Review of 3Q 2020
1. The revenue is consistent with the order books on hand, after come correction due to the lockdown
measures due to COVID. The Oman project is likely the most contributing segment.
2. Currently most projects are back on track. It can be implied that the management is able to execute the
project well and delivery the value to investors.
3. With the recent contracts won, more revenue can be expected from the 1.4B worth of contracts.
4. The company expects more chance in Sarawak’s developments.
5. Plenty of cash left from private placement. There should be no concerning issue on cash flow and
operation of the company.
6. Hence, for the Projection of Q4 2020, with ongoing project 1, 3, 4 ,5 ,6.
a. Total revenue is likely at 227-260 M
b. Net profit margin 7-7.5% = 15.5-17M per Q
c. Converted to EPS (annual)= 50-55 sen
d. At PE 10 (conservative)= RM 5-5.5.
7. From the contracts newly awarded , for the Projection of Q1 2021, with ongoing project 3, 4 ,5 ,6, 7 , 8, 9
and 10
a. Total revenue is likely at 370-390 M
b. Net profit margin 7-7.5% = 25-27M per Q
c. Converted to EPS (quarterly)= RM 0.055
d. At PE 10 (conservative)= RM 2.2-2.3
8. Comments
a. Next QR cash flow is crucial. Late payment from client may impact the operation of the
company.
b. If the cash flow is decent , this indicates contract replenishment will be better than expectation.
c. Currently traded at PE 10 on Q1 2021 , slightly undervalued. More contracts won will need to
be justified .