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GKent's Order Book in hand = 5.6bil? NO, it is 1.4bil only!!! Don't get cheated
GKent Chairman Tan Sri Tan Kay Hock, Merchant bankers & certain i3 members are telling lies by claiming GKent's contract order book in hand are valued RM5.6bil!
Wonderfully, I got this information from the forum of GKent:
RM4.5 billion - LRT3
RM494 million - MRT2
RM642 million - Hospital in Putrajaya and Selangor
Total Order Book in Hand = 5.6 billion
Now, try to read this news:
MRCB and George Kent chosen for the RM9bil LRT3 project
https://www.thestar.com.my/business/business-news/2015/09/05/prasarana-appoints-2-pdps/
"PRASARANA Malaysia Bhd has appointed Malaysian Resources Corp Bhd (MRCB) and George Kent (M) Bhd as the project delivery partner (PDP) for the light rail transit three (LRT3), which is estimated to cost RM9bil."
"The PDP for the LRT3 project will earn a management fee of 6%".
SIMPLE CALCULATION:
Project shared equally with MRCB = 9bil divided by 2 = 4.5bil
Management fee = 6% of 4.5bil = 270mil
CORRECTION:
RM270 million- LRT3
RM494 million - MRT2
RM642 million - Hospital in Putrajaya and Selangor
Total Order Book in Hand = 1.4 billion only
Let's see who had been cheating:
George Kent sees good year ahead
https://www.thestar.com.my/business/business-news/2017/06/23/george-kent-sees-good-year-ahead/
“Together with contracts secured by the engineering division in the last financial year, the order book has grown to RM6.1bil,” the company’s chairman Tan Sri Tan Kay Hock said at a press conference after its AGM.
RHB Maintains Buy On George Kent, Backed By Engineering Orderbook
http://www.bernama.com/en/business/news.php?id=1386976
RHB Research Institute Sdn Bhd has maintained a 'buy' call on George Kent (M) Bhd due to its RM6.1 billion engineering order book backlog.
Let's see who had been honest:
FINAL NOTES:
I am not here to make any judgement on the valuation, but just to highlight on the basis on how to get things right & from there work out your own judgement based on the correct calculation.
With earning RM1, some think the company should worth RM10, some say it should be worth RM20, that's no right or wrong & market will decide later.
But the estimation of earning RM1 must be calculated based on the correct basis, instead of making investment decision based on wrong perception & basis.
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Discussions
Be the first to like this. Showing 50 of 63 comments
KLCI King had lumped up the
PDP fees of LRT3 of RM270 which is almost net income , with the
Project cost of RM494 and RM642 where GK may earn only 9%
Confusion !!
2018-06-01 17:15
I think the author is correct. PDP stands for Project Delivery Partner. They are more like a project management & earning the fees to manage the projects. The project value belonged to the appointed contractors not the PDP entity.
The fees for the PDP is not equal to net income. It need to less the management teams ( office + site consultant team ) overhead, the printing cost for tender evaluation & award, utility for operation & etc. The highest cost for the PDP entity is actually the overhead of the management team / human resources. Imagine each station you have 1 team from Arch, C&S , M&E, QS, Landscape, ID, Planner, etc.
6% for this size I think is fair, this is not normal building but infrastructure. They need to handle all level of counterparts. In fact, there are provision in PDP which stated that any delay or cost overrun. PDP need to dapao themselves without any cost incur to government. PDP entity have to borne all the cost overrun & liable for the late delivery.
2018-06-01 17:35
why 6% is fair ? Because as PDP, they are not only reviewing the design, they need to do coordination across the trades.
For normal residential building . The P&A rate for coordination normally range around 2.5% to 3%. For a more complex building like mall, the P&A will go up to 3.5% to 4%. For healthcare, it will reached 4.5%. It all depends on the degree of difficulty of the coordination. The P&A scope in building contract is almost identical to the PDP role function in railway jobs.
Hence, for railways with multiple disciplines & multiple stations, 6% is a fair rate.
2018-06-01 17:52
Based on annual report, the order book reflect the RM4.5 bil as the PDP 6% fee is based on project progress billing.
Thus, GKENT include it into its order book.
However, you're right that this figure inflated the actual order book value needed to be delivered by GKENT.
Good eye!
Hopefully, IB and analyst will highlight this clearly in their future analysis.
2018-06-01 18:12
Thank you, Mr Sami, your comment make sense to me. Learn something today.
Sami_Value why 6% is fair ? Because as PDP, they are not only reviewing the design, they need to do coordination across the trades.
