Gadang is expected to show an increasing profit next year mainly due to its strong earnings stream from the on-going construction projects and continuous sales activities generated by the flagship projects of the property division.
Current earnings is 27 cents. assuming the forward earning to be 30 cents, to be conservative. Using a simple PE for calculation. the current PE is just only 4. at the price of RM1.2. If you compared with other construction company. ROE is above 15%. with a net cash balance of 40m (equivalent of approximately 19 cents per share) and future earning growth. Gadang current valuation is extremely unreasonable.
In addition. one can note that the margin and cash flow is improving every year. The net margin has improved from prior year 8% to current year 10%. In addition it is generating a free cash flow of 69m compared to its earning RM60m only. The actual cash generated is more than the accounting profit it earn during the year.
Market is always like that, I remembered I did post on Minho on 10 June 2015 regarding Minho, at that time it was only 90 cents plus only, and there is no volume oso. No one cares about my comments. The stock is so cheap that no one wants. when it start to move to RM1.7, everyone starts to be interested in it. The volume is increasing and ppl snatch until RM1.9 in 1 month.
The following is my posting on Minho on June 2015. u can find my comments under Minho stock
limpek: results out limit up till 1.1. now 95 nobody wants. that's ridiculous! Minho is actually a hidden gem and yet this are very less people realizing. from the latest qtr report has shown a significant improvement in all their business due to increased order. Currently timber extraction has contributed around half of the earning due strong logging activites in the current quarter which is equivalent to 5 cents. exclude the earning from logging, the other business still contribute a whopping 5 cents earning to the group in the current quarter.
Management has guided that there will be reduced logging activities in second quarter due to stricter control by authority in issuing license. However, for manufacturing and trading segment, the demand is expected to improve. the property sector will see stronger billing coming in in the following quarters. If we take out the earnings from logging activities, the other segment will still show a contribution of at least 5 cents or more in the coming quarter. If we extrapolate the eanings, the PE is actually less than 4.
In addition to the above, the company also has a strong balance sheet with net cash of around 6-7cents.
Compared to other related industry. this counter should be worth more
Gadang's construction division has not been awarded with new work order since RAPID 2, so I wonder if Gadang's construction division can sustain it's revenue and profit. If not mistaken, the RAPID 2 work order will be completed by 30 Sept 2015. Anyone has any opinion or input on the above-mentioned matter ?
There's only one way to know the EXACT date - from insider. You may try call to the company's Investor Relation Officer and ask about it. Do it few weeks after end of the quarter.
In The busy Weekly issue #340, Kok Onn said gadang target FY2016 net profit increase 15%. As at 30/06, construction job in hand stand at 700m, property unbilled 134m
The busy weekly issue states that the company guided that they have completed 26% of Rapid Package 3. Since when did the company win Rapid Package 3? Also Rapid 2 is only 50% completed with due date as at 30 September 2015. Is it typical for a project to be delayed? Will they be fined for delayed completion? Please advise sifus.
Great Stock to buy and hold. GADANG announced its latest results for 2 quarters (total 9.5 sens). On annualised basis, the EPS comes to 19 sens. It is currently trading at only RM1.37 sens, which is a PE of 7.2 times. Furthermore, it is also trading below its Net Asset per Share of RM1.58. At 10 times PE fair value, the stock should be trading at RM1.90 (which the stock was trading during July 2014).
i thought if the company wanna entice people to convert the warrants into mother share, they should push the share price up...?? to make it seem more worthwhile to convert?
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fatty_tang
297 posts
Posted by fatty_tang > 2015-08-27 12:21 | Report Abuse
need people to goreng it. current sentiment for construction sector is bad..