Ahmad Zaki’s (AZRB) 9MFY12 net profit of RM17.9m came in above our expectation at 84.8% of our full-year estimate, owing to better-than-expected construction margins recognised. Taking that into account, we are upgrading our FY12 core earnings estimate by 8.6% while leaving our FY13 and FY14 numbers unchanged. With RM2.28bn worth of jobs in hand and the potential to win more post-general election, we maintain our TRADING BUY call on AZRB, with our FV unchanged at RM0.93.
Improved construction margins. AZRB’s 9MFY12 revenue came in at RM514.0m, up 30.9% y-o-y due to higher contribution from both its construction and bunkering divisions, which grew 29.1% and 40.5% respectively over the period. PBT, meanwhile, jumped 66.4% y-o-y to RM17.9m, boosted by higher construction margin recognised at 8.0% vis-a-vis 9MFY11’s 4.2%. All in, 9MFY12 net profit totalled RM17.9m, beating our full-year estimate. On a quarterly basis, 3QFY12 revenue of RM174.0m grew 31.6% y-o-y but slipped 10.3% q-o-q on completion of certain projects during the quarter. That said, its net profit amounted to RM6.6m, y-o-y and q-o-q higher on the back of better construction margins recognised during the quarter.
RM2.28bn-strong orderbook. YTD, AZRB has secured RM1.44bn worth of new jobs, mainly comprising the RM765m v6 MRT viaduct package and the RM673m job to build a hotel at the previous MAS headquarter along Jalan Sultan Ismail. Its outstanding orderbook of RM2.28bn could last it well into 2HFY14, assuming a burn-rate of RM200m per quarter. We assume no more job wins for the remainder of the year and reiterate our replenishment target of RM500m p.a. for both FY13 and FY14 at this juncture.
TRADING BUY. Taking into account the better-than-expected construction margins recognised YTD, we are upgrading our FY12 net profit forecast by 8.6%. We are leaving our FY13 and FY14 numbers unchanged for now as we foresee margins to potentially normalise following the completion of a number of more profitable projects. That said, we continue to like AZRB as a trading play given its undemanding valuation, sturdy orderbook, and potential to win more jobs post-election. Hence, maintain TRADING BUY, at an unchanged RM0.93 FV, based on a 10x FY13 PER. Key re-rating catalysts include the potential award of RM1.7bn Kuala Lumpur Outer Ring Road, the potential earnings accretion from its plantation division over the medium-term, as well as the award of its ongoing legal tussle against Al-Faisal University next month.
FYE Dec (RMm)
|
FY10
|
FY11
|
FY12f
|
FY13f
|
FY14f
|
Revenue
|
430.7
|
534.9
|
720.0
|
850.9
|
855.1
|
