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GADANG SOUTHERN BADANG!!!
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DATE : 24th October 2017
Stock : GADANG (RM1.22)
Target Price : RM1.30 (immediate)
Warrant : GADANG-WB (honey)
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THE PROFILES
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Gadang Holdings Berhad (Gadang or the Company) was incorporated in Malaysia on 6 October 1993 as a public limited company under the name Lai Sing Holdings Berhad. It was listed on the second board of Bursa Malaysia Securities Berhad on 2 September 1994 under the construction sector.
In 1997, Tan Sri Dato’ Kok Onn who is the Managing Director cum Chief Executive Officer became the major shareholder and took over the operations of the Company and renamed the Company as Gadang. Gadang was subsequently transferred to the Main Board (now known as Main Market) under the same sector on 24 December 2007.
Gadang is an investment holding company while its subsidiaries are principally involved in civil engineering and construction, property development, water supply and mechanical & electrical engineering services. To gain a stronger footing in business with recurring and sustainable income, Gadang has made inroads into hydro power generation in 2014 by acquiring 60% stake in PT Ikhwan Mega Power, the holder of a 9 megawatt hydro power concession in Kabupaten Tanah Datar, Sumatera Barat for a period of 15 years.
With its wealth of diverse experience and expertise, backed by a strong management team, Gadang stands out as a competitive player in each of its business segments.
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THE KEYNOTES
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GADANG - (AUG 2017) - The East Coast Rail Link (ECRL) project took off with a groundbreaking ceremony yesterday. Prime Minister Datuk Seri Najib Razak has targeted for the RM55 billion project to be completed by 2024. The ECRL is an electric railway project measuring 668km in length connecting the East Coast states of Kelantan, Terengganu and Pahang to Greater Kuala Lumpur. News reports said the travel time from Gombak to Kota Baru will be cut from seven to 12 hours by car to less than four hours.
GADANG - (AUG 2017) - Has won an RM475 million contract to build the 288-bed Cyberjaya Hospital. Gadang Engineering (M) Sdn Bhd, received the letter of acceptance from Cyberview Sdn Bhd, the government-owned company spearheading the development of Cyberjaya.
GADANG - (JUL 2017) - Net profit in its fourth quarter ended May 31, 2017 (4QFY17) slid 3.5% to RM29.99 million from RM31.07 million in 4QFY16, as revenue fell. Also pulling profit down were higher income tax expenses and foreign exchange losses, as well as losses from its discontinued plantation division. Quarterly revenue declined 33.8% to RM163.78 million, from RM247.5 million a year ago as revenue from the construction division declined by 50.03% to RM89.95 million from RM180.02 million previously. It proposed a first and final single tier dividend of three sen for FY17, down from seven sen last year. For its full FY17, Gadang registered a net profit of RM100.38 million, up 5.92% from RM94.77 million in FY16, mainly due to improved profit margins from construction projects and higher contributions arising from property activities. Revenue, however, retreated 19.4% to RM542.8 million from RM673.53 million last year.
GADANG - (JUL 2017) - Selling its indirect wholly-owned plantation unit Desiran Impian Sdn Bhd for RM15 million. The group said its subsidiary Gadang Plantations Holdings Sdn Bhd is selling the unit to Kumpulan Sawit Tan Holdings Sdn Bhd. The proposed disposal is undertaken by the company to dispose of its non-core and lossmaking subsidiary and offers an opportunity for the company to exit from its non-core activity and reallocate its resources to other key businesses within the Gadang group. Proceeds from the sale will be used for general working capital requirements, Gadang said, adding that the deal is expected to be completed by May 2018.
GADANG - (MAY 2017) - Has bagged a RM327.90mil contract to upgrade part of the Jalan Tun Razak highway. The construction company said on Tuesday that Gadang CRFG Consortium Sdn Bhd, a 51:49 joint venture between Gadang Engineering (M) Sdn Bhd and CRFG Malaysia Bhd, had accepted the contract from TRX City Sdn Bhd. The contract involves the traffic disperal and upgrading the stretch from Jalan Langgak Golf to the Kampung Pandan roundabout. Gadang expects the project to contribute positively to the group's future earnings.
GADANG - (APR 2017) - Posted a slight increase of 3% in net profit for the third quarter ended Feb 28, 2017 (3QFY17) to RM25.79 million, from RM25.11 million a year earlier, largely on higher contributions from the property division. It also registered a 41% fall in cost of sales to RM77.92 million during the quarter, from RM131.8 million in the previous corresponding quarter.
GADANG - (MAR 2017) - Has bagged a RM952.09 million contract from Mass Rapid Transit Corp Sdn Bhd (MRT Corp) to undertake viaduct guideway and other associated works under Package V206 of the Mass Rapid Transit Sungai Buloh-Serdang-Putrajaya (SSP) Line. Package V206 involves the construction and completion of viaduct guideway and other associated works from Serdang Raya to UPM. The contract is expected to contribute positively to the future earnings of the group.
GADANG - (JAN 2017) - Posted a 57% jump in net profit to RM27.91mil in the second quarter ended Nov 30, 2016, from RM17.72mil a year earlier on better margins from construction activities and higher contributions from the property segment. This translated to a basic earnings per share of 10.62 sen compared with 7.40 sen previously. The construction and property firm’s revenue was also higher by 45% to RM147.88mil from RM101.98mil. For the first half of the financial year, net profit came in at RM44.60mil from RM38.58mil a year ago on the back of a marginally higher revenue of RM252.48mil from RM251.36mil.
GADANG - (JAN 2017) - Has entered into an agreement with Nusvista Development Sdn Bhd to buy leasehold commercial land in Damansara Perdana in Petaling Jaya for RM55.7mil cash. The purchase consideration was arrived at on a willing buyer-willing seller basis after taking into consideration the market value of the land currently owned by Nusvista. iI would use internally generated funds and/or bank borrowings to fund the purchase. It also would expose the group to interest rate and debt-servicing risks, while any utilisation of internal funds is expected to result in a reduction of funds available for working capital purposes, which may have an adverse effect on the group’s cash-flow position.
GADANG - (JAN 2017) - Posted a 57% jump in net profit to RM27.91mil in the second quarter ended Nov 30, 2016, from RM17.72mil a year earlier on better margins from construction activities and higher contributions from the property segment. This translated to a basic earnings per share of 10.62 sen compared with 7.40 sen previously. The construction and property firm’s revenue was also higher by 45% to RM147.88mil from RM101.98mil. For the first half of the financial year, net profit came in at RM44.60mil from RM38.58mil a year ago on the back of a marginally higher revenue of RM252.48mil from RM251.36mil.
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THE FINANCIAL
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