Post qr results update

EPS suffered due to ~4m higher than average direct & admin fees.

However, unbilled sales is at 790 million as of 31st Match.
This amount of unbilled sales is higher than Lagenda Property for comparison.

As all of MCTs projects is entering billable stages, it's possible for their upcoming quarterly revenue recognition to be at 100m, with 33% of gross margin. 33m gross profit.

Deducting 17m in direct operating expenses, 16m profit before tax and 12m profit after tax is possible.

Entering oversold territory, comparing against other property counters, MCT have much more in terms of earning visibility, net asset per shares but is trading at much lower share price.

let's see if it can be supported at around 18 to 20 cent for these next 2 to 8 weeks, and we'll have AR released then that'll offer more visibility/aid in our decision making.

Wasn't expecting the buying volume suddenly.

It's a bit hard to estimate the fair value at this moment for MCT, especially since
1) the company just started to turnaround (from a profitability/EPS perspective, if based on yearly EPS of 4 cents, PE 10 worth 40 cents)
2) Fundamental change, historical prices of 10, 12, 14 cents is now totally invalid as a reference, due to change from loss making to profit making
3) if based on NAPS, of course, it's ~60 cents
4) Today's OPR result may be supportive of Property counters if rate maintained.
5) 720m unbilled sales at Dec 2022 is a record 4 years high? You will need to go back to AR 2018, for unbilled sales of 814m
6) Overall, the property index is also running up, maybe there's a wider property sector interest too

I think just based on the above which is fact, TP of even 30 cents is reasonable for the next 3 to 6 months. In this period, a few events will add further support to the 30 cents+ TP, Casa Embun and Alora sales/reception, progress billing for current projects etc.

For the immediate 1 week to 2 months, a lot will depend on the new buyers now, do they stay for a longer period or they are happy to take small profit, or worst, cut loss.

Don't want to say too much anymore, but as usual, if you're a shareholder, do try to wait until annual report is out in 2 months time, after which will have more visibility into their sales.

To be honest, I wasn't expecting such an aggressive land acquisitions so fast, and they are doing high end developments as well.

If want to be positive, these land purchases can be taken as a sign that they have sold out or close to selling out all their launches, to be fair to them as well, their last two lands purchased from Tropicana seems to be successfully launched as well.

Hope for the best and see you all after the next QR announcement

Yes agreed that it's deeply undervalued in the 3 to 9 months, but I feel even 3 months also seems like a very long time frame and some may cut loss or take early profit.

Have not really seen MCT billing their recently VP-ed project in Lakefront.... Or maybe they split the invoicing across two quarters? There's still a potential for a bumper profit in the upcoming QR as the VP billable amount for their recently handed over project could worth up to 80, 90 million just by itself.

Other than that, their interest charges should drop by 6 to 7 million like that as well. With the repayment of their 560m loan from holding co.

Taxation should normalize too after that.

Their OneCity project also is reviving in terms of office and shop lots rental, with their carpark rental being well occupied too.

They still have an uncompleted mall and tower 4 in skypark cyberjaya. This building is just opposite of MRT station which will open in Jan 2023... If tower 5 and 6 receives good occupancy, tower 4 will benefit from revaluation and potential rental income as well.

For myself, most of the negatives and stormy seas have already been sailed through, hope existing shareholders don't sell so soon....

MCT really need to improve their IR... (which to be fair, they have been improving)

Persona Metro, another public listed company just announced construction contract awarded to begin construction on 25th October of sanderling lakefront project. This usually means the project has at least 30% SPA signed.

Surprisingly, pilling works seems to have been completed as well? Construction period of 24 months seems too short if foundation works has not been started (Usually pilling and foundation works will take 9 to 12 months of entire development time)

Unbilled sales is potentially around 800 million now. (700m from Aetas, Alira, Casa Bayu + 30% of Sanderling GDV ~100m), income visibility for the next two years is be very consistent now.

But again, very low visibility of the counter to retail investors, and buying volume is very weak. Share price is exposed to price drop when existing shareholders need to exit in short term. Buy only if you have holding power of 2 months++ otherwise you will need to cut and sell at a loss.

Low liquidity is still an ongoing issue, if you buy, make sure to have holding power for a month and a half onwards, despite good net assets and the company turning back to profitability from the coming quarter result.

