Gkent formed in 1930’ started in water service industry has now expanded into rail transportation and hospital construction.
Recent big project that is government linked like
i) Ampang LRT extension that completed on 30/06/2016
ii) Upgrading Hospital Kuala Lipis , completed on 23/04/2017
iii) On-going projects that will generate more revenue to the company like
- LRT3 from Bandar Utama to Johan Setia
- MRT from Sg Buloh to Putrajaya
- Building Endocrine Hospital Putrajaya and Hospital Tanjung Karang
Let’s looks into the fact
|
2013 |
2014 |
2105 |
2016 |
2017 |
EPS |
11.3 |
16.1 |
9.35 |
16.67 |
26.97 |
EPS growth |
- |
42.4% |
-41.9% |
78% |
61% |
Gross dividend |
6.5 |
7.5 |
5 |
7 |
10 |
Total current asset |
239,239 |
388,962 |
454,735 |
531,166 |
741,744 |
Long term liabilities |
14,040 |
10,035 |
8,585 |
1,729 |
4,565 |
Net cash |
117,835 |
209,880 |
163,816 |
241,645 |
430,204 |
Peer comparison
|
GKENT |
ENGTEX |
MLGOBAL |
CIHLDG |
AJIYA |
PE |
15.63 |
6.35 |
54.75 |
15.4 |
11.13 |
ROE |
25.30 |
11.50 |
2.25 |
13.10 |
6.77 |
Dividend per share |
8.52 |
0.75 |
- |
5 |
1.63 |
Market Capital |
1585 M |
406 M |
422 M |
376 M |
250 M |
Among the peers, Gkent has a reasonable PE, given the premium that this company inherited.
Engtex PE improve from recent quarter after disposed a vacant industrial land , not related to business gain. Hence the cheap PE may not really reflect his business growth.
GKENT return of equity is highest among the peers, means that GKENT is among the peers who generating highest return from investor’s money.
Despite the stock price going up recently, the dividend payout still able to reach about 8.52% per share and is highest among the peers. This is very fascinating.
Can you imagine, with the upcoming project that will complete in near future, GKENT is full of potential of capital gain.
I believe that construction is a backbone for Malaysia transformation hence GKENT will be my first choice given the potential of this company has with his experience in building infrastructure since 1930s.
With conservative predict EPS growth of 30-40% per year, EPS in 2018 will be 36.4 cent. If PE remain around 15, the projected price will be RM 5.46, which is 29% gain from current price of RM 4.22
I wonder with such a good company, why PE should limited at 15? Recently JHM jumped to PE of 26, PENTA reach PE of 18. Being the largest construction company, GKENT has the potential to event reach PE of 20 and still consider cheap given the company’s future project to continue generate income.
“The difference between investment and gamble is whether you aware of what you did. Invest on logical fact lead you wealth vice versa gamble on illusion bring you to hell”- Ah Cheok
Chart | Stock Name | Last | Change | Volume |
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VenFx FYI. Cihldg-C.I. Holdings Berhad companies are currently involved in the manufacturing and trading of water taps and other plumbing accessories and also is involved in dealership and distribution of household fittings and appliances; and trading of sanitary wares and related products.
All these companies are involved in provide water supply accessory. Nature of business same as GKENT
2017-06-06 07:46
if gkent has stayed as a water meter company, the price would have stayed there as well. construction companies don't grow at a constant %, it all depends on the orderbook and gkent's orderbook is often misunderstood as bulk of it is LRT PDP. simply assume a constant growth rate at your peril
2017-06-06 08:36
Well written value seeker, simple and easy to understand.
Gkent, at price of 4.23, total equity & dividend growth at 31.25%, cash value per share at 23.48%, a high ROE company, is definitely a sound investment. The only step-backs are its low dividends yield (might due to its price being pushed up) and orderbook basis.
2017-06-06 09:25
Value_trading, it was ages ago CIhldg in the tap fittings marketing by HongLeung last time. The peers u mentioned has already mis matching.
2017-06-06 09:45
Comparing apples and oranges. Should compare apple & apple, or orange and orange. Since GK is in the construction business comparison should be with Gadang, Ekovest, IJM or Gamuda
2017-06-06 11:40
VenFX, u r right!
奇怪竟然拿Mlglobal与Gkent作比较。
MlGlobal 的PE 54.75x 是2016年的,
现在再看Fy2017.
Mlglobal 值RM1.80 至少。
他的PE 会在2017被调低.
Fy2017 Mlglobal超暴涨!
2017-06-06 21:16
VenFx
U use the wrong peer lar.
Cihldg = minyak masak producer
Mlglobal= their Big Move expected to be 2018
Pls chk the rest ....
2017-06-06 00:31