Lets look at things objectively, The last time gadang posted a drop in net profit for a quarter was in 23 April 2015 and 23 January 2014. Look at the graph.
There was either a drop beforehand or the drop recovered within 1-2 weeks or in the case of the latest one where there was a pre-drop before quarter announcement, it took 1 month plus.
It will drop tomorrow. It should drop by about 10-20 sen. This is fundamentally a very very god company, find me another company that can show you 5 year continuous increase in profit.
It will drop and it will recover quickly, like KESM and Topglov.
No wonder the director sold a bunch of shares recently. As I said earlier this week, sell on strength. Expect Gadang to retest RM 3. There are after all too many punters who dont even know Gadang business crowding this stock. Also, Gadang is a small cap construction player. To me, Gadang will never trade more than 12-13x PE. The upside is limited from here. The downside? Plenty. Property unbilled sales in dwindling. Construction order book is dwindling as well. Although it is fair that getting MRT 2 package may boost its earnings visibility, lets not forget that there is a lead time between getting the project and billing your customers. And also, dont expect Gafang to record 15% margin from the new project. Expect Gadang profit to drop by at least 25% after 12 months. Since the market tends to anticipate events six months earlier, allow me to predict Gadang share price will start finding its true value in April or May 2017.
Please look at Gtronic chart as a guide. Reduced profits but prospect remains bright, the share price will initally react negatively in the first 10 minutes before it normalises thereafter as more and more investors are able to digest and think rationally about its future prospect.
Gadang Holdings Bhd saw its net profit fall by as much as 20% to RM16.62 million or 6.46 sen per share for the first quarter of its financial year ended May 31 2017 (1QFY17) from RM20.86 million or 9.61 sen per share.
what is the thinking of institutional fund is a matter, not trader. they wont sell a share because 1 quarter report not perform . they bought on company prospect. when share price drop , it give them a opportunity to accumulate more. let see ...cheers...
how come people so happy to buy construction stock in a country that is heading into deep recession and govt has no money to spend and keep extracting from rakyat?
wow... really drop below 3 meh...? i recalled that 3 is quite hard to break for gadang.. took few times to break it and nw so easy to drop below 3... sigh..
looking at felicity article there he show gadang has a negative cash flow that is three months ago in fact the latest qr show gadang has positive cashflow of 9.8 million pls check it out
need to be rational and not emotional. profit down, order book shrinking and coming up bonus, plit, warrants, will further dilute the eps. Sell now when you still have chance before your pants are gone. rmb the buy mantra but also rmb the sell mantra. all the best guys
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....
Jon Choivo
3,668 posts
Posted by Jon Choivo > 2016-10-28 00:38 | Report Abuse
Lets look at things objectively, The last time gadang posted a drop in net profit for a quarter was in 23 April 2015 and 23 January 2014. Look at the graph.
There was either a drop beforehand or the drop recovered within 1-2 weeks or in the case of the latest one where there was a pre-drop before quarter announcement, it took 1 month plus.
It will drop tomorrow. It should drop by about 10-20 sen. This is fundamentally a very very god company, find me another company that can show you 5 year continuous increase in profit.
It will drop and it will recover quickly, like KESM and Topglov.