For normal residential building . The P&A rate for coordination normally range around 2.5% to 3%. For a more complex building like mall, the P&A will go up to 3.5% to 4%. For healthcare, it will reached 4.5%. It all depends on the degree of difficulty of the coordination. The P&A scope in building contract is almost identical to the PDP role function in railway jobs.
Hence, for railways with multiple disciplines & multiple stations, 6% is a fair rate.
01/06/2018 17:52
2018-06-01 22:16
Politically, No future.
geraldt9 BN cronies counters ... what future prospects ?
01/06/2018 19:19
2018-06-01 23:23
@KLCI King, the first assumption made by you are totally wrong, so eventually the rest of the article can be ignore...lol...wrong lah
the 5.6 billion order book inclusive of
1. LRT extension
2. Hospital construction
3. LRT 3
4. Provision of water meter to Hong Kong, Singapore
5. water construction
6. MRT2
construction revenue around 80% and meter supply around 20%
the next will be share bonus and final dividend....
2018-06-01 23:51
Are you kidding? Do you know what are you talking? I don't need to go anywhere but just to point out how contradict you are in your comment。
Not only you don't know what is written in the newspaper：
"The PDP for the LRT3 project will earn a management fee of 6%"
You try to said apple is actually orange:
1st, you mention what is in 5.6bil order book
Then you said construction revenue 80% meter supply 20%
Can you justify or explain your own comment?
---------------below-----------------------
Nikmon @KLCI King, the first assumption made by you are totally wrong, so eventually the rest of the article can be ignore...lol...wrong lah
the 5.6 billion order book inclusive of
1. LRT extension
2. Hospital construction
3. LRT 3
4. Provision of water meter to Hong Kong, Singapore
5. water construction
6. MRT2
construction revenue around 80% and meter supply around 20%
the next will be share bonus and final dividend....
01/06/2018 23:51
2018-06-02 00:17
The owner also said very clearly PDP will earn a management fee only, still so many people get cheated by the GKent Chairman, Bankers, GKent's AR.....blah blah
haha, so funny, good that many got confused, if not, how to make money in stock market?
2018-06-02 00:19
Totally misleading, please check analyst report on gamuda, they were the pdp of mrt1 and 2, orderbook means orderbook, not fees of orderbook, dont find it meaningful to even post this blog
2018-06-02 02:33
Your level of intelligence can be seen from your comment, if you think I am wrong, so be it. It is up to you to see whatever you want to see.
If you stand firm to say it is order book, then order book loh. I am done with all my explanation & opinion, GKent is gone case anyway.
Primeinvestor Totally misleading, please check analyst report on gamuda, they were the pdp of mrt1 and 2, orderbook means orderbook, not fees of orderbook, dont find it meaningful to even post this blog
02/06/2018 02:33
2018-06-02 10:11
klci king, no need waste energy argue with those gkent fan boy lar
another announcement on ecrl scrapped, they will continue with their order book story again
2018-06-02 10:12
It is obviously your first time in looking at construction stock. Please download analyst reports for Gamuda here, http://gamuda.com.my/analyst-reports/
looks like you have alot to learn about order book classification, but it does not matter, i am not promoting gkent, i am only disgusted by your misleading blog
HSR order book for Gamuda consortium is RM20b, not 6% of RM20b, or you could refer to ytl's news and reports
2018-06-02 17:48
Repeat
KLCI King Your level of intelligence can be seen from your comment, if you think I am wrong, so be it. It is up to you to see whatever you want to see.
If you stand firm to say it is order book, then order book loh. I am done with all my explanation & opinion, GKent is gone case anyway.
