Stock :  GBGAQRS  (RM1.80)

Target Price : RM1.90 / RM2.10

Warrant : GBGAQRS-WA (Jackpot)

 

 

THE BACKGROUND

 

 

GABUNGAN AQRS BERHAD (GAQRS), an investment holding company in Malaysia, is an integrated Construction & Engineering service provider and Property Developer. The company has two core businesses namely, construction and property development. Its construction division is involved in various buildings and civil engineering construction activities for Government and GLCs as well as the private sector. Its property development division deals in the development of commercial and residential properties. The company is based in Selangor Darul Ehsan, Malaysia.

 

 

 

"I just want to say .. be focus closely on this one..will soar like a lion in the desert soonest". - Kim Spartan

 

 

THE KEYNOTE

 

 

1. GBGAQRS - The construction sector outlook for 2017 seems promising, particularly for infrastructure construction players, given the slew of government projects.

 

2. GBGAQRS - Gabungan AQRS Bhd has bagged a RM360.98 million subcontract from its 30%-owned associate Kreatif Sinar Gabungan Sdn Bhd to undertake construction works for the proposed development of Pusat Pentadbiran Sultan Ahmad Shah in Kuantan, Pahang.

 

3. GBGAQRS - The rebound in sector core earnings per share (EPS) growth to 15% y-o-y in 2017E (estimate) from a 1% y-o-y contraction in 2016E is another positive catalyst. Set to be a main beneficiary of residential, non-residential and infrastructure projects influx in Sabah and Pahang. According to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), the project influx in Pahang and Sabah is mainly driven by the housing spill-over effect of the East-Coast railway Link (ECRL), geotechnical engineering subcontracting jobs in ECRL’s Pahang route, and the Pan Borneo Highway project.

 

4. GBGAQRS - Selling its leasehold land in Mukim Sungai Buloh, Petaling Jaya for RM55.69 million cash. The Proposed Sale of Land is expected to have a positive impact on the earnings and earnings per share of the company for FY2017

 

5. GBGAQRS - Selling a piece of land in Petaling, Selangor for RM34.73 million, the proceeds of which will be used to reduce the gearing of the construction and property development group. Had purchased the piece of land for RM19.34 million on Feb 18, 2013. The net book value of the asset stood at RM22.57 million as at Dec 31, 2016.

 

6. GBGAQRS - First quarter net profit jumped nearly 4.4 times on improved operating margin and sale of two pieces of land. The property developer and contractor reported a net profit of RM16.14 million or 4.13 sen a share for the first quarter ended March 31, 2017 (1QFY17) compared with RM3.75 million or 0.96 sen a share in 1QFY16. Revenue surged 99.6% to RM158.94 million from RM79.64 million in 1QFY16

 

7. GBGAQRS - Acquiring an industrialised building system (IBS) company that is majority owned by Nirvana Asia Ltd founder Tan Sri Kong Hon Kong, to be paid in Gabungan shares.

 

8. GBGAQRS - Inked a memorandum of understanding (MoU) with Singapore's Tera Capital Pte Ltd to jointly develop its One Jesselton Waterfront mixed development in Kota Kinabalu, Sabah. Under the terms of the MoU, Gabungan AQRS will develop the hotel and serviced suites portion of the development according to the design concept provided by Tera Capital

 

9. GBGAQRS - Brought in real estate investor Ted Fang, the Singaporean businessman who holds the Days Inn master franchise for China, to take part in the development of RM1.8bil One Jesselton Waterfront in Kota Kinabalu.

 

10. GBGAQRS - Has a joint venture with state-owned Suria Capital Holdings Bhd to develop the project, comprising a hotel, serviced suites, residential apartments, retail shopping mall and office tower on 6.28 acres in Kota Kinabalu.

 

10. GBGAQRS - Executive director and group chief executive officer (CEO) Datuk Azizan Jaafar has upped his stake in Ganjaran Gembira Sdn Bhd — a private investment vehicle which owns a 13.32% stake in Gabungan AQRS.

 

11. GBGAQRS - Has been awarded a contract worth about RM1.14 billion from Prasarana Malaysia Bhd to undertake works related to the 37km LRT3 (Bandar Utama-Klang) line. According to its bourse filing, Gabungan AQRS said its wholly-owned subsidiary Gabungan Strategik Sdn Bhd will undertake the jobs under Package GS04 comprising the construction and completion of guideway, stations, park-and-ride, ancillary buildings and other associated works for the LRT3 line linking Bandar Utama to Johan Setia. The contract, said the group, brings its outstanding orderbook to RM2.6 billion.

 

 

 

THE SUMMARY

 

Another sleeping giants for construction player "Good news announcement will now take place in this month", I am still awaiting the roar and golden finger magic GBGAQRS. - Kim Spartan