Period 4Q12/FY12
Actual vs. Expectations FY12 net profit of RM9.4m was above
expectations and accounted for 125.4% and 117.3% of ours and the street’s full
year estimates of RM7.5m and RM8.0m respectively. It was mainly due to higher
contribution from OBB projects and additional revenue from newlyacquired
subsidiary KnowledgeCom.
Dividends No
dividend was announced during the quarter, as expected.
Key Result Highlights
YoY, FY12 revenue rose slightly to
RM44.5m (+2.7%) due to higher revenue contribution from projects e.g. ICMS
& Outcome Bases Budgeting (OBB) project, which has been c.80% completed
thus far according to management. The net profit increased further to RM9.4m
(FY11: RM8.8m) due to: 1) higher contribution from its higher GP margin
maintenance project i.e. the LHDN maintenance services project, which lifted
the EBIT margin to 22.7% (vs. 22.3% previously), and 2) a lower effective tax
rate incurred of 2.5% (FY11:2.6%).
QoQ, 4Q12 revenue
rose RM17.9m (3Q12:5.3m), boosted by: 1) the higher revenue from the FMSS segment
at RM14.5m (vs. RM4.3m previously) as a result of a higher revenue recognition
from the OBB project and 2) an additional revenue contribution of RM1.5m from
KnowledgeCom, a new subsidiary acquired by the group in Nov-12, which mainly
provides corporate IT training services. In tandem with the top line growth,
the net profit rose to RM4.6m (3Q12:RM1.7m) despite a reduction in the EBIT
margin to 28.8% (3Q12: 35.5%) due to increasing administration expenses (+21%)
as a result of the additional staff training cost incurred during the quarter,
particularly to cater for the OBB project.
Outlook We
believe that CENSOF’s long term outlook remains intact, underpinned by: i) its
active tendering of contracts for both the Indonesian and M’sian markets for
its FMSS segment; ii) continued projects/contracts flow from the various
government agencies where it is now serving over 27 ministries and 80
government agencies in the country, and iii) the possible implementation of
GST/VAT after the looming upcoming General Election.
Forecasts Revised up FY13-14E net profit by 3.7%-4.8% to
RM17.5m-RM15.9m, because we are increasing our topline by 1.2% and 4.2% to
RM73.4m and RM81.1m from additional revenue contribution from KnowledgeCom
Rating Maintain
OUTPERFORM
Valuation We
have revised up TP to RM0.61 (vs. RM0.59 previously) based on an unchanged
targeted FY13 PER level of 12.2x over higher FY13 EPS of 5.0 sen (vs. 4.8 sen
previously)
Risks Failure
to secure more projects.
Delay in projects
revenue recognition.
Source: Kenanga
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