1. Excellent Result
Crest Builder released a strong set of result this evening.
Key observations :
(a) Very little exceptional items. Almost the entire profit is operation related. Core EPS of 3.4 sen.
(b) Actually, the group has already turned around in previous quarter (PBT of RM11.3 mil). However, high tax rate of 85% pressed down its net profit (EPS of 1 sen only). With tax rate normailizing to 34% this quarter, EPS finally shines through.
(c) The company is positive about coming quarter prospects :-
2. BUY Recommendation
(a) Since the beginning of this year, almost all construction stocks had been re-rated. Crest Builder is the last one. Its price has hardly gone up.
(b) Many of the construction stocks that have gone up had fundamentals worse than Crest Builder. Many are still incurring losses and / or saddled with legacy issues. Crest Builder has proper profit track record and is relatively clean (no ticking time bomb).
(c) Crest Builder has RM800 mil order book. Enough to last more than three years based on assumed annual revenue of RM240 mil (based on latest quarter construction revenue of RM59 mil x 4). There is potential to secure more contracts.
(d) Very small market cap of RM167 mil. This is a very good point. It means that the Group only needs a relatively small amount of profit to propel share price upwards. Compare to other bigger construction companies, lower risk of earning disappointment (backed by order book and property division).
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Icon8888, I can't imagine the pain many have gone through if they bought cresbld & cresbld-wb at 1.50 & 0.50 in 2015. Its wb was reduced to dust in its last trading days.
Present price must have bottomed out. Thanks for the writeups & highlights. It has all the sure ingredients needed for turning around and profit growth going forward.
Saw someone was blocking at 0.96 yestesday which is a good deal for a company with visible earnings in the next 1-2 years.
Bought some at 0.96 and join the boat.
2017-06-03 11:37
davidkkw79
Best Buy!
2017-05-25 21:48