Theta has never been able to deliver any meaningful profit for its shareholders since at least FY10 with the profit of RM2.2mil reached back in FY15 being the highest (please take note, at the current price, the company is actually already trading at a high of 16.4x PE based on the highest profit reached in the past 8 years).
Revenue and profit contributions are highly dependent on both Tabung Haji’s related companies and government agencies. For the 9m18 for example, more than half of the revenue are actually from Tabung Haji related companies (which one must assume was based on more favourable terms). Even with that, the company had only managed to deliver a core net loss of RM3.3mil to its shareholders. FY18 would most likely end in the red for the company. Any decision from the government to reduce IT spending (for it agencies) will highly effect Theta’s prospects.
Given the change of management for Tabung Haji and for most of the government agencies, Theta’s ability to win contract might be in doubt given the new government policies of open tender (rather than direct contract awards). Even if the company managed to secure new contracts, it would not be at favourable terms as to what it might have received with the previous government. With this in mind, FY19 would most probably see another negative profit result for the company.
If you are looking to diversify your portfolio outside of Theta (due to its weak earnings outlook), I would recommend you to look at MBMR.
MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.
FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.
Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.
Hey! Today, R-Table will be covering $THETA(9075.MY) - Theta Edge Berhad by presenting 10 years financial results in a short, fun & interesting way. Click the link below to watch the video.
Unusual sold down 150,000 shares at RM0.15. Urge SC to investigate, it may due to intentional sold down and someone wait there and bought and benefited. Nobody will sell down this block of illiquid stock at such a low price.
wow.!!! gap up at 30.5 sen..heading to 42 sen then 52 sen highly profitable company FY 19 profit 8.8m, EPS 8.21 sen at 31.5 sen PE is only 3.8x also theta biz is not affected by COVID 19 at all
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....
windcloud
1,393 posts
Posted by windcloud > 2018-01-10 11:13 | Report Abuse
already breakout ....... TP is about 0.70-0.80 ........