don't really need to emphasis on those news play, fundamentally, it's a stock that can earn 8.5 EPS (10-15% chance), 9.5 EPS(65% chance) or 10.5 EPS (15-20% chance)
For a NAPS of 92 cents company, with 9 cents EPS, trading at 40-50 cents.... it's certainly undervalued excessively.
Previously their problem is on their cash flow, take a lot of loan, for a lot of projects that are not immediately (cash flow friendly) for example, they take loan to build KK bus station for 2 year? They take loan to build the Kulai skill hub, again, all this loan is not CASHFLOW positive...
After all these 2 years, finally, their Kulai project is done, and as a result they are paid with LAND... again not cashflow positive yet. Their KK bus stop, is again paid with LAND, instead of cash.
There's also their decision to buy HH Tower with borrowings... again it's a negative cash flow decision.
However....
Like few months ago only the KK project is doing piling works... (So can expect the KK project to start contribute cash by 3rd or 4th Q this year)
Their Kulai land, is just recently transferred to HH, again, this project will contribute, maybe year end...
Their HH Tower purchase, they can start renting it out by August, this will offset the negative cashflow from their bank loan
Finally, HH final piece of land in Bkt Jalil, there's talks about launching condo there, again in year end.
What I'm saying is, as it is, their current profit of 2.3 cents EPS is JUST MAINLY from the Malton JV.
Over the coming quarters, there's a good visibility that next Q EPS can be maintained, next next Q EPS may increase, and finally 3 quarters later, we're gonna see the peak of their EPS.
PH government winning, it's actually a positive news for HH as well, because, if the construction works are more fairly distributed, HH stands to benefit much more too. As certainly, they're not a favoured by BN company previously.. so you may see some BN only projects, will distribute to the none BN related construction companies like HH
It's really a good time to buy just based on earnings analysis, regardless of whatever 'news' that may or may not come up...
Hoping HH drops back to 40-41 sen range! If it does meet my target price, I will buy for investment. Truly an unappreciated and undervalued stock. An unpolished gem!
Weak support at 46 sen. Today, crucial to maintain at current price or higher. Otherwise, price may fall back to 40-44 sen range. I am hoping for 40-41 sen range.
Definitely an unpolished gem! Price changes of at least 5 sen (plus or minus) from current level of 47.5 sen in the short term. This stock is not for contra player!
Folks, don't be concerned when the director disposed 125,000 shares only. It is a red herring, to induce you to sell. Unknown people are slowly accumulating the shares!
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....
Hohup
376 posts
Posted by Hohup > 2018-06-25 17:17 | Report Abuse
Let hohup make a support first