998, the Company began the production of PVC flexible electrical pipes. Soon after, the Company’s range of product lines expanded further with the introduction of PVC electrical conduit pipes and potable water pipes in 2000, and sanitary pipes and fittings in 2002. In 2003, the Company started to develop and market PVC compounds for use in integrated circuit (IC) packaging tubes, films and bottles, as well as door and window profiles. In 2006, CROWN explored the HDPE market by engaging in marketing and trading HDE pipes and fittings, which were supplied by and HDPE pipes manufacturer and importer. In November 2013, the Company started manufacturing its own HDPE pipes.

At present, CROWN is engaged in the production of plastic compounds, plastic pipes and other related products such as polyvinyl chloride (PVC) pellets, which are used directly and indirectly in the construction and telecommunications industries. The Company derives its revenues from the operations of its two business groups, namely, the compounds group and the pipes group. CROWN sells its compounds to manufacturers of wires and cables, IC tubes, films and sheets, and bottles, among others, while of pipes are sold to hardware dealers, wholesalers, and distributors and to bidded construction projects. 

The Company’s products are located in Guiguinto, Bulacan and in its Davao branch.

As of Sept 29, 2017, CROWN was last traded price at 1.93Php. This is just 1.25 times higher compared to their recorded book value as according to their June 2017 quarterly report. In terms of this parameter, a value investor may find the market price to be still acceptable. 

In terms of P/E, the company recorded a trailing P/E of 10.7 meaning, for every 1PHP earning last 2016, investors of this company are willing or is paying 10.7Php. In terms of P/E, it seems like it's not yet expensive but, let us take a look further on the company PEG ratio. With the P/E value and with a growth rate of just 5.88% from 2015 to 2016, the company trailing PEG ratio would be 1.8 which means, investors of this company are paying 10.7Php for every 1PHP income last 2016 for a growth rate of only 5.88%. In terms of this parameter, a value investor may find this share to be overvalued since the PEG ratio is already more than 1.

In terms of income, the first 6 months net income after tax this year increases by 4.9% in comparison to last year first 6months net income.

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