Financially, 3rd Q result coming in a month and half time, should continue to improve, supported by lakefront homes vacant possession revenue recognition of ~ 90 million, + additional progress billings from casa bayu, park place, all in, revenue could be between 110 to 130 million.

In the 4th q, while the 110m++ earnings will not be sustainable, mct should still be profitable, due to Aetas will be in a almost full quarter of revenue generating period, with construction progress already reaching the 4th floor of residential units for tower 2 as of 1st week in October. while tower 1 residential units will start to be built in October too. Balance sheet wise, borrowings should drop to 150m to 200m from the 550m loan from holding co, and interest charges will also reduce by 3 to 4m per quarter moving onwards. Accordingly, income tax is also expected to be lower as well by 1 to 2m.

After which, the future next 4 quarter of performance of mct will be supported by continuos progress billings of casa bayu, aetas and Alira which have both recorded up to ~ 75% sales overall. Any new launches (casa Embun, sanderling or Narra) in this last 3 months will continue to provide consistent income visibility for FYE2023

Very good value and low risk to reward ratio for those who are able to buy now.
Whoever is selling, is certainly selling at losses now.

Fundamentally, MCT have over 700m in unbilled sales just from their 3 ongoing projects of Aetas, Alira and Casa Bayu.

Their new launches, Casa Embun Phase 1 booking seems positive and should be successfully launched, providing a good continuous earning visibility.

Overall, current price risk to reward ratio does favor the buyer, but low liquidity and buying interest makes it hard for shareholder to exit quickly, without selling at a steeper discount.

QR Update.
Expectations vs Reality, overall original assessment in May still remains, we're looking at the 3rd and 4th quarter result for higher revenue, and eventually lower interest paid and lower taxation (from unclaimable interest expense) to kick in. 1st Q of 2023 onwards should be able to maintain profitable quarters consistently, provided their target of successfully launching 2 projects per year is achieved.

Cons
VP progress billing for market homes missed to be billed in Q2.

Pros
Overall, QoQ improved, and loss narrowed from 11m to 4m

For earnings visibility
Missing the VP billing for lakefront in June quarter is a negative, but it means that 3rd Q result will be good, potentially around 110m in revenue.

4th quarter earnings will depend upon Aetas and Casa Bayu progress billing maybe Alira phase 2 foundation billing.

Risks
Construction workers, and building material increase, market uncertainty in the next 3 months, opportunity costs.

Some update, profit for upcoming quarter maybe very good... Depending on VP payment and progress billing if can bill in 2nd or 3rd quarter ...

If you're reading this and you're shareholder already, the price now is at 2020 March low, during MCO 1.0 announcement.. are things really as bad as that period? No right, I hope existing shareholders don't sell at this bottom.

If you're reading this to buy, again can use same assessment, are we really at the most fearful period in mco 1 announcement back in March 2020? It is really heavily oversold...

MCT unbilled sales have increased up to 520m as officially announced in last AR.

It's possible that unbilled sales could reach up to 600m already now, with Alira sales around 80% already, Aetas is 70% sold while Casabayu is 65% sold.

Amongst property developers MCT actually have around 4million of completed and unsold properties! At 500k per house, that means 8 units of unsold home only ....

There is a lot of good value for buyers, while for existing shareholders, do try to hold until the upcoming q result if possible, just 1 and half month more to go only.

Oh ya, forgot to mention, in 2021, MCT loss about MYR 22 million to their construction subsidiary, (Remember, MCT used to have their own in house construction team) to build their projects before 2020.

Again, this is where the good news comes in, MCT have since fully sub contract construction works out, so, YoY, it's not likely to incur the -22m loss from their construction department.

So, that's the frank story of MCT, good entry if you have the patience, or if you can accumulate on a monthly basis until their year end.

But again, will subject to near term risks for the next 6 to 9 months :(

Hi snowball, to be honest, you'll be looking at a good result for MCT in the 4th quarter results, this next 6 months, the results will be so so only.

Please verify on your own, what is said.

To answer you, interest cost, this is due to the loan MCT took from Ayala in 2018/2019 like that, around 120m++ USD, interest rate around 6%, that's why every year need to pay ~32million in interest.

Why so much loan (500+m MYR) vs low level of sales, I believe they used the money to rush out the completion of projects back then, after those projects were completed around 2020 (When MCT recorded one of their higher profits) of course Covid comes, and it effected their new launches, imagine if without covid, Aetas and Alira were launched 1 year earlier, and at this time, the revenue from these two projects (or more projects) would be just nice to cover the interest and generated profits.

