I think the insiders want people to believe all the proposals will be rejected in the coming EGM.. and the dividend too will be recalled. Hmm.. sad indeed..
Capital City 21 - Was informed that there are about RM140-150m not recognised yet. They also have, Cyberjaya/Semenyih.
Construction order book RM656m, excluding Kwasa Land, estimated RM500-550m.
Plantation, about 5,200 ha, mature in 2-3 years time, market benchmark EV is RM40,000 per ha for small plantation, big plantation company enjoy RM60,000 - RM100,000 per ha. After all, Gadang has 90 years lease.
There are people who are willing to pay RM250m to RM300m for a mature plantation in Sabah with good yield and OER.
Of course, more projects, is in the pipeline, MRT2 etc.
Mini-Hydro in FY19.
Water concession, expanding from 3 to 4 concessionaires. No debt on water concessionaires. Provide stable and reasonable cash flow.
If we have time to research and add it up, you will see the value is higher than the price, and it takes a few years to materialise.
Selling share or not, no one knows except himself.
When a placement is done below market price, is the owner selling so cheap ? It can be a small amount of shares are sold to a syndicate at a cheaper price to push up the price later. You and I will not know the actual intention.
We must not care so much on this type of news, the most important we must know whether it is a good FA stock. To me, both TA and FA are good, just buy and hold.
If the company do not have effective usage for expansion that gave a ROE of say >10%, for a period of time, it is wise to return the money to its shareholders.
However, if a company trying to grow the company to a higher level, say, from an average RM80m p.a. profit last 3 years to RM120m p.a. average over the next 3 years, and gave an ROE of 12%, I rather the company not pay a single sen of dividend.
Furthermore, Gadang is expanding into capital intensive project, plantation (was told no gearing), water concessionaires (already pay down most of it), hydro power plan, on going, need cash injection before inflow comes in.
So, the company need to grow from class B to class A contractor, it needs to build up its shareholders funds. Some tenders, depend on size, need a minimum amount of SF. So, overtime, you have to build it up.
As long as the cash are used wisely, giving an ROE of double digit, I think, it is better, because, this will ultimately turn into capital gain.
For dividend yield stocks, normally we go for consumer, or certain telco that can give consistent cash flow. Normally construction and property company don't give very high dividend yield, especially if they are growing their assets. Gadang is gradually putting more money into stable and sustainable earnings biz like water concessionaires, plantation, and power plant.
Look at IJM Corp, market cap it RM12 billion, and Gadang is only RM750m, Gadang has much much more to grow. Isn't it?
Look at IJM Corp Annual Report 2015, 1986 to 2016, its market cap grow from RM66m to RM12.5 billion in 30 years.
However, if you look at IJM Corp fro 2006 to 2016, it grows from about RM9.3 billion to RM12.5 billion (disregard one off dip in 2009 to RM2.7b, those who bought it at 2009 will be laughing to the bank now)
If your dad just buy RM10,000 of IJM shares for you 30 years ago, today you will get RM1.9 million. So, perhaps, you want to give Gadang to your grandson? Not a bad idea.
IJM Corp today has Property, Construction, Infrastructure, Industry and Plantation. Looks similar to Gadang. So after all, seems easy to be a millionaire right. I don't believe they give much dividend. Based on last 5 years DY is about 2% p.a.
Similarly, Gamuda grow from RM5.6b to RM11.74b from 2006 to 2016 today. Gamuda ROE is about 9-12%, while IJM is about 6-9%. Gamuda also has Construction (include Engineering), Property and Infrastructure Concessionaire.
If you put them side by side, IJM, Gamuda and Gadang, they all move into Infrastructure/Concessionaraire and Plantation while keeping their core with Construction/Engineering and Property. Gamuda Infrastructure Concessionares is contributing 44% in term of PBT.
So, lets us have a healthy body and a strong mind to keep Gadang for say another 10-20 years, if they can grow into the size of Gamuda or IJM Corp. Of course, the growth will slowed once they reach about RM4-5 billion. Your grandkids will thank you for that.
Post a Comment
People who like this
New Topic
You should check in on some of those fields below.
Title
Category
Comment
Confirmation
Click Confirm to delete this Forum Thread and all the associated comments.
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....
tksw
12,976 posts
Posted by tksw > 2016-10-07 14:54 | Report Abuse
ole-ole, got big seller support me