Period 2Q12/1H12
Actual vs. Expectations
2Q12 results came in
within ours and the consensus expectations.
1H12 net profit of
RM147m made up 57% and 56% of our full year FY12 and the consensus’ forecasts respectively.
Dividends No dividend was declared during the quarter.
Key Result Highlights
1H12 revenue
increased by 59% to RM1.7b and its bottom line turned to a profit of RM146m
from a loss of RM4m recorded in 1H11. This was mainly due to higher water
tariffs (+25%) and additional contributions from its oil and gas and
construction division.
QoQ, the net profit
increased by 15% due to EBIT margin improvement across all the division i.e. water
(29%), oil and gas (15%) and construction (18%). However, its water treatment
division profits fell by 19% to 82.2m (from RM101.9m) due to higher operating
expenses.
YoY, net profit
surged from RM4m to RM78m on the back of a 83% jump in revenue. This was mainly
due to additional contribution from its oil and gas and construction divisions.
To recap, Puncak acquired its oil and gas subsidiaries and secured rural water
projects in Sarawak worth RM667m in 2H11.
Outlook YTD,
its oil and gas division chalked up RM286m in revenue and we reckon that it
will be able to achieve at least RM500m in revenue in FY12.
The rural water project
in Sarawak is slated for completion by end of FY12 while we also do not discount
the fact that Puncak could win more water projects in East Malaysia.
Change to Forecasts
No changes in our
FY12-13E forecasts.
Rating MAINTAIN OUTPEFORM
Maintain OUTPEFORM
recommendation as we believe that Puncak will be the best pick for the upcoming
election theme.
Valuation We
are keeping our target price unchanged at RM3.01 based on SOP valuation.
Risks Lower
than expected takeover price for its water concession (below RM2.61) as the
second offer from Selangor State Government is at c. RM2.71 per share.
Source: Kenanga
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