Period 4Q12/FY12
Actual vs. Expectations The reported FY12 revenue and net profit of RM60.2m
and RM6.4m respectively came in on the dot of our expectations, making up 98.0%
and 100.0% of our full year estimates.
Dividends A 1.5
sen interim dividend less tax was declared in the quarter for FY13, which was
also equivalent to the FY12’s distribution. It translates into a decent net
dividend yield of 3.4%.
Key Result Highlights QoQ,
the 4Q12 NP improved significantly by 47.2% despite a 2.2% decline in sales.
The NP margin edged higher by 3.8ppt due to a lower operating expenses-to-sales
ratio of 42% vs. 51% in 3Q12.
YoY, the
4Q12 revenue was up marginally by 5.4% mainly driven by its Malaysian
operation, while sales in the region improved 11.6% YoY. However, the 4Q12 NP
was down by 10.7% YoY given a higher cost of sales that dragged down the GP
margin by 5.3ppt to 54.0%.
The FY12
revenue increased by 12.4% YoY buoyed by the higher sales from all the regions (Malaysia,
+8.4%, South East Asia, +14.8% and China, +27.6%). However, the FY12 NP decreased
by 26.1% due to higher operating expenses arising from the continuous
investment in regional offices and capacity expansion.
Outlook Although
FY12 showed a continued growing revenue trend, the NP saw a decline YoY. The historical
trends indicate that the company’s quarterly earnings are unpredictable, and we
believe it may be due to: 1) the delay in recognising projects earnings; and 2)
a higher operating cost due to the continuous investment in its regional
expansion.
Rating CEASED COVERAGE
Due to the
reasons mentioned above as well as a reallocation of resources, we are ceasing coverage
on Cuscapi. Our previous TP of RM0.36 implied a 17.0x-16.1x PER valuations on
its forward earnings estimates.
Risks Delay
in its project implementations.
Source: Kenanga
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