Primeinvestor Totally misleading, please check analyst report on gamuda, they were the pdp of mrt1 and 2, orderbook means orderbook, not fees of orderbook, dont find it meaningful to even post this blog
02/06/2018 02:33
02/06/2018 10:11
2018-06-02 18:26
please call up analysts and tell them your intelligence is higher than them and ask them to resign because you deserves to be the most intelligent order book estimator, LOL, what a rubbish article, you are lucky because you can be sued for defamation for your sub par intel
2018-06-02 18:36
1）GKENT身为半个PDP可以拿RM9b的50%，
而盈利则是RM9b*50%*6%= RM270m，
注明：以上为夜月大大的计算，他是合格的金融系畢业。
http://moonitez89.blogspot.com/2018/05/gkent.html
2）20/3/2018
報纸刊登的资料，並非我不老实，看看吧:
乔治肯特主席丹斯里陈溪福，通过文告表示，公司再一次创下新纪录，录得6.17亿令吉的营业额、1.6亿的税前盈利和1.24亿令吉的净利。
“这是乔治肯特前所未有的净利记录，归功于旗下均有改善的业务，包括铁路项目、水务基建项目、统筹承包医院项目和水表供应。”
他续称，公司的资产负债表仍是净现金状况，强劲的订单高达56亿令吉，能继续为未来提供清晰的净利能见度，因公司不断在本地和区域寻求机会。
http://www.investalks.com/forum/forum.php?mod=viewthread&tid=19353&extra=page%3D1&page=21
3）a)个人简单计算:
订单56亿约6%赚副为3.36亿
3.36亿/563m股数=每股59仙净利
订单佔大多数的LRT3(45亿)于2020年完工。
因此尚有2年时间收入，每年为59仙/2=29.5仙
水表业务每年取2000万净利计，每股净利为3.5仙
总共下来每年的每股净利(eps)为29.5+3.5=33仙
取pe=8倍，股价=RM2.64
b)另一个计算:
过去3年平均赚副为9.9+16.9+20.2=46.4
46.4/3=15.46
年营业额约6亿,净赚92.8M
92.8M/563M股数=每股净利(eps)为16.4仙
PE=12,股价=RM1.96
订单佔大多数的LRT3(45亿)于2020年完工。
因此尚有2年时间收入.公司cash 4.6亿随时可收购新的业务,况且谁保证公司无法取得新的订单?
hsr (暂取消)，mrt3(暫取消)，ecrl(还未擱致或取消)，这三个项目並未列入公司订单内，有无成行对公司没影响，4/6/2018的股大后，股票回购下就会见到稳定的股价回升，短期负面消息影响已完了。
gkent 的订单56亿中含概mrt2，lrt3 ，医院建设，水表业务等。往好想是gkent未来还有望取得订单，而不是只往负面想，投资不是这样吗？低買高卖，只是分享。无须追踪。
只供参考，買卖自负.
2018-06-02 20:05
Erkongseng...wake up!! Now our country rule by PH not BN anymore. New PM is Tun M and MOF headed by LGE. Wake up my friend
2018-06-02 21:16
Toll operators will be alive next week.
Market will party again, except for BN crony.
Consumer and finance sector Stay Focus.
2018-06-02 21:37
I agreed with the writter on his article, nothing to argue about, but why there are people still try to twist here & there?
2018-06-02 23:03
Tan Sri KH Tan and hos family should use his personal money to buy back the shates if he think the value of the shates still worth 3 times of the current price closed 1/6. Tan Sri has no balls because he worry margin call if personal money use. That clearly shown non of the major shareholders got the courage to use their personal money to buy back. If so confident the share price will go up, why not earn easy money to your own bank account rather than give back the gain to the company! Think rationally before investing....
2018-06-03 11:33
from:635789
Let examine the track record of this company why the share price plunged 75% from year high of RM4.52 to year low of 1.12. This company had been accumulating profits every quarter since 31.10.2003 with unbroken profits for 15 years. Latest audited report as at 31.1.2018 had shown that it had accumulated profit of RM265m, cash of RM511m and borrowing of RM56m. This is a solid listed company with very good track records and is competitive to win big projects for open tendering. It is hard to believe the share price will be falling forever and in fact is a Good time to accumulate buying after plunging 75%.
2018-06-03 19:42
erkongseng开始语无伦次，无法判断大选对GKent的影响，还坚持认为Gkent现在的股价是不合理的，不应该是如此低的。
根据他的判断，一切都没有改变，政府的改变并不会对GKent造成太大的冲击。现在这个价钱根本是大减价，每天就在那里喊说GKent有56亿的工程在手，真可怜。
既然erkongseng那么坚持改朝换代没有对GKent造成很大的影响，那他根本就不会用他拇指般大的脑袋去思考56亿的工程有多大的水分。
我现在终于明白了，原来一切就是那么简单，只是我对他的行为举止感觉悲哀可怜，哀哉！
-------------xxx------------------
Posted by erkongseng > Jun 3, 2018 07:40 AM | Report Abuse
大选前rm3.90个个敢買。
大选后rm1.28没有信心買。
想不通:
1)改朝換代，谁当家都会营造良好经商环境，只要公司有实力与经验再获新订单不是问题。
2)基本面没改变，手中订单依然在，被暫取消的hsr，mrt3都不是订单内的项目。
3)4.6亿现金随时可收购潜力业务。
4)公司股票回购10%将支持股价。
5)rm1.28 大折扣。
03/06/2018 10:00
2018-06-03 21:14
projected profit most important.
ie. lrt3 RM270mil if profit margin 80%. thats alot leh.
