Hehe..I like how regulation force the company must announce the restraining order if i read correctly, employee salary still give but give more time to company discuss on restructuring. I wish them well!
Now all the share ada di Desa Park City. Go there see leng lui with cute dog very therapeutic!
1Q19 losses of RM21mil marks the 8th consecutive losses recorded by Barakah. Some investors might be hoping for the company to start posting positives results given that the company had won some big contracts since mid FY18 (with the MCM contract won back in July 2018). This however, did not materialise which puts in doubts of the company’s ability to execute the contracts won within budget and on time.
Given its not so good track records in previous contracts, investors are hoping that the MCM contract would help the company to deliver profit this time around. Some of the contracts where the company failed to deliver (and record massive losses) are:
1) Pan Malaysia Transport & Installation (T&I) contract 2) Pengerang Pipeline contract 3) Inspection, Repair and Maintenance (IRM) contract
Investors also need to take note that the restraining order imposed by the High Court to PBJV’s (Barakah subsidiary) lenders which prevent them from calling for an event of defaults on any of its debt will expire by mid-April 2019. There is a potential risk that some creditors might want their debt to be paid in full given PBJV’s failure to honour some of the debt covenants (mainly relating to the debt coverage ratio given that the company has been posting losses since FY17).
If you are looking to hedge your portfolio outside of Barakah (due to its weak contract execution track record and potential credit default event), I would recommend you to look at MBMR. (https://klse.i3investor.com/servlets/stk/pt/5983.jsp)
MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.1x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.
FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).
MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.0x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.
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....
azta12
5,594 posts
Posted by azta12 > 2019-03-07 09:39 | Report Abuse
add some