Monday 3 September 2012

Bina Puri Holdings - 1H12 results below expectations


Period  2Q12/1H12

Actual vs.Expectations  The 1H12 net profit of RM4.2m came in below our estimates, making up only 30% of our FY12E net profit.

Dividends    No dividend was declared during the quarter.

Key Result Highlights    YoY, the net profit dip by 45% from RM6m to RM4m due to the lower contribution from its construction division coupled with a higher effective tax rate due to the under provision of taxation in the previous year (effective tax rate was at 34% for the 1H12).

QoQ, the net profit has increased marginally by 2% despite the 6% drop in revenue. This was mainly due to the positive contribution from its micro power service division, which only started operations in July 2011.


Outlook     Its current order book now stands at RM2.5b, mwhich will provide earnings visibility for the next 2 years.

Other than the KLIA2 construction works, we expect the LRT extension works to start contributing from 2H12 onwards.

Change to Forecasts       We have cut our FY12-13E by 29% and 18% respectively due to the reduction in our FY12 order book replenishment assumption from RM400m to RM200m.

Rating   Maintain OUTPERFORM
The stock still offers approximately 35% upside from here.


Valuation      We lowered our Target price to RM1.12 (previously, RM1.24) with a lower 7.0x PER (vs. 10x previously) on our revised FY13E EPS of 15.9 sen.

Risks      Escalating building material prices.

Source: Kenanga

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