Period 3Q12/9M12
Actual vs. Expectations The 3Q12 results came in within expectations.
The 9M12 net profit of RM52m made up 70% and 72% of ours and the consensus’
full year FY12 forecasts respectively.
Dividends No dividend was declared during the quarter.
Key Result Highlights
The 9M12 net profit increased by 8% on the back
of a higher revenue figure of 14%. The revenue from its crane division grew by
73% due to the higher deliveries of the cranes. The crane’s pretax profit
margin profit remained unchanged at 11%. The construction and concession
revenue meanwhile grew by 43% as more progress billings were billed for its
ongoing projects. The concession business pre-tax profit jumped by 37% due to
the positive contribution from Cambodia Airport.
QoQ, the revenue fell
by 7% due to a lower shipyard business
contribution (-21%). However, the net profit increased by 26% thanks to a
strong revenue contribution from its construction division (+34%) coupled with
a pre-tax profit margin improvement from 1% to 5%.
YoY, the 3Q12 net
profit came in higher by 10%, which is in line with the increase in the revenue.
The construction division remained as the main earnings contributor with a 77%
increase in revenue amidst an improvement in margin. Its crane division also
grew strongly with 78% increase in revenue as more cranes were delivered during
the period.
Outlook Its
current order book stands at RM2.2b, comprising of RM1.4b (or 64% of the total)
from construction, RM746m (34%) from the crane division and RM61m (2%) from its
shipyard business. This will last the company for the next two to three
years.
Change to Forecasts No
changes in our FY12-13E forecasts.
Rating Maintain MARKET PERFORM
We are maintaining
our MARKET PERFORM recommendation due to the limited capital upside to our TP
and continued uncertainties in the APH issue.
Valuation No
changes to our TP of RM0.83 based on SOP valuation.
Risks Lower
recoverable amount from APH and further provision for the receivables.
Source: Kenanga
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