Order for shipping crane is correlate closely with oil and gas capes ability, last year end and beginning of these year is when Brent crude oil tumble to below USD 50, almost near to their cost production, most oil and gas company in limbo, freeze capes condition, but since then, Brent crude oil alrdy rebounded to above USD 65, and many of these oil and gas company will resume their caped despite at lower budget in order to keep on oil production.
Please refer to Favco previous Q4 financial result, get impress for its strong balance sheet, in net cash position and under its comment future, management indicate clearly that it's have outstanding order book of more than RM 1 billion and expect to gradually recognize it into profit onwards.
my experience is that companies that give out ESOS will have big fluctuation/speculation in share price. although Favco is a good earning company, but i dislike companies that reward their employees with ESOS. imagine if an employee can buy off market at 0.80 and sell it in open market to make a quick buck, not only i causes dilution, they can sell down at any price as long they are making gains. u can see greedy companies that reward themselves with ESOS all the time.
MY personal opinion, may be wrong : Muhibah got big order from Rapid, Muhibah is one of the counter not affected by current situation, Favco 80% income from O&G, Facvo is child company of Muhibah, thus Muhibah will use Favco Crane. Thus Favco O&G downfall can be covered(but don't know how many %) by Muhibah's rapid job. Any way, I not sure if Muhibah Rapid job need crane or not ??? :)
For the current quarter ended 30 September 2015, the Group recorded revenue of RM571.6 million with profit before tax of RM97.0 million as compared with revenue of RM585.2 million with profit before tax of RM83.8 million in the preceding quarter ended 30 September 2014. The increase in profit before tax for the Group was mainly due to
(1) write back of provision for receivables after recovery of debts amounting to RM12m and (2) revalued foreign exchange gain on US Dollar currency deposits amounting to RM25m.
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....
hng33
19,978 posts
Posted by hng33 > 2015-05-21 11:21 | Report Abuse
If favco upcoming result is good, record more than 10 sen eps, and declare 12 sen dividend soon, then it should trade above RM 3