We have also set the target to become the top 30 listed companies on Bursa Malaysia within five years. This means that our market capitalisation has to hit RM10bil within five years, from the current RM2bil. It is achievable based on our growth.
Let's dissect what KC is saying. He wants market cap to achieve 10 bil in 5 years, or 500% from current market cap.
Gamuda and IJM are not similar to Ekovest but comparable, both have 11 bil market cap, with profit around 500-600 mil. To get to that level, Ekovest needs to grow income at CAGR 50%+ for next 5 years non-stop to justify 10 bil cap.
How would one achieve that? That would be either through margin expansion or volume growth or mix of both. Correct me if im wrong, Ekovest is involved in construction and operating toll highway and property development. Margin expansion sounds more reasonable on property development due to high margin, most developers can achieve 15-20% margin, while it is harder for construction and nearly impossible for toll, unless they decide to raise toll fees by 10-30% per year. Even if we consider a 20% margin on property end, with their 7.8 bil GDV, they would have to burn through all of that in order to hit the target, with no more landbank left on year 6 on wards.
Most confusing of all is they wants to maintain dividend while growing 50% yoy. That's achievable if you have ROE of 80%? Again falls back to margin expansion or volume growth, or else how does a company can manage to growth profit for 300% within 5 years with roe less than 20% and still decide to pay dividend?
Sensible post from JT Yeo. As always, company CEO always talk up their big plans during interviews. Maybe they saw a young and hot lady reporter interviewing them and cant help themselves to brag here and there
Ricky, if Ekovest is increasing the market cap with profit, it is not possible. What about after duke3 is done and REIT got IPO? it shall boost up the NTA greatly. However, 10b in 5years still very blow cow la~~ Anyway, in long term, i believe it could achieve much better-than-expected growth, CAGR of 20% shouldn't be a big problem. :)
if it manage to achieve 5b market cap in 3 years, i would be more than happy. :)
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Posted by moneySIFU > 2017-01-03 06:33 | Report Abuse
We have also set the target to become the top 30 listed companies on Bursa Malaysia within five years. This means that our market capitalisation has to hit RM10bil within five years, from the current RM2bil. It is achievable based on our growth.