Worst of all, after the intercompany loan is approved, goverment implemented taxation on intercompany loans, whereby, interest paid to controlling shareholders is not tax deductible expense. Again, got hit not only by interest, you'll also got hit by taxation as well. MCT's tax rate is insanely high... 30 to 40% ish? I didn't really verify the exact percentages for you...

That's the bad news, but having said all of that, this is where the better news is coming in.

If you check 2020 Annual Report, their unbilled sales is ~RM 320m
If you check the 2021 Annual Report, (EVEN AFTER BILLING minus RM 320m sales), they still have UNBILLED SALES of RM 510m!

Basically, in the year 2021, with covid, with lockdown, MCT sold RM 510m of new homes! Impressive numbers...

This RM 510m sales is from Aetas, Alira, Casa Bayu, which for aetas and alira, is only in the unbillable constructions stage unfortunately. Aetas will hit their residential unit construction in the 3rd quarter, while Alira probably will bill the first 10% in December (assuming foundation works takes a year)

Back to your interest topic, the MYR 500m + loan this figure have moved from Long Term Liability to Short Term Liability in Dec 2021 QR, which means, yes, this pain in the ass Loan/Interest/Tax payment will be replaced with local banking borrowings, that is more realistic with the current activity level, and at a lower interest rate amount as well.

Yes, like that loh, if you're entering now, it's really a good good point to enter, Net Asset 50+ cents, but, please, do prepare to hold up to minimum 6, ideally 9 months for this investment to turn around :(

I wouldn't want you to buy and cut loss in the next 1 to 3 months.
Myself also in the boat, and plan to see it through til year end.

need to trade sideway 26-30 cent until end of april, then 30-34 until end of may, by the time, QR result will then push it past 40 cents, if a minimum 2 cent EPS is achieved.

So far, it's mostly possible to achieve this 2c EPS, for a 2 quarter EPS of 4.65 cents

Replying to Blackpepper, if you understand property business, and the way their profit is calculated you will see their PnL is quite predictable.

For example, if I have completely sold out a 400m condo project, this 400m PnL will be spread across the 3-4 years of construction.
Of course, you will need to minus some profit which will be 'gone' as it has entered their final billing. (After VP 2 years, as they invoice the bank the final 10% of property price upon DLP over)

So we can see that their
1) Their completed properties, is almost sold out (Check balance sheet > Inventory values) They do not have overhang stocks
2) Their current under construction and new project launched, how much has been sold? It's reported in the Q result, this is new Revenue that will come in the next quarters
3) How is the reception to their new projects? Aetas I believe is receiving good interest, and Alira is priced very strategically, compared with other projects there by Tropicana.
4) Aetas project has already started pilling, and again, if you understand property business, they will not start construction, if the SPA sign rate during soft launch is not good.

Overall, I'm quite confident at least a cc EPS will be achievable in the next Q, and as we get more visibility into the sales % of their Aetas and Alira projects, potentially, it will even exceed, 4-5c EPS per quarter within 6-9 months

So short term (3 months to 1 year), we have good visibility of their profitability.
Long term (1-3 years), we should be looking at the beginning of the next property bull cycle,

So to me, the maths is very simple... is just up to all investors do you want to sell, and hope for a drop, to buy in at lower price (trading risk) vs (long term risk) if I hold and wait until 50c ++

To give you a summary, their 2.65c EPS is probably something like this

0.4 cent will not repeat in the next quarter, as it's the final claim after DLP.
2.25 cent will repeat in next quarter, as it's an active project

By next Q you will have
2.25 EPS which is brought forward from existing sales
0.X EPS from the new property sales generated from Jan - March

Of course, we have the forex thingy which may offset the final profit and loss. That's a random part.

Anyway, it's good to see more trading interest in the share, good share, good fundamentals whatever also, no use if no interest. enough commenting for now, hope to see you guys again in 2 months' time, when it's 40c++ la.

Take care~

So far, I like what I'm seeing, as long as above 30 cents by 15th April, the available supply of shares for MCT will have sufficiently been reduced, until the next Q result that's just 7 weeks away now.

Someone posted proudly Come take my Ticket at 0.33 cent just now and deleted.. lol, very easy to see he's a trader and matched his Q I believe..

