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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