This counter is hopeless. Youll expect more losses in next quarter due to steep drop in revenue especially in its old ans gas division. The management is incapable of turning the twist.
Maybe you should wait until there is a clearer picture on when the bauxite moratorium will be lifted. Currently the new deadline is end of March (deadline has been extended multiple times since the first moratorium on Jan 2015) to provide time for both the Pahang state and the Federal government to finalise the new SOP for bauxite mining, transport, stockpile management and export. More importantly it will also provide time for operators to clear off their stockpile at Kuantan Port.
The group’s other main divisions, both the construction and O&G are facing challenging prospects in view of the government decision to review most of the infrastructure project (for construction) and the high cost overruns of its O&G Rapid project. Its contract for West Coast Expressway also incurred high cost overruns last year. Unless management will be able to negotiate with the project owners (both Petronas and WCE Holdings) it is expected both the projects to continue incurring losses in FY19.
For me the biggest positive catalyst would be the lifting of the bauxite ban. Prior to the bauxite ban, mining business is the biggest contributor to the group’s profit at around RM20mil per year. Until then, WZ Satu will most probably record quarterly losses.
If you are looking to diversify your portfolio outside of WZ Satu (due to near term earnings uncertainties), I would recommend you to look at MBMR.
MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.2x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.6x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.
For FY19 growth will be driven by the still high demand of new Myvi and the newly launched SUV and also the new Alza in 2H19.
Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.50.
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....
darksoul
363 posts
Posted by darksoul > 2018-09-05 17:00 | Report Abuse
y sudden shot up? wat happen?