Posted by YTChoong > 2017-07-21 08:50 | Report Abuse

We came away from a recent plant visit feeling more POSITIVE on SKPRES’ medium-term prospect. Several strategic measures have been initiated to strengthen the group’s manufacturing capabilities which could drive revenue growth momentum further with enhanced profitability. Although we have yet to account for the positives, the riskreward ratio is appealing at this level, even with our conservative forecasts. Upgrade to OUTPERFORM with a higher roll-over TP of RM1.60.

Staging for a stronger come back. Recall that SKPRES has been struck by a series of unfortunate events in FY17, i.e. short-term cost pressures resulting from the hiring of higher-cost contract workers as a result of policy changes as well teething issue of new products ramp-up. While all these unforeseen events have reset the group’s profitability to a new low in 9M17 (at c.5%), the group managed to strike back with a swift improvement with the last quarterly results coming in well within our, and the consensus, forecasts, alongside margin improvement (at 5.6%). With the labour issues being resolved coupled with better operational efficiency, we believe the group’s profitability could get back to the >6% mark.

Orders remain resilient; with potential margin enhancement coming from vertical integration. We gather that orders for its main revenue drivers- the box-built products which will contribute at least RM1.7bRM2.0b in FY18-FY19, are still intact. While top-line growth remains decent with a 2-year revenue CAGR of 16% (mainly from the base case assumption of the total announced RM1.1b contracts), we believe the key potential catalyst in the medium term is potentially better profitability (beyond the current level) which could be reaped from its new PCBA services. Note that currently, the group is sourcing the PCB parts from the other suppliers. To further improve its profitability as well as its capability as a complete integrated ‘one-stop’ EMS service provider, the group had on April 2017 announced its long-term strategic plans to expand into PCBA and other EMS related services. During our recent visit, we were delighted to gather that the PBCA set-up will be up and running in 4QCY17, which will utilise 25% space in its new plant. While we have yet to account the margins accretion from the PCBA services given the scarcity of details, we see potential margins improvement from our current conservative CNP margin assumption of 5.6%-5.7%, judging from the trend of other EMS players with in-house PCBA capability. On top of the margins accretion, it is also noteworthy that with more complete integrated one-stop EMS services, this will enhance the group’s possibility of winning more contracts from major customers.

Trading at laggard even with better manufacturing capability now. Among the major EMS players in Malaysia, SKPRES has been trading as a laggard with 2-year forward PER (consensus) of only 10.4x as opposed to other EMS players trading at 2-year forward PER (consensus) of 12-13x with PCBA capability. Even at our very conservative FY19E earnings which is 8% below the consensus (with only 2-year NP CAGR of 19% with CNP margin assumption of 5.7%), it is only trading at 11.1x which is still lagging compared to its peers. We reckon that the premium for its peers stems from the more complete manufacturing capabilities. Now, with the group’s in-house PCBA capability coming in place coupled with the resolution of previous problems, we see better risk-reward ratio from here.

Upgrade to OUTPERFORM with a higher TP of RM1.60.While we made no changes to our FY18E/FY19E earnings, we roll over our valuation base year to FY19E. All in, with an unchanged PER of 13.5x (which is the average 3-year forward PER) being ascribed to FY19E EPS, our TP is increased from RM1.40 to RM1.60. Upgrade to OUTPERFORM. Risks to our call include: (i) lower-than-expected orders from its customers, (ii) higher input costs, and (iii) single customer concentration risk.

Source: Kenanga Research - 20 Jul 2017

Posted by riznet > 2017-07-21 09:17 | Report Abuse

got future if buy this counter...? please advise..?

Posted by Ng Vincent > 2017-07-21 17:22 | Report Abuse

these few days start collecting ,today volume also ok, just need some good good news to push, need time for a wait!

Posted by tales029 > 2017-07-22 00:48 | Report Abuse

星光资源拟2017财年派息4.15仙

Posted by RocketRider > 2017-07-22 10:15 | Report Abuse

EPF just disposed 795k shares, good or bad sign?

