After our recent meeting with management, we are upbeat that the job market remains healthy for Signature. This is despite its chance in winning Country Garden’s Danga Bay project has diminished. Besides RM22mn new jobs secured recently, management is confident in securing several other projects worth RM60mn over the next 3 months. Valuation wise, the stock is currently trading at appealing 6x CY17 EPS. If we reduce the stock price by the projected net cash amount of 24.7sen/share, the PE will drop further to unreasonably low levels of some 4.6x. Maintain Buy
Secured RM22mn new jobs; More to come According to management, Signature secured a few letters of awards for kitchen and wardrobe systems worth RM22mn between March and May. These projects have boosted the company’s order book to RM165mn as at May-16. Jobs are aplenty in the Klang Valley for the company as there are several key property developments, which have reached the advance stage of construction. Letters of awards from these developments can be expected within the next 2-3 months. When asked specifically about the potential contract sums, management guided that it would be approximately RM60mn for 4 to 5 projects
As we had highlighted earlier (please refer to our report dated 30 March 2016), the company has been invited to bid for phase 3A, which comprises 539 units of kitchen systems. We understand from management that the bidding process is on-going and the letter of award can be expected in 1H17. However, it is a positive surprise that Signature had also been asked to bid for Battersea Phase 2. To recap, Signature was not invited in the first-round of tendering process. Assuming kitchen jobs of RM50,000 per unit, the potential contract sum for Battersea Phase 2, which consists of 255 units of apartments, could be worth up to £2.3mn.
Signature has concluded the land sale and received payment of RM80mn from the state government for the disposal of a piece of land at Kota Damansara. Also, it had paid out 10sen/share as special dividend to shareholders on 4 July 2016. The land sale will give rise to a lumpy disposal gain in the upcoming 4QFY16 results. Furthermore, it is expected to boost the company’s net cash position. We estimate, disposal proceeds (RM80mn) and sale of property (est. RM3mn) minus dividend payable (RM23.6mn) and share buyback in June (est. RM0.9mn) would add additional RM58.5mn cash to its existing cash pile of RM0.7mn in Mar-16. This is equivalent to net cash of RM24.7sen/share. Note that Signature also disposed a couple of investment properties for RM3mn in 4QFY16.
Although FY16 core profit is expected to suffer from the slowdown in progress billing, we remain confident on the group’s FY17 earnings given the sizable amount of RM165mn order book and RM400mn tender book as at May-16. Valuation wise, we maintain our target price at RM1.62/share, based on 10x CY17 EPS. Signature is currently trading at a forward CY17 PE of 6x. If we reduce the current share price by the projected net cash amount of 24.7sen/share, the forward PE will drop further to unreasonably low levels of some 4.6x. Maintain Buy.
do note that the profit might only can be seen on FY17, and this is just the estimation don't over confident or put everything into one counter, adjust your portfolio
Ya lo.. wait Aug results out. See how bad is it. Wait Nov results out, see how good is the results. Wait the n see the chart. Sui sui n indicators all positive. After that see Ah Plane best friend Icon promote in i3. After all, then only buy. 1.50, not that high what...kiki..
7246 SIGN SIGNATURE INTERNATIONAL BHD Notice of Shares Buy Back by a Company Pursuant to Form 28A Date of Buy Back : 20/06/2016 to 24/06/2016 No. of Shares Purchased : 400,000 shares Minimum Price Paid For Each Share Purchased : RM 0.950 Maximum Price Paid For Each Share Purchased : RM 0.985 Total Amount Paid For Shares Purchased : RM 394,568.85 Shares Were Purchased Through : Bursa Malaysia Securities Berhad No. of Shares Purchased Retained in Treasury : 400,000 shares Total No. of Shares Retained in Treasury : 4,358,600 shares No. of Shares Purchased Which Were Cancelled : 0 shares Total Issued Capital as Diminished : Date Lodged With Registrar of Company : 30/06/2016 Lodged By : Boardroom Corporate Services (KL) Sdn Bhd Remarks: You are advised to read the entire contents of the announcement or attachment. To read the entire contents of the announcement or attachment, please access the Bursa website at http://www.bursamalaysia.com Submitted By:
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....
cheeseburger
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Posted by cheeseburger > 2016-07-04 10:26 | Report Abuse
special div payment date