I am here to ANSWER a simple question. Why Zelan? (Part 2)

Please refer part one at the link below:

http://klse.i3investor.com/blogs/undervalue/63542.jsp

As per recommendation on my part 1, I have introducing the share with my point of view. After my introduction, the share have hit RM0.365 before come down to RM0.32 today. However, I did not sell even one shares during this period because I am confident on the profit of Zelan will be come out with flying colour once again.

Here is the financial result today:

http://www.bursamalaysia.com/market/listed-companies/company-announcements/1801949

As per announcement above, Zelan have able to achieve 1.58sen eps this quarter. For the financial year 2014, the accumulated earning have reach 3.07sen only on two quarters. If using the prediction that the profit will be maintain, the eps will be reach 6sen in 6more months.

Other than that, as mention in my 1st part, the main contribution, which is Meena Mixed Plaza Use Development Project have just started at the end of September (according to Q2 2014 quarter report), the total project will be AED515,490,023.94 (equivalents RM463mil) which will be charged in 15months, which means there will be additional RM30mil per month, which translate to RM90mil per quarter. If the project earned 10% profit, there will be additional RM9mil per quarter. Imagine what is the EPS next quarter if you included the profit earn from Meena Plaza Use Development Project.

Other than that, RM248,728,660.00 for The Proposed Construction and Completion of the Drawbridge Connecting Muara North and Muara South in Kuala Terengganu City Centre for The East Coast Economic Region Development Council which started on 13 August 2014 to 14 March 2017 will be charging more due to full duration of the three month utilised. (period for Q2 - 13 Aug 2014 to 30 Sep 2014 - 48days) (period for Q3 - 1 Oct 2014 to 31 Dec 2014 - 92days). Hence I expect more revenue will be came in next quarter from this project.

Also, keep in mind that Tanjung Bin project will be ended on 31 October 2014, hence i will reduce the profit by slightly. 

As mentioned in part 1, Zelan have received AED121,638,624.07 (RM109mil) from Meena Plaza Mixed Use Development Project. I guess alot of people will be asking where is the RM109 mil cash go? The answer is they using the money to payoff the trade and other payable

Other resources: 

http://www.theedgemarkets.com/my/article/zelan-makes-rm133-mil-profit-3qfy14

Hence my target price unchaged and I am confident that Zelan will be hitting my personal target price which is RM0.72 to RM0.90 somedays.

Trade at your own risk!!