Posted by hng33 > 2017-07-25 09:19 | Report Abuse

SKIN will be a build, operate, maintain and transfer model and fund raising is through bond issuance with gov concession payout as backup. Therefore, investor need to understand on accounting IFRIC 12: Service Concession Arrangements which explains accounting treatment for concession biz.

Accounting 101: accruals concept means that revenue and costs are recognised as and when they are incurred, not when cash payment is received or paid. So my interpretation is revenue and costs should be recognised in the first 3 years when work is done, not when payment is received in the next 12 years while maintenance revenue will be recognised in the 12 years maintenance period. In other words, my take is that the development revenue for the build and deployment phase should be recognised by progress for the first 3 years while maintenance revenue will be recognised when maintenance works are carried out.

http://klse.i3investor.com/blogs/purelysharing/109447.jsp

Based on above calculation, There will some medication to take into account effective stake 70% and MSC status on tax exemption. Prestaring net profit on Skin

Development stage: Year 1
Profit before tax: RM 67.5m
Profit after tax (MSC status): RM 35.91 + 20.25m (tax exempt)= RM 56.2m
EPS: 11.6sen
EPS (70% stake): 8.15sen


Development stage: Year 2
Profit before tax: RM 113.4m
Profit after tax (MSC status): RM 60.3 + 34.02m (tax exempt)= RM 94.32m.2m
EPS: 19.5sen
EPS (70% stake): 13.68sen


Development stage: Year 3
Profit before tax: RM 159.3m
Profit after tax (MSC status): RM 84.75 + 47.79m (tax exempt)= RM 135.54m.2m
EPS: 27.45sen
EPS (70% stake): 19.21sen

Posted by hng33 > 2017-07-25 09:26 | Report Abuse

If investor have doubt over how concession business work, upcoming Triplc result (by these week) will set good live example as Triplc business is also under concession business model, issue bond, recognized revenues, cost and profit on first year construction stage.

Posted by Pavillion > 2017-07-25 11:44 | Report Abuse

Aiyoyooo you certainly are not an Accountant.
Revenue Recognition set by GAAP are much more complex then your 101 Accounting.

There are different treatment for each industry. ..for example Construction and Software are different...futher this is not straight forward government contract....there are many issues...like transfer of control, VSOE, revenue separation, ability to transfer to customer the significant risk and rewards of ownership, recourse etc.

Without seeing the actual agreement there are no way we could know......there are risk that Auditor will not agree to revenue recognition at all.....i.e. does not meet revenue recognition criteria during the development.....so your calculation.....you just pluck from sky.

Posted by Traderx > 2017-07-25 12:01 | Report Abuse

This company seems like Datasonic in the making, from RM1.90 plunge to RM 1.30 then never recover.

Posted by Traderx > 2017-07-25 12:05 | Report Abuse

something similar 4 years ago before election. Cronies.

Posted by Aero1 > 2017-07-25 12:13 | Report Abuse

I agree with traderx. Companies deal with government's contracts are hard to predict. These companies have always not been tested commercially .. not until at least with a government that has business acumen.

Posted by Aero1 > 2017-07-25 12:15 | Report Abuse

No need to defend with share buyback. Deploying current resources for better use is more important.

Posted by ShareRich > 2017-07-25 15:24 | Report Abuse

At one point,management will come out to clarify the skin's actual profit,price will fly high after that,that's what I'm hoping.

Posted by hng33 > 2017-07-25 15:35 | Report Abuse

FOR those naysayer, please re-read what is accounting standards of IC Interpretation 12 (IC 12): Service Concession Arrangements which explains accounting treatment for concession biz. \


IT HAVE CONFIRM by both Prestaring president and group CEO Dr Abu Hasan Ismail himself and banker. Revenue for SKIN will be recognise revenue from SKIN starting from its financial year ending Dec 31, 2017 (FY17).


...Prestariang will only receive payment from the government (inclusive of all costs incurred during the development, and maintenance and technical operation phases) after three years when the services are fully rendered.

However, the company is expected to recognise revenue from SKIN starting from its financial year ending Dec 31, 2017 (FY17), and revenue from EduCloud, an integrated education platform to be built through a tie-up between Prestariang, Singapore’s Conversant Solutions Pte Ltd and Alibaba Cloud Computing Ltd from FY18 onwards.

“Under the accounting standards of IC Interpretation 12 (IC 12), revenue can be recognised during the construction phase. This is normal practice, as confirmed by our auditors,” Abu Hasan said.

