The proposal was released in the interest for the company and the best way between the company and lenders. Please read the whole proposal and not just read the title.
The most recent quarter result was really a negative surprised to most investors. Market was expecting them to start posting positive result given the huge Pan Malaysia maintenance, construction and modification (MCM) contract that they won back in July.
However, to be fair given that the most recent result is for the period of Jul to Sept, investors might have been a bit too bullish to expect them to turnaround too soon. Its fairer for investors to wait for 4Q before giving a too negative outlook on the company.
Some investors are also worried of the companies ability to execute the contract within budget and on time. Given the many occasions of cost overruns and earnings disappointment in its past contracts such as the Pan Malaysia Transport & Installation (T&I), the Pengerang Pipeline contract and the Inspection, Repair and Maintenance (IRM) contract which all had resulted in massive losses to the company. I am worried that they actually won the MCM because they had underbid the other competitors. Meaning this MCM could be a potential time bomb in the future.
For those interested in the potential turnaround story of the company, it is best for you to wait till there is a real concrete result first (no more losses for example) before you start investing in Barakah.
For those looking to diversify their portfolio outside of the O&G industry, i would recommend them to look at MBMR.
The company is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 5.6x 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 4Q17. And FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19.
Hope Barakah can really turnaround this time with the new Pan Malaysia MCM contract. If it does, i am sure investors will start believing in the company again.
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....
Sniper S
189 posts
Posted by Sniper S > 2018-10-18 15:43 | Report Abuse
adios xxxx