Posted by Yipman > 2017-07-22 10:40 | Report Abuse

Stores has no new orders or contract no doubt the existing contract can hold for next 3 years.

Posted by Yipman > 2017-07-22 10:42 | Report Abuse

may be this is the reason fund manager dispose and look for better opportunity.

Posted by Jilohhuat > 2017-07-22 11:20 | Report Abuse

Kenanga research upgrade tp to $1.60 ! Huat ah!

Posted by VenFx > 2017-07-22 11:37 | Report Abuse

EMS sector is curving up , rooms are ample for growth.
Skpres & Vsi shall continue heading up.
EG & Denko definitely worth your attention from their growth capex spending...
Will bring fruity return.

Posted by enigmatic > 2017-07-22 17:16 | Report Abuse

http://www.theedgemarkets.com/article/skp-resources-plans-415-sen-dividend-fy17

Posted by YTChoong > 2017-07-22 19:45 | Report Abuse

The net profit chart of SKPRES is look like going up stairs. keep going up and up!

Posted by YTChoong > 2017-07-22 19:47 | Report Abuse

The management also announced that coming financial year also has double digit profit. whoa!! it's not double digit growth, it's double digit PROFIT!!

Posted by bsngpg > 2017-07-28 22:19 | Report Abuse

Shit!!! BOD steals the 50% payout dividend policy again which was announced on 29 Feb 2012 and reiterated in Nov 2015.
Whole year eps 8.91 cents x 50% , dividend for the year should be 4.45 cents instead of 4.15 cents. BOD broke their own words each year except FY14.

Posted by onecall > 2017-07-31 11:56 | Report Abuse

Today break 1.35

Posted by fattycat > 2017-07-31 16:26 | Report Abuse

dont be angry bsngpg :)
maybe u can point out during agm
but i think the dividend is quite nice and not all comp in bursa will share their profit wif small shareholders like us

Posted by bsngpg > 2017-07-31 16:56 | Report Abuse

In fact div payout of SKPRes ranks at the top of Bursa as it paid out 49%, 51%, 42%, 47% and 47% for the last 5 years. This is the main reason pulling me into SKPres. I always hope to see 50+3% instead 50-3%.

Posted by bsngpg > 2017-07-31 17:03 | Report Abuse

wow ! closed at 1.38. Hardly see 1.38 in months. Hopefully it has nothing to do with the hype of the newly released AR17. Hopefully the momentum rolls on to catch up with peers.

Posted by wakarimas > 2017-07-31 20:12 | Report Abuse

yes yes yes up!

Posted by mamatede > 2017-07-31 21:44 | Report Abuse

kudos for long term holder.. been long enough stagnating.

Posted by fattycat > 2017-08-02 10:47 | Report Abuse

yeah~~touch 1.41 today

Posted by ignasio > 2017-08-02 13:47 | Report Abuse

looking good but always stumbled at 1.4+-

Posted by onecall > 2017-08-03 09:31 | Report Abuse

gogogo

Posted by Babihutanding > 2017-08-03 10:27 | Report Abuse

Faster 1.48 i ean unload some

Posted by wakarimas > 2017-08-03 11:55 | Report Abuse

wahahaha, go go go push to 1.50

Posted by bsngpg > 2017-08-03 12:30 | Report Abuse

Should not be difficult to reach 1.50.
Question is when can it reach 1.70 - 1.80 for me to sell ?

Posted by wakarimas > 2017-08-03 15:17 | Report Abuse

dont sell lah. Good counter deserve to hold.

Posted by wakarimas > 2017-08-03 15:19 | Report Abuse

oh, waiting for bonus share

Posted by Babihutanding > 2017-08-03 16:03 | Report Abuse

Haha. Hold too long d

Posted by onecall > 2017-08-06 17:23 | Report Abuse

Why dropped? Hmm....

