Period 2Q12/1H12
Actual vs. Expectations
The 1H12 net profit
of RM3.0m was below expectations even after taking seasonal factor into
consideration.
Based on its
historical financial track records, Censof’s 1H result is typically weaker and
accounts for about 30%-35% of the full year net profit due mainly to seasonality
factor.
However, the 1H12 net
profit merely accounted for 17% and 15% of ours and the street’s full year estimates
of RM17.4m and RM20.3m respectively.
Dividends No
dividend was announced during the quarter.
Key Result Highlights
YoY, the 1H12 revenue
rose by 67% to RM21.8m, driven by higher contribution from the FMSS segment (+71%)
and on-going SAGA projects such as Outcome Bases Budgeting (OBB) and ICMS,
which had started since 2H11. However, despite strong growth at the top line,
net profit was flat at RM3.0m (+3%) due mainly to 1) higher operating cost in
the FMSS division, which eroded EBIT margin by half to 14% in 1H12 and 2) the quarter
was predominantly focusing on more fasttracking projects, which generally
garner lower GP margins.
QoQ, despite the
revenue improving by 56% to RM13.3m from more fast-tracking projects, which are
those projects with tight deadlines, one-off and low GP margin projects for the
FMSS division, the net profit was lower at RM1.1m (-46%) as a result of higher operating
cost incurred during the quarter. Hence,
the net profit margin was down to 8.2% (vs. 23.5% previously).
Outlook Remains bright in the long-run underpinned by
i) active tendering of contracts for both the Indonesian and M’sian markets ii)
continued projects/contracts flow from the various government agencies e.g.
PERKESO.
However, it
underperformance of results could probably imply delays in revenue recognition
and margin erosion.
Forecasts We
have lowered our FY12-FY13 revenue forecasts by 5% and 2% to RM53.8m and
RM72.5m respectively to realign the projects timeframe. We have also slashed our
FY12-FY13 NP forecast by 45% and 22% to RM9.5m and RM17.1m respectively after
imputing in the weaker 2Q12 result and the lowering of our profit margin
assumptions.
Rating MAINTAIN OUTPERFORM
Valuation We
have reduced our TP to RM0.61 (vs. RM0.74 previously) based on a targeted FY13
PER of 11.5x
Risks Failure to secure more projects
Reduced government
spending on ICT
Source: Kenanga
No comments:
Post a Comment