AmInvestment Bank Bhd in a report said Prestariang could account for the revenue from SKIN under IC 12 — revenue that is derived by applying a markup margin to estimated costs for the year under review.

https://themalaysianreserve.com/2017/07/20/sukuk-finance-prestariangs-border-control-project/

Posted by Powerstock > 2017-07-25 16:02 | Report Abuse

Avoid power down stock

Posted by Powerstock > 2017-07-25 16:03 | Report Abuse

Never fall in love with power down stock

Posted by Powerstock > 2017-07-25 16:05 | Report Abuse

price action dont support "fundamental"
Why hold? Just cut out

Posted by Powerstock > 2017-07-25 16:07 | Report Abuse

stubborness will cause u bigger loss

Posted by Powerstock > 2017-07-25 16:16 | Report Abuse

1.69 coming

Posted by LuckyG > 2017-07-25 16:17 | Report Abuse

hng33 no need to explain to them . they just want the price down they dont have any presbhd shares . a powerful party just want the price down . powerful enough to cut margin cap . force retailer to sell .

Posted by hng33 > 2017-07-25 16:28 | Report Abuse

There are people like to sell to cut loss by force selling as current price is lowest in year or some like to sell to lock profit if it have bought share many year ago and others opt to hold for rebound as stock remain fundamental strong with very high earning visibility for next 15 year .

Willing buyer, willing seller.

At holding cost RM 1.96+, i opt to hold for rebound :D)

Posted by Aero1 > 2017-07-25 16:35 | Report Abuse

It is likely that this counter no longer meeting the investment criteria of institutional investors.

Posted by newbie92 > 2017-07-25 16:37 | Report Abuse

hng33, how many lot you loaded? Below Rm1.9, really no eye see, sad.

Posted by Ckk2266 > 2017-07-25 16:44 | Report Abuse

Bought Presbhd 1.90-1.91

Posted by ShareRich > 2017-07-25 16:56 | Report Abuse

Q at 1.90,thought cannot get,but all matched,good luck everyone.

Posted by newbie92 > 2017-07-25 16:58 | Report Abuse

If price keep going down, money will stuck.
Need cut loss liao if drop lagi 2moro.

Posted by goodguess > 2017-07-25 17:02 | Report Abuse

hng33, what you mean is profits registered but only get paid after 3 years?

Posted by hng33 > 2017-07-25 17:02 | Report Abuse

If market is effective, there won't have 30 top gainer and 30 top loser in every trading day and keep changing in trading day.

before Skin is awarded, bullish; after skin is awarded, bearish; after profit recognized !?

Short term, share price affect by supply and demand, longer term, share price will accord to company profit growth.

With RM 3.5 billion SKIN, Prestaring is definitely high growth stock and maiden earning growth will start in current financial year 2017 onward

SKIN under IC 12 — revenue that is derived by applying a markup margin to estimated costs for the year under review.

Posted by goodguess > 2017-07-25 17:06 | Report Abuse

support is at 1.75, lowest at July 2016. Its fall was from 3.25 to 1.69. Lets see what happens tommorrow. Then decide buy or sell.

Posted by hng33 > 2017-07-25 17:32 | Report Abuse

If you recheck back what have happen to triplc, then, you will have much better understanding what is concession business model and accounting IC 12. It is in fact the most lucrative profit margin happen during the first 3 year development period as all revenues for the project will all recognized and under IC 12, company able to realize very handsome profit margin as revenue is markup compared to cost to derive very high profit margin for first 3 year developemnt phase. (Remark: in triplc case, its share price jump more than double from 65sen to RM 1.45 from beginning to end of 3 year completion).

After completion of the project under 3 year development, concession enter in maintenance phase in which gov will start payout fixed sum to company, profit margin become significant lower as most of the payment need to setoff against bond interest payment that issue earlier to fund the development phase.

Posted by hng33 > 2017-07-25 17:44 | Report Abuse

Optimistic , wait for rebound

vs

pessimistic, cut loss by force selling

Willing buyer, willing seller, Bear own risk, enjoy own reward

Posted by sunztzhe > 2017-07-25 17:55 | Report Abuse

Very weak attempt to rebound in early morning but price overcomed by very strong down momentum.So bought Hengyuan instead.

Posted by Pavillion > 2017-07-25 19:38 | Report Abuse

Might test 1.60-1.65 during bearish mode....no more story....we can see more stable Myeg(already expensive valuation @ PE 40) performance.

Posted by sunztzhe > 2017-07-25 19:48 | Report Abuse

Low liquidity stock with strong downward momentum.Difficult to get out if one has heavy position.

