Journey to Wealth
Crest Builder Holdings - Meets expectations
Period 3Q12 / 9M12
Actual vs. Expectations 9M12 core earnings of RM13.5m is within expectation, making up 79% of our estimates.
Dividends None as expected.
Key Results Highlights QoQ, 3Q12 pretax profit grew 15% to RM4.5m given stable EBITDA margins of 7% and 20% growth in revenue. Construction revenue (main contributors are Menara Binjai, Setia Sky, Verticas and UniTapah) did exceed our initial estimates significantly, but this helped the softer than expected property billings as Avenue Crest (offices) was launched later than expected; the project has achieved 30% take up rate since the launch in 3Q12.
YoY, 3Q12 core earnings dropped 40% to RM3.9m. Although revenue and EBITDA margins (7%) were flat, finance cost rose 23% to RM4.8m due to higher borrowings arising from UniTapah and Tierra Crest. Furthermore, effective interest rate was higher at 36% (3Q11: 24%).
Ytd-YoY, 9M12 core earnings grew 46% on better revenue from construction (+32% YoY) and property (+9% YoY), as well as, stripping-off last period's non-cash fair value gains of RM19m.
Outlook Dang Wangi project will start in 2H13. We also expect CBH to firm its JV project to develop the Lembaga Getah Malaysia (MRB) site (GDV: RM1.33b). Since UniTapah concession earnings being in FY14E, project financing is expected to be ring-fenced; if so, net gearing without UniTapah will improve to 0.5x from current 0.9x.
CBH is tendering for another RM2.5b contracts, including the Langat 2 water treatment plant.
Change to Forecasts No changes to FY12-13E estimates. Remaining construction orderbook is RM1.2b, which is largely driven by Dang Wangi. To date, the group has recorded RM115m sales from Alam Idaman (100% sold) and Avenue Crest (30% sold), which is inline with our estimates.
Rating Maintain OUTPERFORM
At current price, investors are getting the property segment and UniTapah concession for 'free' based on our TP. The stock is trading at FY12-13E core PER of 7x-6x or near mid-cycle.
Valuation Maintain TP of RM1.34 based on 10% discount to FD SoP of RM1.49; our SoP uses property RNAV discount of 75% (steepest under coverage).
Risks Capital management and sector risks; property (negative policies) and construction (slow awards).
Source: Kenanga
Related Stocks
| Chart | Stock Name | Last | Change | Volume |
|---|
Market Buzz
-1.81%More articles on Journey to Wealth
Ekovest: No plan to launch another offer for Iskandar Waterfront City
Created by kiasutrader | Mar 29, 2018
Kenanga Research - On our Portfolio - Parliament dissolution around the corner?
Created by kiasutrader | Mar 25, 2013
Plantation Sector - Proposed accounting standard scrapped OVERWEIGHT
Created by kiasutrader | Mar 25, 2013
Pavilion Reit - Limited upside, earnings upside have been priced in HOLD
Created by kiasutrader | Mar 25, 2013
Discussions
Be the first to like this. Showing 0 of 0 comments
Post a Comment
Featured Posts
Latest Videos
Apps
Top Articles
2
3
Koon Yew Yin's Blog
CPO price is rising rapidly as shown by chart below - Koon Yew Yin
4
Axcapital's investment blog
KAB - Executing its way to a record quarter. Could more Petronas contracts be coming?
5
Mercury Securities Research
6
BFM Podcast
7
8
BFM Podcast
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Featured Advertisers / Partners
Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
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....