Short term, it may still go down a bit, normal for consolidation to occur after a huge jump, but I believe 30 cent will be a good support.

Over few more days, especially after T7 from 1st April, we'll see how many of the shares traded ended up in 'Investors' hands, who have the holding power.. it'll then stage the next breakout if nothing else happened.

Too many followers are making the 'gurus' rich indirectly... @@

The guru want to sell, they'll ask u to buy, they want to buy, they will ask u to sell, get it?

Buy and invest with your own knowledge and understanding. If you listen to guru, or listen to anyone, you shouldn't be investing.. You'll be taken for a ride.

Compare the performance of ur trading account vs investing account, u may actually be surprised.

Trading account every T7 facility u use, every matching set of buy and sell order, u will lose like 0.8% fees?

This 0.5-8% fees is crazily expensive over multiple multiple trades u perform in a year!!! imagine 10k ammo, u trade (buy/sell) 100 times, each time u incur 0.8% trading fees + the T7 fees, 100 trades u make, u incur 10k in fees already.. roughly la.

Not even talking about u will Cut Loss or not.... you can't win if u trade long enough..

I advice, maybe open 2 shares account, one is cash only account. One is with trading/T7/Gambling facilities.... where no need upfront cash.

Put 70-80% of ur money into the cash only account, put 20-30% into your trading account.

Cash account manage with investor mindset, minimum each trade you need to think long term, 3 months.

Trading account, you can play as usual.

If you can wait for 2 months, 2 months only la... after announce Q result, it will average 40-50 cents, per Q result announcement where a minimum of 2 cent EPS is hit, expect a permanent gain of 10-15 cents.. because this is SUPPORTED by FUNDAMENTALS.... after announcement, the price wont break down anymore.

The last time I was asking people to wait for QR is during 16-19 cents time if you find back my posts in MCT... and yes, I'm still holding on even at 80% gains.. invest more, trade less guys!

Some profit taking is happening, again I want to advice you all to stop or reduce trading mindset, and adopt investor mindset... don't sell for 10-20% profit. Haiyah...

The next Q result will come in 2 months' time, in which it's expected to at least have 2 cents EPS. I'm actually discounting some reduction in EPS.

2.65 + 2 cent EPS... which I expect to be maintained until year end.
2.65 + 2 + 2 + 2 = 8.65 cents.

If you have holding power until year end, it'll be 60-80 cents.

round two, if today can close around 22, 22.5 will be good.

anyway, got benefit also la, if the sifu or speculator promote, a share need some attention to be healthty, and among the 1xxm shares traded yesterday, some should be able to hold ba.. :D welcome mct boat.

Cash and Cash Equivalent, 538m, amount owed to holding company, 526m net cash per share about 22m only
22m you divide by the outstanding shares la... it's certainly not the 33cent i believe. around 2cent net cash per share roughly la, you all do your own maths. lol.

if you yourself is playing as a trader (gambler) you can't blame the sharks, when you lose, but happy when gain. play by the sword, die by the sword la....

Anyway enough about the sharks.

For those who have onboarded and want to learn fundamentals, I will share.

Fundamentally, the property sector is still on an uptrend (overall property index is on a bull run) so, the sector as a whole, is on an uptrend. Look at the property index.

Property is a cyclical market, the 10-12 years cycle. Since it's peak, it's been about 10-12 years, we should be at the recovery stage or 2 years away from the next property bull run.

That's fundamentals on an overall market.

Fundamentals on per share basis, learn to wait for the quarter results, if already buy, hold for 2.5 weeks more la. QoQ performance is expected to be better, and most likely MCT will be profitable.

Their projects, surprisingly they are able to sell efficiently, amongst so many property developer, their completed unsold stock is surprisingly very very low.. the exact amount of unsold stock, you'll need to learn to read the QR/AR yourself...

Debt, no need to say, they are 'debt free' to banks, but they still have borrowing to parent company. They are not really net cash 33 cents, still need to repay la, even if borrow from parent company. But after paying parent, still have net cash. But it's not as much as 30 cents.

Have all the necessary information, and make informed investment decisions!
PS > Always do your own homework, and verify what ANYONE says...

