Boilermech’s 9MFY13
results were within our forecasts, with its net profit of RM17.0m accounting
for about 76.9% of our full-year estimates. Its 9MFY13 net profit had surged by
51.6% on the back of a 23.2% jump in revenue to RM131.3m. The better
performance is attributed to higher manufacturing activities, deliveries and
installation of boilers. 3QFY13 earnings were higher y-o-y on improved margins.
We like Boilermech for its potential growth from its upcoming expansion and
strong balance sheet. Despite softer CPO prices, it was still able to replenish
its orderbook to over RM270m. We are rolling over our valuation to FY14
forecasts, with our FV at RM1.17, pegged to a 2-year average PE of 11.5x on its
projected FY14 earnings. Upgrade to Buy.
In line.
Boilermech’s 9MFY13 results were largely in-line with our estimations. Its net
profit of RM17.0m accounted for about 76.9% of our fullyear target. Annualised
revenue clocked in at 97.9% of our full-year target of RM179.0m. 9MFY13 net
profit had surged by 51.6% on the back of a 23.2% jump in revenue to RM131.3m.
The better performance was due to higher manufacturing activities, deliveries
and installation of boilers. We saw a 25.2% y-o-y increase in contribution from
its manufacturing segment to RM126.7m while its PBT contribution took a 51.0% leap
to RM20.8m. 9MFY13 EBIT margin improved from 14.1% last year to 17.2%, mainly
due to contribution from higher-margin projects as increasing more customers
order higher specifications boilers.
Earnings improve on
higher margin projects. 3QFY13 net profit of RM6.3m was 20.3% higher q-o-q
despite a relatively flat revenue of RM44.0m. The lower top-line was due to
higher activity levels in 2QFY13 and the improvement in bottom-line was due to
higher profit margin from some projects during the quarter under review as well
as the impact from foreign exchange gain.
Cash rich. The
company is still in net cash position after the completion of its plant
purchase in November 2012. It has a total net cash of RM23.0m (net cash per
share of 8.9 sen) as at end-January 2013. To recap, Boilermech bought a piece
of 1.45-acre land near its Subang Jaya premises. The company does not have a
fixed dividend policy. However, we are forecasting a dividend payout of 40%,
which translates into 3.4% and 4.0% yield respectively for FY13f and FY14f.
Upgraded to Buy,
RM1.17 FV. The company’s fundamentals remain intact, backed by a solid
balance sheet. Its production capacity is set to double in the next six months
as it kicks off its plant expansion plan. Despite softer CPO prices,
Boilermech’s orderbooks were not affected. The company was able to replenish
its orderbooks to over RM270m, equivalent to 1.8x its FY12 sales. It has
obtained its board’s approval for change its financial year end (FYE) from 30
April to 31 March. This means that FY13 results will only reflect 11 months of
operations. We have fine-tuned our FY13 projections and now introduce our FY14
forecasts as well as roll over our valuation, deriving a FV of RM1.17, pegged
to an average PE of 11.5x on its projected FY14 earnings. Upgrade to Buy.
Source: RHB
No comments:
Post a Comment