KUALA LUMPUR: PIE Industrial Bhd could be continuing its earnings growth trend following Penang's transition to Phase 2 of the National Recovery Plan, which allows for greater workforce participation.

       According to Kenanga Research, since the move to Phase 2 in mid-July, PIE has raised its workforce to 80%, which has allowed it to pick up on backlogs.

       The second half of the year is also typically seasonally stronger for the group, which bodes well for earnings growth in coming quarters.

       In addition, the group’s entire workforce has been administered with the first dose of vaccine via the Public-private Partnership Covid-19 Industry Immunisation Programme (PIKAS) and will be getting their second dose by the end of the month.

       Kenanga said PIE's recent 2Q earnings result was largely within expectation as it brought 6MFY21 core net profit to RM25.4mil, which came to 42% and 46% of its and consensus full-year estimates.

       Following the result, its earnings forecasts for FY21 and FY22 remained unchanged at RM59.8mil and RM76mil respectively.

       The research house maintained its "outperform" call but raised its target price to RM4.15 as it rolled forward its earnings base to FY22 pegged to a price-earnings ratio of 21x, representing plus-one standard deviation to the three-year mean.