9.6% of the entire MCT share was traded today, if the shares were really bought 9.6% by someone or sold by someone, it'll trigger major share holder changes soon, or the price will go LU, or LD. Big volume with minimal price movement (nett) is a good indicator of tape painting. as i said earlier today, ard 11am.

while i saw it happening, I didn't really benefit from it today as I don't want to sell before QR announcement.

don't play the trading game, you won't get the trading gains, but u don't get the trading losses too...

they can play the game, but if you're short term, your loss will be their gain.

the sharks probably gained twice in this operation, in the 23-24 cents selling, and now again as they pickup shares at 21.5

I read somewhere, some so called 'sifu' make buy call, and the followers, follow... follow to holland d.

hope the traders eventually will learn without losing too much money la.. i really worry those who CL after going in today.

To the sharks, good play... well executed

price will probably drop to 20 cent also, if a lot of those who gambled, are forced to cut loss (realize losses) over next few days.. due to no holding power, no actual money to pickup, or disappointed by unrealistic fast share gains expectations

What is even more painful to see, is if the QR release in the coming 2 weeks eventually is good... a lot of those who traded today and sell at a loss will be hit again the 2nd time, regretting why didnt' keep.

now those contra players who ate too much is cutting losses selling at 21.5 @@ interesting.. aih

for those who follow what sifu sifu and play by them, really will be gg. Come join the long term investor boat la, stop play play trading and get manipulated by so called sifus or buy calls. the volume vs price action clearly shows today action is manipulated one... huge buy and huge sell orders that doesn't really change hands for the shares..

trader wind blown and is gone~

they can buy all the shares volume they want, but 100% no intention to pickup at T2/7 so the volume is actually 'fake/weak' volumes...

QR result if good, will shift the support higher, as it'll discourage existing shareholders from selling... limit supply a bit. I still see a lot of traders hitting and exiting MCT few days.. probably contra/T7 players.

still need fundamental to cement the gains... dunno holding power of today buyer.. they could exit, one day show..

actura.. 4th QR delay max until 31st March, AR delay max until 31st May.....

i hope mct 'investors' here can change from trading to investing mindset, hold longer... lose less brokerage fees from trading in and out of multiple positions.

From people replying here, and other forums, again you can see a lot are hoping to make fast money, limit up la, hope can push up la, Tomorrow up LU, go to sky... lol these are the people who will cut loss when the price goes down a bit below their entry :D

When they cut loss, the share price will go down lu.

nobody knows, if it's really shark or not. if you view mct movement in longer term, the average price (support) has slowly been moving up, 16 > 17.5 and now recently to 19 cent, with these few days trading volume, it's possible the new support is now 20 cent already.

Within this 2 weeks, if the QR is good (It should be a profitable quarter) once QR is announced, the entire mindset on MCT will change, and by then it'll be impossible to buy < 20 cent I believe.

Having said that, we'll only know upon release of Q result, for those who've already invested, even if current EPS is not overperforming, or even if it's underperforming, if ur holding power is long enough, 1.60 average price can be super cheap in 3 years time also... who knows..

It really depends on your investment objective/time frame risk acceptance...

IOIPG themselves have guided that their china property sales is likely to moderate, and the previous QR result is most likely a one off event, due to the chinese in PRC, just open MCO and buy a lot....

why buy IOIPG for an estimated(realistic) EPS of 10-13 cents for this FY, when there're others better Price/EPS ratio, Price/NAPS, Price/NetCashPerShares property counters....

personally, i don't think there's gonna too much good news to be announced.. at least not so soon, you're talking about ultra high net worth individual, 70million is like spare change to him, even if the share price drop 10, 20 percent from his purchase price, really no rasa to him one...

Even if you look at FY 2017, their EPS is 18.42 cents
The FY2017 is due to earnings from projects launched in 2013-2015.. which is still in the peak/just after peak of property bull run....

If their peak of bullrun, EPS is 18.42 cent, even in a best case scenario they can sustain their 3.49 cents EPS, for 4 quarters, it's still an EPS of 13 cents.. which is about fairly valued at 12x EPS for current price range.

His risk profile and your risk profile also very different.... you will cut loss if it drops 10%, he has infinite pocket to keep buying more.

potentially 200-400% gain is even possible, 400% in potentially, 3 years time assuming that's the timeframe for the next 'bull phase' of property sector.

personally, i'm targeting 100% gain from this.... once MCT hits a good result in this next two quarters, it's very likely that upcoming quarters will get even better, so it could potentially be the start of a new bull run.