2018-06-03 23:28
may be, it may be 60%. Compared to what future lies ahead of Gkent, it is relatively small profit.
Share price reflects on future potential growth & profit. Limit downs few times is not because of Market stupid or crazy.
If one thought differently from market, if he is WB, I will seriously look into it.
If one without any proof records, I see it as helpless person drowning.
----------xxx-----------------
johnhuat88 projected profit most important.
ie. lrt3 RM270mil if profit margin 80%. thats alot leh.
03/06/2018 23:28
2018-06-04 07:55
PDP contract is very simple. MRCBGKJV appoint contractors approved by Prasarana. Say they cost 9bn, MRCBGKJV get all their costs reimbursed and the payments to the contractors plus a fee of 6%.
The 6% is a lot but it is not risk free 6% as they have to manage those contracts to finish on time and on budget subject to usual Variations etc. They are at risk on this project.
Tan Sri Tan Kay Hock cannot book the 4.5bn as revenue as it is a 50/50JV, accounting rules apply.
He is trying to tell the market as clearly as he can that they have a much higher revenue than the published accounts suggest at first glance, this is not as small a company as it may look.
If this carries on the EBIT will overtake the revenue.
Leave the guy alone, he is very successful and has managed GK well for many years, building it year by year AND he has NO DEBT in GK. If you invest by politics rather than fundamentals then note he has never been a contributor to BN and is friendly to everyone.
2018-06-04 08:51
with RM1 cash per share a price of 1.20 seems very cheap. Up to you, if you believe everyone successful in Malaysia is a 1MDB thief and will shortly be in jail because Tun Mahathir is reformasi then take all your money out. If you want to make money in the market in the next year you have to be in the market.
2018-06-04 09:46
Even if cancel LRT3 it will cost more than HSR to do so and the rakyat still need this from Shah Alam all the way to One Utama.
2018-06-04 09:48
johnhuat88, you are confusing yourself. The 6% has no real costs, the costs are reimbursed to GK seperately. MRCBGKJV are spending about 9bn, they get paid back 9bn plus 6%. The 6% is not cost.
If all rail stops tomorrow (and GK get compensated by Tun) GK still has hospitals and a leading regional water meter business and NO DEBT.
Value the company on just the water meters and it is undervalued at 1.20.
Up to you lah
2018-06-04 15:53
May have better future, GK were leading siemens in JV to build HSR Assets and could have won but needed to put up a lot of equity in PPP vehicle, maybe bonds etc. Without HSR they will have a cash pile to invest in less capital intensive projects.
2018-06-04 15:56
erkongseng, 你在哪里？在这个兵荒马乱的情况下，想听你指点前程一下。
因为你总是最清醒的那个，当全世界都傻傻的时候，你是最聪明的，很想再听到你那美丽的言论。
erkongseng, your talk is always sweet, regardless what is happening to GKent.
Posted by erkongseng > Jun 4, 2018 07:54 AM | Report Abuse
早前投行像HLBG,RHB,KENANGA有推荐買入，目标价都过3元，你想还会继续下跌吗？主要项目LRT3 于2020年8月完工，净利保证还有2年，也就是2019.2020财政年净利仍然美丽，你想股价都会停留在2元内吗？
2018-07-09 16:25
i think it would be easier if you u guys imagine u are the Gkent company, or mrcb or gamuda, or what ever la. you are PDP and you got management fee, clear about that.
but, who will fork out cash/loan to buy materials, equipment, resources, etc to built the project? is t Prasarana or PDP??. for me la PDP is aka Sub-contractor ler..tukar nama to make it catchy..huhu. and for sub-con, everybody should know their function.
and one more thing, don get confuse with China man style doing business.. China bank, sub-con china man, pay contractor direct, even progress work only few percent, money already distributed in advanced. Like that, $2 company can stat doing business.
2018-07-31 03:59
with management fee 6% from the total amount, it will be fixed upon hand over the finished project. But PDP aka sub-con company still can still make additional profit from running the show on behalf Prasarana (so Prasarana guy can just tidur and submit report to PM !). If the total cost estimated 4.5 billion, due to good management, able to get cheap material, cost reduction, etc..company can get 5-10 % profit lagi.
all confuse coz they use catchy word PDP and management fee...when in fact they should just mention that..prasarana sub-con the project.
2018-07-31 04:13
simply write like tis later tan sri sue you for defamation calling him a cheat wo...haha...faster delete tis post lar bro...hahaha
2018-07-31 07:51
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
dusti
Just forget this counter. Many others to make money from. Good luck!
2018-06-01 16:25