Puncak’s  1QFY13  net  profit  of  MYR60.7m  seems  in  line  with  our expectations  at  22.5%  of  our  full-year  estimate.  Nonetheless,  relative comparisons are distorted by the exclusion of Syabas’ financials, which are  now  accounted  for  using  the  equity  method.  No  changes  to  our estimates  for  now  pending  clarification  from  Management.  Maintain TRADING BUY, with our FV unchanged at MYR2.00. 
 
-  1QFY13 looks decent. 1QFY13 revenue came in at MYR201.3m, down  12.2%  y-o-y  due  to  lower  contribution  from  both  the  oil  and  gas  and construction  segments.  EBITDA,  however,  inched  up  5.4%  y-o-y  on higher  accretion  of  interest  on  long  term  receivables  as  well  as  lower operating  expenses  at  its  water  segment.  All  in,  the group’s 1QFY13 core  earnings  surged  22.6%  y-o-y  to  MYR60.7m,  further  boosted  by  a lower effective tax rate.

- Reclassifying  Syabas’  accounts.  To  our  surprise,  Management implemented  MFRS11,  which  allows  its  70%  stake  in  Syabas  to  be accounted under the equity method instead of the consolidation method previously.  While  this  will  distort  comparisons  against  its  retrospective performance,  Management  said  the  rationale  is  that  the  decision  over Syabas’ annual  business  plan  and  budget  requires  the  approval  of  at least one Puncak director and one director from Kumpulan Darul Ehsan, 
which  holds  the  remaining  30%  stake  in  Syabas.  On  paper,  this  boosts Puncak’s NTA/share from MYR0.72 in 4QFY12 to MYR4.00 currently.

-  Briefly  on  Syabas’  accounts.  Puncak  also  offered  a  snapshot  of Syabas’ 1QFY13 accounts,  which  showed  revenue  of  MYR697.2m  and net  profit  of  MYR7.3m  while  financing  costs  totaled  MYR178.3m.  As  of 1QFY13,  the  receivables  due  from  Syabas  amounted  to  RM1.6bn. Syabas, on the  other  hand,  has lodged a claim  for  MYR2.7bn  for  water tariff compensation with the Selangor state government.

- Maintain BUY. We make no changes to our estimates for now pending Management’s  clarification  on  implementation  of  MFRS11.  Maintain BUY. with our FV unchanged at MYR2.00, based on 3x FY13 P/E.

Source: RHB