18 Nov 2014

Market Capitalisation = RM348 mil

Earnings (Forecast) May 2016 = RM114 mil

Earnings (Forecast) May 2015 = RM82 mil

Earnings (Actual) May 2014 = RM44mil

PE = 3.3X (based on forward earnings of May 2016)

1.  Look up Gadang, recommended by JP Apex, TP = RM2.57 (FY2015 PE of 7.3x)

2. Today's price (18 Nov 2014) = RM1.61

3. DY is 2.5%

4.  Catalyst (a) Capital City (Johor), to contribute RM40m p.a. for next 5 years

                     (b) Construction book order growth from current RM1.3billion order book - can last 2-3 years (more to come) & new projects, RAPID 2, WCE, SUKE, DASH, LRT 3 and MRT 2

                    (c) Well diversified, Construction/Utility/Plantation + Property Development

5.  Low PE, double digit ROE, DY, High Growth (mainly local projects, sustainable even NYSE drops)

6.  Conservatively, if they achieve 80% of 2016 Profit, it will be about RM91m, giving it a forward PE of 3.8x (UNDERVALUED).

Conclusion

Tong Kooi Ong - recommended investors that equity is still the best place to be for next 24 months (Weekly - The Edge).  Personally, we should not time the market, as long as we find that the biz is GREAT and traded at fair price, anytime is a good time.  Personally, I wish there is another major correction, so we can accumulate more.

At the moment, the market is consolidating, esp. for small cap stocks, suggest to accumulate over time.  

Upside for GADANG over next 2-3 years is >50%, hence, within my selection criteria.  Let's hope they don't have management problem like many small caps stocks.  Lets monitor them regularly.

Disclaimer

This is not a recommendation to buy, sell or hold.  It is a merely a record of a personal view of a counter for own consumption. Of course, viewers are welcome to comment.

Many investors not aware they can use their EPF money (A/C1) to invest in Equity (text if need to know more 0122037325, no UT agent pls)