At first glance, the company seems to be undervalue given the low PE multiple of 4.5x. However, after further verification, a big portion of the profit in 3Q and 4Q 18 was mainly due to fair value gain on investment amounting to RM25mil. Excluding those gains, the combined profit for the 3Q and 4Q18 would have fallen to only around RM500k. 1H19 core profit excluding gain on investment is only RM2mil. This means the 12 months trailing core profit for the company is only RM2.5mil. At the current price this would mean that the company is actually trading at a very high PE valuation of 50x. Even if the company managed to record a profit of RM5mil in FY19, this would still mean it is trading at a forward PE of 25x. Normally, investors would expect a steady profit growth of at least 15% (for the profit to double in 5 years) which the company might find it difficult to deliver given the current market condition.
If you are looking to diversify your portfolio outside of Atta Global (due to the high PE valuation and the weaker earning growth in the near term) I would recommend you to look at MBMR.
MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.5x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.
For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.
Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Posted by k6ii > 2018-08-09 16:31 | Report Abuse
Atta hotel seem like complete soon..don know bila opening