Period 4Q12 / FY12
Actual vs. Expectations
FY12 core earnings of RM21.0m came in above expectation,
being 23% ahead of our estimates.
Dividends Gross dividend of 5 sen was declared, as expected.
Key Results Highlights
QoQ, 4Q12 pretax profit grew tremendously by >100%
to RM28.7m, largely due to the fair value gains of RM20.0m arising from
revaluation of its investment properties i.e. The Crest office tower, car park
lots and two other shop units located in Taman Megah and Sentul.
YoY, 4Q12 core
earnings improved by 10% to RM7.5m. Topline growth of 72% was mainly driven by
faster than expected construction revenue recognition (Verticas & Unitapah)
which rose 78% coupled with a margin expansion of 2.5ppt in operating margin to
5.2%. However, higher finance cost (+41%) muted some of the positive impact.
Ytd-YoY, FY12 core
earnings grew 30% on better revenue from construction (+43% YoY) and property
(+15% YoY), despite a slight margin compression of -0.8ppt in operating margin
to 9.5%.
Outlook Dang Wangi project is expected to be rolled
out in 2H13. We also expect CBH to firm its JV project to develop the Lembaga
Getah Malaysia (MRB) site (GDV: RM1.33b). Since UniTapah concession earnings
are commencing in FY14E, project financing is expected to be ring-fenced; subsequently,
it will improve its net gearing to 0.5x from the current 1.0x. Currently, CBH
has a tender book size of RM2b contracts, including the single largest Langat 2
water treatment plant.
Change to Forecasts Raise FY13E estimates higher by 12% to RM22.1m
post our house-keeping, improved sales and billings from largely affordable
driven property offerings in Batu Tiga, Shah Alam and Tierra Crest’s new rental
income from leasing the space to UniTar.
Rating Maintain OUTPERFORM
Valuation No material changes to our TP of RM1.35 (RM1.34
previously). Although we roll-forward to FY13E valuations, resulting in our SoP
increasing to RM1.80 from RM1.49, we have widen our applied holding company
discount to 25% from 10% on heighten GE risks.
Risks Capital management and sector risks; property (negative
policies) and construction (slow awards).
Source: Kenanga
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