Net Profit
|
(61.6)
|
11.9
|
22.8
|
25.9
|
27.5
|
% chg y-o-y
|
-331.9%
|
-118.4%
|
81.5%
|
13.2%
|
6.2%
|
Consensus
|
-
|
-
|
-
| ||
EPS (sen)
|
(22.3)
|
4.3
|
8.3
|
9.3
|
9.9
|
DPS (sen)
|
2.6
|
1.9
|
2.5
|
2.8
|
3.0
|
Dividend yield (%)
|
3.9%
|
2.8%
|
3.7%
|
4.2%
|
4.5%
|
ROE (%)
|
-27.8%
|
6.2%
|
11.1%
|
11.6%
|
11.3%
|
ROA (%)
|
-8.8%
|
1.8%
|
3.3%
|
3.4%
|
3.4%
|
PER (x)
|
(3.0)
|
15.5
|
8.1
|
7.1
|
6.7
|
BV/share (RM)
|
0.66
|
0.69
|
0.75
|
0.81
|
0.88
|
P/BV (x)
|
1.0
|
1.0
|
0.9
|
0.8
|
0.8
|
EV/EBITDA (x)
|
(3.8)
|
3.5
|
2.2
|
2.7
|
2.1
|
Results Table (RMm)
FYE Dec
|
2Q12
|
1Q12
|
Q-o-Q chg
|
YTD FY12
|
YTD FY11
|
Y-o-Y chg
|
Comments
|
Revenue
|
174.0
|
194.0
|
-10.3%
|
514.0
|
392.6
|
30.9%
|
Decent improvement in 9MFY12 numbers y-o-y and q-o-q due to improved showing from its construction and bunkering segments
|
EBIT
|
14.2
|
12.8
|
10.4%
|
40.7
|
27.1
|
50.1%
| |
Net interest expense
|
-2.6
|
-2.7
|
-2.4%
|
-9.9
|
-8.6
|
14.8%
| |
Associates
|
0.0
|
0.0
|
-
|
0.0
|
0.0
|
-
| |
PBT
|
11.5
|
10.1
|
13.8%
|
30.8
|
18.5
|
66.4%
|
Higher margin recognised in its construction division helped to lift overall profitability
|
Tax
|
-5.0
|
-4.2
|
18.0%
|
-12.9
|
-9.1
|
41.6%
| |
MI
|
0.1
|
-0.1
|
->100%
|
-0.1
|
-0.3
|
-72.4%
| |
Net profit
|
6.6
|
5.8
|
15.0%
|
17.9
|
9.1
|
95.7%
| |
EPS (sen)
|
2.4
|
2.1
|
6.4
|
3.3
| |||
DPS (sen)
|
0.0
|
0.0
|
0.0
|
2.5
| |||
EBIT margin
|
8.1%
|
6.6%
|
7.9%
|
6.9%
| |||
NTA/Share (RM)
|
0.73
|
0.72
|
0.73
|
0.67
|
EARNINGS FORECAST
FYE Dec (RMm)
|
FY10
|
FY11
|
FY12f
|
FY13f
|
FY14f
|
Turnover
|
430.7
|
534.9
|
720.0
|
850.9
|
855.1
|
EBITDA
|
(41.0)
|
41.9
|
59.1
|
59.1
|
63.6
|
PBT
|
(49.9)
|
24.4
|
39.3
|
38.0
|
40.3
|
Net Profit
|
(61.6)
|
11.9
|
22.8
|
25.9
|
27.5
|
EPS (sen)
|
(22.3)
|
4.3
|
8.3
|
9.3
|
9.9
|
DPS (sen)
|
2.6
|
1.9
|
2.5
|
2.8
|
3.0
|
Margin
| |||||
EBITDA (%)
|
-9.5%
|
7.8%
|
8.2%
|
6.9%
|
7.4%
|
PBT (%)
|
-11.6%
|
4.6%
|
5.5%
|
4.5%
|
4.7%
|
Net Profit (%)
|
-14.3%
|
2.2%
|
3.2%
|
3.0%
|
3.2%
|
ROE (%)
|
-27.8%
|
6.2%
|
11.1%
|
11.6%
|
11.3%
|
ROA (%)
|
-8.8%
|
1.8%
|
3.3%
|
3.4%
|
3.4%
|
Balance Sheet
| |||||
Fixed Assets
|
191.2
|
217.6
|
257.3
|
301.2
|
343.0
|
Current Assets
|
465.7
|
447.4
|
457.1
|
501.7
|
483.0
|
Total Assets
|
657.0
|
664.9
|
714.4
|
803.0
|
826.0
|
Current Liabilities
|
368.2
|
352.5
|
377.3
|
446.2
|
448.5
|
Net Current Assets
|
97.6
|
94.9
|
79.8
|
55.5
|
34.5
|
LT Liabilities
|
102.2
|
115.2
|
123.1
|
123.9
|
124.6
|
Shareholders Funds
|
181.5
|
191.4
|
207.4
|
225.5
|
244.7
|
Net Gearing (%)
|
16.2%
|
19.5%
|
26.0%
|
11.8%
|
19.7%
|
Source: OSK
No comments:
Post a Comment