On top of that, FY 2018 for construction segment only recorded revenue of 376mio.
Gadang still hold existing project namely, RAPID package 301 and 402 and new projects namely, KVMRT V206 project, TRX project and Cyberjaya Hospital. Based on the on-going infrastructure projects under construction, a stable earnings stream is expected for the financial year ending 31 May 2019. In addition, the division’s outstanding order book of some RM1.51 billion, shall provide good income viability for the Construction Division
So the sustainable earning for Gadang in near future should be very positive. On top of that, potential tender on ECRL, HSR and Pan Borneo might boost the book order beyond 2billion.
Baru also said the highway project in Sarawak also involved the upgrading of existing roads to four lanes over 706km that covered the implementation under the first phase in 35 packages.
He said the 12 packages under construction would continue to be implemented while the remaining 23 packages were still in various stages of implementation.
Very good Q4 result. Strong revenue growth and profit (excl impairment of almost 10M). Recent price drop is unwarranted and present a big discount on GADANG. INITIATE STRONG BUY at 1.00
This year a lot of one off expenses about 28million without that this year gadang will continue the outstanding performance..seem like management have intention to normalise the earning to restrain the share price to fly ?
No one realized that PBT from construction is slumped compared to preceding year? and the profit margin from construction business is also dropped so many, without any explanation.
construction PBT is dropping YOY: For current quarter, revenue increased marginally to RM104.56 million as compared to RM100.66 million recorded in the corresponding quarter of the preceding year. Profit before tax for the current quarter decreased to RM16.76 million as compared to RM36.05 million in the corresponding quarter of the preceding year
17Q4 construction projects in progress - Rapid package 301 and 402 and other completed projects 18Q4 construction projects in progress - Rapid package 301 and 402, MRT2 V206, TRX City, Cyberjaya Hospital
It can explain why FY2018 construction revenue is much higher than last year, while PBT is lower due to new projects kick off such as MRT2 V206, TRX City and Cyberjaya Hospital and timing recognition of variation orders for completed projects in prior year.
@klseinvestor89 it is normal for PBT from construction to be lower. Go check the previous QR and you will see the same thing and yet, Gadang's price still fly. If you have been following Gadang for years (or even any construction counter for that matter), you will see that this is very normal, even in some of the bigger firms. Much of it has to do with the accrual method of accounting used based on percentage of completion method under MFRS and MASB. Construction/property companies are not like ordinary companies selling goods whereby a lower PBT usually implies higher cost of sales. What's more important is to see whether the project has returned a profit over the lifetime of a project. For example, just take a look at the property sector in this QR - this quarter 100% profit but almost 100% loss in Q2. If you were judging the company's performance by the drop in PBT after Q2, your evaluation would be flawed and you would've sold early. So just be careful about these things!
And what do you mean by no explanation for drop in PBT in this quarter? I think it's very clear from the P/L statement that it was caused by the item listed as "other expenses" which has increased by around 10 million was then very clearly explained as being the one-off impairment cost in the notes. ESOS expense isn't really significant to me because it's recurring even in the last quarter.
Sometimes, valuing construction firms is not so straight forward and if you don't have at least some knowledge in accounting, your judgments will be poor. My advice is when in doubt and if you have nobody to consult, don't try to be too smart but instead, follow the insiders or the general direction of the market/sector and you will rarely go wrong.
opportunity to collect cheap hahaha... 2019 will be a turnaround year for gadang... steady income from construction. Jackpot if can get new order... Utility division turnaround..property division.. positive contribution from capital city... :)
Not exactly cash poor. But I've mentioned about the high inventories before. Their property division is not doing well. Revenue ytd dropped by around RM 50 million,but pbt salvaged by contributions from capital city.
What used to be their strength (construction) fared poorly this quarter. Still a good company though.
I read their cash flow clearly. They are quite rich in cash and their property sector is doing better compared to preceding quarter. Anyway, Gadang is still cheap with low PE and high ROE. New government settled down, construction sector bomb soon, I suggest that just keep and hold. Happy investing =)
Jesus christ u guys are so gullible, always use past and immediate share price movement to value future value.
The proper method should be to look at current + prospect objectively disregarding share price movement and ask yourself how much it will worth in the future:
1) what the company is doing now (secured order book); 2) fundamental (very healthy current working capital + short term debt with long term financing of assets = no need use own money to finance); 3) future prospects (ECRL, HSR, Pan Borneo Highway etc is a GREAT bonus if secured); 4) facts (still profitable when peers are falling here and there and escaped political cronyism by protecting shareholders value by not giving kickbacks); 5) attractive valuation (very cheap and good quality in relative to peers and should deserve a PREMIUM, that means more upside).
But instead all of them including the so called professionals and experts still get tricked by share price movement every single time and some even quickly announce to the whole world whether they bought it or sold it just to justify your feel good feeling, LOL.
If you really do your homework you will know how misunderstood GADANG is compare to all its peers and all the construction stocks in BURSA, both in relative and in absolute terms. It never fails to amaze me how all the so called professionals and expert still make novice mistake when we paid so much money for them to manage just to get things right, I guess emotion still gets them at the end of the day huh.
And btw, GADANG is never meant for quick profit and cash rich because its a steady quality growth stock. I sincerely hope all traders and non-long term investor to sell all your GADANG shares because it will never meet your objectives that way. Pls sell all now, like right now straight away pls.
i topup @ 0.77...if continue down every 2cts will topup each time.... haha ytd i go through the holding of epf.... if saw it keep increase since jan 2018....from 5% to 7% for fundamental, i quite confident on it management and the project on their hand
It look like Gadang still long way to go..... currently no new project coming in, dividend still maintain 3 cents.... plan to drop first and come back later.
Pls look at the quarter reports. Current qr is influenced by one off impairment loss, eps still above 3.5cents. The annual earning still almost compared to previous year. Look at the on going projects, they will busy these 3 years. TP: rm1, still.
If there is a fruitful reward on share price return,credit should all gone to investor themselves for patience. Gadang is the good company,but its management,pui! They won't consider the benefit as being investors
If compare previously price of 1.2x with the latest result, maybe we can say bad.. But now the price only 0.765 with the total capital market of 510m..the result is consider good.. Try take a look of others big company.. Their profit is much more lower than Gadang
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.
New IPO: Building management systems (BMS), solar thermal systems and energy-saving services provider, Solar District Cooling Bhd aims to list on the Ace Market!
MQ Trader 380 views | 2 d ago
0:17
New IPO: The onshore and offshore support services provider for the O&G industry, Steel Hawk Bhd aims to list on the Ace Market!
MQ Trader 11754 views | 10 d ago
0:17
New IPO: The largest mini-market player and a leading groceries retailer in Malaysia, 99 Speed Mart Retail Holdings Bhd aims to list on the Main Market!
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....
investor88
282 posts
Posted by investor88 > 2018-07-25 20:41 | Report Abuse
On top of that, FY 2018 for construction segment only recorded revenue of 376mio.
Gadang still hold existing project namely, RAPID package 301 and 402 and new projects namely, KVMRT V206 project, TRX project and Cyberjaya Hospital. Based on the on-going infrastructure projects under construction, a stable earnings stream is expected for the
financial year ending 31 May 2019. In addition, the division’s outstanding order book of some RM1.51 billion, shall provide good income viability for the Construction Division
So the sustainable earning for Gadang in near future should be very positive. On top of that, potential tender on ECRL, HSR and Pan Borneo might boost the book order beyond 2billion.