Given the gloomier industry outlook and increasing uncertainty in the sector, we reduce the target price-to-earnings ratio (PER) multiple for construction companies with exposure to rail-related projects and arrive at a revised target price (TP) for Gamuda Bhd (TP: RM4.48), IJM Corp Bhd (TP: RM1.73), Sunway Construction Group Bhd [SunCon] (TP: RM1.71), WCT Holdings Bhd (TP: RM1.02) and Gadang Holidngs Bhd (TP: RM1.10). Subsequent to the TP adjustment, we downgrade SunCon to “sell”.
Given the gloomier industry outlook and increasing uncertainty in the sector, we reduce the target price-to-earnings ratio (PER) multiple for construction companies with exposure to rail-related projects and arrive at a revised target price (TP) for Gamuda Bhd (TP: RM4.48), IJM Corp Bhd (TP: RM1.73), Sunway Construction Group Bhd [SunCon] (TP: RM1.71), WCT Holdings Bhd (TP: RM1.02) and Gadang Holidngs Bhd (TP: RM1.10). Subsequent to the TP adjustment, we downgrade SunCon to “sell”.
Gadang is fortunate to land projects that escaped the cutting knife of PH Govt which hammered other construction compaines
1) Its MRT Job ongoing KVMRT V206 project , (RM952 MILLIONS VIADUCT PROJECT FROM SERDANG RAYA TO UPM)
2) Its 2 Jobs package in Pengerang RAPID buffered by Rm28 Billions cash infusion from Saudi Aramco. Gadang might still win some more projects in RAPID like Dialogue which is still expanding. And more downstream investments on the way.
3) Its Cyberjaya Hospital Project is a neccessity
4) And TRX is not cancelled. WCT even won a fresh project for TRX
5) Its white elephant Capital City is saved by its cash rich partner Hatten from Singapore
This week or next Gadang should be out with another good QTR
Thought of posting new photos of Capital City 21 this morning in Sungapore.
But my computer CPU broke down. So i went to Jurong Point to buy a new one. Wow! Nothing cheap. The lowest price is S$800 or about Rm2,400
So i returned home and check up with Lazada, Spore. Ha! I found the exact CPU going at S$170.
Less than 75% what Jurong Point is selling.
So i am really happy to have bought into Singpost for e commerce.
I also like Protasco because like Gadang price has fallen to attractive levels. Protasco will have lots of business repairing roads due to rise of ecommerce. With tens of thousands of trips by lorries, trucks and delivery vans on highways.
At its peak (adjusted after capital exercise) Gadang was over Rm1.30 and its price fell to a low of 64 sen which is 50% down.
And while the share price collapsed by half i see Gadang at below 70 sen with NTA over Rm1.00 has a margin of safety now. Sifu Ben Graham's rule. So Gadang has now fallen into my investment radar.
My fear for Gadang then was due to its euphoria and i think i was correct. Those who had sold above Rm1.30 can get it back cheaper at 50%. But those bought in euphoria at Rm1.30 and cutloss in panic would have lost 50% capital.
I used to pass by Capital City 21 as i owned a house nearby. And i am sure glad to see its completion as it will also help in the betterment of all its surrounding neibourhood. If it is abandoned then my assets will also be affected.
Other reasons i see are 1) Gadang has escaped the cutting knife of PH Govt's austerity in calling off many high end projects as it got its job in Pengerang. 2) Its viaduct package for Mrt not affected 3) Its hospital in Cyberjaya a neccessity 4) TRX is also another work spared by PH cutting knife.
So as gadang's fundamental and value is still sound and price has crashed it is now quite safe as an ongoing business.
Both Kok Onn and EPF are buying.
Now not only Gadang...as so many stocks are also sold down....both bad and good stocks....Calvin is really delighted to pick up bargains after bargains.
Always look for bargains. Once fly away please resist chasing.
Thank you.
Note: I also posted about Venfx's EG when it fell below 50 sen. I highlighted Protasco because it is totally bombed out and oversold below 50 sen.
Now the PER gap between Gadang and other peers (GKent, Kimlun, Mitra) mainly due to the coming QR concern. If the QR is good as public expectation, the share price can reach 1 dollar.
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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....
didi2005
302 posts
Posted by didi2005 > 2018-07-11 19:03 | Report Abuse
Top up 0.64. Capital 21 Mall will be open next month. This year focus on dividend, next year focus on capital gain.