i like the way W-Wizard use those cartoon images....makes me feel young at heart..he he..and color selections (so soothing to the eyes)...and of course the facts presented...simply the best in i3 so far..
thanks for the article. I think there are some items which you might want to consider as well.
1. A huge chunk of construction orderbook is from Duke 3, so you might want to include the interest on the sukuk to be issued to finance the construction. It's RM3.64b but of course Ekovest won't max it out and won't issue all at once. But even if another RM2b in debt x 5% interest will shave off your PBT by RM100m a year
2. There are 122m warrants outstanding which is already in the money. as long as share price doesn't fall below RM1.35, we can expect warrant holders to convert. Based on your upside calculations, that would dilute it down to ~RM3.50
If you consider the above factors, the upside may not be as huge but of course this is ignoring future property developments, new construction jobs, Duke 3 etc.
Hi Jay, good to point out, my reply is as follows:
1. The interest for sukuk will be capitalised during the construction period of Duke 3 . You may refer to Ekovest account (past 2 years) in treating the construction of Duke 2.
2. Any target price is just a visionary target, market will be the final decider.
I can guarantee you over the next few weeks one day down, one day up, one day down, one day up.
Sometimes, it will be 2 days up, 3 days down, or 3 days up, one day down.
Its called thousands of human beings buying or selling based on mood. In the end however, it will go back up once they announce the div and the completion of sale.
Well say, Jon Choivo, market is always emotional one, the same company can be up & down very frequently, kind of crazy stuff. If anyone try to time it, good luck.
I prefer look at what I am going to get & trust my judgement rather than looking at others' people moods.
----------------------------------------------------- Its called thousands of human beings buying or selling based on mood. In the end however, it will go back up once they announce the div and the completion of sale.
1. you are correct. Duke 3 will take longer to construct so the interest cost won't appear in the 4 years period.
2. of course market decides the TP, I'm just using your calculations as an illustration. because when market looks at PE, they do look at EPS, which will be diluted when warrants kick in. just highlighting
Thank you, Jay, we are all small time investors, I don't think my articles can push up big company like Ekovest, just hope to get something back for our money.
Open up all facts & disclosing all figures will help to make informed decision. Rather than listen to newspapers where only a small portion of facts/info disclosed here & there.
Jay, I think your concern about earnings being diluted in the future years is pretty myopic. When people look at Ekovest at the fundamental level, they see high PE and high debt. What they missed was the value behind Kesturi, construction arm and property arm as well as the potential of Duke 3. Perhaps why Ekovest is undervalued now may be caused by the big project at hand - Duke phase 3 where a significant of construction costs may be incurred. The beauty of investing in Ekovest right now is we all know Ekovest is undervalued and EPF had done the maths for us. The price which investors paying at the current price is 60% of kesturi. The key to profitting from this investment is up to the management actions to minimize the disparity between the price and value and investors to ride the wave.
Profit projections are way off. Duke 2 revenue ramping up is too optimistic
Construction of Duke 2 is at the tail-end, at the start of this year already 70-80% completed. Duke 3 construction and recognition will only start next year
Revaluation gains are one-off, but then you know that already
Better hope next Q results will include exceptional items or 'early profit recognition' or this is a goner
Profit projection is always subjective, so nothing to argue, if you think too otimistic, then it is.
You are right at duke 2. But Duke 3 is started in august, please google the relevant news.
Since this is your opinion saying it's goner, then just let it be gone. ------------------- Posted by valuelurker > Oct 7, 2016 06:58 PM | Report Abuse
Profit projections are way off. Duke 2 revenue ramping up is too optimistic
Construction of Duke 2 is at the tail-end, at the start of this year already 70-80% completed. Duke 3 construction and recognition will only start next year
Revaluation gains are one-off, but then you know that already
Better hope next Q results will include exceptional items or 'early profit recognition' or this is a goner
Will Ekovest benefit from Bandar Malaysia in long term? Since IWH-CREC is the master developer of Bandar Malaysia.
Like Gearge Kent in MRT2, GKent is the Project delivery partner & awarded itself RM1bil MRT2 job.
---------------------------------------------------------------- 1. Ekovest's Tan Sri Lim Kang Hoo owns Credence Resources 2. Credence Resources is the 60% shareholders in IWH. 3. IWH owns 60% in IWH-Crec. 4. Bandar Malaysia is 40%-owned by MoF, with IWH-CREC holding the remaining 60%.
With an estimated gross development value of RM200bil, Bandar Malaysia is located on the former Sungai Besi air force base. Its development will be carried out over three to four phases and expected take 20 to 25 years to complete.
younginvestor92, my 2 cents opinion as I only responsible for my money invested in Ekovest, with such huge jobs in hand, downside is quite limited, unless Malaysia is having war later, then can't say.
While downside is being taken care, it is up to the Market to decide its value in coming months.
Construction outfit Ekovest Bhd expects to surpass the RM1 billion revenue mark by its financial year ending 30 June 2017, driven by strong outstanding order book of RM5.3 billion.
Besides that, Lim said Ekovest was also bidding for another RM5 billion worth of construction jobs.
He said the company had a good chance of securing several of them including the 1Malaysia Civil Servants Housing project in Putrajaya and the Pan Borneo Highway job.
Other than that, Lim said, the group was pre-qualified for the Light Rail Transit Line Three and Mass Rapid Transit Line Two.
Hmmm.... Interesting, the directors should be staying at the apartments and driving proton, Pls don't buy since it does not fulfill your requirements. Pls look for Public Bank or BAT, they pay more dividends.
I think WealthWizard has not incorporated effect of RoL, but existing assumptions are already more than enough to prove how good is Ekovest. With so many good news week in week out, what management is trying to do is very interesting.
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Posted by moneySIFU > 2016-10-07 11:06 | Report Abuse
Very well structured & detailed analysis. You've done it again, WealthWizard.
Thank you for sharing!