Gadang PE (net cash) is about 7x. CAGR for PAT is about 12-15% next 2-3 years. PE will go down to about 5x. Some small construction stocks traded at around 12-15x. It's undervalued.
Looks like fund are pouring into construction sector now. Below is my qualitative ranking by book order size relative to revenue, profit margin, projected FY18 PE and experience in rail projects.
GADANG (MRT2, Cyberjaya Hospital, TRX)
GKENT (PDP LRT3, 3x Hospital, MRT2, a robust water meter business)
GBGAQRS (LRT3, Kota SAS, SUKE, PR1MA projects, One Jesselton) – Most important – link to Pahang Royalty (ECRL). Precedent: Gemas-JB rail – YTL (partner with Johor Royalty)
EKOVEST (KL Rivercity, SPE Highway, potential listing of DUKE Highway this year)
VIVOCOM (PR1MA, PPA1M, Private Buildings, Standing out: Local partner for CRCC, new largest shareholder CNQC) Dark horse Bet!
Do have a look at the last AGM's minutes on 8 Nov 2017 in Gadang's website, the management said there is about RM260m to be recognised over next 2 years. This may be the game changer for Gadang for 2018.
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....
gaomin
596 posts
Posted by gaomin > 2018-01-02 07:48 | Report Abuse
This year gadang will go up.