PublicInvest Research
JAKS Resources Berhad - Back to Losses
PublicInvest
Publish date: Fri, 30 Nov 2018, 10:51 AM
PublicInvest
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An official blog in I3investor to publish research reports provided by PublicInvest Research team.
All materials published here are prepared by Public Investment Bank Berhad. For latest offers on Public Invest trading products and news, please refer to: https://www.publicinvestbank.com.my/pbswecos/default.asp
PUBLIC INVESTMENT BANK BERHAD (20027-W)
9th Floor, Bangunan Public Bank
6, Jalan Sultan Sulaiman, 50000 Kuala Lumpur
T 603 2031 3011 | F 603 2272 3704 | Dealing Line 603 2260 6718
All materials published here are prepared by Public Investment Bank Berhad. For latest offers on Public Invest trading products and news, please refer to: https://www.publicinvestbank.com.my/pbswecos/default.asp
PUBLIC INVESTMENT BANK BERHAD (20027-W)
9th Floor, Bangunan Public Bank
6, Jalan Sultan Sulaiman, 50000 Kuala Lumpur
T 603 2031 3011 | F 603 2272 3704 | Dealing Line 603 2260 6718
Contrary to our expectations of stronger 2H18, JAKS Resources’ (JAKS) earnings performance in 3QFY18 took an unexpected turn by swinging back to a net loss of RM2.8m. YTD, the Group’s net profit of RM27.8m only constituted c.35% and c.37% of our and consensus full year estimates. This earnings discrepancy is mainly due to unexpected lower billings from its Vietnam EPC contract which registered revenue and profit after tax of RM32.8m and RM7.6m, which were even lower when compared to similar period a year ago. To recap, the project started in March 2016, with target completion by 2H2020 or c.4.5 years construction period. So far, only RM591m has been recognized or only 31% of total construction cost of RM1.89bn with c.1.5 years to targeted completion date. That said, management still believes that the power plant is on track to complete on schedule. We would rather err on the side of caution as power plant earnings continue to be erratic even though construction progress is believed to have been ahead of schedule just a few months ago. As such we cut our FY18-20 earnings estimates by 52%/22%/18% respectively. We are also wary over the various dilutive equity fund raisings done so far and the legal row with Star Media Group. Factoring higher execution risk and potential losses from the Pacific Star legal row, we revise our TP lower to RM0.65 (from RM1.10 previously), derived from higher c.60% discount to our SOTP estimates of RM1.60 or effectively pegged at c.6x PER. Maintain Neutral.
- Outstanding orderbook at RM1.9bn (from RM2.0bn in 2QFY18). Vietnam IPP EPC 2 contract registered RM32.8m in revenue and remained the largest net profit contributor with RM7.6m during the quarter. However, the profit after tax was lower c.26% YoY which was attributed to construction works which have now been refocused on completion of key components of the main power plant mainly undertaken by the Chinese partner, CPECC. We understand that of the total RM1.89bn order book for the Vietnam EPC contract, only RM591m has been billed so far.
As for the property division, unbilled sales as at 3QFY18 stood at RM160.5m, mainly from the Pacific Star development. The business division continued to bleed with higher losses due to reversal of LAD totaling RM12.1m, relating to Tower A of Pacific Star. As for its mall, the Evolve Concept mal is still incurring losses totaling RM6.4m. We still expect property to continue dragging earnings in the near term while waiting for completion of Pacific Star and also improvement of mall occupancy which is now only has 55% open tenants.
Source: PublicInvest Research - 30 Nov 2018
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Discussions
1 person likes this. Showing 11 of 11 comments
has the 50 million penalty been accounted for? heard they refuse to pay up....
actually nothing going for it. property division is haemorrhaging and there is no cashflow from the Vietnam project. how long would the RI money last? no wonder drop so much..uncle must have ran away
2018-12-01 09:37
andy n uncle pakat pump and dump and take the money go Vietnam already.....rakyat stuck wif stock while they take the cash....hahaha
2018-12-01 09:41
Tis good news kan
So far, only RM591m has been recognized or only 31% of total construction cost of RM1.89bn with c.1.5 years to targeted completion date.
That said, management still believes that the power plant is on track to complete on schedule
♡♡♡
1,890,000,000 - 591,000,000 = 1,299,000,000
Balance 1,299,000,000 over next c.1.5 years
At profit 20% profit adalah c.259,800,000 in c.1.5 years
Profit c.43,300,000 per quarter
That said, management still believes that the power plant is on track to complete on schedule
Just slower tapi in c. 1.5 years
♡♡♡
2018-12-01 09:50
TP lower to RM0.65 (from RM1.10 previously), derived from higher c.60% discount to our SOTP estimates of RM1.60 or effectively pegged at c.6x PER.
♡♡♡
Professional betul why suka suka cincai cincai 60% discount?
TP 1.60 shd not discount jz cos we would rather err on the side of caution
TP 1.60 yg betul
Mana ada big construction wit few contractors go evenly not erratic? Kadang kala kena tunggu contractor lain beres baru can take procession site kan ?
♡♡♡
We would rather err on the side of caution as power plant earnings continue to be erratic even though construction progress is believed to have been ahead of schedule just a few months ago.
2018-12-01 09:58
insiders and uncle already dump,no use see pe cannot come to above 1.00 already in a long time
2018-12-01 10:08
the useless mall and the property segment ...should have sell off & recognise one off loss
rather than now every qtr also happen loss on this mall and property
HELLO JAKS management , please sell off your mall & property segment & recognise one time loss , to settle it , useless to continue to drag the whole company profitability
2018-12-02 00:53
Posted by RainT > Dec 2, 2018 12:53 AM | Report Abuse
the useless mall and the property segment ...should have sell off & recognise one off loss
rather than now every qtr also happen loss on this mall and property
HELLO JAKS management , please sell off your mall & property segment & recognise one time loss , to settle it , useless to continue to drag the whole company profitability
======================
lol
2018-12-02 00:58
This company never pay any dividend at all, like operating a kedai runcit. Theoretically there is no limit to downside, price can go down till 0.005.
2018-12-02 01:05
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2018-12-01 09:02