Posted by anson8222 > 2017-08-06 19:44 | Report Abuse

@onecall, are u the first time join this boat? Just wait for it.

Posted by Babiyou8 > 2017-08-08 10:22 | Report Abuse

this stock sleep too long d..

Posted by jamesyfl > 2017-08-10 03:32 | Report Abuse

tp 1.50 :)

Posted by asrizabidi > 2017-08-14 06:40 | Report Abuse

https://t.me/sahamteknikmath (Channel Telegram Pembelajaran Analisis Saham)

Posted by onecall > 2017-08-16 15:15 | Report Abuse

Come liao

Posted by micsoh > 2017-08-16 20:08 | Report Abuse

Result should be good.

Posted by Stockwatch Kim > 2017-08-20 23:54 | Report Abuse

https://klse.i3investor.com/blogs/kimstockwatchfajar/130341.jsp

Posted by onecall > 2017-08-24 11:10 | Report Abuse

epf buying daily...

Posted by dalpinia > 2017-08-24 16:10 | Report Abuse

very good QR.....1:1 bonus/split share to be announced soon

Posted by apolloang > 2017-08-24 16:13 | Report Abuse

where got? jangan tipu lah,results also not out yet

Posted by apolloang > 2017-08-24 16:15 | Report Abuse

skp tak boleh bagi 1 for 1 bonus and split cos capital too much already and reserve not enough. maybe 1 for 4 bonus can lah

Posted by wakarimas > 2017-08-25 15:42 | Report Abuse

when is the result come out? Expecting for bonus share .

Posted by VenFx > 2017-08-25 19:14 | Report Abuse

CONGRATES TO SKPRES BOARD & HOLERS HERE *v@

All parameters showing Skpres is firing up :)


[ Performance review ] (Q1'2018 - ended 30/6/17) ----------------------------------

-The Group recorded a turnover of RM524.9 million with profit before tax of RM43.9 million for the current financial period to date as compared to RM320.6 million and RM24.0 million in the preceding year corresponding period respectively.
-The increase in revenue of 63.7% and profit before tax of 82.8% was mainly due to the higher revenue recorded from existing keycustomers during the period.

[ Commentary on prospects ] ------------------------------------------------------------
-SKP Group is confident to report consistent positive growth in the bottom line moving forward, backed by the strong order books from its existing customers and operational efficiency.
-Going forward, SKP shall keep its sight firmly to develop its market further in the EMS sector and continue to pursue vertical integration status .

Posted by bsngpg > 2017-08-25 19:18 | Report Abuse

Cheer! after more than a year of dull holding period, we at last see money light with great qtrly result with eps 2.7 cent. Bravo!

Posted by VenFx > 2017-08-25 19:24 | Report Abuse

EMS-v.i. poised to move up their the ramp .
Slow & stellar prospect till 2020 :)

Posted by dalpinia > 2017-08-25 21:18 | Report Abuse

SKPR-CF will jump 100% Monday

Posted by micsoh > 2017-08-25 23:43 | Report Abuse

Why don't u buy the skpres-ce?if cf is 100%jump in Monday, that means the mother share price will jump to rm1.88, for ce, 1.88-1.2=0.68, 0.68/1.5=0.45, now the price for ce is just.20cents ,so, 0.45/.2=125% profit, isn't it more attractive?

Posted by micsoh > 2017-08-25 23:45 | Report Abuse

Furthermore, their expired date almost same.

Posted by Wenson Ng > 2017-08-26 09:22 | Report Abuse

spilt share? bonus share? come on , the share issue are too high already, almaost 1.25B share , in addition, the ESOS will significantly add on more 15% of the total number of share issued share of skp! eps of share sure will be diluted! for what?

Posted by onecall > 2017-08-27 16:37 | Report Abuse

Tmr fly fly fly

Posted by Wenson Ng > 2017-08-28 09:37 | Report Abuse

no power fly at all...hahaha