Posted by talk34 > 2017-07-25 20:13 | Report Abuse

Anyone would have expect the price will raise 3 years later, if the system launch successfully, but the problem is rebound from what price level. But based on current situation, looks like majority not having a positive review on its position for now. Those who wanna get in, probably now or at 1.8, might be further if breaks 1.8, those who don't, no point of talking if you don't want to involve on this boat. No comment on getting out. Your money your responsibility, don't blame anyone after you listened to someone and don't meet your expectation.

Posted by Aero1 > 2017-07-26 09:07 | Report Abuse

First you have too rich the valuation which is set to correct sharply.
Second now that the expectation gap is wider because of the lousy terms signed in the SKIN.
Third you will have hell lots of uncertainties going forward during the implementation stage with the impending 1 billion debts.
Last don't think they can raise the 1 billion debts without raising equity. Creditors are not stupid the terms especially the financing cost will be adverse.

Posted by Ckk2266 > 2017-07-26 09:47 | Report Abuse

Sold all Presbhd @ 1.96

Posted by bjgdila123 > 2017-07-26 09:48 | Report Abuse

rebound . rebound 3

Posted by hng33 > 2017-07-26 09:58 | Report Abuse

Recovery :D)

Posted by ShareRich > 2017-07-26 09:58 | Report Abuse

Presbhd's usual movement,gradually recover,will back to above 2.00 soon,buy now!

Posted by zoomboom > 2017-07-26 12:00 | Report Abuse

...

Posted by ShareRich > 2017-07-26 13:10 | Report Abuse

Bro Zoomboom,why speechless?

Posted by bjgdila123 > 2017-07-26 13:11 | Report Abuse

ready 2 fly ...

Posted by Post1 > 2017-07-26 14:06 | Report Abuse

Keep buying..big boss will do somethings.Bro zoomboom ada email ke?

Posted by zoomboom > 2017-07-26 16:46 | Report Abuse

Post1 zoomboom8282@gmail.com
apa berita best nak share? mai hantar kat saya...

ShareRich, this ... i learned from bro tewnama long ago (not very long la just 1, 2 year ago)...
its not speechless... it's like... no point writing, yet since so many ppl comment (some nonsense, some make sense, some just plain posting just for the sake of posting.. )

btw, i have not budged. i am still holding all my shares. lol... kan long term saya ni...

Posted by hng33 > 2017-07-26 16:58 | Report Abuse

:DD)

Posted by zoomboom > 2017-07-26 17:47 | Report Abuse

so many come and go liow... used to have a few buddies during PenjaraBursa days... lol..

hopefully this round hng33, Post1 will teman and hang around long enough with me to ride this next wave lol..

Posted by Pavillion > 2017-07-27 08:38 | Report Abuse

(July 26, RMI.96)
Maintain hold with fair value (FV) of RM2.08: We maintain "hold" on Prestariang Bhd with a a
higher sum-of-parts-derived FV of RM2.08 per share (previously RM2 per share) following our meeting with its management. We have t also revised our earnings forecasts t for its financial year ending Dec 31,2017 (FY17) to FY19 after making changes to the assumptions
for the Sistemn Kawalan Imigresen Nasional (SKIN) project.

After speaking to the team in charge of SKIN, we are more inclined to believe that the execution risks of the project are well managed.
We also note that payments from the government for SKIN are highly secured. Therefore, we lower our discount rate for SKIN to 8% from 9.5% to derive its net present value (NPV)by removing a 1.5% risk premium previously attached to execution uncertainties. In addition, after a more in-depth study of the project requirements, we lower our year four to 15 operational expenditure
assumptions to RM100 million per year from RM135 million per year.

Based on our channel checks, debt funders may be able to lend up to 90% of the project capital expenditure requirement RM800 million to RM900 million).

Posted by fzank > 2017-07-27 10:22 | Report Abuse

:)

Posted by Pavillion > 2017-07-27 11:59 | Report Abuse

Large investment, huge debt and long gestation period is for KWAP, AIA not for retailer.

Posted by 2016v > 2017-07-27 12:00 | Report Abuse

price trend don't look good

Posted by Pavillion > 2017-07-27 14:47 | Report Abuse

After 4 years.... no more story on SKIN already.

Interest cost alone... 6% over RM800-900M ?

Posted by coldinvestor > 2017-07-27 16:28 | Report Abuse

中长期跌势已确定， 任何反弹就是逃生的时机。

Posted by Aero1 > 2017-07-27 16:33 | Report Abuse

Most institutional funds will not invest and will no longer have mandate to stayed invested.

Posted by hng33 > 2017-07-28 09:50 | Report Abuse

bought last batch prestaring at 1.90