Construction:Average PE = 11. Protasco Latest FY EPS = RM 0.12 Assuming Protasco moves to average PE of 11x = RM 1.33. I believe Protasco is worth more than 11x PE with its long term recurring income from long term govt contracts.
Property: Protasco holds land with GDV worth RM 6.6 billion. Assume conservative property net margin after development of 20%, property segment is potentially worth RM 1.32 billion or about RM 4.4.
Oil and Gas: Profit guarantee of US$ 50 million or RM 150 million, translating into minimal profit/equity of RM 0.50
Construction + Property + Oil & Gas = RM 5.73 + Rm 0.5 = RM 6.23
It looks far-fetched. You can apply a discount however you want it but at the current price, seems like market is only valuing the company for its construction and engineering service.
Property: Gross Development Value as mentioned by Datuk Chong is RM 6.6 billion. Typical net profit margin for Property Companies is 20% i.e. Net Profit attributable to equity holders = 20% x RM 6.6 billion = RM 1.32 billion.
No. of shares outstanding approx. 300 million.
Net Profit attributable to equity holders = RM 1.32 billion / 300 million = RM 4.4. (over the life of the project)
Oil & Gas: There is a profit guarantee of US$ 50 million (RM 150 million) over 3 years from the counter-party which stipulates that the vendor will make up for any shortfall. We could assume (unless the vendor defaults) that RM 150 million of profit would be attributable to equity holders over 3 years. Again, given about 300 million shares outstanding, this segment would be valued minimally at RM 0.50.
I think the price would be reasonable but I'm not sure about the reasonableness of the intrinsic value. Perhaps we can use apply a discount rate to the yearly profits (assuming they eventually translate into cash) under a discounted cash flow model.
protasco is new kid on the block for property sector with a superb de sentrum project, once due diligence done on oil n gas biz will be another source of revenue. director bought 500,000 shares on 16/7
The value of 100 acres of land in Kajang, assuming it forms 10% of the GDV, the value of land is estimated at RM660mn (RM152psf), far exceeding its current market capitalization of RM420.2mn. Hua Yang Berhad recently acquire a piece of 3.73 acres of leasehold land at Sri Kembagan, located within walking distance to The Mines and Serdang KTM commuter station, and is about 7km away or approximately 8 minutes drive to De Centrum City, for RM350psf.
RM660mn / 310.91mn (o/s shares) = RM2.12 (land value already represents 57% upside to share price now)
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Posted by mk88 > 2013-07-15 18:41 | Report Abuse
Pro has been getting many jobs lately. Good work